China May Have to Pull Back on Tightening Efforts as Recovery Stalls

“China may hold off tightening monetary policy after growth in services and manufacturing weakened, underscoring challenges for the nation’s leaders as they open the annual session of parliament tomorrow.

Expansion in industries including retailing, transportation and banking was the slowest in five months in February, an official survey of purchasing managers showed yesterday. Gauges released March 1 pointed to manufacturing growth cooling.

Premier Wen Jiabao will outline economic policies at the start of the National People’s Congress session in Beijing as the government tries to sustain a recovery from the slowest growth in 13 years without triggering consumer and asset-price inflation. While authorities have pledged to boost incomes and consumption, last week’s decision to intensify a three-year effort to tame the property market may damp the nation’s rebound.

“The recent batch of data suggest the current recovery is relatively weak compared to past ones, which means the government may delay the timing of monetary tightening to support growth,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong, who previously worked for the International Monetary Fund.

The Shanghai Stock Exchange Property Index fell 7.6 percent as of 9:41 a.m. local time, on pace for the worst decline since 2009. The benchmark Shanghai Composite Index dropped 2.2 percent.

A services industries gauge fell to 54.5 in February from 56.2 in January, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday.

Manufacturing Gauges…”

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“China’s swap market turned cautious on the economy last month for the first time since August and global banks are divided on prospects for growth.

The extra cost of locking in interest rates for five years rather than two shrank to 36 basis points, from 46 on Jan. 31, according to data compiled by Bloomberg. The five-year swap that exchanges fixed payments for the floating seven-day repurchase rate fell seven basis points to 3.69 percent, while the two-year rose three basis points. Societe Generale SA and Bank of America Merrill Lynch said the so-called curve flattening will persist, while Deutsche Bank AG and Standard Chartered Plc forecast renewed steepening.

Confidence in the world’s second-biggest economy is being tested as a March 1 report showed manufacturing growth slowed in February, while an Italian election fanned concern Europe’s debt crisis will escalate and the U.S. government is reining in spending. China’s central bank auctioned repurchase agreements on Feb. 19 for the first time since June, withdrawing cash from the banking system to curb inflation. The gap between five- and two-year swap rates narrowed last month in the U.S. and Brazil.

“The latest manufacturing indicator was weaker and this could be the first shift in sentiment against the consensus calling for solid first-half growth,” said Wee-Khoon Chong, a rates strategist in Hong Kong at SocGen. “What’s happening inEurope helped a bit to dent optimism, and see what the U.S. sequestration will bring.”

Manufacturing Cools….”

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“Haruhiko Kuroda said that the Bank of Japan (8301) will do whatever is needed to end 15 years of deflation should he be confirmed as governor and indicated that open-ended asset purchases could start sooner than next year.

“I would like to make my stance clear that we will do whatever we can do,” Kuroda, president of the Asian Development Bank, said at a confirmation hearing in the parliament in Tokyo today. The central bank hasn’t bought enough assets and should consider buying large amounts of longer-term bonds, he said.

Prime Minister Shinzo Abe’s nomination of Kuroda has spurred forecasts for more aggressive easing after Masaaki Shirakawa exits the job on March 19, with the yield on 5-year government bonds hitting a record low today. The opposition Democratic Party of Japan, the largest party in the upper house, has signaled it will back Kuroda, easing his passage through a split Parliament.

Kuroda will need “to show that he’s radical at the central bank’s two meetings in April, otherwise markets will be very disappointed,” said Masamichi Adachi, senior economist at JPMorgan Securities Asia in Tokyo and a former BOJ official. He must convince policy board members “to change their mindset by 180 degrees,” Adachi said.

The “scale and scope” of the assets purchased by the central bank so far are not enough to achieve a 2 percent inflation target, Kuroda said. The central bank currently buys government debt maturing up to three years, as well as exchange- traded funds and other risk assets.

Kuroda said he would consider bringing forward open-ended purchases, due to start next year.

Stocks, Yen

The Nikkei 225 Stock Average (NKY) pared gains and the yen strengthened after Kuroda said that the BOJ should refrain from directly underwriting government debt — highlighting the potential for even expanded action by the central bank to disappoint some investors.

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“Nikkei 225 Stock Average futures volume plunged more than 90 percent today as a software error forced a halt to Osaka trading of some derivatives, the first outage for Nasdaq OMX Group Inc. (NDAQ) technology installed in 2011.

Trading of Nikkei 225 options and futures in Japan resumed at 2:10 p.m. The failure began at 10:20 a.m. when a program processing index options stopped responding, Osaka Securities Exchange Co. Managing Director Yoshinori Karino said at a press briefing. The volume of March contracts traded plummeted to 5,718, about 7 percent of the 14-day moving average, according to data compiled by Bloomberg.

Osaka is the only venue in Japan where Nikkei 225 futures change hands. The trading system that failed today, known as J- Gate, uses technology from Nasdaq OMX. The Japan bourse, formed by the merger of Osaka Securities Exchange Co. and Tokyo Stock Exchange Group Inc., which suffered two trading-system halts last year, plans to adopt J-Gate for all derivative transactions by March 2014, it said in October.

“There’s nothing positive about the troubles we saw today for the stock market,” Hidehiro Tomioka, who helps oversee $1.3 billion in Japanese equities at Manulife Asset Management (Japan) Ltd. in Tokyo. “It’s going to breed distrust among global investors, who are keeping a close eye on Japanese stocks. Generally speaking, it’s easy for there to be problems during and after a merger. It’s important that they clarify what the problem was.”

TSE Failure…”

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The Nikkei gapped up nearly 2% at the open and then traded as high as 2.46%. Then at 10:20 am Nikkei time a software problem caused futures volume to crash 90% forcing a closing of a derivatives exchange. Trading resumed four hours later where the Nikkei managed to close positive by 0.40%.

Shitaly hurt the Euro as newspapers try to focus on election and government uncertainty, but the real deal is that a upstart electee for the Italian government is talking referendum for Italy to leave the Euro. While he may never be elected  and a referendum may never be held, it is very troublesome none the less that any notion of said referendum to vote Italy out of the Euro would be a beginning to the end of a stable region.

World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

This is insane…..

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[youtube://http://www.youtube.com/watch?v=aOzM3nfPnfc 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=aOzM3nfPnfc

[youtube://http://www.youtube.com/watch?v=PSDp0ibSYzg 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=PSDp0ibSYzg

“The rich are different, wrote F. Scott Fitzgerald 88 years ago in his novel The Great Gatsby. Last week, a team of five researchers that conducted a set of seven psychological experiments confirmed Fitzgerald’s opinion, specifying that the rich behave more unethically and greedily than lower-class individuals.

The team—four Psychology professors from the University of California at Berkeley and a Business professor from the University of Toronto—conducted two “naturalistic” field studies to determine if the rich were more likely to break the law while driving, and five laboratory studies gauging upper-class attitudes and propensities toward unethical decision-making. In all seven studies, the rich subjects behaved more unethically and harbored positive opinions of greed that helped justify their selfishness.

In Studies 1 and 2, volunteers at a busy intersection observed whether those drivers who broke traffic laws by cutting off other vehicles or pedestrians were more likely to be driving expensive cars. Overall, 12.4% of drivers cut in front of other vehicles and 34.9% failed to yield to a pedestrian. But rich drivers broke the law at a far greater rate: they cut off other cars 29.6% of the time and failed to yield 46.2% of the time, while lower class drivers did so only 7.7% of the time and not at all, respectively.

Studies 3 and 4 attempted to measure the relationship between class and attitudes toward ethics. In Study 3, subjects read a set of eight scenarios involving unethical decisions that lead to profit, with upper class persons much more likely to engage in the wrongful conduct. In Study 4, the subjects were asked to take a jar of candies to some children in a nearby lab, and were told they could take some if they wanted. The rich subjects took more candy that would otherwise go to children than did the lower class subjects.

Studies 5 and 6 measured positive attitudes toward greed and the tendency to behave unethically. In Study 5, after completing a survey on their attitudes toward greed, subjects assumed the role of an employer negotiating with a job candidate and were told that the mock job would soon be eliminated. Reporting the chance they would tell the job candidate the truth about job stability, the rich subjects were far more likely to lie than the lower class ones. In Study 6, rich subjects were much more likely to cheat at a dice game by falsely inflating their scores. In both cases, the differences were explained by the fact that the rich viewed greed in a more positive light than did the lower class subjects….”

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“Lawmakers in South Dakota have passed a bill that would allow school districts to arm staff and teachers with guns to make their schools “safer”.

State Senators on Wednesday voted 21-14 to pass the measure, despite large-scale opposition from school administrators and personnel, who are largely opposed to bringing weapons into their schools.

Supporters of the bill claim that arming teachers could prevent tragedies like the Dec. 14 massacre in Newtown, Conn. The bill’s sponsor, Sen. Craig Tieszen, R-Rapid City, said that he would leave the decision to arm teachers up to individual school districts, but that he strongly recommends it.

When Craig advocated for the measure earlier this year, he said that having gun-free schools would simply make them more vulnerable and invite potential mass murderers.

“The possibility of an armed presence in any of our schools is a deterrent,” Craig told Fox News, claiming that no shooter would attack a school whose teachers are armed.

Supporters of the bill also argue that teachers would only become armed after partaking in a “School Sentinel program” that would provide them with firearms training by law enforcement officers. No teachers would be forced to take part in the program and could choose to remain unarmed.

But opponents, including many teachers themselves, remain uncomfortable about the prospect of having dangerous firearms in schools. Rep. Troy Heinert, D-Mission, said teachers should not be employed to act as law enforcement officers and that arming them would make him uncomfortable about sending his child to kindergarten.

“Doesn’t this blur the line between a teacher and a law enforcement officer?” he told Fox News. “Do we want to tell our children the only way to be safe is to carry a gun?”

The South Dakota Education Association claims that guns should only be provided to trained professionals and that no training program could properly instruct a teacher how to respond to a situation like the massacre in Newtown, Conn…..”

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“Many women soon can thank Obamacare for ensuring that they won’t have to pay higher health insurance premiums than men. But elderly women can’t say the same of long-term care insurance.

Thanks to an Obamacare loophole, long-term care insurance providers can charge women more than men for the same coverage. And Genworth Financial, the largest U.S. provider of long-term care insurance, plans to charge some women higher premiums than men starting this spring, Kaiser Health News reports.

The change will apply to women who buy new individual long-term care insurance policies, Genworth Financial told Kaiser Health News.

Long-term care insurance covers help with daily habits such as eating and getting out of bed, usually for the elderly, the ill and the injured.

“Claims experience shows that two out of three of Genworth’s current claim dollars are paid to women,” Genworth Financial spokesman Tom Topinka wrote in an email to The Huffington Post on Saturday. “Our decision to charge women applying individually for long term care insurance higher premiums than men beginning this April has nothing whatsoever to do with The Affordable Care Act.”

Obamacare will ban gender discrimination in pricing for new individual and small-group health insurance policies starting in 2014. Women currently pay $1 billion more in premiums every year than men for the same set of benefits, according to the Center for American Progress. That may be partly because research has foundwomen use health care services more than men. Starting in 2014, Obamacare also will ban health insurance companies from denying coverage to women.

This post has been updated to include a comment from Genworth Financial spokesman Tom Topinka….”

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“March 2 (Reuters) – Las Vegas Sands Corp said it “likely” violated the federal Foreign Corrupt Practices Act, which outlaws the bribery of foreign officials, according to a Securities and Exchange Commission filing on Friday.

The filing marks the first disclosure by the casino operator, controlled by founder and billionaire Republican donor Sheldon Adelson, that it was under investigation.

The SEC subpoenaed company documents in February 2011 relating to its compliance with the antibribery act while the U.S. Department of Justice also advised Sands it was conducting an investigation, the company said in its annual report filing.

“There were likely violations of the books and records and internal controls provisions of the FCPA,” the company said.

Sands spokesman Ron Reese said on Saturday he had no additional comment beyond the SEC filing….”

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“…….In recent months, Bristol studied a possible acquisition of Biogen Idec Inc.,BIIB +1.42% a $39 billion-market-cap biotechnology firm that makes drugs to treat neurological diseases such as multiple sclerosis, people familiar with the matter said. Last year, Bristol also engaged advisers to study a possible acquisition of ShireSHPG +2.81% PLC, a U.K. biotech whose drugs treat attention deficit and hyperactivity disorder and a range of rare diseases, other people familiar with the matter said. Shire has a market value of roughly $18 billion.

And in 2011, Bristol had flirted with the idea of buying Pharmasset Inc., a hepatitis C drug manufacturer that Gilead Sciences Inc. GILD +1.71% bought for $11 billion.

Bristol declined to comment about takeover or deal-making specifics, saying it doesn’t talk about market rumors or speculation. Biogen and Shire declined to comment.

Whether the leaner Bristol succeeds could prove a bellwether for the prospects of other drug makers that have simplified their businesses in the face of severe patent cliffs. Pfizer Inc., PFE +0.07% which lost its top-selling drug Lipitor in late 2011, has sold its infant-formula and animal-health businesses. Abbott Laboratories,ABT -0.56% concerned about the outsize sales of rheumatoid arthritis treatment Humira, split into medical-device and pharmaceuticals companies….”

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Unless airlines can figure a way to replace business travel, I’m afraid there will be long term earnings issues.

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Ritalin is a technically a stimulant, but is used to calm a person suffering from sleeping disorders and attention deficit problems….perhaps the Fed should stop pimping crack rock mixed with crystal meth to Gorillas in the mist that use the money to speculate in the breadstuff of the country.

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“A long-awaited assessment of TransCanada Corp.’s Keystone XL pipeline by the U.S. State Department made no specific recommendation on the project, cheering oil companies and outraging environmentalists who said it underestimated the project’s impact on climate change.

The draft analysis, which is subject to public comment, examined the revised route TransCanada proposed after President Barack Obama blocked an original path amid concerns it posed a threat to an aquifer in Nebraska.

The State Department report doesn’t make a recommendation on whether the pipeline should be approved or denied. It instead points to ways in which the pipeline could harm the environment, though supporters said none should derail the project. Administration officials stressed the analysis was a work in progress.

“We’re looking for feedback now from the public to help us shape this going forward,” Kerri-Ann Jones, State’s assistant secretary for oceans and international environmental and scientific affairs, told reporters today on a conference call. After 45 days for public comment, and additional time for federal agencies to weigh in, a final decision may be made in late September.

Environmental groups said they were “outraged” by the analysis because it found the pipeline would have little impact on greenhouse-gas emissions.

‘Dirty, Dangerous’ ….”

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“This is just the latest revelation in the stealth inflation and food fraud theme I have written about frequently in recent months.  The non-profit group Oceana took samples of 1,215 fish sold in the U.S. and genetic tests found that that 59% of those labeled tuna were mislabeled.

It seems that “white tuna” should be avoided in particular as “84% of fish samples labeled “white tuna” were actually escolar, a fish that can cause prolonged, uncontrollable, oily anal leakage.” …”

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“Beppe Grillo, the leader of Italy’s nascent Five-Star Movement catapulted into power by last week’s Italian elections, is causing a bit of a stir this weekend.

Yesterday, Grillo told German weekly news magazine Focus that given the dire straits Italy’s economy is in, if things didn’t change, Italians would want to leave the euro.

Today, in an interview with Bild – Germany’s biggest newspaper – Grillo said he supports a referendum on euro membership….”

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By killing interest rates the Fed is trying to force you mom and pops into risky assets. Thus far, more people have opted for “safety” in bonds vs stocks and commodities. Also thus far, cheap money has allowed the super wealthy and money managers to invest and run up the breadstuff of the country hurting the greater part of the country through inflation by speculation.

The question is can the bearded clam win over a longer term trend of disinterest?

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