“Federal Reserve Bank of Dallas President Richard Fisher said that a recent drop in equity prices is no reason for the central bank to intervene to boost the economy.

“Markets are manic depressive, they come and go,” Fisher told reporters Tuesday in Dallas when asked if slumping markets and slower-than-expected employment gains had changed his outlook for Fed policy. “The key to success here is not further monetary accommodation.”

The U.S. central bank last month said the recovery will “pick up gradually,” and upgraded its forecasts for inflation, growth and unemployment for this year. Reports released since then have suggested a more tempered outlook for the economy, with employers adding the fewest number of workers in six months in April.

Fisher said that business owners want clarity on health care costs and taxes, and that trillions of dollars are sitting on sidelines until then. He spoke to reporters following an appearance at an economic forum put on by the Dallas Convention and Visitors Bureau.”

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“The European economy resembles a “slow motion train wreck” that will end with Greece leaving the eurozone, says New York University economist Nouriel Roubini.

In recent elections, Greece’s leading political parties failed to muster enough votes to form a coalition government that would favor staying the course with austerity measures in exchange for bailout money.

Calls to scrap austerity are growing, even if such policies mean shut off the flow of bailout money, which is roiling currency and stock markets worldwide.”

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“The U.S. economy is at risk of slipping back into recession in 2013 because of likely impasses in Washington over taxes and mandatory spending cuts, said Wilbur Ross, the billionaire investor.

“That’s too big a hit for the economy to take,” Ross said during a discussion at Bloomberg Markets’ Global Financial Elite lunch in New York.

“We’re going to have another freak show at the end of the year.”
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“In 2010 the U.S. stock market peaked at the end of April and then sold off until the Fed announced QE2 several months later. In 2011 the stock market peaked at the end of April and sold off until the Fed announced Operation Twist several months later.

This will be the third year in a row that stocks have started selling off in May. I predict the drop will continue until the Fed announces the next version of stock market stimulus; probably in August at the Fed’s Yellowstone confab.

Why stock prices did not peak at the end of this April was that in April 2010 and April 2011 there were decent inflows into U.S. equity mutual funds and U.S. ETFs. This April there were outflows not inflows from both U.S. equity mutual and exchange-traded funds…”

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ARNA, NILE, DMD, DVAX, IILG, MRX, MELI, SGEN, SODA, STEC, DIS, XL

Full report

In Play

& On the Wires 

Germany and France wanted austerity and they got it along with a neo nazi presence in Greek parliament. France of course has seen Sarkozy kicked out with a new socialist leader who wants to reject austerity outright.

Germany must now walk on egg shells or else watch the EU zone melt down. Given all the recent spectacle it does not appear Germany has any kid gloves in the box.

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“Denial is leading to collective economic suicide in Europe and the United States. The French on Sunday elected a socialist president who wants to raise taxes on those elusive rich and keep spending as if there is no tomorrow.

Many on the left, including European socialists, The New York Times and its economist Paul Krugman, are falsely claiming that Europe and even the United States are being saddled with austerity. ”

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Traders at various banks have seen their pay and or bonuses cut over the past few years. Hedge funds have the cash to entice the move of these star traders.

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“Federal Reserve Bank of Richmond President Jeffrey Lacker said much of U.S. unemployment results from structural weaknesses like inadequate training that can’t be fixed by additional Fed stimulus.

“Some commentators are urging the Fed to take additional action as long as the unemployment rate remains elevated,” Lacker said Monday in Greensboro, North Carolina. “But if elevated unemployment reflects largely fundamental factors rather than insufficient spending, such stimulus might have little impact on unemployment and instead just raise the risk of pushing inflation up.”

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Gapping up 

NLS +9.9%, CHDN +5.5%, IVR +3.5%, SNHY +2.7%, ULTA +2.3%, AIG +1.1%, GNRC +16.3%,  GTXI +9%,

HBC +1%, PT +4.1%, TEF +2.8%, TI +2.3%, CTSH +1.2%,  CCL +1%,

Gapping down

MAKO -25.1%, SNCR -18%, RAX -11.7%, DNDN -10.2%, KKD -6.3%, CLMT -6.2%, WWWW -4.7%,

CLNE -4.4%, PMT -3.3%, MT -3%, SBH -2.3%, RDS.A -2%, BP -1.9%, WYNN -1.5%, VVUS -1.2%,

ATVI -1.1%, EA -0.8%, FOSL -23.7%, MCD -2.6%, PCX -1.9%, ING -3.3%, DB -2.3%, CS -1.6%,

BHP -1.9%, RIO -1.4%, SLV -1.4%, GFI -1.4%, GLD -0.7%, SO -3.9%, TOT -2.2%, SDRL -1.5%, E -0.5%,

KKD -6.3% , CLMT -6.2%,  KORS -4.8% , ATVI -1.1%, SYNC -7.3%

AFFY, DNDN, EA, FN, FOSL, RAIL, LOPE, MAKO, RAX, VVUS, WYNN

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In Play

On the Wires 

Hat Tip: @getshawn on Twitter for the link:

start at 42:00

Flashback:

NEW YORK (CNNMoney) — European Union officials are expected to begin debating ways to boost economic growth, after voters in France and Greece rejected austerity.

The focus on growth comes after Socialist party leader Francois Hollande defeated incumbent Nicolas Sarkozy in France’s presidential election Sunday. In Greece, voters punished the two main political parties, raising concerns that a weak coalition government will backtrack on the nation’s bailout program.

At the same time, many European economies have tumbled into recession as austerity measures — budget cuts and tax hikes — take a toll on growth.

Hollande has said he would renegotiate the “fiscal compact” that most EU leaders signed late last year to incorporate a “growth dimension.” The pact is designed to increase fiscal discipline and prevent a future crisis by ensuring that governments respect deficit rules and do not overspend.

Eurozone unemployment hits record 10.9%

But analysts say Hollande will probably back down on this issue to avoid a conflict with German Chancellor Angela Merkel, who has been the most vocal supporter of austerity.

Given the shifting political winds, the most likely outcome will be a new “growth compact” to complement the fiscal treaty, according to James Goundry, an analyst at IHS Global Insight.

Read more here:

American taxpayers are encountering a drumbeat of bad news from Afghanistan: Insurgents are launching coordinated complex attacks and implanting record numbers of IEDs. Strained by more than a decade of war, US troops, are implicated in Koran-burning, desecration and renegade killings.

Today the news broke that United States officials, in a futile hope of quelling violence, have been party to a pernicious “catch-and-release” system that facilitated the secret release of high-level insurgent detainees, who are then free to strike at American forces again.

As American taxpayers try to process these indicators of a failing war, do they also know that their taxes are helping to bankroll the Taliban?

When I was embedded with American troops in insurgency-wracked eastern Afghanistan, soldiers began telling me that the U.S. government wastes tens of billions of taxpayer dollars each year on scandalously mismanaged aid and logistics contracts connected to the war. The soldiers told me there was a toxic system that links distracted American officials, private U.S. corporations, powerful Afghan insiders-and the Taliban. One way or another, everyone was in on the take.

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The pendulum doesn’t normally swing this fast.

In a matter of a few short months, Europe has swung from a continent burdened by debt and consumed by the idea of austerity as a means of sharply reducing the cost of government to a continent sill laden by debt but now consumed by growth.

Voters on Sunday made clear in elections in France, Greece and Germany that they’ve had enough austerity. No more layoffs, no more pay cuts, no more scaled-back benefits.

Instead, the French voters who threw out incumbent President Nicolas Sarkozy in favor of Socialist Francoise Hollande and the Greek and German voters who supported anti-austerity parties in national and local elections are seeking something far more nebulous than mandated budget cuts: sustainable economic growth.

“The problem is, while we are now looking at ‘growth’ as a solution, that’s highly likely to disappoint,” said Peter Tchir, a founder of TF Market Advisors in Connecticut.

Tchir said austerity measures drafted and approved in recent months for debt-addled European nations, usually as part of a bailout agreement with the International Monetary Fund, the European Union and the European Central Bank, “attempted to be good for the economy.”

Tchir is skeptical that shifting that strategy 180 degrees virtually overnight will benefit Europe or global markets.

“There are no magic bullets,” he said. “Growth will fail and we are back to having too much debt.”

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“Barton Biggs, founder of the Traxis Partners LP hedge fund, said he isn’t adding to bearish equity bets in Europe after elections in France and Greece this weekend signal voters are seeking leaders who support more stimulus.

The U.S. economy is still strong and will avoid a double-dip recession while seeing a “soft patch” for the next month or two, Biggs said during the television interview.

“The U.S. economy is still cranking along at 2.5 percent real gross domestic product growth,” he said. “That’s a good healthy level.”

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A similar performance to 19080 says Knapp.

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