Quick Overview

• The trade shortfall is rising again after two months of declines, pushed by oil prices and a flood of imports from China. U.S. exports were down $0.2 billion to $115.7 billion in April, while imports were up $1.4 billion to $179.1 billion.
  

• Canada's unemployment rate improved from 6.4% to 6.1% in May, the lowest in 31 years.
  Canada's exports were down 2.3% to C$37.1 billion in April, while imports were up 1.2% to C$33.1 billion.
  

• Machinery orders in Japan were up 10.8% in April, stronger than expected. Late yesterday,
  

• The USDA's 2006-2007 U.S. ending stocks estimate for:
  Corn was reduced from 1.141 to 1.091 billion bushels.
  Soybeans were increased from 650 to 655 million bushels.
  Wheat was reduced from 447 to 416 million bushels.
  Cotton remained at 4.90 million bales.
  Sugar was reduced from 870,000 to 822,000 tons.
  

• The USDA's 2006-2007 world ending stocks estimate for:
  Corn was 92 million tons, down from 130 million tons the previous year.
  Soybeans were 58 million tons, up from 55.5 million tons the previous year.
  Wheat was 128 million tons, down from 144 million tons the previous year.
  Cotton was at 47 million bales, down from 53 million bales the previous year.
  
  

• The USDA estimates the Florida orange crop at 153 million boxes, the USDA increased the projected juice yield from 1.62 to 1.62 gallons per box at 42.0 degrees Brix.
  
  
  

• The USDA estimated that 2006-2007 world ending coffee stocks would increase 1.27 million bags, to 21.75 million bags. Resulting in ending stocks to use ratio of 18%.
  
  

Congressman concerned about superintelligence
Rep. Brad Sherman (D-Calif.) did not propose an amendment, but wanted further discussion and perhaps a report on a particular aspect of future supercomputing research. Sherman said that, based on the opinions of experts, there is reason to believe that in about 25 years a supercomputer will be built that “exceeds human intelligence.” Sherman said he hopes that some of the future researchers that the bills would cultivate will be steered toward the potentially emerging field of making sure that the super-intelligent computers “avoid self-awareness … and ambition,” he said.

To which Boehlert responded: “My grandson has a Gameboy that exceeds my intelligence.”

Quick Overview

• Investors pulled a net $1.87 billion from stock funds in the week ended June 7, TrimTabs Investment Research estimated on Thursday.
  

• U.S. Jobless claims were down 35,000 last week to 302,000, less than expected.
  

• U.S. Wholesale sales were up 1.3% in April, inventories increased 0.9%.
  

• South Korea's central bank raised its rate from 4.00% to 4.25%.
  

• The Japanese government's June report on the economy will say deflation remains but there have been improvements, sources said on Friday.
  
  

• The European Central Bank increased its interest rate by a quarter percent to 2.75%.
  

• Australia's unemployment rate improved to 4.9% in May, the lowest in thirty years.
  

• Labor productivity in Canada was up 0.5% in the first quarter of 2006 and up 2.1% YoY.
  

• The U.S. Department of Energy said that underground supplies of natural gas were up 77 billion cubic feet to 2.320 trillion.

Quick Overview

• Australia's GDP rose 09% in the first quarter of 2006 and up 3.1% YoY.
  

• Japan's index of leading indicators was unchanged in April, at 50.0.
  
  

• The Energy Department said:
  Crude-oil stocks grew last week by 1.1 million barrels to 346.6 million barrels, or 4 percent above year ago levels.
  Gasoline inventories grew by 1 million barrels to 210.3 million barrels, or 2.5 percent below year ago levels.
  Heating oil supplies were up 100,000 barrels.
  
  

• Over the past four weeks gasoline demand is 0.7 percent higher than it was during the same period a year ago.
  
  

• Retail diesel fuel prices this summer are expected to average $2.79 per gallon, 38 cents higher than last year, the Energy Department said.

Bankrupt Logic About China's Debts
..the massive problems facing Chinese banks, whose nonperforming loans total an estimated $700 billion, drew some strong responses. Before getting into one in particular, let me explain the issue in a nutshell. China isn't acting quickly enough to clean up the bad debts that have made its biggest banks technically insolvent.

Fed's Poole: Slowing economy won't reduce inflation
"If inflation turns out to exceed our expectations, our target range, I do not believe we can count on a slowing economy to bring inflation down, by itself, quickly," Poole, said in an interview with the Wall Street Journal published on Tuesday.

Quick Overview

• Merrill economist David Rosenberg says “if the Fed hikes after the raft of soft data posted in recent weeks, then we can only draw the conclusion that in the name of rebuilding anti-inflation credibility, the central bank is willing to sacrifice the economy”
  
  
  

• YoY Brazil's industrial output fell 1.9% in April.
  
  

• Index of services in the Euro zone increased from 58.3 to 58.7 in May, the highest in five years.
  

Distracter in Chief
What uncharted realm lies beyond brazen cynicism? A wasteland of utter shamelessness, perhaps? A vast Sahara of desperation, where principle goes to die? Someday George W. Bush and the Republican right will be able to tell us all about this barren terra incognita, assuming they ever find their way home.

G-7's Push for Stronger Asian Currencies May Not Cut Trade Gap

Army Manual to Skip Geneva Detainee Rule
The Pentagon has decided to omit from new detainee policies a key tenet of the Geneva Convention that explicitly bans "humiliating and degrading treatment," according to knowledgeable military officials, a step that would mark a further, potentially permanent, shift away from strict adherence to international human rights standards.

Quick Overview

• Even though the U.S. economy is now slowing down, Bernanke on Monday called recent increases in inflation unwelcome and pledged to make sure surging energy prices don't make things worse.
  
  
• Japan's Ministry of Finance said that YoY corporate profits were up 4% in the first quarter.
  

• YoY Japan’s capital spending was up 13.9% in the first quarter.

Bush approval ratings hit new low in California
Poll reflects growing discontent with president, Congress
"We're in uncharted waters," said Mark DiCamillo, director of the Field Poll. "All previous presidents who have dipped this low either resigned from office shortly thereafter or were voted out of office. Here we have a president who will be with us for 2 1/2 more years.

Invoking Secrets Privilege Becomes a More Popular Legal Tactic by U.S.
Facing a wave of litigation challenging its eavesdropping at home and its handling of terror suspects abroad, the Bush administration is increasingly turning to a legal tactic that swiftly torpedoes most lawsuits: the state secrets privilege.

More, Lots More
JUST in case your Uncle Bob or Aunt Sophie has been asking you "Exactly what the hell is going on in Iraq?" and you're looking for hard facts to help them get off the fence, here you are.

Ethanol dazzles Wall Street, White House Ethanol production in the United States is growing so quickly that for the first time, farmers expect to sell as much corn this year to ethanol plants as they do overseas.

"It's the most stunning development in agricultural markets today — I can't think of anything else quite like this," says Keith Collins, the U.S. Agriculture Department's chief economist.

The amount of corn used for ethanol, estimated at 2.15 billion bushels this year, would amount to about 20 percent of the nation's entire crop, according to department projections.

Even as ethanol devours corn and pushes prices higher, the president and Congress are calling for even greater ethanol use. Wall Street cannot seem to get enough of ethanol-related investments. Automakers are speeding ethanol-capable vehicles onto the road.

Is It Raining Aliens?
Stranger still, dozens of his experiments suggest that the particles may lack DNA yet still reproduce plentifully, even in water superheated to nearly 600˚F. (The known upper limit for life in water is about 250˚F.)

Why Hank Paulson?
And now, we are in a new stage. We have not a productive economy, but a speculative economy. We have a Treasury secretary to go with it. Goldman's first-quarter earnings report shows that of the firm's total intake of $10.34 billion, $6.88 billion was made largely from proprietary trading and investments. In effect, the firm is a hedge fund crossed with an investment bank. As CEO, Paulson's share of the take was $38.3 million in salary, stock, and options last year alone. And his net worth is estimated at $500 million. But we do not grudge the man or the cream he has licked off the platter. As leader the speculative economy, who else would you want except the leading speculator?

Onus is on US, EU to save WTO talks: China
China has turned the tables on Washington by demanding that the United States and Europe do more to cut farm subsidies and tariffs to break a deadlock in global trade talks.

Quick Overview

• U.S. Inflation will likely stay contained but is at the top end of a price-stability zone and interest-rate policy should aim to move it down, Chicago Federal Reserve President Michael Moskow said on Friday.
  

• U.S. Employers added only 75,000 new jobs in May, the Labor Department said in a report that signaled slower economic growth and led financial markets to slash bets on further interest-rate increases. Average hourly earnings were up just 0.1%.
  
  

• U.S. Factory orders were down 1.8% in April.
  

Quick Overview

• First-quarter worker productivity jumped to 3.7% from 3.2% (annual rate) the Labor Department said Thursday
  

• The Labor Department revised Unit labor costs lower, from an annual rate of 2.5% to 1.6% in the first quarter. In the fourth quarter, unit labor costs were revised lower, from a 3.0% annual rate of gain, to a 0.6% decline.
  

• The Institute of Supply Management's index of U.S. manufacturing dropped from 57.3 to 54.4 in May, weaker than expected, but still a sign of expansion.
  

• Construction spending declined 0.1% in April, the first decline in almost a year, the Commerce Department said Thursday
  

• The number of Americans filing first-time unemployment claims rose by 7,000 last week to 336,000, the Labor Department said Thursday.
  

• The U.S. government should confront Tokyo about the unfairly low value for the yen that gives Japanese car makers an advantage of up to $3,000 per car sold in the United States, Chrysler Group Chief Executive Tom LaSorda said on Thursday.
  

• Bank of Japan board member Hidehiko Haru said on Thursday the central bank needs to keep supporting the economy with an easy monetary policy and is in no rush to end its zero interest rate policy.
  

• GDP in the Euro zone increased 1.9% in the first quarter YoY.
  

• U.K. Manufacturing index dropped from 54.0 to 53.2 in May.
  

• The U.S. Department of Energy (DOE) said that:
  Supplies of crude oil were up 1.6 million barrels at 345.5 million barrels.
  Supplies of unleaded gasoline were up 800,000 barrels
  Supplies of heating oil were up 1.0 million barrels.
  Supplies of underground natural gas were up 80 billion cubic feet to 2.243 trillion cubic feet, up 27% from a year ago
  

• OPEC, pumping almost as much as it can amid soaring oil prices, decided Thursday to keep its output steady, rejecting suggestions by Venezuela to cut production.