Today's Headlines

Bloomberg:

• Merkel Backs Draghi's Call for Growth to Combat Debt Crisis. Chancellor Angela Merkel backed European Central Bank President Mario Draghi’s call to focus on spurring economic growth, as German officials rejected charges they are fixated on budget austerity to fight the debt crisis. Europe needs growth “in the way that Mario Draghi, the president of the European Central Bank, said it today, that is in the form of structural reforms,” the chancellor told a conference of her Christian Democratic bloc in Berlin today. Hollande called the remarks helpful and said France won’t ratify the fiscal pact in its current form if he is elected. “The main risk at this time is that the European economy remains in a recession because not enough credit is provided to companies,” the Socialist candidate told a news conference in Paris today.
• Hollande Vows Not to Ratify Euro Pact, Auguring Merkel Clash. French Socialist Francois Hollande, the leading presidential candidate, said France won’t ratify the European agreement pushed by Germany to tighten budget rules if he’s elected. “There will be a re-negotiation,” Hollande told journalists today in Paris. “Either there will be a new treaty, or there will be a modification of the existing treaty. It’s about negotiation.” The comments put Hollande on a collision course with German Chancellor Angela Merkel, who has championed debt reduction as the key to ending the region’s fiscal crisis. Hollande, who has also pledged to eliminate France’s budget deficit, is aiming to use popular support at home to strengthen his hand in talks to promote an alternative. Merkel and her ruling party are standing firm on German-led remedies, including the commitment to cut debt that was signed last month by all 17 euro-area leaders, among them Hollande’s opponent, President Nicolas Sarkozy. “If Mr. Hollande were to say that he wants to increase government spending and save less, he’ll lose the confidence of the financial markets,” Peter Altmaier, the parliamentary whip of Merkel’s Christian Democrats, said in an interview in Berlin yesterday. “We will stick to our fundamental principles because there’s really no alternative.”
• Credit Suisse Chief Says April Market Conditions Less Favorable. Credit Suisse Group AG (CSGN) Chief Executive Officer Brady Dougan said market conditions worsened in April from the first quarter, when its investment bank returned to profit after a 2011 loss. “So far in April market conditions haven’t been as favorable as they were in the first quarter,” Dougan said in an interview with Bloomberg Television in Zurich today. “We’re pretty constructive about what we hope we’ll see for the rest of the year. We certainly have to be prepared for volatility in the markets.”
• EAA Confounds Schaeuble's Debt Reduction Plan, Handelsblatt Says. Erste Abwicklungsanstalt, the so- called bad bank formed to wind down assets of German state-owned lender WestLB, will confound Finance Minister Wolfgang Schaeuble’s plan to reduce the country’s debt load, Handelsblatt newspaper said, citing people it didn’t identify. EAA expects WestLB to transfer a portfolio of about 100 billion euros ($132 billion) in the next months, of which about 50 billion euros will be added to the government’s debt, the newspaper said. The amount isn’t included in a debt-reduction plan that Schaeuble sent to European authorities in Brussels and may boost Germany’s debt load to 84 percent from 82 percent of gross domestic product this year, Handelsblatt said.
• Barclays Accused Over Libor Fixing in U.K. Rate Swaps Lawsuit. Barclays Plc (BARC) was accused of undermining the integrity of the London interbank offered rate in a lawsuit filed by a care home company which claims it was sold unfair interest rate swaps linked to the measure.
• Fed Says Economy Will 'Pick Up Gradually'; Policy Unchanged. Federal Reserve policy makers said they expect growth to gradually accelerate, while refraining from new actions to lower borrowing costs. “The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually,” the Federal Open Market Committee said in a statement today at the conclusion of a two-day meeting today in Washington. “Despite some signs of improvement, the housing sector remains depressed.” Policy makers led by Chairman Ben S. Bernanke are holding off on additional steps to boost the economy amid signs the more than two-year expansion is gaining strength. Still, the jobless rate isn’t declining fast enough to satisfy central bankers, who repeated their view today that borrowing costs are likely to remain “exceptionally low” at least through late 2014. “Strains in global financial markets continue to pose significant downside risks to the economic outlook,” according to today’s statement. The Fed has cited the risk from strains in global markets in its previous five meetings. In March it said those strains had “eased.”
• China Auto Scraps IPO After Struggling to Lure Investors.
• Caterpillar(CAT) Revenue Misses Estimates as China, Brazil Sales Slow. Caterpillar Inc., the largest maker of construction and mining equipment, reported a gain in first- quarter revenue that missed analysts' estimates as sales of construction equipment fell in China and Brazil. Revenue climbed 23 percent to $16 billion, the Peoria, Illinois-based company said in a statement today. The average of 13 estimates compiled by Bloomberg was for $16.1 billion. Net income rose to $2.37 a share, beating the $2.13 average of 21 estimates. Caterpillar raised its full-year profit forecast while maintaining its projected 2012 revenue. The shares fell in pre-market trading in New York. "They still reported a big number but lower than expected on near-term softness in China and Brazil," Larry De Maria, a New York-based analyst for William Blair & Co. who recommends buying the shares, said in an interview.
  

Wall Street Journal:

• EU Parliament President: Collapse of EU "Realistic Scenario". The collapse of the European Union has become a "realistic scenario," with national governments claiming back more power, xenophobia increasing, calls to reintroduce border controls and concerns about the euro emerging, the president of the European Parliament said Wednesday.
• Gingrich to End GOP Bid, Endorse Romney. Newt Gingrich plans to end his presidential campaign and endorse Mitt Romney next week at an event in Washington, aides to the former House speaker said.
• 5 Cities Where Home Prices Hit New Lows.
  

CNBC.com:

• Lloyd Blankfein: 'We Haven't Gotten Everything Right'. In his first interview in two years, Goldman Sachs CEO Lloyd Blankfein told CNBC Wednesday, "We haven't gotten everything right in how we deal with the public." In the March 14 piece, Greg Smith, head of Goldman's U.S. equity derivatives business in Europe, the Middle East and Africa, said the firm put its own profits ahead of clients, with some executives disparaging some clients as "muppets."
• Investors Face 'Bumpy Journey' as Euro Crisis Grows: El-Erian. "Bimodal" conditions mean that those employing the simple "risk-on" or "risk-off" approaches are missing both opportunities and dangers, El-Erian said during an interview on CNBC's "Squawk Box." "We are on this bumpy journey to this unusual destination, which is three to five years" long, said El-Erian, co-chief investment officer at Pimco, which runs the largest bond fund in the world. "The length depends on policymakers, and policymakers have been postponing the deleveraging, which makes this journey even more uncertain."
• UK Slides Back Into Recession in First Double Dip Since 1970s. Britain's economy slid into its second recession since the financial crisis after official data unexpectedly showed a fall in output in the first three months of 2012, piling pressure on Prime Minister David Cameron's embattled coalition government.

Business Insider:

• Even Liberal Justice Sonia Sotomayor Shredded The Government's Arizona Immigration Arguments Today.
• The Bank Bailout Wasn't "Profitable" - It Will Cost Taxpayers $120 Billion.
• Meet The Man Revealing The Huge Scandals That The Chinese Government doesn't Want You To Know.
• Dylan Grice Warns: Australia's Credit Bubble Is Built On An Even Bigger Chinese Credit Bubble.
• The Radical Implications of America's Dirt-Cheap Natural Gas.
• Yes, You Should Be Astonished By Apple(AAPL)...
  

Zero Hedge:

• Has America Been Crippled by Intellectual Idiots?

Reuters:

• Plunge in Durable Goods Orders Clouds U.S. Outlook. Demand for long-lasting manufactured goods tumbled by the most in three years in March and businesses cut back on spending plans, suggesting the economy slowed as the first quarter drew to a close. Durable goods orders dropped 4.2 percent, the largest decline since January 2009 when the economy was nose-diving, Commerce Department data showed on Wednesday. Economists had expected a drop of just 1.7 percent.February orders were revised to show only a 1.9 percent increase instead of the previously reported 2.4 percent rise."This adds to the evidence that momentum in the economy sort of fell flat in March," said Ellen Zentner, a senior U.S. economist at Nomura Securities in New York. Although non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.8 percent in March, the prior month's figure was revised up to show a 2.8 percent gain from a 1.7 percent increase. In addition, shipments of non-defense, non-aircraft capital goods orders, which go into the calculation of gross domestic product, rose 2.6 percent after increasing 1.4 percent in February. "Unexpected weakness in core orders in March suggests less growth of equipment and software spending in the second quarter, and more first-quarter inventory investment suggests a larger decline in inventory investment in the second quarter," said Ben Herzon, an economist at Macroeconomic Advisers in St. Louis. The drop in orders for durable goods and an expected rise in inventories in the first quarter could set the economy up for a soft patch heading into the middle of the year. Orders for durable goods last month were dragged down by a 12.5 percent plunge in bookings for transportation equipment - the most since November 2010 - as aircraft orders tumbled. Boeing received only 53 orders for aircraft, according to the plane maker's website, down from 237 in February. Orders for motor vehicles barely rose last month. Excluding transportation, orders fell 1.1 percent after a 1.9 percent rise in February.

Xinhua:

• The capital sufficiency levels of China Guangdong's property developers in the 1Q are at their lowest since 2009, citing a report by the province's real estate industry association.

Shanghai Daily:

• Slower Expansion Seen Through 2015. HAVING experienced an economic slowdown for the past five quarters, China may lag the growth rate of the global commercial vehicle industry through 2015, an industry study shows. The revenue of medium and heavy-duty commercial vehicle sector, which is affected by a country's business circle, may grow 3.2 percent within three years in China against the estimated 4.3 percent for the world, according to a study by consulting firm AlixPartners. China's commercial vehicle sector posted an explosive revenue growth of 45 percent in 2010 after the government introduced a 4 trillion yuan (US$634 billion) stimulus package in 2009 .