Financial Market Report for April 28, 2011 (All news items courtesy of Between The Hedges)
Bloomberg reports Yields Surge as Local Spending Boosts Inflation: India Credit. Spending by local governments before elections is stoking India's inflation, which as driven yields on the nation's benchmark bonds to their biggest monthly surge in more than a year. Gross state borrowings rose 39% in the year ended March, ever seen an 8% drop in the previous 12 months. India's central bank warned last month that lax fiscal discipline threatens efforts to contain inflation. "Policy akers' efforts in fighting inflation are being offset by populist measures," S.C. Kalia, executive director of Union Bank of India in Mumbai, which buys regional government bonds, said in a phone interview on April 26. "States have to exercise fiscal discipline" to avoid a situation where "the panic button on inflation has to be pressed," he said.
Financial Times reports Brazil's inflation influenza
Bloomberg reports China Property Slowdown Poses Growth Risks, World Bank Says. China’s real-estate market is a “particular source of risk” to growth given the importance of property construction to the world’s second-biggest economy, the World Bank said today. “Shocks to the property sector that would slow down construction significantly could have a large impact on the economy and on bank balance sheets,” the Washington-based lender said in its China Quarterly Update released in Beijing. “A property downturn could affect the finances of local governments, which do a lot of the infrastructure investment.” Regulators told China’s banks last week to conduct more stress tests on their real-estate lending as the government steps up efforts to curb surging housing prices. A potential rise in bad debts on property loans and credit to local government financing vehicles risks triggering another state- funded bailout, Fitch Ratings said this month. “With tension between the underlying upward housing price pressure and the policy objective to contain price rises, interaction between the market and policy measures could lead to a more abrupt than planned downturn in the real-estate market,” the World Bank said in its report. High property prices should be controlled through “macroeconomic levers” rather than administrative measures, the bank said.
Economic Observer China's top economic planning agency has arranged to meet with several large domestic coal producers this morning at which the government will ask the companies to "appropriately" control price increases, citing a person familiar with the situation.
Reuters reports Biggest Changes in NYSE Short Interest. Short interest on the New York Stock Exchange rose 3.4 percent in early April compared with the last half of March, according to information released by the exchange this week.
Currencies trading up today included
South Africa Rand, SZR .57
Australian Dollar, FXA ,57
Swedish Krona, FXS .52
Russian Ruble, XRU. 45
The Euro, FXE .16
Emerging Market Currencies, CEW .13
Swiss Frac, FXF .09
The US Dollar $USD, fell 0.55% to 73.12 and UUP fell 0.29 to 20.96
Junk Bonds, JNK, rose to 40.81. Leveraged Buyouts, PSP, rose to 12.22
Clear a stock market top is being made, in the world stocks, VT, and ACWI. Asia stocks fell lower on inflation destruction and the rising of feudal Chinese state corporatism in the form of price controls on coal mining companies. Inflation turning stocks lower is a symptom, that is a sign of exhaustion of quantitative easing. The seigniorage, that is the moneyness of Neoliberalism, is failing. A global chancellor, that is a Sovereign, and a global banker, that is a Seignior, will arise to provide new moneyness.
EEB -1.2, INDY -0.9, SCIN -1.7, EWZ -1.4, BRF -2.7, YAO -1.2, HAO -1.2, CAF -1.9, THD -0.7, CHIE, -1.2, CHIX, -1.1, CHIM, -1.0, SKOR, -1.0
ETFs rising today
IYR 1.1%, IYT 1.1%, IHF 1.6%, KIE 2.0%, XLU, 0.9,
Stocks of interest
Annaly Capital Management NLY
India Bank, HDFC Bank, HDB
Brazil Financials, BRAF
Silver Miners ETF, SIL,
Gold Miners GDX