- Euro-Area Services Output Shrinks as Retail Sales Drop: Economy. Euro-area services and manufacturing output shrank for a 15th straight month in April and retail sales fell in March as the 17-nation economy struggled to emerge from recession. A composite index based on a survey of purchasing managers in the manufacturing and services industries increased to 46.9 last month from 46.5 in March, London-based Markit Economics said in a report today. While above an initial estimate of 46.5 published on April 23, it was still below 50, indicating contraction. Retail sales declined for a second month in March, another report showed. The euro-area economy will shrink more than previously estimated in 2013 as part of a two-year slump that has pushed unemployment to a record high, the European Commission said on May 3. “The financial markets appear to have survived (EUGNEMUQ) the government debt crisis, but the leading economic indicators have recently declined,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. There is “a significant risk that, contrary to analysts’ expectations, the economy will not pick up in the spring,” he said.
- Draghi Says ECB Ready to Cut Interest Rates Again If Needed. European Central Bank President Mario Draghi said policy makers are ready to cut interest rates again if needed after reducing them to a record low last week. “We will be looking at all the data that arrives from the euro-area economy in the coming weeks and if necessary, we are ready to act again,” Draghi said in a speech in Rome today. “Monetary policy will remain accommodative.”
- Euro Declines After Draghi Says ECB Prepared to Act. The euro fell against the majority of its 16 most-traded peers as European Central Bank President Mario Draghi said policy makers are ready to cut interest rates again if needed after reducing them to a record low last week. The 17-nation currency fell 0.3 percent to $1.3077 as of 2:37 p.m. New York time.
- Copper Futures Drop on Bets Demand Will Ebb on European Woes. Copper futures fell for the first time in three sessions on concern that demand will slump in Europe as global supplies increase. Euro-area services and manufacturing output shrank in April for a 15th straight month, a report from London-based Markit showed today. The European Commission said on May 3 that the region’s economy will contract more than estimated. Copper stockpiles monitored by the London Metal Exchange are close to the highest since 2003. “All the data we’re seeing suggests no rebound in Europe, as well as slowing in China and sub-par growth in the U.S.,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “We’re still not seeing any inordinate demand for copper, and supplies are adequate.”
- Rio(RIO) Said to Pursue $5 Billion Iron-Ore Expansion as Glut Looms. Rio Tinto Group (RIO), the world’s second- biggest miner, will probably pursue a $5 billion expansion of its iron-ore output in Australia, Chief Executive Office Sam Walsh said, according to two people present at a meeting with investors and analysts. The board is expected to approve in the fourth quarter an increase in annual production to 360 million metric tons from 290 million tons unless there are significant changes to the global demand-supply situation, Walsh told the gathering, the people said.
- Bain, Golden Gate Agree to Buy BMC(BMC) for $6.9 Billion. Bain Capital LLC and Golden Gate Capital agreed to acquire BMC Software Inc., a struggling technology provider that failed to find a buyer last year, for $6.9 billion in the third-largest private-equity deal of 2013.
- MBIA(MBI) Surges After Report Insurer Settled with Bank of America. MBIA Inc. surged as much as 57 percent after Dow Jones Newswires reported Bank of America Corp. will pay $1.6 billion of cash as part of a settlement with the bond insurer of mortgage-bond litigation. MBIA was up 43 percent to $14.10 at 12:25 p.m. in New York after earlier climbing to as high as $15.45. The intraday jump is the most ever. The settlement includes a $500 million line of credit, Dow Jones reported today, citing people familiar with the matter.
- Fed Loan Officer Survey Says Business Loans Lead Credit Thaw. U.S. banks eased standards and terms on loans to businesses as commercial lending led a credit thaw, according to a Federal Reserve survey.
Fox News:
- FBI arrests Minnesota man believed to be plotting terror attack. The FBI has taken into custody a Minnesota man who was believed to be plotting a terrorist attack. Buford Rogers, 24, of Montevideo, was arrested Friday after authorities searched his home and found guns and explosive devices, according to an FBI news release. The Associated Press reports Molotov cocktails, suspected pipe bombs and a Romanian AKM assault rifle were among the weapons found. An affidavit said Rogers admitted firing the weapon at a gun range in Granite Falls.
- How Al Gore's Net Worth Caught Up With Mitt Romney's.
- The Most Crowded Trades. (graphs)
- Russia, China Urge Respect Of Syrian Sovereignty As UN Finds Only Syrian Rebels Used Chemical Weapons.
- Charles Gave: "Get Out Of Banks, Get Out Of France - Get Out Of The Euro". (graphs)
- Apollo's Leon Black: The Smart Money Is "Selling Everything That Is Not Nailed Down". (video)
- Of Spain's "Bad Bank" Foreclosed Properties, Only 6,000 Of 83,000 Units Have Tenants.
- CHART OF THE DAY: Investors Are Leveraging Their Stock Market Bets Like It's 2007.
- Police Find Al Qaeda Magazine On Computer Belonging To Bombing Suspect's Wife.
- New York to Sue Wells Fargo(WFC) and Bank of America(BAC) Over Settlement Violations. New York’s top prosecutor plans to sue Bank of America and Wells Fargo over claims that they violated terms of a $26 billion mortgage settlement, his office said on Monday. Eric T. Schneiderman, New York’s attorney general, paved the way for a lawsuit against both banks over what he said was “repeatedly violating” the terms of the National Mortgage Settlement, a sweeping pact brokered last year between five of the nation’s biggest banks and 49 state attorneys general over foreclosure abuses.
- Slovenia Falls From Economic Grace, Struggling to Avert a Bailout. As fears grow that Slovenia could follow Cyprus and become the sixth euro zone country to seek a bailout, his rise and fall have come to symbolize the way easy and cheap credit, combined with Balkan-style crony capitalism and corporate mismanagement, fueled a banking crisis that has unhinged a country previously praised as a regional model of peaceful prosperity.
- Senate Democrats fleeing ‘Obamacare’. The exodus started quietly at first. Sen. Max Baucus said last month he fears the president’s signature health care reform law is quickly turning into a “train wreck.” How bad is it? The Montana Democrat, head of the Senate Finance Committee and an author of the law, has decided not to seek re-election. Why? Because Obamacare isn’t yet up and running. The true effects won’t be felt until 2014 and beyond. So Mr. Baucus will disappear into the night a hero, long before the nightmare comes.
- Italy's Letta sees anti-EU surge if no answers to crisis. Europe risks a wave of anti-EU votes in 2014 European parliamentary elections unless a June summit of European Union leaders offers a concrete response to economic crisis, Italian Prime Minister Enrico Letta said on Monday. "If the European summit in June... results in a bureaucratic, routine, formal conclusion, with a great abstract plan that needs two years to be implemented...we risk creating a climate in Europe in which the winning parties will be anti-European," Letta said.
- EMERGING MARKETS-Brazil stocks slip on China, euro zone data.
Telegraph:
- Policy battle rages in China as slowdown feeds 'sense of crisis'. Pressure is building for yet another burst of easy credit, even though the "economic efficiency" of debt is collapsing. The output gained from each extra yuan of credit has fallen from a ratio of 0.8 to 0.35 since 2008, a warning sign that the cycle has played out. Fitch downgraded China's debt in April, warning that credit has already jumped from 125pc to 200pc of GDP in four years, much of it in shadow banking. While another burst of loans may boost growth in the short run, it risks storing up ever greater problems.
- Warren Buffett sees 'brutal' damage for savers from central bank money printing. Veteran investor Warren Buffett has warned that savers and bondholders are suffering a "brutal" erosion of their money as the US Federal Reserve and other central banks force yields to historic lows.
- Mirrlees Says Spain Still Needs to Exit Euro. Spain needs to return to the peseta, print money, and dedicate it to public investments to solve economic crisis, Nobel Laureate James Mirrlees said. "My fear is that the improvement of the credit market is coming too late," he said.
- Germany's Schaeuble Tells Les Echos Reforms Must Continue. France and Germany are working well together and have a particular duty to the rest of Europe, Schaeuble said in an interview. High public debts and loss of competitiveness are the reasons for the problems face by some EU states, he said.
- Brazil Central Bank Wants Holders to Bail Out Banks. Central bank is preparing proposal for shareholders, bondholders and depositors to bail out banks instead of using govt resources, citing director Sidnei Correa Marques.
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