Today's Headlines

Bloomberg:

• Italy Borrowing Costs Rise on Concern Over Debt Crisis. Italy was forced to pay about 1.1 percentage point more than a month ago to sell three-year debt as concern about Spain’s budget deficit reignites the euro area’s debt crisis. The Treasury sold 2.88 billion euros ($3.78 billion) of a 3-year benchmark bond to yield 3.89 percent, which was less than a maximum target of 3 billion euros and up from 2.76 percent at the previous auction on March 14. Investors bid for 1.43 times the amount offered, down from 1.56 times last month. The Rome- based Treasury also sold 2 billion euros of bonds due in 2015, 2020 and 2023. The auction’s top target was 5 billion euros. “Spain and Italy are the twin bellwethers of the euro-zone crisis,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said by e-mail after the auction. “When one of them catches a cold, the other one sneezes. It’s the similarities between Spain and Italy that concern investors”.
• Monti Tackles Italy Corruption as Scandals Taint Parties. Prime Minister Mario Monti is shifting his focus from overhauling Italy’s economy to tackling corruption, a problem highlighted by the recent resignation of one of the country’s best-known political leaders amid a party- financing scandal. Monti’s government is readying a package of anti-corruption measures, including broadening the criminal definition of corruption to include cases in the private sector and tightening procedures to prevent failed prosecutions due to the statute of limitations, said a person with knowledge of the proposals, who declined to be identified because an official announcement hasn’t been made yet.
• IMF's Lagarde Says Europe Still Main Economic Risk. International Monetary Fund Managing Director Christine Lagarde said the main risk to global growth is a return of Europe’s debt crisis. A recent move by European governments to increase their crisis defenses is only part of the solution, Lagarde said, adding she is hopeful to see progress on her pledge to increase IMF resources when member countries meet in Washington next week. “Risks may not be as large as estimated earlier this year,” Lagarde said in a speech in Washington today. “But let us make no mistake, the risks and the needs are still sizable and it would be very imprudent to ignore that fact.”
• Sovereign, Corporate Bond Risk Falls, Credit-Default Swaps Show. The cost of insuring against default on European sovereign and corporate debt fell, according to traders of credit-default swaps. The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments fell 2.5 basis points to 271.5 at 8 a.m. in London. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings dropped 14 basis points to 660, according to JPMorgan Chase & Co. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings fell 2.75 basis points to 140.25 basis points. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers fell seven basis points to 240 and the subordinated index declined 10 to 388.
• Jobless Claims in U.S. Rose Last Week to Two-Month High: Economy. More Americans than forecast filed applications for jobless benefits last week, reinforcing concern among Federal Reserve policy makers that the labor-market recovery will be slow to develop. Unemployment claims increased 13,000 in the week ended April 7 to 380,000, the highest since Jan. 28, the Labor Department reported today in Washington. The median forecast in a Bloomberg News survey called for 355,000 claims.
• U.S. Core Producer Price Index Rises More Than Estimates. Wholesale prices in the U.S. excluding food and fuel rose more than forecast in March, led by a pickup in the costs of light trucks and soaps. The so-called core producer price index climbed 0.3 percent after a 0.2 percent rise, Labor Department figures showed today in Washington. Economists projected a 0.2 percent gain, according to the median estimate in a Bloomberg News survey. The overall gauge was little changed after a 0.4 percent rise.
• India's Industrial Output Rises Less Than Estimated. Indian industrial production rose less than predicted in February as weaker overseas demand and the highest interest rates since 2008 curbed output, with January’s figure revised lower because of a data error. Production (INPIINDY) at factories, utilities and mines advanced 4.1 percent from a year earlier, the Central Statistical Office said in a statement in New Delhi today. The median of 36 estimates in a Bloomberg News survey was for a 6.7 percent gain. January’s reading was cut to 1.1 percent from 6.8 percent after an error was found in sugar output calculations, the office said.
• Oaktree(OAK) Falls in Trading Debut After Raising Less Than Sought. Oaktree Capital Group LLC, the world's largest distressed-debt investor, fell on its first day of trading after raising less than sought in an initial public offering. Oaktree, which began trading today on the New York Stock Exchange under the ticker symbol OAK, declined 5.1 percent to $40.80 at 9:43 a.m. after losing as much as 5.5 percent. The Los Angeles-based firm, co-founded by Howard Marks and Bruce Karsh, raised $380.2 million in its IPO yesterday, about 27 percent less than originally sought.
• Maiden Lane Redux Joins With Europe to Roil CMBS. A $7.49 billion mass of real-estate debt assumed by the Federal Reserve Bank of New York in 2008 is weighing on the commercial-mortgage bond market, exacerbating a slide in values as Europe’s debt crisis flares and doubts mount about the strength of the U.S. economy. Relative yields on securities tied to shopping malls, skyscrapers and hotels have climbed to 206 basis points as of April 10, a six-week high, from a more than four-year low reached March 27, according to a Barclays Plc index. The 29 basis-point widening compares with a 17 basis-point rise in a Bank of America Merrill Lynch corporate bond index.
• Inside the Homes of Obama's High-End Donors. (video) Bloomberg's Hans Nichols gives an inside look at some of the homes where President Obama held fundraisers. He speaks on Bloomberg Television's "Inside Track."
• Oil Rises on Fuel Supply.
  

CNBC.com:

• Chinese Banks 'Great Shorts,' Won't Be Broken Up: Chanos. Chanos, the head of Kynikos Associates, has been betting against China — despite its role as a global economic leader — primarily because he believes the country is overbuilt and does not have the internal demand to support its ambitious growth plans. Nowhere has that trend been more apparent than in the banking system.
• The Global Financial Stress Index is Rising.
• Cut Public Debt Levels to 50% of GDP: OECD. Levels of government debt have soared in most countries since 2008 as a result of the financial crisis and will need to be brought down to “prudent” levels of around 50 percent of gross domestic product to cope with future challenges including health and long-term care and pensions, the OECD said in a report published on Thursday.

Business Insider:

• Catholic Bishops Vow To Resist 'Totalitarian Incursions' Of The Obama Administration.
• The Latest Employment Stats From Greece Are Terrifying.
• Seriously, These Chinese Malls Don't Have Any People In Them.
  

Zero Hedge:

• Uncrossing The Rubicon Toward A Euro Federal State: Germans Challenge ESM, Fiscal Pact In Constitutional Court.
• El-Erian Breaches The Final Frontier: What Happens If Central Banks Fail?
• Goldman(GS) on the Greek Elections.
  

New York Times:

• A Fund-Raiser for Obama, With a Host From The Private Equity World. Not everyone in the private equity industry is sour on Mr. Obama. Hamilton E. James Jr., the president of Blackstone(BX) and one of the few prominent Democratic supporters from the private equity world, will host a fund-raiser for Mr. Obama in mid-May, two people with knowledge of the plans said on Thursday.

Reuters:

• Exclusive - SEC, Goldman(GS) to Settle Research Case for $22 Million - Sources. U.S. securities regulators are preparing to announce that Goldman Sachs will pay $22 million to settle allegations the bank did not have adequate policies to prevent research from being passed inappropriately to preferred clients, people familiar with the matter said on Wednesday.

Financial Times:

• Spanish Shares Are Standout Fallers. Spain’s Ibex index fell 0.8 per cent and has now fallen 14 per cent this year, while most global indices have rallied strongly. Banks led the Spanish decline after Banesto, the Spanish domestic bank, set aside €475m for provisions against bad property loans, and Banco Espírito Santo, Portugal’s largest bank by market capitalisation, launched a €1bn deeply discounted rights issue as part of efforts to rebuild its balance sheet.

Telegraph:

• Gold 'to hit $2,000' on Spain Fears. A looming flare-up in the eurozone crisis over Spain will drive the price of gold towards $2,000 (£1,255) an ounce this year, a leading consultancy predicts.

Macleans.CA:

• Household Debt and the Bank of Canada's Anxiety Levels. (graph) In the graph below, we’ve charted debt-to-income ratios, alongside some increasingly alarmed quotes from BOC governor Mark Carney or other Bank officials.