Today's Headlines

Bloomberg:

• ECB Mulls Tighter Greece Rules After 100 Days of Tspiras. (video) European Central Bank officials will debate tighter rules for the liquidity that Greek lenders rely on for survival, two people familiar with the matter said, a move that underscores the fragility of the country’s financial system. The Governing Council will discuss Wednesday whether to raise discounts on the collateral Greek banks pledge in exchange for emergency funding, said the people, who are familiar with the agenda and asked not to be identified. Governors will also review how much more Emergency Liquidity Assistance to offer Greek banks.
• ECB Said to Raise Cap on Emergency Liquidity for Greek Banks. The European Central Bank increased the cap on emergency cash available to Greek lenders as the nation continues to struggle with a financial crisis, people familiar with the decision said. Policy makers meeting in Frankfurt on Wednesday raised the limit on Emergency Liquidity Assistance by 2 billion euros ($2.3 billion) to 78.9 billion euros, the people said, asking not to be identified as the meeting is private. ELA is offered by the Greek central bank against lower quality collateral than the ECB typically accepts. 
• German-Bond Investors Just Lost 25 Years of Yield in 14 Days. Exit bull, pursued by bear.  Over the past couple of weeks, investors in German government bonds have received a crash course in "duration," a geeky concept that is nevertheless a driving force in fixed income.
• Ukrainian Army Suffers Deadliest Day in 3 Weeks in Blow to Truce. Ukraine’s military suffered its deadliest day since mid-April, heaping further pressure on a shaky truce with pro-Russian militants in its easternmost regions. Five servicemen were killed in the past 24 hours, four by a land mine and one in an ambush, Defense Ministry spokesman Andriy Lysenko said Wednesday. Twelve were injured, while the separatists target the town of Shyrokyne, near the Mariupol port, he said. The rebels accused Ukraine of breaking the cease-fire 55 times in the past day, including with artillery.
• IMF Warns on EU Insurers’ Business Models as JPMorgan(JPM) Cuts. European life insurers’ business models are becoming unsustainable after interest rates slumped across the continent, International Monetary Fund analysts said. Low yields on government bonds mean euro-area firms are incurring more financial stress than in recent tests by regulatory authorities, when almost a quarter were unable to meet requirements, analysts including Reinout De Bock and Andrea Maechler said in a report dated Tuesday.
• Credit Markets Frothier Than in 2007: Byrne. (video)
• Shanghai Composite Going Back to 6,000, Matthews Says. (video)
• Indian Stocks Slump to Five-Month Low as Foreigners Extend Sales. Indian stocks tumbled, with the benchmark index falling to its lowest level this year, after block deals in index futures and foreign funds extended the longest selloff in local shares this year. Bharat Heavy Electricals Ltd., the top power-equipment maker, was the biggest loser on the S&P BSE Sensex, while NTPC Ltd., the largest utility, fell the most in eight weeks. ICICI Bank Ltd. slid to a three-month low, sending a gauge of lenders its sharpest loss since April 27. The yield on sovereign bonds due 2024 climbed to a four-month high and the rupee weakened. The Sensex plunged 2.6 percent to 26,717.37, the lowest close since Dec. 17. The gauge briefly extended losses to more than 10 percent from its Jan. 29 record, meeting the definition of correction, as more investors seek more evidence that the government’s efforts to bolster growth will lead to a revival in company profits. Foreigners sold $475 million of shares on Thursday and Monday, and have been sellers of CNX Nifty futures since April 23.
• European Stocks Decline for a Second Day After Yellen’s Comments. European stocks slid for a second day, extending declines as the euro strengthened and Federal Reserve Chair Janet Yellen said equity market valuations are high. The Stoxx Europe 600 Index slid 0.6 percent to 388.68 at the close of trading, having swung between losses of 1 percent and gains of 0.3 percent.
• Yellen Says Equity-Market Valuations Are ‘Quite High’. Federal Reserve Chair Janet Yellen said equity-market valuations are “quite high” and could be a potential source of financial instability. “I would highlight that equity-market valuations at this point generally are quite high,” Yellen said in Washington on Wednesday in a response to a question at a forum on finance. “Now, they’re not so high when you compare the returns on equities to the returns on safe assets like bonds, which are also very low, but there are potential dangers there.”
• Tesla's(TSLA) New Battery Doesn't Work That Well With Solar. Tesla Chief Executive Elon Musk introduced a new family of batteries designed to stretch the solar-power revolution into its next phase. There's just one problem: Tesla's new battery doesn't work well with rooftop solar—at least not yet. Even Solar City, the supplier led by Musk, isn't ready to offer Tesla's battery for daily use.

Wall Street Journal: 

• Baltimore Mayor Seeks Federal Investigation of Police Department.

MarketWatch.com:

• Oil in the $30s? It may happen as a ‘short squeeze’ ends.

Fox News:

• Purported ISIS warning claims terror cells in place in 15 states. (video) A grim online warning from a self-described American jihadist said Sunday's terror attack in Texas was the work of ISIS and that the terrorist group has scores of "trained soldiers" positioned in 15 states, awaiting orders to carry out more operations.

ZeroHedge: 

• The Problem Isn't Over-Production; It's Mal-Investment!
• Between A "Selling Panic" And Black Crows, Where Do German Bunds Go Next. (graph)
• Greek Deal On Monday "Not Possible" MNI Reports Despite Troika Attempt To Reconcile Differences.
• As The 10 Year Selloff Accelerates, "All Eyes On The 2.27%/2.32% Support Zone". (graph)
• Yellen Kills The Music, Says "Equity Valuations Are Quite High", Sends Dow Red For 2015. (graph)
• Crude Pumps (And Dumps) After DOE Show Biggest Inventory Draw In 8 Months. (graph)
• Euro, Bunds, & DAX Have Given Up All Q€ 'Gains'. (graph)
• Greece Floats Surcharge On Withdrawals As ECB Considers Cuts To Liquidity Lifeline.
• US Productivity Suffers First Consecutive Quarterly Plunge Since 1993. (graph)
• ADP Employment Tumbles To 15 Month Lows As Manufacturing Jobs Plunge. (graph)

Business Insider: 

• NFL finds Patriots deflated balls and Tom Brady was 'at least generally aware'.
• Something's brewing in Central Asia and the West 'needs to take this seriously'.
• Chicago will pay millions to people tortured by the city's police in the 1970s and 1980s.
• State Department official blasts Hillary Clinton's private email system as 'not acceptable'.
• Hedge funds are in love with crude oil. (graph)