news23may11
USA
Utah making gold and silver coins legal currency, pushing debate about national gold standard; Utah became the first state in the country this month to legalize gold and silver coins as currency. The law also will exempt the sale of the coins from state capital gains taxes. Earlier this month, Minnesota took a step closer to joining Utah in making gold and silver legal tender - Washington Post
Banks are sitting on huge stocks of foreclosed homes. All told, banks own ~872K homes, nearly 2x as many as before the crisis struck in ’07. As these homes come to market they threaten to deepen the housing slump and create a further drag on the recovery - NYT
U.S. Steps Up Loan Scrutiny- DOJ has instructed federal prosecutors to be “creative”
in using old laws and statues to pursue claims against banks. HUD is looking into whether banks sold unsound mortgages to the FHA. Banks remain in talks w/state AGs over settling foreclosure related charges (the state AGs are apparently seeking $20B in fines). WSJ
Fed Focusing on Inflation Expectations - Expectations for annual consumer-price gains have jumped by 43 percent to 2.10 percentage points since the central bank began its second round of asset purchases in November - Bloomberg
Obama departed late Sun for a trip through Europe. Mon: Ireland; Tues: meeting Queen in London; Wed: meeting UK PM Cameron and delivers speech before Parliament; Thurs: Obama attends G8 summit in France; Fri: still at G8; Sat: Obama travels to Poland. AP
Europe
Spain - ruling party suffers setback in Sun elections; calls for a general election following losses although Prime Minister Jose Luis Rodriguez Zapatero late Sunday ruled out calling elections before his term expires early next year - The opposition People’s Party won 38% of the vote in municipal voting Sun, compared with 28 percent for the ruling Socialists, the Interior Ministry said. The Socialists lost control of Barcelona for the first time since 1979, and also ceded Seville. The central region of Castilla-La Mancha, held by the Socialists for three decades, fell to the PP, as did the Balearic Islands. There remain concerns that new regional governments may uncover previously hidden debt loads, exacerbating the country’s fiscal situation. Bloomberg/DJ
Greece - Greek Prime Minister George Papandreou will discuss new measures with his cabinet on Monday to cut the budget deficit; officials will discuss potentially dismissing civil servant employees. Also - a current EU12K income tax exemption may be cut in half. A higher VAT is being looked at too. The current inspection visit by the IMF, EU, and ECB is being described as the country’s toughest to date; officials hope to have the evaluation completed in the coming week - Reuters
Greecefails to pay medical bills - the government has fallen sharply behind on payments to health care companies. FT
Mexico to propose its CB governor to run IMF - Mexico central bank Governor Agustin Carstens will be presented as a candidate for managing director of the International Monetary Fund - Bloomberg
Asia
China flash PMI (May) eased to 51.1, compared to 51.8 for the April PMI final reading.
China’s exports of rare earths actually expanded 33% for the first 4 months of the year on a Y/Y basis despite Beijing’s efforts to clamp down on the industry. WSJ
China may be reconsidering ban on Japan imports - China is willing to increase agricultural imports from Japan, provided they meet safety standards, premier Wen Jiabao said on Saturday - FT
China Banks - China is setting rules tougher than the new standards agreed by the Basel Committee on Banking Supervision, or Basel III. "The Basel III set the minimum requirement, rather than the best option in our view," Fan Wenzhong, director-general of the China Banking Regulatory Commission, said on Saturday. "Considering China's banking industry's huge assets, it makes sense to take a prudent supervision policy." - Shanghai Daily
China Autos - Gov’t planning to limit the # of cars allocated to gov’t officials to 1 per 20 people vs. currently every minister-level official gets a car. Bloomberg
Hong Kong loan growth may slow - “For some banks, the assumptions for their deposit and loan business growth may be quite aggressive,” HKMA Chief Executive Norman Chan told lawmakers in Hong Kong today. “We are talking to them to see if they need to slow the growth in their loan business.” Bloomberg
Japan may this week announce a plan to make solar panels compulsory on the roofs of all new buildings by 2030, the Nikkei newspaper said on Sunday. Reuters
Japan - Moody’s issues warning - Japan's return to recession and a bigger-than-expected slump in first-quarter economic growth are negative for its credit rating, Moody's Investors Service said - Reuters
Asia trade pact being contemplated - Japan, China, and South Korea said they would accelerate plans for a possible three-way free trade pact between the countries - WSJ
Reserve Bank of Australia has received five briefings from its economists in the past year on bubbles in the global commodity markets, the risk of a serious correction in China and the extent to which Australian house prices are overvalued - The Australian
Hong Kong - Apr. CPI rose to 4.6% vs. 4.4% in March, inline w/St.e stimates. Bloomberg
MEA
Yemen - once again president Saleh backs away from a deal to step down from power - Saleh over the weekend was expected to sign a deal that would pave the way for him to leave power but once again he has backed away from the plan. WSJ
Syria’s brutal crackdown continues - Syrian forces killed at least five people in a funeral procession yesterday for anti-government activists, raising the two-day death toll to 49 - Bloomberg/NYT
Iran says the US stealing its rain - Ahmadinejad has accused Western countries of plotting to "cause drought" in Iran by using high tech equipment to drain the clouds of raindrops - London Telegraph.