Moody’s Begins Euro-Bank Downgrade Tour With Italy

The Street – Over two dozen Italian banks were downgraded by Moody’s Investors Services Monday as the rating agency kicked off a promised multi-week revision of its assessment of Western-European financials. The downgrades ranged from one to four notches, with banks such as Cassa di Risparmio di Ferrara scraping the ratings basement with a D- and Intesa Sanpaolo SpA hitting the top of the range with a C+. UniCredit SpA — one of the country’s largest institutions — had its rating cut to C-. Read Article

ECB stops operations with some Greek banks

Reuters – The European Central Bank has stopped providing liquidity to some Greek banks as they have not been successfully recapitalized, the ECB said on Wednesday, confirming news earlier reported exclusively by Reuters. The news sent the euro lower against the dollar, fanning concerns among investors and in Greece that the country may have to leave the euro zone. Read Article

Greeks Withdraw Nearly $1 Billion From Local Banks

CNBC – Greek depositors withdrew 700 million euros ($900 million) from the nation’s local banks recently, said President Karolos Papoulias, though the exact timing of the transfer was unclear. Citing a conversation he had with Greek Central Bank Governor George Provopoulos, Papoulias said “that the strength of banks is very weak right now.” Stocks declined following the report after being up earlier in the day. Read Article

Only global poverty can save the planet, insists WWF (President, Prince Charles) – and the ESA!

Register – The WWF – endorsed by no less a body than the European Space Agency – has stated that economic growth should be abandoned, that citizens of the world’s wealthy nations should prepare for poverty and that all the human race’s energy should be produced as renewable electricity within 38 years from now.Most astonishingly of all, the green hardliners demand that the enormous numbers of wind farms, tidal barriers and solar powerplants required under their plans should somehow be built while at the same time severely rationing supplies of concrete, steel, copper and glass. The WWF presents these demands in its just-issued Living Planet Report for 2012. It’s a remarkable document, not least for the fact that it is formally endorsed for the first time by the European Space Agency (ESA) – an organisation which would cease to exist in any meaningful form if the document’s recommendations were to be carried out. Read Article

Editorial Note – The WWF’s President is Prince Charles, a man well known for his poverty stricken lifestyle, small houses and inexpensive “green” cars.

Oil prices could double by 2022, IMF warned

Guardian – The International Monetary Fund (IMF) has been warned by its internal research team that there could be a permanent doubling of oil prices in the coming decade with profound implications for global trade. “This is uncharted territory for the world economy, which has never experienced such prices for more than a few months,” the report warns. Read Article

Greek leftists reject proposal for technocrat government

Reuters – Greece’s president will ask politicians on Tuesday to stand aside and let a government of technocrats steer the nation away from bankruptcy, but leftists have already rejected the proposal and look set to force a new election they reckon they can win. Read article

Euro Fall Would Raise Stakes for China, US

Financial Times – The situation in the euro zone has become so bleak that it is giving rise to the most improbable rumours. The latest to make the rounds of European hedge fund managers suggests that the euro will be tied to the dollar at close to parity, a dramatic fall from its current level of just under $1.30 and one that would involve the printing of hundreds of billions of euros. Read Article

Shortfall in California’s Budget Swells to $16 Billion

NYtimes – The state budget shortfall in California has increased dramatically in the last six months, forcing state officials to assemble a series of new spending cuts that are likely to mean further reductions to schools, health care and other social programs already battered by nearly five years of budget retrenchment, state officials announced on Saturday. Read article

Thousands march against economic gloom in Spain, UK

Reuters – Thousands of Spaniards fed up with economic misery and waving banners against bankers marched on Saturday to mark the first anniversary of the grassroots “Indignados” movement that has sparked similar protests around the world. Read article

China Lowers Banks’ Reserve Requirements to Support Growth

Bloomberg – China cut the amount of cash that banks must set aside as reserves for the third time in six months, pumping money into the financial system to support lending after data showed a slowdown in growth is deepening. Reserve ratios will fall 50 basis points, effective May 18, the People’s Bank of China said on its website yesterday. The level for the nation’s largest lenders will decline to 20 percent based on previous statements. Read Article

JPMorgan Loses $2 Billion on Unit’s ‘Egregious Mistakes’

Bloomberg – JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said the firm suffered a $2 billion trading loss after an “egregious” failure in a unit managing risks, jeopardizing Wall Street banks’ efforts to loosen a federal ban on bets with their own money. The firm’s chief investment office, run by Ina Drew, 55, took flawed positions on synthetic credit securities that remain volatile and may cost an additional $1 billion this quarter or next, Dimon told analysts yesterday. Losses mounted as JPMorgan tried to mitigate transactions designed to hedge credit exposure. Read Article

Going Out of Business in Greece: 1,000 Stores Per Week

Greek Reporter – While Greek politicians squabble over who can – or can’t – form a coalition government in the wake of May 6 elections in which anti-austerity rage caused a fractured result, more than 1,000 businesses in Greece are closing up shop each week, victims of a deep recession caused by pay cuts, tax hikes and slashed pensions that have made many Greeks simply stop spending on anything than goods needed for their survival. Read Article

Major UK companies cut secret tax deals in Luxembourg

BBC – Major UK-based firms cut secret tax deals with authorities in Luxembourg to avoid millions in corporation tax in Britain, the BBC’s Panorama has found. The programme obtained confidential tax agreements detailing plans to move profits off-shore to avoid what was a 28% corporate tax rate at the time. Those involved include pharmaceutical giant GlaxoSmithKline (GSK) and media company Northern & Shell. Both firms told the programme they have a duty to be tax efficient. Read Article

S.E.C. Opens Investigation Into JPMorgan’s $2 Billion Loss

NY Times – Regulators are investigating potential civil violations surrounding the $2 billion loss that JPMorgan Chase disclosed on Thursday, raising further questions about trading activities at the nation’s biggest bank. The Securities and Exchange Commission recently opened a preliminary investigation into JPMorgan’s accounting practices and public disclosures about the trades, according to people briefed on the matter, who spoke on the condition of anonymity because the case is not public. Read Article

Panasonic losses spiral to £3.4bn

Independent – Panasonic’s January-March losses ballooned 10-fold to 438 billion yen (£3.4 billion), completing a year of record red ink at the Japanese electronics maker battered by natural disasters and an ailing TV business. The firm racked up a 40.7 billion yen loss for the same period the previous year. Read Article

Eurozone economy to shrink by 0.3%, EU Commission says

BBC – The eurozone economy is forecast to shrink this year as its debt crisis continues to bite. The European Commission’s spring forecast confirmed its prediction of a 0.3% contraction in 2012 in the economies of the 17 countries that use the euro. It predicted growth of 1.0% for the eurozone in 2013. European Commissioner for Economic and Monetary Affairs Olli Rehn said “a recovery is in sight” for the eurozone. Read Article

FTSE 100 bosses’ pay unrelated to results

BBC – Bosses of the UK’s biggest companies earn millions in “excess remuneration”, a report reveals. Pay packages designed to incentivise FTSE 100 chief executives had little effect on company performance, it found. Reckitt Benckiser, ICAP, and BG Group are among the “worst value FTSE 100 companies”, said Zurich-based financial research firm Obermatt. Read Article

Italy: Industrial output falls almost 6% amid recession

AKI – Italian industrial output in March plunged 5.8 percent from a year earlier as weak economies in Europe and the United States sap demand for products, according to a new report. In an effort to lower its 1.9 trillion euros in debt, Italy’s unelected government has implemented tax hikes and changed pension rules making workers stay on the job longer before retirement. Industrial output in the eurozone’s third-biggest economy rose 0.5 percent from February. Read Article

JPMorgan reveals shock $2bn trading loss on investments

BBC – JPMorgan Chase, the biggest US bank, has revealed a surprise trading loss of at least $2bn (£1.2bn) on complex investments made by its traders. Chief executive Jamie Dimon blamed “errors, sloppiness and bad judgement” for the losses and warned “it could get worse”. The risky hedging strategy could cost the bank an additional $1bn, he added. JPMorgan shares dropped 7% in after-hours trading, and other bank shares also fell. Read Article

Oil Falls a Seventh Day, Longest Run of Losses Since 2009

Bloomberg – Oil fell for a seventh day in New York, its longest run of declines since December 2009, as hopes for a solution to Europe’s debt crisis receded, U.S. supplies rose and Chinese imports fell. West Texas Intermediate oil fell as much as 0.5 percent. Crude inventories rose 3.7 million barrels last week to 379.5 million, the highest level since 1990, even as fuel supplies shrank, Department of Energy data showed. Read Article

Keep cutting or EU aid stops, Greeks told

Telegraph – The political turmoil triggered market turbulence yesterday as shares fell on fears that Greece will be forced out of the euro within months. Concern that the problems may spread pushed up the price of borrowing for Spain and Italy. Guido Westerwelle, the German foreign minister, warned that unless Greece implemented £12 billion of new austerity measures next month the EU will stop aid “tranches”, a move that would cause the collapse of public services and make the Greek state bankrupt. Read article

Spain nationalises Bankia as euro crisis escalates

Telegraph – Spain has nationalised crippled lender Bankia in a dramatic move to contain the esalating crisis and restore faith in the country’s management. The forced rescue was ordered by premier Mariano Rajoy after auditors Deloitte refused to sign off the bank’s books, amid allegations of €3.5bn (£2.8bn) of inflated assets. Half of the bank’s €37bn of property exposure is deemed “problematic” by regulators. Read Article

What Iraq’s Oil Boom Means For The Global Market

NPR – In a remarkable shift, Iraq’s oil exports jumped by 20 percent since January, and the country exported more oil in April than in any month since Saddam Hussein invaded Kuwait in 1990. Energy expert Daniel Yergin discusses how Iraq’s oil wealth is driving the Iraqi economy and reshaping the global oil market. Read Article

Intercell signs finance deal with BB Biotech

Reuters – Austrian biotech group Intercell has signed a financing deal with Switzerland’s BB Biotech and is in talks with other investors about a private stock placement that could total 20 million euros, it said. The investment, through a wholly owned subsidiary of BB Biotech AG, consists of a 20 million euro ($26.1 million) secured loan and a commitment to invest 5 million euros as part of a proposed private share placement, Intercell said. Read Article

US reportedly abandons plans for Afghan consulate after already spending $80M

FoxNews – US officials abandoned plans to open a consulate in northern Afghanistan over security concerns — despite spending more than $80 million on the site, The Washington Post reported Sunday. Read article