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The Fed's quarterly Senior Loan Officer Opinion Survey, says U.S. banks have relaxed lending standards and more businesses looked for loans in the first quarter. Yet the demand for loans is sluggish. While auto loans increased, credit cards and other instalment loans were flat, and mortgage demand is decreasing. The sluggish demand for loans is holding back the growth in the profits of banks. This is also why the KBW Bank Index fell by 7.9% this year and bank stocks are not doing well. Lower revenue reduces the Net Interest Margin, a key measure for bank profitability- the difference between what is earned on assets and the cost of deposits and other laibilities. NIM went up to 3.77% in 2010 with the Fed's low interest policy. Since the first quarter of 2010 NIM is falling. NIM at 2.67% is flat at Bank of America, fell for Citigroup and Well Fargo, and only rose slightly at J.P. Morgan Chase.

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Air Canada is planning a campaign to persuade business travellers to try Air Canada hubs in Montreal, Toronto and Vancouver, for flights to Europe, Asia and other long distance destinations. This strategy is aimed at secondary markets in the U.S. that lack direct service to Asian countries. Toronto's Pearson airport has just completed a C$4.4 billion modernization. In Vancouver and Montreal passengers connecting to the U.S. will no longer have to claim their baggage and will go directly to U.S. customs. The same arrangement is being planned for Toronto this fall. Air Canada is counting on its fleet of younger planes and wide body aircraft and a pleasant experience through Canadian airports. Recent capacity additions for Aisa will also help. Air Canada's trans-Pacific traffic increased by 22% in 2010 from 2009. Air Canada made a profit in 2010, after suffering a serious loss of 1 billion Canadian dollars in 2008. Air Canada's CEO Calin Rovinescu's strategy is part of his effort to make Air Canada "an international powerhouse," making Toronto and other Canadian hubs some of the world's major gateways....

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New auto sales in Japan experienced a sharp decline of 51% in April 2011, higher than the 37% fall in March. Sales of Toyota fell 69% to 35,557 vehicles in April, Nissan's dropped 37%, and Honda's dropped 49%. About 500 suppliers in northeasern Japan are affected by the earthquake. Toyota president Akio Toyoda says the production will return to normal by November or December.

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As U.S. carmakers vehicle sales recover and the Japanese carmakers go through a slowdown as a result of disruptions from the earthquake, the U.S. and the Japanese carmakers find their situations reversed. Japanese carmakers are facing vehicle shortages in the U.S.. Detroit carmakers see the opportunity to make gains in market share during this period, till Toyota and Honda return to normal. Detroit carmakers have also been affected by the earthquake related supplier disruptions, but to a much smaller extent. Chrysler expects to produce 50,000 to 100,000 fewer vehicles as a result of disruptions, according to Marchionne. Chrysler, the weakest of the Detroit carmakers, has staged a recovery under Fiat's Marchionne. One hurdle was the high interest payments- $348 million in the first quarter of 2011- on the $7.5 billion borrowed from U.S. and Canadian governments. Chrysler increased revenue by 35% to $13.1 billion, with global sales of vehicles up 18% to 394,000, and profits of $116 million in the first quarter 2011. The market situation is still precarious for several reasons. Sales of pickup trucks and larger vehicles- which still constitute a major portion of vehicles sales of Detroit carmakers- are vulnerable to higher gas prices. The Japanese carmakers have large cash reserves for new investments, and will introduce new models as they recover from the earthquake. In the past Detroit carmakers used incentives to maintain sales, which diluted profits. Jeremy Anwyl, chief executive of Edmunds.com, says Detroit carmakers have an opportunity to get back to a situation where they can compete with foreign carmakers on a level playing field, with better market acceptance and higher prices. GM says it will increase prices by about $123 on average to cover higher materials costs. The risk will continue to be in the product mix of a higher proportion of pickup trucks and larger vehicles in a volatile oil price environment....

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South Korea's Posco received environmental clearance in January 2011 for a steel plant with a capacity of 4 million metric tons a year. Posco has now been given permission to clear forest land for the $12 billion plant and infrastructure. The plant capacity will later be increased to 12 million tons a year. Indian law does not allow forest land to be cleared if villages have claims to the land. Projects by Arcelor Mittal and Posco have been held up for five years because of hurdles in getting environmental clearance and permission to clear forest land.

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This account describes the events that preceded the raid on the compound in Abbottabad that housed Osam bin Laden. The first information came years earlier during interrogation of Al Quaeda suspects in Iraq, who referred to a courier carrying messages from senior leaders. One suspect Hasan Gul referred to an important courier in 1994, and tried to disclose as little as possible. Over several years the information was pieced together leading to the courier's location at the Abbotabad compound. There was another individual living there who rarely ventured out and a seven foot wall protected the terrace in that part of the compound, making it impossible for outsiders to see who he was. Garbage was burned at the compound, and the nature of the compound with high walls and security led the CIA to believe there was a high probability that senior Al Quaeda leaders were inside. In December the CIA asked Congressional lawmakers at a secret meeting for additional funds to finance the operation. Adm. McRaven was placed in charge of the operation. A mock compound was built in Afghanistan and the attack on the compound was practiced by Special Forces. In April, Leon Panetta, who had tracked the information about the compound as head of the CIA, held daily meetings. He told his team "we've got to find out what the hell is in that compound." On April 19, Panetta informed Mr Obama that the CIA believed Osama Bin Laden was there. The same day Obama gave the go ahead for a helicopter assault....

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Canada's Conservative party leads in 166 constituencies, and is likely to win the 155 seats for a majority in parliament. The NDP is leading in 100 constituencies and will have the second largest bloc of seats. The Liberals were likely to win only 33 seats and the party Quebecois was ahead in only 3 constituencies. The NDP's gains came at the expense of the Liberals and the party Quebecois.

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Japanese stock markets after the earthquake in 2011.

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Stress-testing a portfolio and diversification, by Jonathan Burton, the Money and Investing Editor at Market Watch in San Francisco.

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Jonathan Rockoff interviews Pfizer CEO, Ian Read. Read says Pfizer will make up for the loss of patent protection on Lipitor sales of $10.7 billion. He plans to cut Pfizer's $8.1 billion research budget to $6.5 billion. Pfizer sold one unit that makes drugs in capsule form for $2.4 billion. He looks to growth in Lyrica for fibromyalgia, and Prevnar for pneumococcal vaccine. And sees growth in China and emerging markets. Even with government ordered price reductions in China, increase in volume sales make up for the price reductions. Asked about the closing of the Pfizer labs in Sandwich, England, Read says the competitors were ahead of Pfizer in areas of research at Sandwich such as allergy, respiratory and urology. Pfizer will move scientists from Groton, Connecticut, to Cambridge, Mass, to bring scientists together in hubs of innovation such as La Jolla, Boston, and Cambridge, England. In the old days Groton served as a location because it was near a river, fermentation was needed and water access had to be provided. Read says Pfizer will focus on the core- neuroscience, cardiovascular medicine, oncology, inflammation, immunology and vaccines, specialized units for pain, sensory disorders and biosimiliars- and make sure this is producing results....

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Polls show the New Democratic Party (NDP) surging in the polls in today's Canadian elections. The NDP is drawing voter support from the Liberal Party and from the Bloc Quebecois party in Quebec. The Liberals are now in danger of finishing third behind the NDP in the elections. The Liberals were in power for 32 of the last 50 years, with premier Pierre Trudeau being the most well known figure from the Liberal party. The Bloc Quebecois trails the NDP in Quebec by 16 percentage points in some polls. The NDP program calls for improved health care services, carbon reduction strategies and increased spending for seniors. The NDP proposes to spend 70 billion Canadian dollars for these programs.The party leader Jack Layton could become prime minister in a coalition with the Liberals or join an alliance with the Conservatives led by Steven Harper. In the last parliament NDP held 36 seats. It is now expected to win 100 seats in the 308 seat House. The Conservatives had 143 seats and need 155 to secure a majority, which now appears unlikely....