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Some Parts Of EuropeTitle:
The Pain of Restoring Investor Confidence
Yesterday, the Dow continued to fall – down 130 points. Oil slipped lower too. And gold rose. Just as you’d expect. But two days a trend does not make.
And what’s in the news this morning?
“Europe left reeling as the people revolt against austerity measures,” says a headline in the TIMES.
Spain’s ruling Socialists got hammered at the polls. Borrowing costs are rising – pushing Italy, Spain and Greece closer to default. There is really no way out. The IMF – under DSK – made things worse by lending more money to governments that can’t pay it back. And now, day by day, the whole smelly pile of European government and bank debt gets closer to the fan.
Of course, debt deflation – writing down, defaulting, foreclosing – is what a Great Correction is meant to do.
In America, except at the ...
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ECB monitoring price pressures very closely: B.Smaghi
(Reuters) - The European Central Bank is watching very closely for signs of second-round effects in price moves, ECB policymaker Lorenzo Bini Smaghi said on Monday, adding that markets can be complacent on inflation expectations.
The ECB must look at inflation expectations very closely, he said, highlighting the risk posed by second round effects -- where supply-related cost increases begin to have an impact on wage demands and other prices.
"We are monitoring this very closely," he said, speaking on the sidelines of a conference in Vienna.
"We have to look at inflation expectations very closely, at least the way the markets measure (them), because the markets sometimes are a bit complacent and tend to take for given certain numbers and react in a non-linear way," he added.
Euro zone ...
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Weekly Economic and Financial Commentary : 20/05/2011
Weekly Economic and Financial Commentary
U.S. Review
Manufacturing Cools While Housing Remains Frozen
The Empire and Philly Fed manufacturing surveys for May suggest that the manufacturing expansion lost a sizeable amount of momentum, while April manufacturing production contracted on auto production cuts related to the Japanese tsunami.
Meanwhile, housing remains in the deep freeze. April housing starts and permits came in far below consensus expectations. In May, the NAHB housing market index held at its 6-month average of 16, and April existing home sales fell back to 5.05 million.
How Healthy Is the Recovery?
Economic data released this week point to a recovery that is still trying to find its balance. In fact, there is growing reason to believe that some important sectors ...
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Did President Obama's Mideast Policy Speech Chill USD Values?
A speech delivered by President Barack Obama yesterday regarding US policy in the Middle East caused a stir in late-session trading. Though his position appeared moderate, even standoffish in its approach to the ‘Arab Spring,' many have criticized Obama for his missed opportunity in addressing other major concerns. It is difficult to state whether this had a chilling effect on the US dollar in today's trading or not, but spectator sentiment appears to have viewed the speech with doubt and consternation.
Economic News
USD - US Dollar Mixed as Traders Eye Manufacturing and Housing Data
Poor economic data out of the United States continued to weigh on the US dollar yesterday as investors continued to eye the interest rate differentials between the US and Europe. The soft data has ...
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Lessons to Be Learned from the Greek Debt Crisis Read more: Lessons to Be Learned from the Greek De
The stock market slumped yesterday to a new 14-year low, while bond yields jumped toward modern-era highs. The currency also slumped, as politicians failed to enact deficit-reducing austerity measures.
Otherwise, nothing much of interest happened in Greece yesterday.
Here at home, the stock market rebounded a bit, as did the price of crude oil and most other commodities. Reuters News says the stock market advanced because of “Dell’s strong earnings” and that commodities rallied due to an “unexpected drop in US oil supplies.” Bloomberg News says the stock market advanced because “the Federal Reserve signaled continued low interest rates” and that commodities rallied due to “signs of increasing demand.”
The Daily Reckoning’s editors are not smart enough to know which specific event ...
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Investing in Areas With Rapid Growth Potential
Dow up 80…oil still below $100…gold still below $1,500….
Oil has a long way to get back to its 2008 high. But it’s still 3 times what it was in 2005 and 5 times its price in 2001.
In the battle between inflation and deflation, it’s not clear to us who’s winning. Prices are rising, but in the context of a general deflationary funk. Try as they might, the feds just can’t shake the Great Correction. It leaves them struggling to loosen monetary policy to free-up the economy…and succeeding only in tightening the noose around the consumer’s neck. Here’s the AP report:
NEW YORK (AP) – High gas prices are driving a wider wedge between the wealthy and everybody else.
The rich are back to pre-recession splurging: Saks Fifth Avenue and Nordstrom customers are treating themselves to luxury items ...
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Investors seek stock, euro bargains
(Reuters) - World stocks climbed off four-week lows on Wednesday and the euro recovered some ground against the dollar as investors sought bargains in recently hard-hit markets.
Wall Street looked set to open higher.
The hunt for cheaper assets, however, was tempered by disappointing U.S. economic data on Tuesday and continuing concerns about the euro zone's struggle to control debt in its peripheral economies, particularly Greece.
Europe's top financial officials broke a taboo on Tuesday and acknowledged for the first time that Greece may have to restructure its debts, a move which could stoke Europe's sovereign debt crisis.
Yields on a German bond auction were lower and those at a Portuguese sale higher than in previous bidding, reflecting the perceived safety of bonds from the euro ...
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Corn rallies to 2-week top as weather threatens crop
(Reuters) - Chicago corn rose to its highest in nearly two weeks on Wednesday, while wheat hit a one-week top as adverse crop weather in the United States and Europe continued to threaten output.
Wheat and corn have risen more than 6 percent this week -- the biggest 3-day rally since early April -- on renewed concerns over supplies with little relief seen in the weeks ahead from adverse crop weather.
"There are certainly a lot of concerns around the European weather as minimal rains are expected in the next two weeks," said Adam Davis, a senior commodity analyst at Merricks Capital in a Melbourne.
"Most of the anxiety about corn is for the eastern Midwest, also some issues in the northern part, so a lot of worry around the weather."
Chicago Board of Trade July corn rose 0.8 percent to $ ...
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Stocks off on economy woes; euro edges up
(Reuters) - World stocks fell to a one-month low on Tuesday as data spurred a new wave of doubts over the global economic recovery and on worries about debt-laden euro-zone nations, while a late pick-up in the euro brought commodities off earlier lows.
The euro rose against the dollar in choppy trade, but was seen still vulnerable to global risk aversion and the possibility that Greece might restructure its massive debt.
The euro rose 0.4 percent to $1.4221, and oil copper and gold prices came off their lows.
U.S. housing starts and building permits plunged in April and factory output declined for the first time in 10 months as Japan's earthquake interrupted the supply of parts to auto makers.
The weak data drove down U.S. stocks on concerns the recovery is taking longer than expected.
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