G-20 To Tell Samurai Abe to Take it Easy

“Japan will be reminded of its pledge not to drive down the yen when Group of 20 finance chiefs meet this week for the first time since the world’s third- largest economy intensified its campaign to defeat deflation.

As G-20 finance ministers and central bankers prepare to convene this week in Washington, theU.S. Treasury is saying it will press Japan to refrain from competitive devaluation and European governments are urging it not to become too reliant on fiscal and monetary stimulus.

The yen has fallen against all 16 of its most-traded peers since April 4 when the Bank of Japan (8301) surprised investors by doubling monthly bond purchases and setting a two-year horizon for achieving its goal of 2 percent inflation. The salvo leaves foreign policy makers coupling praise for the effort to boost stagnant economic growth with concern it may come at the expense of their exporters if the yen keeps sliding.

“Yen moves have been too rapid for the U.S. to applaud Japan’s battle to end deflation,” said Yasuhide Yajima, chief economist at NLI Research Institute Ltd. in Tokyo, an affiliate of Nippon Life Insurance Co., Japan’s biggest life insurer. “Japan will have to show fiscal plans and means to strengthen growth to make it clear it’s not depending only on weakening the yen to revive the economy.”

Currency Report

The yen rose against all but one of 16 major counterparts today after a report showed Chinese growth unexpectedly slowed in the first quarter, fueling demand for haven assets. The Japanese currency added 0.2 percent to 98.22 per dollar as of 12 p.m. in Tokyo after earlier touching 97.63, the strongest since April 8…..”

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“Poor retail sales and GDP data sent Chinese stocks down 10% in a session.

China’s stocks fell, dragging the Shanghai Composite (SHCOMP) Index down by 10 percent from its February high, as data on the nation’s economic growth and industrial production missed estimates.

Construction machinery maker Zoomlion Heavy Industry Science and Technology Co. slumped to a 15-month low after forecasting lower profit. Cosco Shipping Co. (600428), a unit of China’s biggest shipping company, lost 3.9 percent after reporting a loss. Zijin Mining Group Co. sank 5.6 percent, leading gold producers lower, after the metal’s futures dropped by the 5 percent daily exchange limit in Shanghai.

The Shanghai Composite fell 1.1 percent to 2,181.94 at the close, its lowest level since Dec. 24. The economy grew 7.7 in the first quarter from a year earlier, the National Bureau of Statistics said today, less than the 8 percent median forecast in a survey of 41 economists. Industrial production rose 8.9 percent in March, the report showed. That compared with the 10.1 percent median economist forecast.

“These figures are pretty bad,” said Dai Ming, a fund managerat Hengsheng Hongding Asset Management Co. in Shanghai, which manages $190 million. “The current stock prices haven’t fully reflected lower-than-expected economic data and the market has room for further declines.”

The CSI 300 Index retreated 1 percent to 2,436.82. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong slid 1.8 percent. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, fell 0.5 percent in New York yesterday.

Economic Data

The Shanghai index has fallen 10 percent from a Feb. 6 high amid concern steps to coolproperty prices will drag on economic growth. Valuations on the gauge dropped to 8.9 times projected 12-month earnings on April 12, the lowest level since Dec. 13 and less than the seven-year average of 15.8, data compiled by Bloomberg show…”

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Okay not bear market territory exactly, but it feels like it given recent price action.

“Brent crude fell to its lowest level in nine months and West Texas Intermediate dropped below $90 a barrel, as economic growth unexpectedly eased in China, the world’s second-largest crude consumer.

Brent declined as much as 2.2 percent to its weakest since July 13. China’s gross domestic product in the first quarter rose 7.7 percent from a year earlier, according to the National Bureau of Statistics. That compares with the 8 percent median forecast in a Bloomberg survey and 7.9 percent in the prior quarter. The World Bank cut its forecast for the nation’s economic growth. Nicolas Maduro was elected president of Venezuela, OPEC’s third-biggest oil producer.

“This simply confirms the picture of a slowing economy” inChina, said Guy Wolf, Global Head of Market Analytics at Marex Spectron Group in London, who predicts Brent may fall as low as $85 this quarter. “Globally, the picture is not healthy.”

Brent for May settlement, which expires today, fell as much as $2.28, or 2.2 percent, to $100.83 a barrel on the London- based ICE Futures Europe exchange, and traded at $101.04 at 9:42 a.m. local time. The more-active June future dropped $1.97 to $101.07 a barrel. The front-month European benchmark grade was at a premium of $11.88 to WTI futures.

WTI for May delivery decreased as much as $2.83, or 3.1 percent, to $88.46 in electronic trading on the New York Mercantile Exchange, the lowest since Dec. 24. It was at $89.13 a barrel at 9:46 a.m. London time. The volume of all futures traded was 237 percent above the 100-day average.

Growth Moderation….”

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What timing $GS has. Uncanny…no?

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“Stocks dropped and commodities fell to a nine-month low after China’s economic growth unexpectedly slowed in the first quarter. U.S. equity-index futures declined, while the yen strengthened.

The MSCI All-Country World Index slid 0.5 percent at 9:55 a.m. in London, with the Shanghai Composite Index capping a 10 percent retreat from this year’s peak. Standard & Poor’s 500 Index futures lost 0.5 percent. The S&P GSCI gauge of 24 raw materials dropped 1.2 percent, led by gold and silver, which dropped more than 6 percent. Oil sank below $90 a barrel and copper retreated to an eight-month low. Japan’s currency appreciated for a third day against the dollar, advancing 0.3 percent to 98.09.

China’s economic growth lost momentum as factory output weakened last month, according to data from the National Bureau of Statistics in Beijing. A report from the Federal Reserve Bank of New York may show manufacturing in the region expanded for a third month in April. Citigroup Inc. and Charles Schwab Corp. are scheduled to report earnings today.

“China’s data are confirming the underlying concern about its economic outlook,” said Koji Toda, the chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about 15 trillion yen ($153 billion). “Profit-taking is dominating the market as it seems like the yen won’t weaken beyond 100 per dollar soon.”

The Stoxx Europe 600 Index fell 0.9 percent as a gauge of basic-resources producers slid to the lowest level since October 2011. Randgold Resources Ltd., a miner of the precious metal in West Africa, and Kazakhmys Plc, Kazakhstan’s biggest copper producer, lost more than 6 percent in London trading.

Metal Producers…”

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

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

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“Asset price correlations across a wide spectrum of industries and asset classes are meaningfully lower than the last few months. ConvergEx’s Nick Colas note that this is something completely unexpected: we’ve approached a “Normal” capital market over the last 30 days.

 

S&P 500 sector correlations are below 80% relative to the index, foreign stocks are 77-87% correlated to U.S. stocks, and even domestic high yield corporate bonds are 56% dancing to their own tune.

 

However, before we run off celebrating the return to a stock-picker’s market, it is worth noting one statistical point worth your time: when industry sector correlations have dropped below 80% from 2010 to the present…”

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“The stock market is not crashing yet, but there are lots of other market crashes happening in the financial world right now.  Just like we saw back in 2008, it is taking stocks a little bit of extra time to catch up with economic reality.  But almost everywhere else you look, there are signs that a financial avalanche has begun.  Bitcoins are crashing, gold and silver are plunging, the price of oil and the overall demand for energy continue to decline, markets all over Europe are collapsing and consumer confidence in the United States just had the biggest miss relative to expectations that has ever been recorded.  In many ways, all of this is extremely reminiscent of 2008.  Other than the Bitcoin collapse, almost everything else that is happening now also happened back then.   So does that mean that a horrible stock market crash is coming as well?  Without a doubt, one is coming at some point.  The only question is whether it will be sooner or later.  Meanwhile, there are a whole lot of other economic crashes that deserve out attention at the moment.

The following are 11 economic crashes that are happening RIGHT NOW…”

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“Critics of sustained easy monetary policy in the United States often cite the potential for a surge in inflation down the road.

The real problem right now though, according to BofA Merrill Lynch economist Ethan Harris, is actually the opposite – disinflation (positive, but falling inflation rates).

“For central banks,” many of which have a 2 percent inflation target, says Harris, “this increases the pressure to maintain super-easy monetary policy.”

Most of the central banks across the developed world still aren’t generating enough inflation to hit their targets, even though many have pinned interest rates at or close to zero. The United States, Canada, the euro area, Sweden, Switzerland, Japan, and Norway all find themselves facing this issue (the U.K. and Australia are notable exceptions).

This struggle, says Harris, is behind the “shift to QE — a less predictable and more controversial policy tool.”

(In 2013, a flurry of speeches by Federal Reserve governors expressed concern over the continued trajectory of quantitative easing and what it means for financial stability.)

So, what’s behind the disinflation?

According to Harris, there are three major fundamental drivers of falling inflation rate….”

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“(Reuters) – Modeled on the hawkish, inflation-fighting Bundesbank, the European Central Bank is used to focusing on containing price rises rather than worrying about them increasing too slowly – or even falling.

But now ECB policymakers are keenly aware that inflation in their 17-country euro zone risks slipping further below their target of just under 2 percent, even if they insist deflation is not a threat.

The concern – which will add to pressure for the bank to cut interest rates or take other “easing” actions – has been highlighted by a slide in Greek inflation to below zero.

So far Greece, which entered deflationary territory in March for the first time in 45 years, is an isolated case. But price pressures are weak elsewhere in the euro zone periphery once tax rises are discounted.

In Portugal, annual inflation is running at 0.5 percent, although Nordea analyst Holger Sandte calculates consumer price inflation measured at constant tax rates is just 0.3 percent there. It is at 0.7 percent in neighboring Spain, he says.

“Given the recession, rising unemployment and tight fiscal policy in these countries, it would be no surprise at all to see rates below zero at least for a few months this year,” said Sandte, one of a batch of analysts to put out research notes in recent days on the risk of a drift towards deflation.

Even in France, inflation slowed to 1.1 percent in March….”

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“Gold plunged into bear market territory Friday, as a fierce selling wave swept across commodities markets and shorts raised their stakes.

Gold tumbled four percent and fell below $1,500 per troy ounce for the first time since July, 2011. It officially entered bear market territory Friday, down more than 20 percent from its August, 2011 high of $1,891.90.

Silver futures lost nearly five percent to $26.30, and it is now 45 percent below its April, 2011 to high. Oil fell more than 2 percent, with West Texas Intermediate breaking through a support level at around $92 per barrel…”

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“The U.S. Treasury Department said it will press Japan to refrain from competitive devaluation while stopping short of accusing it of manipulating the yen in a report on exchange rates.

The Treasury will pressure Japan to adhere to international commitments “to remain oriented towards meeting respective domestic objectives using domestic instruments and to refrain from competitive devaluation and targeting its exchange rate for competitive purposes,” the department said in its semi-annual currency report to Congress released in Washingtonyesterday. The report also declined to name China a currency manipulator.

“This is a shot across the BOJ’s bow,” Kit Juckes, a global strategist at Societe Generale SA inLondon, said in an e-mail. “Everyone still supports Japan’s fight against deflation, but the U.S. would much rather the yen did not weaken significantly further.”

The Bank of Japan (8301) surprised markets on April 4 by doubling monthly bond purchases to almost match the Federal Reserve’s monetary easing, and by setting a two-year horizon for achieving its goal of 2 percent inflation. BOJ Governor Haruhiko Kuroda said yesterday there’s no time limit to the stimulus.

The Bank of Japan and Japanese Finance Ministry didn’t answer phone calls today byBloomberg News.

The yen has depreciated against all 16 of its most-traded peers since April 4, declining 2.2 percent to the U.S. dollar, 3.5 percent to Europe’s 17-nation common currency and 2.8 percent to Australia’s dollar.

‘Too Rapid’…”

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[youtube://http://www.youtube.com/watch?v=6ihPOTDxMfE 450 300]

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It has often been said that media paints a picture for us to view. If you do not seek out alternative media and news outlets then you will be left with a truly different picture compared to reality.

The next time you argue with a friend, colleague, family member, etc you must ask yourself if you truly know and have all the facts. Have you done your research or are you arguing someones opinion and or indoctrination.

More importantly, you should consider if you have been divided and conquered via information distortion.

Cheers on your weekend!

Click here for documentary

 

[youtube://http://www.youtube.com/watch?v=UmNV8_VBGX0 450 300]

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[youtube://http://www.youtube.com/watch?v=KJGbFeg62as 450 300]

 

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[youtube://http://www.youtube.com/watch?v=vVGd9R3O-sU 450 300]

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“Bearish forecasts for the U.S. economy are giving way to more upbeat views of the nation’s ability to weather federal spending cuts and tax increases.

At Morgan Stanley in New York, Chief U.S. Economist Vincent Reinhart now sees a 3 percent pace of growth in the first quarter, up from 0.8 percent in December. JPMorgan Chase & Co.’s Bruce Kasman raised his forecast to 3.3 percent from 1 percent.

“What happened at the beginning of the year was a genuine surprise in terms of how well the economy held up,” Kasman, the firm’s New York-based chief economist, said in an April 5 conference call.

Gross domestic product probably climbed at a 3 percent annualized rate from January through March, according to the median forecast in a Bloomberg survey of 69 economists from April 5 to April 9. That’s up from the 2 percent gain projected last month and 1.6 percent in December.

Consumers overcame a 2 percentage-point increase in the payroll tax and higher gasoline prices to spend at the fastest pace in two years, the survey shows. The pickup, combined with sustained gains in housing and business investment, will help propel the expansion through the worst of the automatic government cuts that are projected to take effect this quarter.

“We are surprised that there wasn’t a bigger and more immediate hit to spending” by consumers, said Reinhart. “There is an underlying momentum in spending, which means that sequestration and the tax increase will only lead to a momentary pause.” …”

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