Chrysler

• China cash crunch deepens as PBOC withholds funding (FT), just a week behind ZH
• Platts in hot manipulated crude again: Traders Try to Game Platts Oil-Price Benchmarks (WSJ)
• Kabul Suspends Security Talks With U.S., jeopardizing plans to maintain a U.S. military presence (WSJ)
• Afghan government irked over U.S. talks with Taliban (Reuters)
• BOJ Kuroda: BOJ to Adjust Policy If Japan Econ Changes (MNI)
• Google Considering Private-Equity Alliances (BBG)
• Korean Air Buying 747-8s to End Boeing’s Sales Drought (BBG)
• Syria's Islamists seize control as moderates dither (Reuters)
• SEC considers policy shift on admissions of wrongdoing (FT)
• U.K. Banker Bonuses Face Decade Delays in Industry Overhaul (BBG)

• As Goldman's money-printing tentacle Carney arrives, everyone else leaves: Tucker to Leave BOE (WSJ)
• So much for pent up demand: Refinancings Plunge as Bond Yields Rise (WSJ)
• Singapore Censures 20 Banks for Attempts to Rig Benchmark Rates (BBG)
• Behind the Big Profits: A Research Tax Break (WSJ)
• While working for spies, Snowden was secretly prolific online (Reuters)
• Turkey to Await Ruling on Park as Erdogan Meets Protesters (BBG)
• Iran votes for new president, Khamenei slams U.S. doubts (Reuters)
• NSA revelations, modified wheat cast a pall on U.S. trade talks with Europe (WaPo)
• Euro zone inflation subdued as employment keeps falling (Reuters)

We showed yesterday the truly dreadful state of this economic recovery had one odd bright (green) spot, US auto production (and sales). While cash-for-clunkers started it, and easy money from the Fed expanded it (via credit for an ever-growing cohort of subprime borrowers), the car companies have now reached back into the bag of old tricks that blew them up before - incentives in May jumped to 8% of market value - or almost $2,500 per vehicle - the highest in over 2 years. If things are going so well in this 'recovery' why are the car makers forced to squeeze margin for volume... The problem, as BusinessWeek reports, is that increasingly rich incentives aren't moving the needle much on sales.

The market is having a difficult time trying to figure out what Fannie is worth these days.

• Japan’s Stocks Correction Raises Stakes for Abe’s Growth Plan (BBG)
• China Failure to Grow With $1 Trillion Is Warning to Li (BBG)
• Blankfein Leads Bank CEO Pay With $26 Million Deemed Overpaid (BBG)
• IMF says ‘no evidence yet’ of Abenomics hurting other economies (FT)
• Europe Seeks CFTC Delay in Imposing Swaps Rules on Banks (BBG)
• Fed's Rosengren: 'Modest' QE3 cut may make sense in a few months (Reuters)
• Who’s who of Obama lobbyists pushes Keystone pipeline (FT)
• China to Study Joining U.S.-Led Trade Accord After Japan Added (BBG)

• ‘Cov-lite’ loans soar in dash for yield (FT)
• Cambodian police clash with thousands of garment workers, 23 hurt (Reuters)
• Obama Accepting Sequestration as Deficit Shrinks (BBG)
• Having done nothing to restore confidence in a fragmented market, the SEC turns back to main street fraud (WSJ)
• Europe's austerity-to-growth shift largely semantic (Reuters)
• Germany thwarts EU in China solar fight (FT)
• In EU-China dispute, Beijing warns of trade  (FT)
• U.S. Oil Boom Divides OPEC (WSJ)
• Record Cash Sent to Balanced Funds (BBG)
• Hilsenrath: Fed Wrestles With Market Expectations About Pace of QE (WSJ)
• Worse-Than-Cyprus Debt Load Means Caribbean Defaults to Moody’s (BBG)
• States Raise College Budgets After Years of Deep Cuts (WSJ)
• U.K. Banks Cut 189,000 With Employment at Nine-Year Low (BBG)

• Mine union threatens to bring South Africa to 'standstill' (Reuters)
• Russia Raises Stakes in Syria (WSJ) - as reported here yesterday 
• Japan buys into US shale gas boom (FT)
• Bill Gates Retakes World’s Richest Title From Carlos Slim (BBG) - so he can afford a Tesla now?
• China Wages Rose Sharply in 2012 (WSJ)
• Regulators Target Exchanges As They Ready Record Fine (WSJ)
• Citi Takes Some Traders Off Bloomberg Chat Tool (WSJ)
• After Google, Amazon to be grilled on UK tax presence (Reuters)
• Apple CEO Cook to Propose Tax Reform for Offshore Cash (BBG)
• French, German politicians to pressure Google on tax (Reuters)
• Gold Bears Revived as Rout Resumes After Coin Rush (BBG)
• A stretched Samsung chases rival Apple's suppliers (Reuters)

• As scandals mount, White House springs into damage control (Reuters)
• Glencore Xstrata chairman ousted in surprise coup (Reuters), former BP CEO Tony Hayward appointed as interim chairman (WSJ)
• JPMorgan Chase asks Bloomberg for data records (Telegraph)
• Platts Retains Energy Trader Confidence Amid Price-Fix Probe (BBG)
• Syrian Internet service comes back online (PCWorld)
• Japan Q1 growth hits 3.5% on Abe impact although fall in business investment clouds optimism for recovery (FT)
• Soros Joins Gold-Stake Cuts Before Bear Market Drop (BBG)
• Factory Ceiling Collapses in Cambodia (WSJ)
• Sony’s $100 Billion Lost Decade Supports Loeb Breakup (BBG)
• Snags await favourite for Federal Reserve job (FT)
• James Bond’s Pinewood Turned Down on $300 Million Plan (BBG)

• Hilsenrath: A Top Contender at the Fed Faces Test Over Easy Money (WSJ)
• Yen drops further as G7 avoids criticizing Japan (Reuters)
• Markets missed Flaherty’s clues on next Bank of Canada chief (G&M)
• Republicans turn screws over Tea Party tax probes (FT)
• Dual-track Libor replacement lined up (FT)
• Risks to China recovery seen as factory output underwhelms (Reuters)
• Barack Obama’s goal of universal healthcare could be set back significantly by Texas Governor Rick Perry (FT)
• Gold Bears Pull $20.8 Billion as BlackRock Says Buy (BBG)
• Mexico sets shelters as volcano shakes, spews ash (AP)
• Europe Eases Corporate Tax Dodge as Worker Burdens Rise (BBG)
• IPOs Set to Raise Most Cash Since Crisis (WSJ)
• Melting Ice Opens Fight Over Sea Routes for Arctic Debate (BBG)
• Top hedge funds bet on Greek banks (FT)
• Icahn Asks Investors to Make Big Bet on a Debt-Laden Dell (BBG)

• The Inland Empire bubble is back: BMW to Amazon Space Demand Spurs Rush to Inland Empire (BBG)
• Tamerlan Tsarnaev was on classified government watch lists (Reuters)
• Brothers in Boston Bombing Case Said Drawn to Radicalism (BBG)
• Germany Spurns Calls to Loosen Austerity Stance (WSJ)
• Spain poised to ease austerity push (FT)
• What ever happened to France's voice in Europe? (Reuters)
• U.S., South Korea Reach Nuclear Deal (WSJ)
• U.S. Sees No Hard Evidence of Syrian Chemical Weapons Use (BBG)
• RBA Set to Invest Foreign Currency Reserves in China, Lowe Says (BBG)
• FedEx Wins $10.5 Billion Postal Contract as UPS Shut Out (BBG)

The money printing of the Federal Reserve with no anchor to gold has allowed the welfare state to grow to immense proportions. It has allowed politicians to buy votes by spending taxpayer dollars on multi-million dollar Keynesian zero return albatrosses. It has allowed politicians to enslave black people on a welfare plantation of entitlements. Bernanke and his cronies reward mal-investment through their policies. They reward bad behavior (borrowing & spending), while punishing good behavior (saving and investing). West Philly is a testament to failed economic policies, government waste, lack of personal responsibility, corrupt politicians, excessive union costs, and the delusional belief that government can create economic growth. The 30 Blocks of Squalor is descending further into squalor and it will accelerate as Bernanke’s policies further destroy what remains of capitalism in this country.

• JPMorgan Leads Job Cuts as Banks Seek to Bolster Profit (BBG)
• North Koreans don't show for work at Kaesong factory park (Reuters), as NK urges foreigners to leave South Korea (FT)
• Lisbon Struggles to Close New Budget Gap (WSJ)
• Portugal may face delay to bailout funds (FT)
• Putin Squeezing Out UBS to Deutsche Bank Using Oligarchs (BBG)
• China's Xi Says Fast Growth Over (WSJ)
• Spain’s PM wants more powers for ECB (FT)
• Bernanke Says Interest on Reserves Would Be Main Tightening Tool (BBG)
• Bird Flu Claims 7th Victim in China (WSJ)
• Texting While Flying Linked to Commercial Helicopter Crash (BBG)... No, Bernanke wasn't the pilot

The term “Story stock” used to mean a company with little more than a sheaf of press releases and a glitzy narrative about its future prospects.  Now, ConvergEx's Nick Colas notes that pretty much any stock with a fighting chance of outperforming needs to have a “Story” to cut through the clutter of a noisy macro-driven market.  Story-less equities where the valuation is cheap simply dawdle, while theoretically expensive story stocks sizzle loudly.  So what makes a good story?  The answer is not only “Blowin’ in the wind,” it is as old as the hills.  CEOs matter intensely – they tell the story, and in the best cases they are the “Hero” at the center of it.  Other types of narratives: “New Blood”, “Resurrection”, and “Conan the Barbarian.”  And even with all these categories, Colas reminds us that we can’t forget that the U.S. equity market is essentially one large story stock, driven by a “Hero” figure – even if you don’t consider Chairman Bernanke is the same league as Moses or Ironman. Of course, we don’t know how this particular “Story” will end.  We don’t call someone a “Hero” until they finish the cycle and return with their gifts and teachings. After all, if creating +$2 trillion out of thin air isn’t some powerful magic to fight off the forces of evil, we don’t know what is.

Thanks to the Fed's ZIRP, the investing world is on a constant reach for yield; and due to the fact that the last bubble of investor largesse (ignoring leverage and reality) was not 'punished' but in fact 'bailed-out', participants in the financial markets learned nothing. Just as the last crisis was formed on the back of an insatiable mortgage-backed security market desperate for new loans (any loans) of increasingly dubious quality to securitize, so this time it is subprime auto loans that have taken over. As a Reuters review of court records shows, subprime auto lenders are showing up in a lot of personal bankruptcy filings. At car dealers across the United States, loans to subprime borrowers are surging - up 18% in 2012 YoY, to 6.6 million borrowers. Subprime auto lending is just one of several mini-bubbles the bond-buying program has created across a range of assets; "it's the same sort of thing we saw in 2007, people get driven to do riskier and riskier things." Of course, with auto production having been the backbone of so many macro data points that are used to 'show' the real economy recovering (despite the channel-stuffing), now that the growth in auto-sales are stalling, it is for the subprime originators "under extreme pressure to hit goals" in their boiler-room-like dealings to extend loans (at ever higher rates) and securitize while the Fed 'music' is still playing. It seems we truly never learn.

Meetings between public company managements and investors are the bedrock of the fundamental investment process.  The reason for that, however, is often lost in translation.  It is not, for example, because most investors or analysts are systematically better at reading “Body language” about the quarter or new products.  Seriously – they aren’t.  No – the reason that management meetings are useful is because, over time, managements let down their guards and act like regular people.  And in those moments, truth – about character, about wisdom, about judgment – comes rolling out.  Today we offer up a personal highlight reel of examples from +20 years of management meetings. Between the earnings forecast and the actual results sit only two things: time and management.  Time is uniform; management quality is not.