ECB Lends Record $622 Billion in Bid to Ease Crisis

ECB Lends Record $622 Billion in Bid to Ease Crisis

(Source WallStreet Journal) FRANKFURT -- The European Central Bank pumped a record €442 billion ($622 billion) into euro-zone money markets Wednesday in its first-ever offer of one-year funds as it battles the Continent's recession.
Euro-zone banks borrowed the one-year funds, the largest amount the central bank has ever dispersed in a single shot, at the ECB's current key rate of 1%. Much of the total likely substituted for amounts banks had been borrowing from the ECB for shorter periods, so the net stimulus to the economy is less than it appears at first sight.
The novelty lies more in the length of time over which the ECB is prepared to offer unlimited funding, reflecting a desire to bring longer-term money-market interest rates down. Although the risk premium that banks charge each other for funds has fallen since the dramatic days of September, it still appears big enough to strain the economy.

The ECB's move signals the central bank remains committed to bolstering the euro-zone economy even as policy makers world-wide discuss how best to unwind the welter of monetary and fiscal stimulus pumped into the global economy over the course of the crisis. The ECB believes the 16-nation euro-zone economy will start growing again by the middle of 2010.

The ECB said in May that it would begin offering banks funds for one year. Before Wednesday, the longest period banks could borrow from the central bank was six months.

Consumer, production prices continue to drop in China

Consumer, production prices continue to drop

Consumer, production prices continue to drop by -- CHINA'S consumer and production prices continued to decrease in May as expected, which allowed the central bank to retain low interest rates.

Analysts anticipate the deflation will extend into August and some...

Brazil has gone into recession after its economy contracted by 0.8% in the first three months of 2009.

Brazil's economy enters recession
Brazil has gone into recession after its economy contracted by 0.8% in the first three months of 2009.

(Source BBC)
The figure from statistics agency IBGE was still better than expected and a big improvement on the 3.8% decline in the last three months of 2008.

Most economists define a recession as being two consecutive quarters of negative growth.
Also on Tuesday, Romania went into recession following a decline of 4.6% in the first three months of the year.
It had contracted 3.4% in the last three months of 2008, according to the statistics agency Ins.
The International Monetary Fund, which has recently approved a 12.9bn euro ($18bn; £11.1bn) loan for Romania, predicts that its economy will contract by 4.1% in the whole of 2009.

'Momentum'

In Brazil, while household spending grew 0.7% and government spending expanded 0.6%, capital spending fell by 12.6% in a sign of companies cutting back on investment.
"The stronger first-quarter number should add some momentum to the view that the second-quarter recovery could be stronger than expected and growth may not be as bad for the whole year," said Paul Biszko from RBC Capital Markets.
"Obviously it's positive for the currency and I think it will lessen the need for the central bank to cut interest rates aggressively, moving forward."
Foreign investors have been putting money into Brazil recently in the hope that its economy will recover more quickly than other countries.
The Ibovespa stock market index has been reaching levels not seen since before the global financial crisis.
http://news.bbc.co.uk/2/hi/business/8091632.stm

ECB ziet economie langzaam herstellen

ECB ziet economie langzaam herstellen

(Bron, De Telegraaf DFT) AMSTERDAM (AFN) - De neergang van de wereldeconomie lijkt over zijn dieptepunt heen. Nu steeds meer indicatoren wijzen op een mogelijke stabilisering van de economie, praat ook de Europese Centrale Bank (ECB) voorzichtig over een einde van de krimp.
“Na het extreem zwakke eerste kwartaal zal de economie in de rest van het jaar veel minder sterk verslechteren”, aldus ECB-president Jean-Claude Trichet donderdag na afloop van de maandelijkse rentevergadering van de ECB. “We verwachten positieve kwartaalcijfers vanaf de tweede helft van 2010.”

De positieve signalen over de wereldeconomie kwamen donderdag zowel uit de eurozone als de Verenigde Staten. In de eurolanden verkochten de detailhandelaren in april voor het eerst in vijf maanden weer wat meer dan in de voorgaande maand. In de VS was het aantal mensen dat een werkloosheidsuitkering aanvroeg vorige week lager dan een week eerder en nam de productiviteit per werknemer in het eerste kwartaal toe. Lees Artikel...
http://www.telegraaf.nl/dft/nieuws_dft/4083486/__ECB_ziet_economie_langzaam_herstellen__.html?p=25,1

Cost of Fed Expansion of Balance Sheet Is $30K Per American, Congressman Grayson Says

Cost of Fed Expansion of Balance Sheet Is $30K Per American, Congressman Grayson Says

Latin American stocks end week at 8-month highs as commodity prices boost recovery hopes

Latin American stocks end week at 8-month highs as commodity prices boost recovery hopes

(Souce Yahoo Finance)
MEXICO CITY (AP) -- Latin American stocks were mixed Friday but ended the week at eight-month highs as rising commodity prices boosted outlooks for some of the region's top exporters and suggested a deeper economic recovery.
Brazil's benchmark Ibovespa index gained 0.3 percent to 53,198, its highest close since Sept. 3, with shares in steel maker Gerdau SA climbing 1 percent. The Porto Alegre-based company comprises about 3.7 percent of the index.

Brazil's currency strengthened 2 percent to 1.97 reals to the U.S. dollar, ending the day below the 2-real mark for the first time since Oct. 1. The currency has gained about 28 percent since its three-year low in December as the government sold billions in dollar reserves to weaken demand for the greenback.

"The sustained appreciation trend is not only a reflection of Brazil's more optimistic outlook, but also is common to many other currencies in Latin America," Barclays Capital said in a note to investors. "As risk aversion dwindles, the dollar's role as a safe haven has tended to come down and we have seen a joint pickup in investments in emerging markets."

The real's outlook is so strong that Brazil's central bank has resumed buying dollars, and analysts say it may not let the dollar slip much below the 2-real mark in order to keep Brazilian exports more competitive. Agriculture Minister Reinhold Stephanes this week warned that a less than 2-real dollar may hurt Brazilian crop sales.
http://finance.yahoo.com/news/Latin-American-stocks-end-apf-15389363.html?.v=2