Thursday morning headlines

Americans keep spending: And not just for gasoline. May retail sales rose twice as much as the experts had been forecasting, perhaps the result of the tax rebates that have been arriving over the last several weeks. "The gain is largely because of the rebate, but maybe the American consumer is just hanging in a lot better than we anticipated," Sal Guatieri, a senior economist at BMO Capital Markets told Bloomberg. A separate report showed that prices of goods imported to the U.S. rose 2.3 percent in May from the previous month, less than economists had forecast. The Dow is up sharply this morning.

Spending may grow at an annual rate of 0.8 percent this quarter, down from a 1 percent pace in the prior quarter and the weakest since the first three months of 1995, according to the median estimate of economists surveyed by Bloomberg News this month. The bulk of the tax rebates will probably be spent from July through September, giving third-quarter growth a lift, before the economy decelerates again in the last three months of the year, the Bloomberg poll also showed.

As for commodities...: Those heavy rains in the Midwest are boosting prices for corn, soybeans and wheat even further, which means there will not be any relief at the supermarket. "You know those complaints you’ve been hearing about high food prices? They’ve just begun," Jason Ward, an analyst with Northstar Commodity, told the NYT.

The Agriculture Department this week cut its yield expectations for corn by 5 bushels an acre, to 148.9 bushels, a big drop for a growing season that has just begun. It now estimates the 2008 crop at 11.7 billion bushels, down 390 million bushels from what it was expecting last month. Since the rain has not yet let up, these figures could prove optimistic. In its weekly crop rating, the Agriculture Department said that the quality of the corn was notably lower this year, with the amount deemed “excellent” only half that of the 2007 crop.

Oil prices fall: Crude's zig-zag movements continue this morning as a strengthening U.S. dollar (today anyway) pushed down the price to $133.24 a barrel. Meanwhile, local pump prices keep rising. The Auto Club's daily fuel gauge report has the average price at $4.54 a gallon, up a nickel from a day earlier. (Bloomberg, KNX)

Details on Countrywide VIPs: Democratic Party insider James A. Johnson received more than $5 million in loans from the Calabasas-based mortgage lender that were arranged outside the normal underwriting process, the WSJ is reporting. They include loans on at least six properties between 1998 and 2007, part of the so-called Friends of Angelo program (that's Countrywide CEO Angelo Mozilo). Getting preferential treatment at a company that's at ground zero of the mortgage implosion is not exactly politic, which is why Johnson resigned from the Obama campaign. From the Journal:

Perhaps the most unusual of Mr. Johnson's loans was one for more than $1.5 million last year for a real-estate project in Big Timber, Mont. At the time he got the loan, what the records indicate were Mr. Johnson's monthly obligations were nearly twice his stated monthly income, according to documents and to people familiar with the matter. The records say Mr. Johnson's "total income" was $55,834 a month, while his "total obligations" were $97,708.97 a month. The result was a total debt ratio of 175%, which Countrywide's records say was "too high." Countrywide handled this as a house construction loan, which meant that Mr. Johnson wasn't required to make a down payment apart from the $240,000 investment he had already made in raw land and a payment for construction.

[CUT]

Mr. Johnson also has served on corporate boards, including those of [L.A.-based] KB Home, Target Corp. and UnitedHealth Group Inc. He led the compensation committee at KB Home, which in 2007 restated seven years of earnings because it had backdated executive stock options. At the same time, Mr. Johnson led a board committee at UnitedHealth overseeing an internal probe of that company's options backdating.

99 Cents Stores was robbed: The City of Commerce discounter reported a fourth-quarter loss of $4.4 million because of an unexpected jump in thefts at some of its stores. Analysts had expected a modest profit because more consumers are trying to save money in the face of rising gasoline costs. The stock is down 3.8 percent in early trading. From the LAT:

[CEO Eric] Schiffer said on the conference call that the company believed that the theft troubles were "fixable." He and other executives said the losses were concentrated in 29 stores, and that "a lot of them, not all, but a lot of them are in one geographic area." Where? Schiffer wouldn’t say, except that "it’s not Los Angeles." The company has stores across California and in Arizona, Nevada and Texas. As for the culprits, the company wasn’t specific in the conference call about whether the thefts were believed to be primarily by customers or by employees.

Lakers draw big ratings: Tuesday night's game was ABC's most-watched NBA Finals broadcast since Game 3 of the 2004 Finals, when the Lakers played the Pistons in Detroit. Ratings were up 44 percent over the third game of last year's Spurs-Cavs series. (LAT)

SAG deal unlikely by June 30: Screen Actors Guild President Alan Rosenberg told Variety that contract talks with the media companies have slowed down in recent sessions, going back to when AFTRA, the other actors union, made its deal. No decision has been made on taking a strike authorization vote (the contract expires at the end of the month). Rosenberg and National Executive Director Doug Allen have blasted the AFTRA deal as giving in to the studios, though AFTRA officials say they have received an "overwhelmingly positive" response from its members. So pick your sides.

Writers consider credits: The guild's cockamame way to determine which name(s) wind up in lights could be in for an overhaul. The WGA plans a referendum next month to simplify the process. Three separate proposals are on the table that would reduce the number of split decisions among arbiters and improve the chances that rewrite teams would gain credit. (Variety)