World Markets Fall and Then Recover a Bit; Worries Still Abound Over Greece & Global Slowdown

“Stocks fell, sending the global benchmark index to a one-week low, amid concern the economic recovery is faltering. Portuguese and Irish debt insurance surged to records after Moody’s Investors Service saidGreece has a 50 percent chance of default.

The MSCI All-Country World Index slid 0.5 percent at 7:15 a.m. in New York. Futures on the Standard & Poor’s 500 Index rose 0.3 percent after the gauge tumbled the most since August yesterday. The yield on Greece’s 10-year bond jumped 12 basis points, and the Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments climbed 3.5 basis points. The euro strengthened against 13 of its 16 major peers, adding 1 percent to $1.4466. Sugar and wheat gained.

Economists cut their forecasts for U.S. payroll gains in May after a private report yesterday showed employers added 38,000 jobs, less than a quarter of the median growth forecast in a survey. Data today may show U.S. factory orders fell the most since October. Moody’s downgraded Greece to Caa1 from B1, putting it on a par with Cuba, according to a report yesterday.”

Full article

They targeted Sr U.S. officials gmail accounts for passwords. China says the claims are base less….

“Google Inc. (GOOG), owner of the world’s most popular search engine, said hackers tried to steal passwords from hundreds of Gmail users, targeting the accounts of government officials in the U.S. and Asia.

The campaign, which appears to have originated in Jinan, China, probably used a so-called phishing scam to collect passwords with the goal of monitoring e-mail content, Eric Grosse, engineering director on the Google Security Team, said in a blog post. The company said it detected and disrupted the campaign, secured users’ accounts and notified authorities.

“We believe that being open about these security issues helps users better protect their information online,” Grosse said on the blog.

The campaign against Gmail users comes amid growing concern about network security, prompted by recent cyber attacks against Sony Corp. and Lockheed Martin Corp. Google said last year it was the victim of attacks against its systems that originated in China and focused on human-rights activists’ accounts. Google said it was no longer willing to censor search results in China, and then started redirecting users there to its Hong Kong service.”

Full article

“The euro gained versus the dollar and yen as German Chancellor Angela Merkel said she is committed to the currency and European Central Bank officials backed the creation of a euro-region finance ministry.

Europe’s single currency rose against 14 of its 16 major peers tracked by Bloomberg. The yen stayed lower as Japan’s Prime Minister Naoto Kan survived a no-confidence vote after offering to step down once his work to lead a recovery from March’s earthquake is accomplished. The New Zealand dollar dropped against the euro and the yen after Fonterra Cooperative Group Ltd. said whole milk powder prices fell to a four-month low at an auction.”

Full article

down 0.6% as you read this.

In light of the world not ending, U.S. futures are pointing to a higher open, just ahead of European markets opening.

At the moment, S&P futures are up 2.4.

Supply shortage

Full article

In response to Wall street’s blood letting session.

Halted.

Full article

Full article with video

min mkt cap $1billion

5 JOSB -13.29 1,580,000,000
6 JNPR -9.94 19,520,000,000
7 DG -9.30 11,980,000,000
8 TWI -7.66 1,160,000,000
9 BC -7.59 1,930,000,000
10 RF -7.37 8,870,000,000
11 FNSR -7.22 2,150,000,000
12 CENX -7.19 1,500,000,000
13 MTZ -7.05 1,670,000,000
14 SEE -7.05 4,110,000,000
15 MWW -6.84 1,880,000,000
16 THRX -6.77 2,200,000,000
17 BVN -6.75 11,200,000,000
18 IO -6.74 1,560,000,000
19 LYG -6.74 57,760,000,000
20 RAVN -6.70 1,010,000,000
21 BAS -6.65 1,150,000,000
22 WFR -6.65 2,420,000,000
23 TZOO -6.64 1,240,000,000
24 URI -6.60 1,710,000,000
25 RGC -6.57 2,090,000,000
26 STI -6.56 14,060,000,000
27 RP -6.55 2,050,000,000
28 DLX -6.53 1,320,000,000
29 SVU -6.53 2,180,000,000
30 LDK -6.46 1,120,000,000
31 HLX -6.39 1,860,000,000
32 IDCC -6.37 1,950,000,000
33 TTMI -6.37 1,350,000,000
34 POOL -6.32 1,460,000,000
35 MU -6.27 10,210,000,000
36 NAK -6.27 1,190,000,000
37 ODFL -6.24 2,140,000,000
38 SWY -6.23 9,040,000,000
39 EWBC -6.22 2,940,000,000
40 NOG -6.19 1,240,000,000
41 WTI -6.18 1,930,000,000
42 THO -6.04 1,800,000,000
43 PANL -6.01 2,160,000,000
44 BID -5.99 2,870,000,000
45 TROW -5.97 16,440,000,000
46 NGG -5.96 36,590,000,000
47 RIMM -5.95 22,330,000,000
48 TEX -5.95 3,250,000,000
49 EDMC -5.85 2,860,000,000
50 AMTD -5.85 12,310,000,000

“Moody’s rating agency downgraded Greece’s local and foreign currency bond ratings deeper into junk status on Wednesday, citing an increased risk that the country will not be able to handle its debt problems without an eventual restructuring.

Moody’s downgraded Greece to Caa1 from B1 late Wednesday. Apart from the increased risk of restructuring, the agency also cited “highly uncertain” growth prospects and missed targets in budget reforms.

Although French finance minster Christine Lagarde said restructuring was “off the table,” investors continue to watch for signs that Greece will default.

In response, Greece says that Moody’s downgrade does not take into account government efforts to meet targets and expedite privatisations.”

Full article

However Greece Moves Closer to a deal

Full article

“Groupon is partnering with Expedia to create a new discount travel service that will let people book hotel rooms and airfare at half the cost.

The announcement is being made today at the D Conference in Rancho Palos Verdes, Calif., before Groupon CEO Andrew Mason gets on stage.

“Groupon Getaways with Expedia” will work very similarly to the daily emails sent by Groupon today, but instead of offers for spas, restaurants and other local services, consumers can buy vouchers for airline tickets, car rentals, cruises and other activities.

Travelers can sign up for the emails starting today at Groupon.com/getaways, and the service is expected to launch in late June.

“Travel is a very popular category on our normal site, and Expedia is the biggest and best brand in travel. The partnership made a ton of sense,” Mason said.

Together, the two will leverage their combined sales forces to find travel deals across the U.S. Initially, it will offer discounts on hotels and expand to other segments, like air and cars, as well as internationally.”

Full article

“Shahawar Matin Siraj immigrated to Queens, N.Y., from Pakistan with his family when he was 16. Siraj began working at his uncle’s Islamic bookshop in Queens where, soon after 9/11, an undercover police officer began coming around and engaging Siraj in conversations about politics and religion. Whatever Siraj said to the officer in those conversations, it was enough for NYPD to soon assign another undercover officer to befriend the young man as well.

That second officer showed Siraj images of victims of American wars in the Middle East and of Guantanamo Bay, and began making up stories about secret terrorist organizations inside the U.S. Over the next year, the undercover agent prodded Siraj to devise a plan to detonate a bomb in New York City, as a means of responding to the U.S. government’s violence. Siraj first agreed but eventually refused to actively participate in the plot, saying, “No, I don’t want to do it.” But after more repeated prodding of the young man, Siraj finally agreed to act as a lookout for others…..”

Full article

“NEW ORLEANS — Nearly six years have passed since Hurricane Katrina drowned New Orleans in misery, but many residents haven’t forgiven the Federal Emergency Management Agency for its sluggish response to the storm. Now another delayed reaction by FEMA – a stop-and-start push to recoup millions of dollars in disaster aid – is reminding storm victims why they often cursed the agency’s name.

As a new hurricane season begins Wednesday, FEMA is working to determine how much money it overpaid or mistakenly awarded to victims of the destructive 2005 hurricane season. The agency is reviewing more than $600 million given to roughly 154,000 victims of hurricanes Katrina, Rita and Wilma and is poised to demand that some return money.

FEMA already has sent letters to thousands of victims of other disasters, asking them to return more than $22 million. Letters to victims of the 2005 hurricanes could go out in a matter of months, but it’s too soon to tell how many people will be told to repay or how much money is at stake.”

Full article

“(NaturalNews) The biotechnology industry and its lackeys in the US government may be getting away with pulling a fast one on the American people, but citizens across Europe and in Australia continue to resist the onslaught of genetically-modified organisms (GMOs) in their food supply. A recent report from Gene Ethics Media (GEM) explains that two of Australia’s largest grain traders are refusing to deal with any GM canola this year, citing intense and increasing consumer opposition to GM grains.

Europeans import much of their canola fromAustralia, a country that for years had unilaterally held anon-GMOpolicy for canola. After all, virtually nobody from the countries to whom Australia exports itsgrainswants GM canola, and this has naturally created market conditions in whichcanolagrowers have voluntarily chosen to stick with non-GM andorganicvarieties.”

Full article

Bianco of Bianco research gives his outlook on the markets. I like his point on the crowded aspects of the dollar devaluation trade.

Remember the old TV show MASH? When the choppers and buses would bring in scores of wounded soldiers all at once, completely overwhelming the medical staff, who were scrambling to provide care? The first thing they would do would be to assess the scope of the damage, then stabilize the injured and prioritize which patients got tended to first. To borrow the words of Jim Grant, it was “fast and ugly” in action.

The other side of that type of urgent triage would be “slow and ugly,” a euphemism often used to describe the current course of action the Federal Reserve and Treasury have embarked upon to restore the economy. But now that we’re more than three years into it, critics such as Jim Bianco of Bianco research say it’s high time we started moving forward.

“Quantitative easing is all about trying to prevent pain in the marketplace,” he says. ” But in doing so, it prevents adjustments, and that’s why markets like housing can’t move forward.”

Given the latest housing statistics, few would argue that point.

“The problem with housing is that we’re at the wrong price, so prices have to come down” Bianco says. “But we don’t want prices to come down, so we invent like 58 programs and QE to prevent them from coming down, and then we complain that prices aren’t going up. Going up?! They still need to come down.”

But as much as Bianco would like to see the Fed’s money-printing experiment ended with QE2, he admits that the chance of QE3 goes up with each weak data point that comes out. And lately there have been many of them, including the private payroll flop from ADP and a big slump in ISM Manufacturing on Wednesday alone.

“I cant imagine the Fed would do two trillion of quantitative easing…and saying ‘Look guys, we tried, you’re on your own,'” Bianco says. ” No, there will be QE3 and 4 and 5.”

“At some point, if you believe in free markets and the capitalist system, you have to let markets adjust” or risk an outcome like Japan, which Bianco says has been “muddling along” for 22 years. “Never really a catastrophe, but never really gets better either.”

In place of “slow and ugly,” Bianco would prefer a “very modified version” of what was done in 1974 and 1932 that “would be bad over the very short term but then it’s over and things start getting better…we hit bottom and can see things moving forward as opposed to this perpetual waiting and waiting and waiting like Japan.”

Probably the nicest thing Bianco will say about the country’s post-crisis playbook is that things have definitely stabilized since 2007 and that the weak dollar has resulted in a few short-term benefits. However, he adds, “I think the all-time crowded trade right now is the weak dollar” and that world history is full of examples that support the notion that “you can’t devalue your way to prosperity.”

And maybe he’s right. Had we gone “fast and ugly” from the outset, we might be in an entirely different position right now.

[youtube:http://www.youtube.com/watch?v=2YcgACl1Sr8 450 300]

“The NY Fed has a very good piece on their blog this morning titled “Commodity Prices and the Mistake of 1937: Would Modern Economists Make the Same Mistake?”   It helps shed some light on the current economic environment and shows why investors should not be too quick to assume that high inflation will result from the commodity price increases.  They say:…..”

Full article

“Interest in Rare Earths is starting to heat up once again, and it something you should keep on your radar. China’s Baotou Steel has announced its intention to start up the world’s first rare earths exchange. The move is expected to increase the liquidity and visibility of these valuable elements while reducing their trading costs.

So named because they were hard to get in the 18th and 19th century, these once obscure elements have suddenly become the focus of several converging trends in the global economy, as they are the key ingredient of magnets. There are 17 in all, divided into light (cerium, Ce, lanthanum, La, and neodymium, Nd) and heavy (dysprosium, Dy, terbium, Tb, and europium, Eu). Since the beginning of the year, the price of 99% pure cerium oxide has rocketed by 650% to $11.50 a pound.

It turns out that you can’t build a hybrid or electric car, a wind turbine, thin film solar, LED’s, high performance batteries, or a cell phone without these elements. One Prius uses 25 kilograms of the stuff. You also can’t fight a modern war without rare earths, being essential for radar, missile guidance systems, navigation, and night vision goggles….”

Full article