PRESS DIGEST - New York Times business news - Aug 5

Aug 5 (Reuters) - The following were the top stories in the New York Times business pages on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy.

* The chief executive of the mortgage giant Freddie Mac (FRE.N) rejected internal warnings that could have protected the company from some of the financial crises now engulfing it, according to more than two dozen current and former high-ranking executives and others.

* Merrill Lynch & Co's MER.N chief said he sold mortgage investments at fire-sale prices to bolster employee morale.

* Driven primarily by energy and food prices, inflation grew 0.8 percent over May, the biggest monthly increase since September 2005, the Bureau of Economic Analysis reported on Monday. Spending, by comparison, grew just 0.6 percent in June.

* Growth in China is expected to slip a couple of percentage points below the double digit threshold over the coming year, relieving inflationary pressure but undermining global growth.

* A study estimates that about one of every three working-age adults without insurance in the U.S. has received a diagnosis of a chronic illness and is not getting adequate treatment.

* JetBlue Airways Corp (JBLU.O) said Monday that it planned to begin charging for pillow and blanket sets on flights of two hours or longer. The $7 sets, which passengers can keep and reuse, include a 10-by-12 inch pillow, a fleece blanket and a $5 coupon for Bed Bath & Beyond.

* T. Boone Pickens Jr., the billionaire Texas oilman, has mounted a campaign to launch a national debate about the use of natural gas in cars and trucks.

* HSBC Holdings (HSBA.L), the biggest European bank, reported a 29 percent decline in profit for the first six months on Monday, saying that the business environment remained uncertain and that growth in emerging markets was expected to slow.

* Capital Research Global Investors, one of Yahoo Inc's (YHOO.O) largest shareholders, has asked for a re-examination of Yahoo's shareholder vote at last Friday's annual meeting, the investment group's parent company said Monday.

* The Port Authority of New York and New Jersey announced plans on Monday to block the Bush administration's proposal to auction landing slots at La Guardia, Newark and Kennedy Airports by banning any airliner that used an auctioned slot.

* Robert Novak, the conservative columnist who learned recently that he has a brain tumor, says his condition is "dire" and he has retired, his home newspaper, the Chicago Sun-Times, reported on Monday.

* Byetta, an injectable drug that lowers blood sugar, may help people with diabetes to live longer, according to the results of a major clinical trial.