Today's Headlines

Bloomberg:

• Consumer Confidence Slumps to 6-Month Low. Consumer sentiment unexpectedly decreased in May to the lowest level in six months as Americans grew concerned over the outlook for jobs and the economy, while a measure of home prices dropped to a nine-year low. The Conference Board’s confidence index dropped to 60.8 from a revised 66 reading in April, figures from the New York- based private research group showed today. Home prices decreased 5.1 percent in the first quarter from the same time in 2010, according to data from S&P/Case-Shiller. A separate report today showed manufacturing cooled. Consumer finances have been squeezed by rising costs of food and fuel and erosion in home equity, causing spending to slow. The group’s measure of present conditions decreased to 39.3 from 40.2 a month earlier. The gauge of expectations for the next six months slumped to 75.2, the lowest since October, from 83.2. The share of respondents expecting more jobs over the next six months dropped, as did the proportion projecting their incomes will rise.
  
• Chicago Purchasing Mangers Index Falls to 56.6 in Sign Expansion Slowing. Business activity in the U.S. cooled more than forecast in May, a sign manufacturing may be leveling off after leading the recovery in the world’s largest economy. The Institute for Supply Management-Chicago Inc. said today its business barometer fell to 56.6 this month, the lowest since November 2009, from 67.6 in April. The measure’s 11-point drop this month was the biggest since October 2008.
• IMF Must Reflect the End of U.S.-Led Order, Sachs Writes in FT. The next head of the International Monetary Fund must be capable of helping to create a new global framework, for the existing U.S.-led order has had its day, Jeffrey Sachs, who heads the Earth Institute at Columbia University, wrote in the Financial Times. The answer is a system based on several regional currencies: the dollar, the euro, the yuan and, perhaps, the Brazilian real and the Indian rupee; that means regional groups such as the eurozone, the Arab world and the main economies of southeast Asia must assume responsibility for monetary policy, financial regulation, tax coordination and enforcement and fiscal policy harmonization, he said.
• Crude Oil Futures Rise as Greece Aid Package Bolsters Euro Versus Dollar. Oil climbed, trimming the biggest monthly drop in a year, on signals the European Union will approve aid for Greece, bolstering the euro against the dollar. Crude rose as much as 2.8 percent after Luxembourg Prime Minister Jean-Claude Juncker said leaders will decide on a new aid package by the end of June. The comments sent the euro to a three-week high versus the dollar, increasing the appeal of commodities.
• Buyout Firms Morphing Into Asset Managers. After making their founders billionaires, buyout specialists such as Carlyle Group and KKR & Co. are turning into asset managers that run hedge funds and strip malls as fresh capital and takeover targets become scarce.
• China Raises Power Prices for Business, Farmers as Summer Shortage Looms. China raised electricity prices for businesses and farmers for the first time in more than a year, threatening to exacerbate inflation as the nation aims to curb power shortages that may be the worst on record. The increase in electricity costs may complicate China’s fight against inflation, which is above the government’s target. The world’s biggest energy consumer may boost residential rates in the second half, according to Citigroup Inc. Higher prices may spur generation as pressure eases on profit margins squeezed by rising coal costs. An electricity shortfall this summer may be as much as 40 gigawatts, surpassing the 2004 record, State Grid Corp. of China said.
• Ex-Egypt Bank Head Arrested on Sex Charges. The former chairman of Egypt’s Bank of Alexandria was charged with sexually abusing a maid at the Pierre Hotel in New York, police said. Mahmoud Abdel Salam Omar, 74, chairman of El-Mex Salines Co., was arrested yesterday after a 44 year-old female maid alleged he attacked her May 29, according to a police department spokesman.
• Apple's(AAPL) Jobs to Unveil iCloud, New Software. Apple Inc. (AAPL) Chief Executive Officer Steve Jobs will address an annual conference on June 6 to unveil a service that lets users store content online and tout a new version of the software that runs the iPad and iPhone. Jobs, in the midst of his third medical leave since 2004 as he battles a rare form of cancer, will deliver a keynote address at Apple’s Worldwide Developers Conference, the Cupertino, California-based company said in a statement. It will be Jobs’ second appearance this year, after the iPad debut in March. Apple follows rivals Google Inc. (GOOG) and Amazon.com Inc. (AMZN) in creating services to make it easier for customers to store and access music and other content via the Internet.

Wall Street Journal:

• Economists Downgrade Prospects for Growth. The world's largest economy may be facing a growth problem. After a disappointing first quarter, economists largely predicted the U.S. recovery would ramp back up as short-term disruptions such as higher gas prices, bad weather and supply problems in Japan subsided. But there's little indication that's happening. Manufacturing is cooling, the housing market is struggling and consumers are keeping a close eye on spending, meaning the U.S. economy might be on a slower path to full health than expected.
• Obama Taps Businessman Bryson for Commerce Post. President Barack Obama on Tuesday nominated John Bryson, the former chairman of a California power company and a prominent environmental advocate, to be his next commerce secretary. Mr. Bryson retired in 2008 from Edison International, a publicly traded power company and the parent of Southern California Edison and Edison Mission Group, after 18 years there. He now serves as one of 20 senior advisers to the private-equity firm Kohlberg Kravis Roberts & Co.

CNBC.com:

• The Stupidity of Hope: Greece is Still Going to Default.

Business Insider:

• What I Learned From One Week Spent In Chengdu, China.
• Strauss-Kahn Hires ALL-MALE Cleaning Crew for his Tribeca Townhouse.
• Karzai Threatens War Against NATO.
• Europe's Cucumber Crisis Kills 14 People - Everyone Blames Spain. Most of Europe is moving to block Spanish cucumber exports after a deadly outbreak of E. coli. two weeks ago killed at least 14 people in Germany, according to Bloomberg. 329 people in Germany are reported to have a severe form of the infection, that includes bloody diarrhea and stomach cramps. Sweden had reported 30 cases; Denmark, 11; Austria 2; and Britain 3 so far, according to The New York Times.

Zero Hedge:

• Food Stamp Usage Hits Fresh Record. (graph)
• Oil Is Now Leaking In Sea Near Fukushima.
  

New York Times:

• As China's Workers Get a Raise, Companies Fret. Wages are surging this year in China and in its main low-wage Asian rivals, benefiting workers across the region. But the increases confront trading companies and Western retailers with surging costs, and are making higher price tags likely for American and European consumers.

Washington Post:

• Credit Unions Increasingly Offer High-Rate Payday Loans. To millions of member-customers, credit unions are the financial equivalent of a trusted uncle, dispensing prudent loans for cars, homes, and education without the profit motive of traditional banks. But encouraged by federal regulators, an increasing number of credit unions are competing directly with traditional payday lenders, selling small, short-term loans at prices far higher than they are permitted to charge for any other product.

CBS News:

• Muslim Girl in Beauty Contest Stoned to Death. A teenage Muslim girl was stoned to death by suspects claiming the 19-year-old has violated Sharia law by taking part in a beauty contest, a British newspaper reports. The body of Katya Koren was found in a forest near a village in the Crimea region of Ukraine. Will Stewart of the Daily Mail writes that Koren's remains were found a week after her disappearance. She appeared to have suffered head injuries and been strangled. Police are investigating claims that three Muslim youths killed her, saying her death was justified under Islamic law. The Daily Mail reports one 16-year-old suspect under arrest told police Koren had "violated the laws of Sharia." According to an official report on a Crimean government website, the 16-year-old classmate confessed to her murder, and gave as his reason, "I just wanted to kill her."

Rasmussen Reports:

• 68% Say Bank Bailout Money Went To Those Who Caused Meltdown. The latest Rasmussen Reports national telephone survey of Likely Voters finds that 61% think it was a bad idea for the government to provide bailout funding for banks and other financial institutions. Twenty-four percent (24%) say the bailouts were a good idea.

Reuters:

• Exclusive: EU Energy Plan Threatens Carbon Billions. The Europe Union's carbon market could be flooded with excess pollution permits over the next decade, cutting prices in half and depriving governments of billions in budgeted revenues, EU sources say. "There's a real concern of negative impacts on prices if the issue is not properly addressed," one EU source said on condition of anonymity. "Some of the studies imply that carbon prices will collapse."
• German FDP Expert Calls for Greek Eurozone Exit - Report. A leading finance expert of the junior coalition partner in Germany's parliament called on Tuesday for debt-laden Greece to exit the euro zone. "As long as Greece hasn't privatised a single cent worth of assets, increasing the aid would be absolutely the wrong signal," Free Democrat parliamentarian Frank Schaeffler told business daily Handelsblatt. "At the same time governments must help with an orderly euro zone exit," added Schaeffler, one of the loudest dissenting voices against Greek aid in the FDP. Athens should restructure its debt and private creditors should participate in the restructuring, he said.
• Ally Financial Bests on Risky Subprime Car Loans. Ally Financial Inc, the United States' largest maker of car loans, hopes that people have forgotten the time when "subprime" became a synonym for "disaster." Ally, once known as GMAC Financial Services, is getting ready to go public this year, and is making the case that subprime loans for used car buyers are not about to produce the same results that they did in the housing market a few years ago -- a near-collapse of the financial system.

Helsingin Sanomat:

• Greece's access to funding on the international markets next year "looks difficult," Finance Minister George Papaconstantinou said. He declined to comment on a new bailout package for Greece, saying no decisions have been made and it's too early to comment on the matter. "Any new aid will be decided on at a later stage," Papaconstantinou said. "A lot depends on whether we can tap international markets for funding already next year. At the moment that looks difficult."

Die Zeit:

• Northern European Union countries led by Germany still want private creditors to Greece to contribute to bailouts of the over-indebted country. The countries are especially pushing for a lengthening of maturities of outstanding Greek government bonds.

O Globo:

• Brazil Finance Minister Guido Mantega conditioned his support for Christine Lagarde's candidacy to head the IMF on Brazil being granted a "strategic position" on the IMF's board.