Today's Headlines

Bloomberg:

• Merkel CDU Says Euro Future Hinges on Low Debt. Staying the course on debt reduction and measures to boost competitiveness are the prescriptions for ending the euro region crisis, German Chancellor Angela Merkel’s party says in a draft paper for her re-election campaign. The 10-page platform for the Christian Democratic Union suggests that Merkel, who is running for a third four-year term in Sept. 22 elections, will stick to positions staked out during the debt crisis that have made her popular in Germany and resented in southern Europe. “The answer to the sovereign-debt crisis must be greater competitiveness in Europe” and lower budget deficits, the CDU document obtained by Bloomberg News says. “This is the only path that leads to growth and new jobs and strengthens Europe.” Pooling euro-area debt, including with so-called euro bonds, is rejected because it “would weaken Europe.”
• ESM Bank Aid Delayed by German Push to Slow Banking Union. Germany has secured French support to delay rules on direct bank aid from the euro area’s firewall fund, calling into question when the tool will be available, according to two European officials. Euro-area finance ministers had aimed to reach political agreement this month on when and how the European Stability Mechanism could help banks so that the new program is ready next year when common supervision starts within the currency bloc. 
• EU Seeks Role in Bank Shutdowns That Goes Against German Plan. The European Commission is seeking to give itself the power to shut down failing euro-area banks as part of a draft crisis blueprint that defies German calls for a more decentralized approach. The Brussels-based authority is set to propose that decisions to force losses on crisis-hit lenders’ creditors, as well as other steps to prevent a disorderly collapse, should be taken largely out of national hands, according to a document obtained by Bloomberg News. While the system would include a “newly-created central resolution body,” final decisions would be taken by the commission itself. 
• European Stocks Climb as Fed’s Lockhart Backs Stimulus. European stocks rose, rebounding from a one-month low, as Federal Reserve Bank of Atlanta President Dennis Lockhart said the central bank is committed to its stimulus program.
• Gross Says Reduce Risk Assets Since QE Not Boosting Growth. Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund (PTTRX), said the Federal Reserve’s zero-bound interest rate policy and quantitative easing programs are becoming more of a problem for an economy that needs structural reforms. The Fed’s polices are “desperately attempting to cure an economy that requires structural as opposed to monetary solutions,” Gross wrote in his monthly investment outlook posted on Newport Beach, California-based Pimco’s website today. “Central banks -- including today’s superquant Kuroda, leading the Bank of Japan -- seem to believe that higher and higher asset prices produced necessarily by more and more QE check writing will inevitably stimulate real economic growth via the spillover wealth effect.”    
• IRS Paid Speaker $17,000 to Paint Michael Jordan at Event. The Internal Revenue Service spent $17,000 to hire a speaker who painted pictures of Michael Jordan and U2 singer Bono to motivate employees at a 2010 conference in California, the agency’s inspector general said. The tax agency spent about $49 million on 225 conferences from fiscal 2010 to 2012, including $4 million on the Anaheim, California meeting, said the inspector general report released today. In Anaheim, some IRS employees stayed in rooms typically costing as much as $3,500 a night, and the agency paid $135,350 to speakers, including $17,000 for a lecture by Erik Wahl on “The Art of Vision,” the report said.
• Shipping Faces $500 Billion Environment Costs as Rates Slump. Shipping faces $500 billion in extra costs to meet environmental legislation at a time when a rout in rates has become so severe that some owners are struggling to maintain vessel safety. The industry will need $50 billion a year between 2015 and 2025 to meet sulfur-emission rules and other regulations, Masamichi Morooka, chairman of the International Chamber of Shipping, representing most of the world’s ship operators, said at a conference in Oslo today. Some shipping companies already aren’t earning enough to maintain their fleets, said Andreas Sohmen-Pao, chief executive officer of BW Group Ltd., a Singapore-based owner.

MarketWatch:

• Goldman’s(GS) chief economist Hatzius: Fed may taper in September. If Goldman Sachs’s latest guess is on the money, the Fed could start tapering its $85 billion monthly bond-buying program as soon as September. 
• Corporate executives have a lot to say about the Japanese yen.

CNBC: 

• Pimco's El-Erian: Walk, Don't Run From Equities Risk. (video) Economic growth is not coming fast enough to the justify the artificially high asset prices created by the Fed's massive bond-buying program, Pimco's Mohamed El-Erian told CNBC on Tuesday.

Zero Hedge: 

• From Equity "Love" To Market Hate? (graph)
• US April Trade Deficit Rises But Less Than Expected. (graph)
• Why Suppressing Feedback Leads To Financial Crashes.
• Here Come The Trade Wars: Europe Imposes Duties On China Solar-Panels.
• The Lumber Chronicles: Margin Up, Limit Down. (graph)
• It's Not Growth 'Hopes' That Has Backed Up Rates. (graph)

Business Insider: 

• The Stunning Image Of 'The Lady In Red' Will Endure Even After The Turkey Protests End.
• American Imports From OPEC Plunge To A 25-Year Low [CHART].
• A Stock Market Warning Flag Has Been Raised. (graph)
• The Stunning Downfall Of MSNBC In Five Charts.

Telegraph: 

• France risks being left behind by periphery if it does not reform. France must implement sweeping labour reforms or risk being left behind by bailed-out countries such as Greece and Portugal that are quickly regaining competitiveness, the International Monetary Fund has warned. 
• 1.1m older people in UK drowning in debt as credit card generation reaches retirement. More than a million older people are struggling to pay off debts as a generation used to relying on credit cards and mortgages reaches retirement, a study shows.  

Xinhua:

• China's economic situation is "very complicated" and the country is facing increasing risks and challenges, citing Vice Premier Zhang Gaoli.

China National Radio:

• Land Sales in 10 Chinese Cities Surge 390% Y/Y in May. Land Sales in 10 Chinese cities including China totaled about 67b yuan in May, a record high since 2008, citing data from E-house China R&D Institute. Beijing Jan.-May land sales are more than 60b yuan, almost equal to the total of 2012.