Today's Headlines

Bloomberg:

- General Electric Co.(GE) objects to elements of U.S. President Barack Obama’s financial-system overhaul that analysts said may force the parent company to cleave away its GE Capital finance unit.

- California’s credit rating, already the lowest among U.S. states, may be cut several levels by Moody’s Investors Service as government leaders seek ways to eliminate a $24 billion budget deficit. The move would affect $72 billion of debt, Moody’s said in a statement today. California’s full faith and credit pledge is rated A2 by Moody’s, five steps below top investment grade.

- Supreme Leader Ayatollah Ali Khamenei said the re-election of President Mahmoud Ahmadinejad was valid and warned of a crackdown on Iran’s “political elites” should protests continue. “Street demonstrations should end,” Khamenei said in a sermon at Friday prayers in Tehran. “If they don’t, leading politicians will be held accountable for the chaos.” He said terrorist acts have been committed against police and militia. “For someone who wants to commit a terrorist act, what is better than to hide amidst a crowd of protesters and marchers?”

- U.S. defense officials will urge Chinese leaders next week to step up action in support of international penalties against North Korea and to reveal more of their military plans and intentions.

- Crude oil fell more than $1 a barrel and gasoline tumbled the most in two months on speculation that supplies of the motor fuel will climb as refineries bolster output and imports gain. Gasoline inventories rose 3.39 million barrels to 205 million last week, the biggest increase since January, the Energy Department said on June 17. Total daily demand for fuels is 6 percent lower than a year ago.

Wall Street Journal:

- Chinese regulators have ordered Google Inc.(GOOG) to suspend search services for foreign Web sites via its Chinese Web site, the official Xinhua News Agency reported Friday, a day after the company was warned over the pornographic content available through its search engine.

CNBC:

- Signs that unemployment pains may be easing in individual US states in April disappeared by May, when jobless rates jumped in 48 states and the District of Columbia, according to data released on Friday.

- The high cost of securing health insurance for all Americans, the top domestic priority of President Obama, has Congressional Democrats scrambling to scale back their proposals or find ways to trim tens of billions of dollars a year from existing health programs.

Fox News:

- The U.S. military is planning to intercept a flagged North Korean ship suspected of proliferating weapons material in violation of a U.N. Security Council resolution passed last Friday, FOX News has learned. The USS John McCain, a navy destroyer, will intercept the ship Kang Nam as soon as it leaves the vicinity off the coast of China, according to a senior U.S. defense official. The order to interdict has not been given yet, but the ship is getting into position.

CNN:

- Just recently, President Obama took to interfering in the Middle East by scolding Israel for its treatment of Palestinians and its settlements in the West Bank. Yet now, in a real disappointment to anyone who values freedom, Obama has declared his reluctance to "meddle" in the aftermath of the disputed Iranian presidential election even as hundreds of thousands of protesters put themselves at risk on the streets of Tehran. Sometimes, the only correct course of action is to meddle. Here you have the brutal repression of political dissent, the suppression of free speech and the beating and gunning down of dissidents. College students are reportedly being beaten in their dormitories by government thugs and threatened with worse if they don't stop protesting. In the street, armed police officers whale on old ladies and teenagers with clubs, as demonstrators carry unconscious comrades bleeding from head wounds. And -- in what served as my wake-up call -- the government shut down foreign media coverage by revoking the press credentials of foreign correspondents and restricting them to their hotels. That was an ominous sign of what may be coming. With the curtain drawn, Iranian President Mahmoud Ahmadinejad must think he can crush his opponents once and for all and the world will be none the wiser.

Rassmussen:

- Most adults in Michigan (69%) say the government should sell its shares in General Motors and Chrysler as soon as possible. A new Rasmussen Reports telephone survey in the state finds that only 13% think the government should hold on to the companies, both based in Michigan, for a long time.

Politico:

- While businesses across the country are cutting back, members of the House saw their own office budgets increase by an average of 7 percent between 2008 and 2009. House officials say the increase is because of — not in spite of — the nation’s economic woes. “The demands on member offices have increased dramatically during our nation’s current financial crisis, and staff have been called on to work harder and smarter to ensure that we are meeting those growing needs,” Rep. Robert Brady (D-Pa.), chairman of the Committee on House Administration, said in a statement provided to POLITICO. An office’s budget — called the Member’s Representational Allowance — is meant to cover the day-to-day costs of running a congressional office: staff payroll, travel expenses, rent for district offices and the like. The average MRA for 2009 is nearly $1.5 million, up almost $100,000 over 2008. While House members have given up the automatic pay raise they would have gotten for 2010, they haven’t turned down the 7 percent hike in their 2009 MRAs — an increase that outstrips the inflation rate, the consumer price index and the 5.8 percent cost-of-living adjustment for recipients of Social Security.

- President Obama's campaign for health care reform by this fall, once considered highly likely to succeed, suddenly appears in real jeopardy. Top White House advisers, especially chief of staff Rahm Emanuel, are still privately predicting massive changes to the health care system in 2009. But for the first time, Democrats on Capitol Hill and in the administration are expressing frank worries about stronger-than-expected opposition from moderate Democrats and worse-than-expected estimates for how much the plan could cost.

Reuters:
- China Unicom, one of China's top three mobile carriers, may be close to a deal that would see it become the exclusive seller of Apple's (AAPL) iPhones in China for two years, a Merrill Lynch analyst said. "Our industry checks reveal that Unicom and Apple have most likely reached a deal for an exclusive 2-plus year agreement," analyst Cynthia Meng wrote in a research note dated June 18. "We expect iPhone products to be available in conjunction with the Unicom commercial scale 3G launch in Q4, starting on Oct 1."

- The overhaul announced Wednesday includes a provision to "establish a fiduciary duty for broker-dealers offering investment advice," to help empower the U.S. Securities and Exchange Commission to increase fairness for investors. Brokers must now simply put clients in suitable investments, not necessarily ones that are less costly or more tax-friendly. Brokers could not ordinarily plow a retiree's investable assets into risky stocks or illiquid investments, for example. The newspaper said a new fiduciary standard would require brokers to disclose potential conflicts of interest, and could also expose them to more lawsuits.

- Federal Reserve Bank of Kansas City President Thomas Hoenig said on Friday that the U.S. central bank was thinking seriously about its exit strategy, but inflation was not yet an imminent danger. "I think the inflation outlook is one that is for the longer term. But I think ... the role of the central bank is to think longer term. And therefore we have to be mindful of that, and that is what this focus on an exit strategy is all about," he told CNBC Television in an interview.

- Texas billionaire Allen Stanford and four associates were indicted on fraud, conspiracy and obstruction charges in a $7 billion pyramid scheme to bilk investors, U.S. Justice Department officials announced on Friday.

Financial Times:
- Banks and insurers may no longer be able to book gains on falls in the value of their own debt under proposals being considered that could remove one of the most controversial elements of mark-to-market accounting. The International Accounting Standards Board (IASB) on Thursday called for comments on the issue, which centers around whether companies can take into account the market’s view of their creditworthiness when reporting liabilities. This means that, when the price of a bank’s debt falls, the bank can write down the value of its liability and report the difference in price as a gain. In theory this reflects the fact that the bank could then buy the bonds back at the lower price, but critics claim the practice flatters earnings because the weaker price probably reflects a bank in trouble, and risks under-reporting the true extent of someone’s liabilities. The plunge in bank debt prices in the past two years means many banks have reported large gains from reporting market prices, although the recent rally will take the gloss off those gains and will mean potentially booking losses.