Today's Headlines

Bloomberg:   

• Malaysia Says Accord Reached to Hand Over Bodies of MH17. Malaysian Prime Minister Najib Razak said rebels in eastern Ukraine agreed to hand over bodies of crash victims and grant access to the site where a passenger jetliner was brought down last week near the Russian border. The agreement to transfer the remains of 282 people to the Netherlands was reached with Alexander Borodai, prime minister of the self-proclaimed Donetsk People’s Republic, Najib said today at his official residence in the administrative capital of Putrajaya. The two black boxes will be handed over to a Malaysian team in Donetsk tonight, he said.
• Four Die in Gaza Hospital Shelling as Death Toll Tops 500. Israeli tank shells slammed into a Gaza Strip hospital, killing a patient and three relatives and wounding 50 other people, Gaza health officials said, as U.S. Secretary of State John Kerry headed to the Middle East on a mission to halt two weeks of violence. The Israeli military, which has been fighting to quell rocket fire from Hamas-controlled Gaza and destroy tunnels dug for cross-border raids, said it was looking into the report.
• Junk Sales Soaring 92% as Fed Pledge Spurs Deluge: Mexico Credit. Mexico’s riskiest companies have almost doubled their bond sales abroad this year as surging demand for junk debt sends borrowing costs to a record low. “With rates staying this low, reaching down for yield is the new sport,” Claudio Robertson, the head of fixed-income trading at Investment Placement Group, said by e-mail. “Comparable bonds are very hard to get.”
• Godot Seen Showing Up Sooner Than Stronger Global Growth. IMF could well stand for “It’s Moderating Forecasts” -- so often has the International Monetary Fund downgraded the outlook for world economic growth. The Washington-based lender is poised this week to cut its estimate for global expansion in 2014 from 3.6 percent in April. That was a reduction from the 3.7 percent it anticipated in January and the 4.1 percent in January 2013.
• McDonald’s(MCD), Yum(YUM) Cease Using Chinese Meat Supplier During Probe. McDonald’s Corp. (MCD) and Yum! Brands Inc. (YUM) halted buying meat products from a Shanghai supplier while authorities investigate allegations that the company sold chicken and beef past their expiration date. 
• Alan Krueger Says Europe at Risk of Bank Runs. (video)
• Russia Stocks, Bonds Slide as Putin Faces More Sanctions. Russian stocks fell the most since the nation’s incursion in Crimea, bonds slid and default risk climbed as global indignation over the downing of a Malaysian Air jet spurred speculation new sanctions will be imposed. The Micex Index (INDEXCF) dropped 2.7 percent to 1,384.50 by the close in Moscow, the most since March 3. About $47 billion was erased from the gauge’s market value last week, the most in four months, according to data compiled by Bloomberg. OAO Gazprom, the bourse’s biggest weighted company, dropped 2.3 percent. The yield on ruble debt due 2027 rose 19 basis points to 9.23 percent, a more than two-month high. The cost of insuring against losses on Russia’s sovereign debt rose to the highest level since May.
• European Stocks Drop as Russia Faces Tougher Sanctions. European stocks fell, after posting a weekly gain, as the U.S. and Europe threatened tougher sanctions on Russia over its suspected role in the shooting down of flight MH17 in Ukrainian airspace. Commerzbank AG dropped 1.9 percent after a report that Germany’s financial-markets regulator found high operational risks at the country’s second-biggest lender. Deutsche Post AG lost 1.6 percent after JPMorgan Chase & Co. lowered its earnings and stock-price estimate for Europe’s largest postal company. Julius Baer Group Ltd. jumped the most since at least October 2009 after saying first-half profit rose 56 percent. The Stoxx Europe 600 Index fell 0.5 percent to 337.95 at the close in London.
• Fed’s Junk Loan Bubble-Busting Faces Trouble as Sales Jump. One of the Federal Reserve’s first post-crisis tests of its ability to quash excessive risk-taking using regulatory tools is so far looking like a failure. The Fed’s Board of Governors told Congress last week that it’s engaged in “strong supervisory follow-up” to guidance given to banks in 2013 to improve their underwriting standards for high-yield loans. Despite those efforts, Chair Janet Yellen said she’s still seeing a “marked deterioration” in quality. For the first time, more than half of the junk-rated loans arranged in the U.S. this year lack typical lender protections like limits on the amount of debt borrowers can amass relative to earnings. Yellen’s own easy-money policies are boosting demand for such high-yielding products at the same time that she tests her doctrine that financial bubbles should be constrained by supervisory actions, not a general rise in interest rates.
• Ex-Jefferies Bond Trader Anticipates Junk Swoon. Fiera Quantum, one of the winners of the meltdown in Canada’s asset-backed commercial paper market, is looking for its next trade idea in junk bonds. The Toronto-based hedge fund manager owned by Fiera Capital Corp. (FSZ) started the FQ Income Opportunities Fund in May to take short positions, or bearish bets, balancing bullish investments in U.S. and Canadian high-yield bonds. Fiera Capital oversees C$82 billion ($76 billion) of assets. “If there’s ever a time to get more cautious, it’s now,” said Angus Rogers, who left his job as head of high-yield trading at Jefferies Group LLC in New York in March and moved to Toronto to start the fund with Greg Foss, who started betting on restructured commercial paper four years ago. “Most of the credit rally has happened. Over the next two years, defaults are definitely going higher.” 
• Carmelo Anthony Forms Fund to Invest in Technology Startups. New York Knicks All-Star Carmelo Anthony formed a fund to invest in technology startups.

Wall Street Journal:

• Israel Says Seven More Officers, Troops Killed in Gaza Ground Operation. Palestinian Death Toll in Two-Week-Old Offensive Reaches 550, Health Ministry Says.
• Why Putin Is Willing to Take Big Risks in Ukraine. A Look at Differing Fates of Poland, Ukraine Gives Clues.
• Rick Perry to Deploy National Guard at U.S.-Mexico Border. Governor Poised to Activate 1,000 Troops in South Texas.

MarketWatch.com:

• Yellen encourages ‘fully-fledged equity bubble,’ says Jeremy Grantham. Jeremy Grantham blasts Janet Yellen and her predecessors at the Federal Reserve in his latest quarterly letter. The Fed chairwoman is “sticking faithfully” to the “clearly wrong” policies of Alan Greenspan and Ben Bernanke, writes Grantham, who is the founder of Boston-based money manager GMO and has a reputation for sniffing out market bubbles early. He says: 
• A junk-bond warning: Investors exit as yields rise. Investors pull most money from high-yield bond funds since last summer. 
• China’s meaningless GDP figures. Opinion: Bloated Chinese economy needs austerity diet.

CNBC: 

• Obama 'timid' in response to plane crash, GOP says. (video) Republicans this weekend roasted President Barack Obama over what they called his "timid" and ineffectual reaction to the Malaysia Airlines flight that was shot down over eastern Ukraine last week, killing all 298 aboard.
• Pershing Square's Ackman: Why I think Herbalife(HLF) is going to collapse.
• China: Don’t rush to blame Russia for MH17. (video) While the West ramps up pressure on Russia and its President Vladimir Putin over the downing of a Malaysia Airlines jetliner over eastern Ukraine, Moscow is finding some support from the East.
• New college grads hit by slow wage growth: Fed study.

ZeroHedge: 

• Russian Sanctions Leading To Economic Contraction... In Germany?
• China Sends Surveillance Ship To Hawaii In Retaliation To US Navy Build Up In Its Back Yard.
• As Bearish Russell 2000 Bets Hit 3 Year High, Here Is How Hedge Funds Are Doing In 2014. (graph)
• They Call Them Junk Bonds For A Reason...(graph)
• Putin Makes First Official Statement; Russia To Cut IBM, Microsoft Dependence: Complete Ukraine Situation Summary.

ValueWalk: 

• What Family Offices Are After When Investing With Hedge Funds.

Business Insider: 

• 15 Astounding Technologies DARPA Is Creating Right Now.
• Everything We Know About The Huge Spy Base In Cuba That Russia Is Reopening.

Telegraph:

• Global industry stalls as Europe's slowdown threatens recovery. Europe's recovery "runs out of steam" as broker Macquarie warns that China alone can't support global industrial output. 
• Have central banks been breaking the law? Quantitative easing has had a reverse Robin Hood-type effect by robbing from the poor and giving to the rich.