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Courtesy of ZeroHedge. View original post here.

Submitted by thetrader.
 on QE to Infinity! Then, in May 2010 and again in May 2011, the stock market started a sell-off that lasted several months. Will that happen again this year? I actually do think we are at the start of another stock market decline. Why? Because the ups and downs of the stock market are all due to the actions of the Federal Reserve. It is their money we are playing with. Before the Fed took over control of the stock market, new money for stocks used to come from the amount of wages and salaries and other income not spent, also called savings. But no, not anymore.

Strong manufacturing data in the US and China have eased fears of a slowdown in global growth and suggest that a feeble European economy may diverge from robust activity elsewhere. The US purchasing managers’ index recorded a surprise increase from 53.4 in March to 54.8 in April, the strongest since June 2011, assuaging fears of a “spring slowdown” in the world’s largest economy. Meanwhile, the official Chinese manufacturing PMIrose to 53.3 last month, its highest in more than a year, from 53.1 in March. It was also China’s fifth consecutive month above the 50 level.

Bolivia has said it will expropriate the assets of Spain’s Red Eléctrica, sending armed troops to its headquarters in the second nationalisation of a Spanish company’s business in Latin America in two weeks. In a move likely to trigger further unease for Spanish companies operating in the continent following seizure of Repsol’s YPF unit in Argentina last week, Evo Morales, Bolivian president, on Tuesday announced the state would take control of Transportadora de Electricidad, the Spanish electricity grid’s Bolivian subsidiary.

A significant number of investors are preparing to confront the management of UBS on Thursday by voting against the Swiss bank’s 2011 pay award and denying executives formal approval of their actions. The bank’s share price dropped 28 per cent last year and it lost $2.25bn in a rogue trade in Londonthat caused the largest unauthorised trading loss on record in Britain. For the same period, the bank chose to pay 12 members of its executive boardSFr70.1m ($77.1m) compared to SFr91m in the year before.

Nicolas Sarkozy mounted a defiant show of force in Paris on Tuesday, wresting the spotlight from traditional trade union May Day marches and vowing to fight to the last against François Hollande, his socialist challenger in Sunday’s presidential election. In an impassioned address to tens of thousands of his conservative supporters, against a backdrop of the Eiffel Tower, Mr Sarkozy implored the crowd to use the last three days of campaigning to “explain, convince and mobilise” voters behind his re-election.

Deep divisions over European banking rules will be exposed on Wednesday as finance ministers clash on how best to tighten regulation and protect taxpayers without stifling lending or damaging competition.  Translating the “Basel III” international rules on bank capital into law has emerged as the most highly charged financial regulation issue in Brussels throwing up sharp disputes and creating unusual political bedfellows.
Most Asian stock markets were modestly higher Wednesday, and the U.S. dollar remained well-supported after a surprisingly strong U.S. manufacturing report. Investors were encouraged by the Institute of Supply Management’s purchasing managers index reading for April, which topped forecasts and sent the Dow Jones Industrial Average to its best close in more than four years on Tuesday. Japan’s Nikkei Stock Average was flat, Australia’s S&P/ASX 200 was up 0.1%, South Korea’s Kospi Composite advanced 0.8% and New Zealand’s NZX-50 gained 0.4%. Dow Jones Industrial Average futures were up four points in screen trade.

U.K. manufacturing grew in April at its slowest pace in four months as export orders dropped, according to a survey released Tuesday, adding to concerns that Britain’s economy will struggle to pull out of recession. The purchasing managers’ index for manufacturing slid to 50.5 in April, the lowest monthly level so far this year, according to a survey by research firm Markit and the Chartered Institute of Purchasing and Supply. The figure, below analysts’ estimates, compares with 51.9 in March, which was revised down from an originally reported 52.1. A reading above 50 indicates expansion, while below that level points to contraction.

President Barack Obama made a symbolic trip to Afghanistan on Tuesday, arriving on the first anniversary of the killing of al Qaeda leader Osama bin Laden to sign an agreement with President Hamid Karzai that marks a transition in the war while committing the U.S. to another decade of economic and military aid. Mr. Obama said the Strategic Partnership Agreement he signed in Kabul would allow the U.S. to disentangle from Afghanistan, while not specifying funding or troop levels.

The U.K.’s coalition government Thursday faces its toughest electoral test since taking office in 2010, with 5,000 seats in about half the local authorities in England, Scotland, and Wales up for grabs, as well as the job of running London. The coalition faces voters two years into a five-year austerity program, with the economy in recession, unemployment at historically high levels, and real incomes falling. Like other governments pursuing austerity programs around Europe, the coalition partiesthe centre-right Conservatives and centrist Liberal Democratsare likely to lose votes and seats. Even in the best of times, U.K. governments tend to lose out

French far-right leader Marine Le Pen on Tuesday said she would cast a blank ballot in Sunday’s presidential runoff, delivering a stinging rebuke to both President Nicolas Sarkozy and Socialist challenger François Hollande, who have courted her supporters ahead of the vote. The National Front leader’s decision further raises the stakes for Mr. Sarkozy who is fighting for his political survival and seeking to attract the nearly 18% of the French population that voted for Ms. Le Pen in the first round on April 22.

Seven people have been arrested in Britain on suspicion of financing terrorism in Somalia by smuggling khata leaf that can produce a mild high when chewedinto the U.S., officials said Tuesday. Scotland Yard said the group was arrested as part of an operation that involved Homeland Security Investigations, the investigative branch of U.S. Immigrations and Customs Enforcement. The operation was investigating a network suspected of illegally exporting khat from the U.K., where it is legal, to the U.S. and Canada, where it is a controlled substance, Scotland Yard said

Facebook Inc. has built a $3 billion-a-year advertising business by convincing marketers to buy new forms of advertising designed to create buzz around their brands. But some advertisers with big spending accounts are wondering whether they’re getting their money’s worth. The doubt lingers as bankers and prospective investors decide how to value Facebook for an initial public offering planned for May 18, said people familiar with the matter. Facebook executives will be pitching the company to big investors in an IPO roadshow starting Monday, these people said.
Greek voters choose a new parliament Sunday and the results are unlikely to promote either stability or reform. Four years into a severe economic crisis, Greeks have soured on the leftist PASOK and center-right New Democracy parties that have been in charge for 40 years. With the economy in free fall, Greek politics appear to be fracturing with polls suggesting that eight to 10 parties from the extreme right to extreme left will enter the 300-seat Parliament.
Gold edged down on Wednesday, off a two-week high hit in the previous session as upbeat U.S. manufacturing data soothed worries about the economy and dampened hopes of more monetary easing. Spot gold edged down 0.2 percent to $1,659.06 an ounce by 23:17 p.m. EDT (0317 GMT), after rising to $1,671.20 in on Tuesday. U.S. gold lost 0.1 percent to $1,660.2.

Brent crude was steady above $119 a barrel on Wednesday, supported by positive manufacturing data from the United States and China that lifted hopes of higher oil demand at the world’s top two energy consumers. Prices will be rangebound, with Brent trading between $115-$120 this week, he added.Brent crude for June slipped 15 cents to $119.51 a barrel by 23:48 p.m. EDT (0348 GMT), after settling 19 cents higher at $119.66 on Tuesday. U.S. crude for June was down 22 cents at $105.94.
Chinese tourists traveling to Europe to take advantage of savings as much as 50 percent on designer clothes and accessories are finding fewer bargains.LVMH Moet Hennessy Louis Vuitton SA (MC) and its peers are raising prices to make up for lost business in China and lower profitability outside the country, even if it puts items like 2,270-euro ($3,000) Lockit handbags further out of reach for Europeans whose disposable incomes are shrinking amid austerity. “You cannot continue to sustain the existing price gaps that have been a mainstay of the luxury goods industry for the past 20 or 25 years,” saidLuca Solca, global head of European equities at CA Cheuvreux, in an interview. “What we expect luxury-goods companies to have to do is progressively close the pricing gap and, more likely than not, this is going to come from stepping up prices outside of Asia.”

Shanghai and Beijing, the two cities with Asia’s fastest-growing office rents, are set to lead a surge in commercial property transactions in China as more developers sell assets to raise cash for housing projects. Sales of office and retail buildings in the two major Chinese cities will double this year to $10.4 billion, according to Cushman & Wakefield Inc., which doesn’t make nationwide projections. The number of deals being negotiated in Shanghai in the past six months rose 50 percent from a year earlier, Jones Lang LaSalle Inc. said. Chinese real estate companies are selling commercial buildings for funds to complete apartment projects after the government’s two-year effort to curb home prices tightened credit. The cash ratio, a measure of liquidity for developers, fell to the lowest since 2008 as of December, according to data on 146 listed builders in China and Hong Kong compiled by Bloomberg.

In May 1998, Indonesia was in turmoil. During the previous 10 months, the currency had plunged 80 percent in value and food prices had soared 200 percent. Rioters were marauding through Jakarta, torching businesses owned by wealthier ethnic Chinese, who were fleeing for their lives. Safely ensconced in Hong Kong, where he was on vacation, an Indonesian-Chinese retailer named Djoko Susanto could have sat tight. Instead, he flew home to defend his four supermarkets from the mob. As he transited Singapore, where planes were arriving from Indonesia full and returning empty, the airline’s crew stared at him in disbelief. “There were five people on my flight,” Susanto recalls. “And I was the only Chinese.” While he couldn’t save his stores — all four were looted to the last light bulb — Susanto was on hand to seize an opportunity that would make him a billionaire, Bloomberg Markets reports in its June issue.
Two Federal Reserve presidents said Tuesday that it’s too early to say whether the United States is seeing a longer-term slowdown, but the recent ebb in economic growth is certainly worrisome. Chicago Fed president Charles Evans and Atlanta Fed Dennis Lockhart made it clear that we’re nowhere near normal economic times. “The economy continues to recover at a modest pace,” Lockhart said Tuesday, during a sit-down with reporters at the Milken Institute Global Conference. “Of course we have some vulnerability to shocks [and] the economy has a certain amount of fragility associated with it.” Lockhart, who is currently a voting member of the Federal Open Market Committee, wouldn’t say whether the United States’ economy has hit a “soft spot” yet.
Japan’s real gross domestic product contracted 0.8% during the month of March, swinging from growth in February, according to research cited in a Nikkei business daily report Tuesday. The Japan Center for Economic Research, which tracks Japanese GDP on a monthly basis, said consumer spending fell for the first time in fourth months, falling 0.4%, while exports were flat. But the study said both spending and exports likely improved in the first quarter, when compated to the October-December period, the Nikkei reported. “Whether the overseas economy recovers smoothly before the effects of eco-car subsidies and other policy measures weaken” will be key in determining the direction of the Japanese economy, the report quoted the JCER as saying.
Angela Merkel has said Europe needs “political courage and creativity rather than billions of euros” in a thinly disguised rejection of Francois Hollande’s pledge to re-write the fiscal pact if he wins the French presidential election on Sunday. The German Chancellor fired the warning shot at Mr Hollande as the socialist stormed ahead of Ms Merkel’s ally Nicolas Sarkozy in the presidential race. “It is important that we break with the idea that growth always costs a lot of money and must be the result of expensive stimulus programs,” she said in an interview due to be published on Wednesday in Hamburg’sAbendblatt newspaper.

The 2012 Olympics are unlikely to provide a substantial boost to the British economy, according to credit rating agency Moody’s. In a report on the London Games, Moody’s warns that GDP figures have already felt the impact of infrastructure spending on the Olympics and further benefits are likely to only be short-term. The report will be a setback to the Government, which has viewed the Olympics as a potential driver of consumer spending in the third quarter of 2012 that could lift UK out of its double-dip recession. Moody’s says that while increased visitor numbers could boost sales of retail and consumer products, any longer-term benefits will simply be through the increased visibility of brands and not extra sales.

One in seven home owners struggles to pay the mortgage and 20pc would not have enough for essentials such as food if their repayments rose by £100 a month. According to research by Which?, the consumer group, 70pc of mortgage-holders are concerned about an increase in interest rates. More than a million home owners will see the cost of their mortgage payments increase today as several lenders raise standard variable rate (SVR). Three quarters of mortgage-holders told the group that they would be affected if their repayments increased by £50 a month, with 41pc saying they would need to cut back on regular spending, 20pc reducing savings and 11pc not having enough for essentials.
China’s stock exchanges in Shanghai and Shenzhen on Monday both said they would cut brokerage fees for A-share transactions by over 20 percent starting June 1 in a bid to lower investor burden. The Shanghai bourse said in an online statement that the brokerage fee would be lowered from 0.011 percent to 0.0087 percent of the trading volume, representing a drop of about 20.91 percent. The Shenzhen bourse said it would lower the fee from 0.0122 percent to 0.0087 percent, a drop of 28.69 percent.

China`s big four state banks might have issued almost 101.7 billion yuan new loans by the date of April 25, an anonymous insider told China Securities Journal on Tuesday. Meanwhile, the big four lenders saw decrease in RMB deposits as the new lending slows down. The deposits declined more than 1 trillion yuan in the first two weeks, the source added.

China’s foreign exchange regulator said Sunday the country’s return on foreign investment has surged by an annual rate of 32 percent since 2004 to hit 128 billion U.S. dollars last year. Guan Tao, head of the balance of payment (BOP) department under the State Administration of Foreign Exchange (SAFE), said the SAFE is promoting the yuan’s convertibility under the capital account in a prudent and orderly manner and supports domestic institutions and individuals to conduct foreign investment.
West Bengal chief minister and key UPA ally Mamata Banerjee’s demand on a total moratorium on interest payments on loans taken by the state government is unlikely to be met. Senior Central government officials who didn’t want to be named said prime minister Manmohan Singh, who’s due to meet Banerjee on Friday ahead of the NCTC meeting, cannot give a firm promise because a special moratorium for one state is constitutionally invalid. Prime minister, however, has assured that his government will try and bail out the state when he met the TMC MPs last week.
South African crude oil imports from Iran rose to R3.37bn in March from R2.8bn the previous month, customs data showed on Monday, indicating Pretoria had not bowed to US pressure to curb commercial links with Tehran.  The Revenue Service said Africa’s biggest economy imported 505,908 tonnes of Iranian crude in March, up from 417,188 tonnes the previous month.
Iran has signed a 1.6 billion euro contract with a Spanish company to manufacture high-tech equipment and components for its oil and gas industry. Iran’s Society of Iranian Petroleum Industries Equipment Manufacturers (SIPIEM) signed the contract with the Spanish company, the Mehr News Agency reported on Tuesday.  The SIPIEM also signed another contract with a Chinese company to transfer technology to Iranian oil industry, the report added.

International Monetary Fund officials dismissed the U.S. pressures to suspend Iran relation with the fund, insisting the IMF isn’t violating any laws toward Iran. A New York-based advocacy group that has pressured companies and organizations to halt business with Iran is urging the International Monetary Fund to close its account at Iran’s central bank and suspend Iran as a member. Mark Wallace, president of United Against Nuclear Iran, a group whose founders include current and former administration officials, has sent a letter to IMF managing director Christine Lagarde criticizing the IMF’s relationship with Iran, according to a copy provided to Bloomberg. Iran’s central bank, also known as Bank Markazi, has been sanctioned by the U.S. and the European Union.

Indian state-run insurers have agreed to give cover to local ships for carrying Iranian oil, helping the energy-hungry country import from Tehran from July, a Shipping Corp of India director said on Tuesday. “We have in writing from General Insurance Corp that it and four other insurers will provide a cover of $50 million to Indian flag carriers per Iranian voyage,” Sunil Thapar of Shipping Corp of India, the country’s largest shipping firm with a fleet of 29 crude carriers, told Reuters. Tough new European Union sanctions aimed at stopping Iran’s oil trade also ban EU insurers and re-insurers from indemnifying ships carrying Iranian crude from July. China, another key oil client of Iran, is considering sovereign guarantees for its ships to continue importing oil.
An official announcement to declare India the Most Favoured Nation, or MFN, by Pakistan is expected by the end of this year, a top government official said on Tuesday. The central banks of the two countries are in close touch to clear the way for the opening of bank branches in each other’s territory by early next year. “Actually the cabinet of the Government of Pakistan in principal agreed that India is a business partner. There are some technicalities and after those are resolved then the final shape will be done,” Pakistan’s Federal Commerce Minister Makhdoom Amin Fahim told Khaleej Times on Tuesday at the Annual Investment Meeting in Dubai.

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