All Content

May 16, 2012

mhanna — Wed, 16 May 2012 22:56:36 +0000

Wednesday, May 16, 2012

By:

Mark Hanna

U.S. stocks closed with losses again Wednesday a report that the European Central Bank stopped funding operations with some Greek banks spooked investors. An afternoon release of the latest Federal Reserve meeting minutes indicated more officials were open to additional quantitative easing, but it was not enough to life the market. The S&P 500 fell 0.4% and NASDAQ 0.7%.

Minutes of the central bank's April 24-25 meeting released Wednesday stated that "several members" thought additional Fed support could be needed if the recovery lost momentum or if the risks to the economy became great enough. The minutes did not spell out what circumstances would trigger further Fed efforts to lower interest rates to boost the economy. But they did note some threats to the U.S. economy. One is Europe's debt crisis. Another is the risk that spending cuts and tax increases that could take effect at year's end if Congress can't reach a budget agreement could slow growth more than expected.

Economic news was benign:

Construction of homes rose 2.6% from March; even with the gains, the rate of construction for all homes is only about half the 1.5 million annual pace that most economists consider healthy.
U.S. factory production increased 0.6% in April; half of the April increase in factory output reflected a 3.9% jump in the production of motor vehicles and parts. That was the fifth straight gain at auto plants.

Gold fell $20.50 to finish at $1,536.60 per ounce, while silver dropped 88.4 cents to $27.17 per ounce. Crude oil fell $1.17 to end at $92.81 per barrel.

British shares were off 0.6% while Germany's DAX closed down 0.3%. The CAC-40 in France traded 0.3% higher.

Japan's Nikkei 225 index dropped 1.1% while China's Shanghai Composite Index fell 1.2%.

Germany Faces Political Isolation

europac admin — Wed, 16 May 2012 18:24:48 +0000

By:

John Browne

Tuesday, May 15, 2012

One month ago it appeared that Germany held the whip hand in its titanic struggle against those seeking to cure all economic ills with the snake oil of currency debasement. Now, it appears that the ground beneath its feet is being swept away in a flood of popular unrest and political exploitation. The recent elections in Europe, which highlight both the strong grass roots revolt against Germanic demands in Greece and France show that the cause of sound money and fiscal prudence to be a lonely and difficult endeavor.

The political isolation will likely weigh on the Merkel administration to abandon their monetary obstructionism. Unfortunately, Merkel has suffered recent election losses at home that seriously undermines her grip on power (see last week's column). Having suffered the chaotic, and socially destructive consequences of a collapsed currency in the early 1920's, the German people are firm believers in hard, effective work and sound money. Despite having one of the strongest currencies, Germany had been the world's leading exporter, until only recently having been overtaken by China. But this preference does not appear to be shared by the nations in which she is bound by monetary union.

Germany accepted the formation of the eurozone on the condition that the euro would remain a sound currency. To her credit, France has largely honored her pledge to support this aim. However, the recent election of Francois Hollande as France's President has placed continued French support in question creating severe political problems for the German government. To make matters worse, the recent elections in Greece threaten to dissolve the budgetary demands that Germany imposed on Greece in exchange for bailout funds. These agreements took months to negotiate and now may not be worth the paper upon which they are written.

Germany's belief in sound money mandates that wasteful government spending must be reduced. Furthermore, the Germans believe that, despite recession, it is better to endure economic and social pain now to achieve real growth, sound money and social stability over the long-term. The Anglo-Americans believe the contrary, that austerity will create unacceptable social unrest and that governments should increase spending even if they have to borrow massively, recklessly expand the money supply, risking high inflation to do so. But as the teeth of these policies inflict short term pain, as they are designed to do, rank and file voters revolt.

In Greece, the right wing parties of LAOS, Golden Dawn and the Conservatives lost heavily, with their share of the vote shrinking by more than half in some cases. Even the Socialists lost heavily as votes flowed leftwards to the Democratic Left, SYRIZA, led by Mr. Tsipras, and to the Communists. As no party seems able to gather a majority coalition, most likely there will be further elections in June, when it is expected that the left will consolidate and increase its gains. All three of these left leaning parties have declared austerity to be dead on arrival.

Most Eurozone banks and governments hold Greek government paper. If the Greeks default, the Eurozone, the EU and possibly some major U.S. banks will be put at risk. In addition, if other Club-Med countries see this happen they may be tempted to join the ranks of Greece and Iceland as preferring default to foreign-imposed austerity.

If Italy or France were persuaded to default, the Germans would have to consider leaving the Eurozone. The euro would be in danger of collapse and with it possibly the EU superstate, reverting to its originally declared form of a free trade area. The collapse of the EU, now the world's largest economy with a GDP of some $17.4 trillion and the euro as the second currency, would be potentially devastating to the world economy and to the international fiat currency system.

Doubtless, massive diplomatic pressure is now being put on the German government to ignore its peoples' wishes for a sound currency and to join the Anglo-American led Keynesian club of monetary debasers. It's hard to imagine if the German's longstanding aversion to money printing can be overcome in order to maintain the status quo.

Should Germany succumb, the world probably will experience a short-term boom before sliding into a long and severe period of depression, hyperinflation and ultimately stagflation. From my perspective, this could lead to a renewed global polarization with some countries drifting toward Communism while others drift towards the stability of a new international gold standard.

John Browne is a Senior Economic Consultant to Euro Pacific Capital. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific Capital, or its CEO, Peter Schiff.

Subscribe to Euro Pacific's Weekly Digest: Receive all commentaries by Peter Schiff, John Browne, and other Euro Pacific commentators delivered to your inbox every Monday!

Are you a serious investor? Then don't miss hard-hitting, original analysis in every issue of Euro Pacific Capital's Global Investor newsletter. Click here for more information.

To save 35% on Peter Schiff's new book, The Real Crash: America’s Coming Bankruptcy – How to Save Yourself and Your Country, pre-order your copy today.

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Please feel free to repost with proper attribution and all links included.

Euro Pacific Global Investment Conference Brings Leading International Transportation, Energy and Mining Companies to NYC

europac admin — Wed, 16 May 2012 18:19:07 +0000

Content Type:

Press Release

May 15, 2012

Euro Pacific Global Investment Conference Brings Leading International Transportation, Energy and Mining Companies to NYC

Thursday, May 31, 2012 - Sofitel Hotel in New York

Euro Pacific Capital Global Investment Conference

WESTPORT, Conn.--(BUSINESS WIRE)--Euro Pacific Capital, a U.S. based brokerage firm, has announced its second annual Global Investment Conference. The one day event, which will feature top executives from 55 international public companies with a combined market capitalization of more than $300 billion, will be held on Thursday, May 31st at the Sofitel Hotel in midtown Manhattan.

Attending executives represent global companies from the transportation, mining, and energy sectors, including such notable firms as Petrobras (PBR) --South America's largest energy company, Deutsche Post (DPW), Agnico Eagle Mines (AEM), Aurizon Mines* (AZK), Harry Winston Diamond (HWD), Canadian Oil Sands (COS), and A.P. Moller Maersk - Damco [MAERSKB] --the world's largest container shipping company. Presentations will last 30 minutes, after which the executives will be available for one-on-one meetings with institutional investors. In addition, the event will feature panel discussions on the future of non-traditional energy and how the 2012 JOBS act will alter the regulatory landscape for public companies that seek listing on U.S. exchanges. For more information, go to EPC Global Investment Conference 2012.

The event's key note address will be delivered by Euro Pacific founder Peter Schiff, who has long championed the need for greater non-dollar diversification for U.S.-based investors. "Over the last generation, the vast majority of the world's economic growth has occurred beyond America's borders," said Mr. Schiff. "This conference is my attempt to showcase that opportunity to both institutional and retail investors."

The 7:30am to 5:30pm event is priced at $295 for retail investors and will be held at New York's elegant Sofitel Hotel. Admission includes two buffet meals, a two hour post event cocktail party, and a gift bag that includes Mr. Schiff's brand new book The Real Crash: America's Coming Bankruptcy and How to Save Yourself and Your Country. Admission is free for employees from qualified institutional investment firms.

Institutional investors looking to attend should contact Keith Wellen at Euro Pacific Capital institutional sales office, at 800-727-7922 ext. 277 or e-mail: kwellen@europac.net. Retail investors should register online at Euro Pacific Capital Conference Registration.

About Euro Pacific Capital

Founded in 1997 and headquartered in Westport, Connecticut, Euro Pacific Capital, Inc. is a full-service, registered broker/dealer specializing in foreign markets and securities. Peter Schiff, is widely known for his outspokenviews on global economics and the potential vulnerabilities of the U.S economy and the U.S.dollar. The firm operates from six regional branches coast to coast and employs more than 40 investment consultants, a team of research analysts, and three divisions - Retail Brokerage, Wealth Management and Capital Markets.

Please note: Company list is subject to change. This is not an offer or solicitation of the securities herein.

* Euro Pacific Capital has initiated research coverage of this company.

Contacts
Euro Pacific Capital
Andrew Schiff, 800-727-7922 ext. 135
aschiff@europac.net

BOJ Failed to Draw Enough Offers in Debt Purchase

europac admin — Wed, 16 May 2012 16:48:29 +0000

Content Type:

Newswire

Source:

Bloomberg

Link:

http://www.bloomberg.com/news/2012-05-16/boj-failed-to-draw-enough-offers-in-debt-purchase.html

Final Link:

BOJ Failed to Draw Enough Offers in Debt Purchase
Bloomberg • May 16, 2012

Farmland Values Continue to Surge in U.S. Midwest

europac admin — Wed, 16 May 2012 16:40:53 +0000

Content Type:

Newswire

Source:

Wall Street Journal

Link:

http://online.wsj.com/article/SB10001424052702304371504577406633108337476.html?mod=googlenews_wsj

Final Link:

Farmland Values Continue to Surge in U.S. Midwest
Wall Street Journal • May 16, 2012

ECB Stops Operations With Some Greek Banks

europac admin — Wed, 16 May 2012 16:36:09 +0000

Content Type:

Newswire

Source:

Reuters

Link:

http://www.reuters.com/article/2012/05/16/us-ecb-greece-banks-idUSBRE84F0SN20120516

Final Link:

ECB Stops Operations With Some Greek Banks
Reuters • May 16, 2012

Time Is Running Out for Treasury Market Rally

europac admin — Wed, 16 May 2012 16:32:33 +0000

Content Type:

Newswire

Source:

CNBC

Link:

http://www.cnbc.com/id/47424011

Final Link:

Time Is Running Out for Treasury Market Rally
CNBC • May 16, 2012

Stimulus Dollars Fund Studies into Erectile Dysfunction

europac admin — Wed, 16 May 2012 16:29:24 +0000

Content Type:

Newswire

Source:

NBC

Link:

http://www.nbcbayarea.com/investigations/Stimulus-Grants-Fund-Erectile-Dysfunction-And-Sexual-Habits-Studies-151195105.html

Final Link:

Stimulus Dollars Fund Studies into Erectile Dysfunction
NBC • May 16, 2012

Germans Fret about Their Foreign Gold Reserves

europac admin — Wed, 16 May 2012 16:27:48 +0000

Content Type:

Newswire

Source:

Der Spiegel

Link:

http://www.spiegel.de/international/germany/debate-breaks-out-in-germany-over-foreign-gold-reserves-a-833289.html

Final Link:

Germans Fret about Their Foreign Gold Reserves
Der Spiegel • May 16, 2012

People’s Bank of China Will Cut Banks’s Reserve Ratio

europac admin — Wed, 16 May 2012 16:15:56 +0000

Content Type:

Newswire

Source:

Bloomberg

Link:

http://www.bloomberg.com/news/2012-05-12/people-s-bank-of-china-will-cut-banks-s-reserve-ratio.html

Final Link:

People’s Bank of China Will Cut Banks’s Reserve Ratio
Bloomberg • May 16, 2012

Greeks Withdraw $894 Million in a Day

europac admin — Wed, 16 May 2012 14:50:45 +0000

Content Type:

Newswire

Source:

MSNBC

Link:

http://worldnews.msnbc.msn.com/_news/2012/05/16/11729795-greeks-withdraw-894-million-in-a-day-is-this-beginning-of-a-run-on-banks?lite

Final Link:

Greeks Withdraw $894 Million in a Day
MSNBC • May 16, 2012

May 15, 2012

mhanna — Tue, 15 May 2012 23:47:00 +0000

Tuesday, May 15, 2012

By:

Mark Hanna

U.S. stocks experienced another volatile session Tuesday as better than expected (but not good) European GDP data surpassed the worse fears, but news out of Greece continued to weigh on markets. The S&P 500 fell 0.6% and NASDAQ 0.3%.

Gold fell $3.90 to finish at $1,557.10 per ounce, while silver dropped 26.5 cents to $28.054 per ounce. Crude oil declined 80 cents to end at $93.98 per barrel.

Britain's FTSE 100 ended 0.5 percent lower while Germany's DAX fell 0.8 percent. The CAC-40 in France shed 0.6 percent.

The euro fell as low as $1.2720, a four-month low against the dollar, after Greek socialist leader Evangelos Venizelos declared that attempts to form a governing coalition there had failed and new elections will be held next month.
Germany prevented the economy of the 17 countries that use the euro from falling into a recession in the first quarter of the year despite a raging debt crisis that's raising the specter of the breakup of the currency union.
The country, which accounts for over a quarter of economic output in the single currency bloc, managed to post growth of 0.5 percent in the first three months of the year against the previous quarter. Germany propped up the ailing eurozone economy during the quarter, preventing it from falling back into recession — officially defined as two consecutive quarters of negative growth. Without it, the economy of the remainder of the eurozone would have slipped into a recession with a 0.25 percent decline in GDP

Japan's Nikkei 225 finished down 0.8%.

Jerry Brown's Plea: 'Please Increase Taxes Temporarily'

europac admin — Tue, 15 May 2012 15:44:59 +0000

Content Type:

Newswire

Source:

Los Angeles Times

Link:

http://www.latimes.com/news/local/la-me-state-budget-20120515,0,1532582.story

Final Link:

Jerry Brown's Plea: 'Please Increase Taxes Temporarily'
Los Angeles Times • May 15, 2012

John Snow: 'Taxmaggedon' Is a Real Threat

europac admin — Tue, 15 May 2012 15:38:21 +0000

Content Type:

Newswire

Source:

Wall Street Journal

Link:

http://online.wsj.com/article/SB10001424052702304743704577382371561326132.html?mod=opinion_newsreel

Final Link:

John Snow: 'Taxmaggedon' Is a Real Threat
Wall Street Journal • May 15, 2012

Italy Economy Contracts Most in Three Years on Recession

europac admin — Tue, 15 May 2012 15:36:03 +0000

Content Type:

Newswire

Source:

Bloomberg

Link:

http://www.bloomberg.com/news/2012-05-15/italy-economy-contracts-most-in-three-years-on-recession.html

Final Link:

Italy Economy Contracts Most in Three Years on Recession
Bloomberg • May 15, 2012

Merkel Tells Greece to Back Cuts or Face Euro Exit

europac admin — Tue, 15 May 2012 15:28:31 +0000

Content Type:

Newswire

Source:

The Telegraph

Link:

http://www.telegraph.co.uk/finance/financialcrisis/9265930/Merkel-tells-Greece-to-back-cuts-or-face-euro-exit.html

Final Link:

Merkel Tells Greece to Back Cuts or Face Euro Exit
The Telegraph • May 15, 2012

Faith Fades in Eurozone Firewall

europac admin — Tue, 15 May 2012 15:27:14 +0000

Content Type:

Newswire

Source:

Financial Times

Link:

http://www.ft.com/intl/cms/s/0/517e01a6-9ddf-11e1-9a9e-00144feabdc0.html#axzz1ux1vyc7f

Final Link:

Faith Fades in Eurozone Firewall
Financial Times • May 15, 2012

Resource-Rich Canada Looks to China for Growth

europac admin — Tue, 15 May 2012 14:34:57 +0000

Content Type:

Newswire

Source:

Wall Street Journal

Link:

http://online.wsj.com/article/SB10001424052702304177104577311921156382152.html

Final Link:

Resource-Rich Canada Looks to China for Growth
Wall Street Journal • May 15, 2012

Workers Lacking Skills Hinder More Factory Gains

europac admin — Tue, 15 May 2012 14:32:11 +0000

Content Type:

Newswire

Source:

Bloomberg

Link:

http://www.bloomberg.com/news/2012-05-14/workers-lacking-skills-hinder-more-u-s-factory-gains-economy.html

Final Link:

Workers Lacking Skills Hinder More Factory Gains
Bloomberg • May 15, 2012

Investment, the Engine of U.S. Prosperity, Is Underrated

europac admin — Tue, 15 May 2012 14:31:42 +0000

Content Type:

Newswire

Source:

Bloomberg

Link:

http://www.bloomberg.com/news/2012-05-13/investment-the-engine-of-u-s-prosperity-is-underrated.html

Final Link:

Investment, the Engine of U.S. Prosperity, Is Underrated
Bloomberg • May 15, 2012

May 14, 2012

mhanna — Tue, 15 May 2012 00:18:43 +0000

Monday, May 14, 2012

By:

Mark Hanna

U.S. stocks closed with losses again Monday, continuing a rough streak in May as European politics dominated the news flow. The S&P 500 and NASDAQ both fell 1.1%. As investors fled over the worries in Europe, they continued to push into the U.S. dollar (the euro fell to 3 month lows versus the dollar), which hurt commodities.

Gold fell $23, or 1.5%, to $1,561 per ounce, while silver fell 53.9 cents, or 1.9 percent, to $28.319 per ounce. Crude oil lost $1.35 to end the day at $94.78 per barrel.

Britain's FTSE 100 fell 2% and Germany's DAX tumbled 1.95. France's CAC-40 lost 2.1%.

State television in Greece reported the president of the fiscally beleaguered country will continue talks on forming a coalition government, although Socialist leader Evangelos Venizelos said on Monday he was not optimistic that a government could be formed.
German Chancellor Angela Merkel's Christian Democrats suffered a crushing defeat on Sunday, which could encourage the opposition to increase attacks on her austerity policies. Merkel said on Monday the defeat was a bitter setback, but would not alter her view on how to achieve growth.
Moody's Investors Service downgraded the debt ratings of 26 Italian banks as they struggled with the effect of the weak economy and government austerity measures. The move means Moody's now ranks Italy's banks lower than most of their Western European peers. The ratings agency said the banks are suffering because Italy is back in recession and government measures are cutting demand for loans. Banks are facing more loan losses, limited access to funding and weaker profits.

Japan's Nikkei 225 index rose 0.2% while China's Shanghai index fell 0.6%.

China cut the amount of cash banks must hold as reserves by 50 basis points over the weekend. The move is expected to free over 400 billion yuan ($63.4 billion) in financing.

John Browne

Friday, May 11, 2012

Last week's media headlines focused on how the election results in France and Greece reflected a wave of rising public resistance across Europe to the austerity programs being championed by Germany, the IMF, and the EU. Less notice has been given to Germany's internal revolt against Chancellor Angela Merkel's conservative policies at home and abroad. Elections in the north German state of Schleswig-Holstein just ended the dominance there of Angela Merkel's Christian Democrats (CDP/CDU) while emboldening the center-left Social Democrats (SDP), hard-left Greens, and libertarian Free Democrats (FDP). Those results are expected to be repeated at this Sunday's ballot in North Rhine-Westphalia, Germany's largest state.

Taken together, these elections send a message to the Chancellor that support for her assistance-for-austerity program is eroding. Instead, Germans are increasingly choosing more radical positions. Those in favor of austerity are losing patience with subsidizing Greek largesse, while a larger majority is tiring of austerity altogether. There is talk that this polarization may eventually lead to an unprecedented "Traffic Light Coalition" of the SDP ("the reds"), FDP ("the yellows"), and Greens at the federal level. This coalition would likely offer a policy program in direct opposition to the current Government, with great implications for the eurozone.

Chancellor Merkel's Government has walked the fine line of tending to traditional post-war German sentiments of fiscal and monetary prudence and trying to hold together the currency bloc dominated by Germany. This dual mandate manifested itself in massive assistance for Greece, Ireland, and Portugal in return for harsh austerity measures. The Chancellor's supporters see this as a moderate and prudent compromise - but as is the case with such arrangements, all partisans are left with grievances.

The German left - represented by the conventional SDP and the radical Greens - largely supports the subsidies being sent to the eurozone's weaker members but also questions why belts must be kept so tight at home. In their utopian Marxist vision, all Europeans should be living a life of plenty and no one should truly be asked to work for it.

The German right - represented by Merkel's conventional CDP and the radical FDP - was initially interested first and foremost in preventing a shock to the market caused by the failure of one of the PIIGS (Portugal, Ireland, Italy, Greece, or Spain). However, as these peripheral nations have rebelled against the austerity requirements accompanying the assistance Germany has offered, many of the more market-minded members of the right have begun to see the euro as a lost cause and a drag on Germany's own economy.

If this trend continues, the next federal election could see the current Merkel coalition lose out to the Traffic Light Coalition of the left-wing parties and the radical-right Free Democrats. The resulting policy agenda could include both increased public expenditure at home to placate the left wing and a withdrawal from the eurozone at the behest of the radical right. As with the current policy, this will be a mixed blessing for global investors.

A German withdrawal from the eurozone would utterly undermine the world's second reserve currency. The ECB absent of German influence would be pressured by the likes of France and the PIIGS to devalue the euro expeditiously. This would have dramatic implications for world trade and for the international monetary system. It may even forestall the further decline of the dollar as investors run away from the euro and into the relative stability of the US for a time.

However, for Germany, I believe it would be a decidedly winning move. Even with less fiscal prudence under the dominant left-wing parties, inflation hawks would likely retain their historic control of the Deutsche Bundesbank, which would resume issue of the trusty Deutsche Mark. While the SDP/Greens' public-sector expansion might precipitate a crisis far in the future, Germany currently has the domestic surpluses and industrial capacity to underwrite their foolishness.

If Germany decides that its economic system is fundamentally incompatible with a neo-Keynesian Europe, it may shift its trade focus to emerging BRICS countries, some OPEC members, and even resource-rich Western nations like Australia and Canada. I believe that such an economic bloc would favor a gold-based international monetary system, which may actually lead to the ultimate demise of the fiat money system advocated by Washington and Brussels.

In summary, beneath much media noise about the backlash against austerity in bankrupt nations, it is actually once again the German electorate that may hold the fate of Europe in its hands. Let us all hope they choose the course of least devastation and watch carefully to position our investments for any outcome.

Subscribe to Euro Pacific's Weekly Digest: Receive all commentaries by Peter Schiff, John Browne, and other Euro Pacific commentators delivered to your inbox every Monday!

Are you a serious investor? Then don't miss hard-hitting, original analysis in every issue of Euro Pacific Capital's Global Investor newsletter. Click here for more information.

To save 35% on Peter Schiff's new book, The Real Crash: America’s Coming Bankruptcy – How to Save Yourself and Your Country, pre-order your copy today.

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Please feel free to repost with proper attribution and all links included.

Facebook Co-Founder Gives Up US Citizenship Before IPO

europac admin — Mon, 14 May 2012 13:57:57 +0000

Content Type:

Newswire

Source:

Business Week

Link:

http://www.businessweek.com/news/2012-05-11/facebook-co-founder-saverin-gives-up-u-dot-s-dot-citizenship-before-ipo

Final Link:

Facebook Co-Founder Gives Up US Citizenship Before IPO
Business Week • May 14, 2012

May 11, 2012

mhanna — Fri, 11 May 2012 23:31:03 +0000

Friday, May 11, 2012

By:

Mark Hanna

U.S. stocks finished mixed in another volatile session Friday after Thursday evening's disclosure of a large trading loss by JPMorgan roiled the banking sector. The S&P 500 fell 0.3% while the NASDAQ finished gradually higher. JPMorgan, the country's largest bank, dropped 9.3%.

JPMorgan Chase & Co lost $15 billion in market value and a notch in its credit ratings on Friday while a chorus of regulators and politicians reacted to its surprise $2 billion trading loss by demanding stiffer oversight for the banking industry.
The company estimates the business unit involved in the trading loss will lose $800 million in the current quarter, excluding private equity results and litigation expenses. The bank had previously expected the unit to post a profit of about $200 million. Jamie Dimon, JPMorgan's chief executive, cautioned that losses could grow by another $1 billion
Fitch Ratings downgraded JPMorgan's debt ratings by one notch and put all of the ratings of the bank and its subsidiaries on negative ratings watch. While Fitch saw the size of the loss as manageable, "the magnitude of the loss and ongoing nature of these positions implies a lack of liquidity," the ratings agency said. "It also raises questions regarding JPM's risk appetite, risk management framework, practices and oversight; all key credit factors."

In economic news:

Thomson Reuters/University of Michigan's preliminary consumer confidence index for May improved to a reading of 77.8 from 76.4 in April, topping forecasts of 76.2. Consumers were only slightly more optimistic about declines in the unemployment rate than they were a year ago, with only one in four expecting it to fall in the year ahead.
The Labor Department said its seasonally adjusted producer price index dropped 0.2% last month. That was the first drop this year. Economists polled by Reuters had expected prices to be flat last month. The drop in PPI was due to a 1.4% decline in energy prices, the biggest since October.

Silver dropped 27.8 cents to $28.858 per ounce while gold fell $11.50 to end at $1,584 per ounce. Crude oil dropped 95 cents to end at $96.13.

British shares rose 0.6% while Germany's DAX rose 1%. The CAC-40 in France was down 0.4%.

Japan's Nikkei 225 index and China's Shanghai index both fell 0.6%.

Chinese industrial production rose by 9.3% in April (versus 12% in March), the lowest level since May 2009, while retail sales surprised the market by slowing to a 14.1% rise, the lowest level in 14 months.
Annual consumer inflation moderated to 3.4% in April from 3.6% in March, while food prices rose by 7%, compared with 7.5% in March.

France's Hollande: Sarkozy Underplayed Budget Woes

europac admin — Fri, 11 May 2012 15:23:10 +0000

Content Type:

Newswire

Source:

Yahoo! Finance

Link:

http://finance.yahoo.com/news/frances-hollande-sarkozy-underplayed-budget-103758874.html;_ylt=Ao7c.MJEZDZV.JbuR_ZuLon2uYdG;_ylu=X3oDMTQ3MzQ4NGRtBG1pdANUb3AgU3RvcnkgTGlzdCAgTm8gQ29sbGVjdGlvbgRwa2cDNjZkNzkwNTEtZjFhMy0zNTAyLThkOWEtNzBlZjZlZWE5YjUwBHBvcw

Final Link:

France's Hollande: Sarkozy Underplayed Budget Woes
Yahoo! Finance • May 11, 2012

Number of Women Not in Labor Force Hits All-Time High

europac admin — Fri, 11 May 2012 15:18:56 +0000

Content Type:

Newswire

Source:

CBS21

Link:

http://www.whptv.com/news/local/story/324-000-women-dropped-out-of-the-labor-force-in/k27lvYikdUKzcnuBky2vxw.cspx

Final Link:

Number of Women Not in Labor Force Hits All-Time High
CBS21 • May 11, 2012

China Halts European Debt Buying on Crisis Concerns

europac admin — Fri, 11 May 2012 15:14:28 +0000

Content Type:

Newswire

Source:

Financial Post

Link:

http://business.financialpost.com/2012/05/09/china-investment-halts-european-debt-investments-on-crisis-concerns

Final Link:

China Halts European Debt Buying on Crisis Concerns
Financial Post • May 11, 2012

Banks Prepare for the Return of the Drachma

europac admin — Fri, 11 May 2012 15:08:15 +0000

Content Type:

Newswire

Source:

Reuters

Link:

http://www.reuters.com/article/2012/05/11/us-banks-drachma-idUSBRE84A0DC20120511

Final Link:

Banks Prepare for the Return of the Drachma
Reuters • May 11, 2012

Greece Euro-Exit Debate Goes Public

europac admin — Fri, 11 May 2012 14:52:44 +0000

Content Type:

Newswire

Source:

Bloomberg

Link:

http://www.bloomberg.com/news/2012-05-09/greek-euro-exit-talk-seeps-into-public-as-officials-air-doubts.html

Final Link:

Greece Euro-Exit Debate Goes Public
Bloomberg • May 11, 2012

Italian, German Central Bankers at Odds on ECB Role

europac admin — Fri, 11 May 2012 14:51:40 +0000

Content Type:

Newswire

Source:

Reuters

Link:

http://www.reuters.com/article/2012/05/09/ecb-italy-idUSL5E8G983220120509

Final Link:

Italian, German Central Bankers at Odds on ECB Role
Reuters • May 11, 2012

Spain Underplaying Bank Losses Faces Ireland Fate

europac admin — Fri, 11 May 2012 14:49:16 +0000

Content Type:

Newswire

Source:

Bloomberg

Link:

http://www.bloomberg.com/news/2012-05-09/spain-underplaying-bank-losses-faces-ireland-fate.html

Final Link:

Spain Underplaying Bank Losses Faces Ireland Fate
Bloomberg • May 11, 2012

EU to Release Most of Aid Tranche to Greece

europac admin — Fri, 11 May 2012 14:45:58 +0000

Content Type:

Newswire

Source:

Wall Street Journal

Link:

http://online.wsj.com/article/SB10001424052702304070304577393993915783720.html?mod=googlenews_wsj

Final Link:

EU to Release Most of Aid Tranche to Greece
Wall Street Journal • May 11, 2012

May 10, 2012

mhanna — Thu, 10 May 2012 23:49:50 +0000

Thursday, May 10, 2012

By:

Mark Hanna

U.S. stocks were mixed Thursday after giving up moderate gains earlier in the session. There was no particular catalyst other than the markets had been oversold coming into the day and were prone to a 'dead cat' bounce at some point. The S&P 500 gained 0.2% while the NASDAQ was flat. However, after the closing bell JP Morgan (JPM) admitted a large trading loss which caused a slump in the futures market.

JPMorgan Chase, the largest bank in the United States, said Thursday that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money. The company's stock plunged almost 7 percent in after-hours trading after the loss was announced. "The portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought," CEO Jamie Dimon told reporters. "There were many errors, sloppiness and bad judgment."

In economic news:

New claims for state unemployment benefits slipped 1,000 last week to a seasonally adjusted 367,000, the Labor Department said. The four-week moving average for new claims, considered a better measure of labor market trends, fell 5,250 to 379,000.
The trade gap widened 14.1% to $51.8 billion in March, the biggest jump in nearly a year, as a surge in imports swamped a rise in exports. Imports grew 5.2%, the biggest gain since January. For the year, the trade deficit is running at an annual rate of nearly $600 billion. That's about 7% more than last year's gap.

Gold rose $1.30 to end at $1,595.50 an ounce, while silver fell 6.1 cents to $29.136 per ounce.mmCrude oil rose 27 cents to finish at $97.08 per barrel.

British shares closed 0.3% higher while Germany's DAX rose 0.7%. The CAC-40 in France ended 0.4% higher.

The Bank of England kept its base interest rate at the all-time low of 0.5% and did not approve any additional monetary stimulus.
Spain announced it would take over Bankia SA, the country's fourth-largest bank, which has high exposure to bad property loans.

Japan's Nikkei 225 index dropped 0.4%, while China's Shanghai Index added 0.1%.

49% of Americans Saving Zilch for Retirement

europac admin — Thu, 10 May 2012 16:01:35 +0000

Content Type:

Newswire

Source:

CNN Money

Link:

http://money.cnn.com/2012/05/10/retirement/saving-retire/index.htm?iid=Popular

Final Link:

49% of Americans Saving Zilch for Retirement
CNN Money • May 10, 2012

Germany: Greece Must Agree to Bailout Or Aid Will Stop

europac admin — Thu, 10 May 2012 15:58:59 +0000

Content Type:

Newswire

Source:

The Telegraph

Link:

http://www.telegraph.co.uk/finance/financialcrisis/9255637/Germany-warns-Greece-it-will-halt-aid-unless-it-commits-to-bailout-agreements.html

Final Link:

Germany: Greece Must Agree to Bailout Or Aid Will Stop
The Telegraph • May 10, 2012

Moody’s Downgrades Risk Choking European Recovery

europac admin — Thu, 10 May 2012 15:27:03 +0000

Content Type:

Newswire

Source:

Bloomberg

Link:

http://www.bloomberg.com/news/2012-05-08/moody-s-bank-downgrades-risk-choking-european-recovery.html

Final Link:

Moody’s Downgrades Risk Choking European Recovery
Bloomberg • May 10, 2012

Greece’s New Leftist Leader Says Bailout Deal Is Dead

europac admin — Thu, 10 May 2012 14:31:49 +0000

Content Type:

Newswire

Source:

CNBC

Link:

http://www.cnbc.com//id/47334408

Final Link:

Greece’s New Leftist Leader Says Bailout Deal Is Dead
CNBC • May 10, 2012

CEOs Tell Geithner New Tax Hikes Would Harm Economy

europac admin — Thu, 10 May 2012 14:31:13 +0000

Content Type:

Newswire

Source:

Fox Business

Link:

http://www.foxbusiness.com/news/2012/05/09/ceos-tell-geithner-dividend-capital-gains-tax-hike-would-harm-economy/

Final Link:

CEOs Tell Geithner New Tax Hikes Would Harm Economy
Fox Business • May 10, 2012

Few Options if Europe Turns Away From Austerity

europac admin — Thu, 10 May 2012 13:51:43 +0000

Content Type:

Newswire

Source:

New York Times

Link:

http://www.nytimes.com/2012/05/09/business/global/if-europe-turns-away-from-austerity-who-will-foot-the-bill.html?_r=3&ref=business

Final Link:

Few Options if Europe Turns Away From Austerity
New York Times • May 10, 2012

Turmoil in Greece Raises Euro Risk

europac admin — Thu, 10 May 2012 13:50:41 +0000

Content Type:

Newswire

Source:

Wall Street Journal

Link:

http://online.wsj.com/article/SB10001424052702303630404577392381738590646.html?mod=rss_whats_news_us

Final Link:

Turmoil in Greece Raises Euro Risk
Wall Street Journal • May 10, 2012

U.S. Trade Deficit Rises to $51.8B in March

europac admin — Thu, 10 May 2012 13:50:26 +0000

Content Type:

Newswire

Source:

Fox Business

Link:

http://www.foxbusiness.com/economy/2012/05/10/us-trade-deficit-rises-to-518b-in-march/

Final Link:

U.S. Trade Deficit Rises to $51.8B in March
Fox Business • May 10, 2012

May 9, 2012

mhanna — Wed, 09 May 2012 22:29:40 +0000

Wednesday, May 9, 2012

By:

Mark Hanna

U.S. stocks continued their losing streak with the S&P 500 down 0.7% and NASDAQ 0.4%, in yet another volatile session. Markets dropped to their lowest point early in the session on rumors Greece would not receive their next tranche of bailout funds, but when news reports surfaced to reject that claim markets jumped to nearly positive mid day. However, stocks continued to sell off as the session continued. The euro fell to its lowest point versus the dollar since January 23.

Gold dropped $10.30 to finish at $1,594.20 an ounce, while silver fell 21.7 cents to $29.197 per ounce. Crude oil fell 20 cents to end at $96.81 per barrel.

British stocks fell 0.4%, German stocks gained 0.5%, and French stocks dropped 0.2%.

The yield on the 10-year Spanish bond climbed above 6%, after Spain said it will demand banks set aside another 35 billion euros ($45 billion) against loans to the ailing building sector.
German exports rose 0.9% in March compared with the previous month to hit a new record level, but the growth rate slowed as demand from elsewhere in the debt-troubled eurozone sagged. Germany, Europe's biggest economy, exported goods and services worth a total of €98.9 billion ($129 billion) in March, theFederal Statistical Office said — a 0.7% increase compared with the same month last year, which was the previous record. It was the third successive month-on-month increase in exports, although the growth rate was slower than the 1.5% seen in February and January's gain of 3.4%.

Japan dropped 1.5%, while China gave back 1.7%.

The China Association of Automobile Manufacturers said Wednesday that April's total sales rose 5% from a year earlier to 1.62 million vehicles. Auto sales growth in China has slowed from 35% in 2010 to just 2% in the first quarter of this year, as local governments imposed traffic curbs, credit policies were tightened and economic growth cooled.