George Soros Tells Germany It Should Leave Euro Zone...

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 As the backlash against austerity and bailouts increases in the euro zone, billionaire investor George Soros is the latest person to criticize Germany's role, telling the country on Tuesday that austerity "does not work" and that it should even consider leaving the euro itself.

"The financial problem is that Germany is imposing the wrong policies on the euro zone. Austerity doesn't work. You can't shrink the debt burden by shrinking the budget deficit," Soros, the founder and chairman of Soros Fund Management,said during a speech in Germany's financial center of Frankfurt on Tuesday.

Soros, who is known as "the man who broke the Bank of England" for betting against the pound in the early 1990s, told Europe's paymaster and largest economy that it had made mistakes on Cyprus' 10 billion euro ($13.07 billion) bailout, which forced some savers to share in the cost.

"In the bailout of Cyprus, Germany went too far, what happened in Cyprus undermined the business model of the European banks which relies heavily on deposits," he said.


 In a lecture entitled "How to save the European Union from the euro crisis," Soros said that he was attributing "a large share of the responsibility [for the crisis] to Germany."

"I want to make it clear in advance that I am not blaming Germany. Whoever was in charge would have made similar mistakes…I realize that I risk antagonizing you by putting the responsibility on Germany. But only Germany can put things right," he added.

He said that Germany should either drop its opposition to "Eurobonds" – the mutualization of European debt – or should leave the euro.

"My first preference is eurobonds; my second is Germany leaving the euro…It is up to Germany to decide whether it is willing to authorize eurobonds or not. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing Eurobonds," he said.
"In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting others introduce them," he said, adding that another dimension to the crisis was Germany's unwillingness to take responsibility for its policies.

"Germany did not seek the dominant position into which it has been thrust and it is unwilling to accept the obligations and liabilities that go with it. Germany understandably doesn't want to be the "deep pocket" for the euro. So it extends just enough support to avoid default but nothing more," he added.
Soros' comments come against a backdrop of anti-austerity feelings in Europe as Portugal's constitutional court rejected reform measures and Slovenia becomes the latest country to resist pressure to request a bailout.

(Read More: Portugal Fires Warning Shot for Austerity in Europe)
His comments also follow criticism of austerity from the U.S. Treasury Secretary Jack Lew. During his visit to Europe this week, Lew called on his European counterparts to strike a balance between growth and austerity and to boost demand.

Lew met French and German finance ministers on Tuesday and his pro-growth message may have struck a chord in France, which is grappling with slow growth and high unemployment. Germany, however, has the biggest trade surplus in the euro zone and is the driving force behind austerity measures.

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News Source: www.cnbc.com

North Korea warns foreigners to leave South Korea...

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North Korea intensified threats of an imminent conflict against the United States and the South on Tuesday, warning foreigners to evacuate South Korea to avoid being dragged into a "merciless, sacred, retaliatory war".

The North's latest antagonistic message belied an atmosphere free of anxiety in the South Korean capital, where the city center was bustling with traffic and offices operated normally.

Pyongyang has shown no sign of preparing its 1.2 million-strong army for war, indicating the threat could be partly intended to bolster Kim Jong-un, 30, the third in his family to lead the reclusive country.

None of the embassies in Seoul appeared to have issued any directives to their nationals after the warning and airlines reported no changes in their schedules. Schools catering to foreign pupils worked without interruption.

The warning, read out on North Korea's state television in a bulletin that interrupted normal programming, was the latest threat in weeks of high tension following U.N. sanctions slapped on Pyongyang for its latest nuclear arms test.

It followed the North's suspension of activity at the Kaesong joint industrial just inside North Korea, all but closing down the last remnant of cooperation between the neighbors. North Korean workers failed to turn up on Tuesday.

North Korea had said South Korea was trying to turn the Kaesong complex into a "hotbed of war".
The warning to foreigners, reported by the KCNA news agency said once war broke out "it will be an all-out war, a merciless, sacred, retaliatory war to be waged by (North Korea).
"It does not want to see foreigners in South Korea fall victim to the war," the agency quoted the Korea Asia-Pacific Peace Committee as saying.

"The committee informs all foreign institutions and enterprises and foreigners, including tourists...that they are requested to take measures for shelter and evacuation in advance for their safety."
Last week, North Korean authorities advised embassies in Pyongyang to consider pulling out in case of war, though none appeared to have taken any such action.

SPECULATION OVER MISSILE LAUNCH, NUCLEAR TEST

Speculation has grown that the North would launch some sort of provocative action this week -- perhaps a missile launch or a fresh nuclear weapons test.
A government source in Seoul said a North Korean medium-range missile, reported to have been shunted to the east coast, had been tracked and was believed to be ready for launch.
"Technically, they can launch it as early as tomorrow," the source said.

But a U.S. embassy official in Seoul said a directive issued last week saying there was no imminent threat to Americans in South Korea remained valid. "Our workers are in all our offices today," he said. "We have not evacuated anyone."

A Philippine foreign ministry spokesman quoted diplomats at its Seoul embassy as saying the situation "remains normal and calm".

Stocks, which had fallen 4 percent over the past four days, edged higher on Tuesday despite the warning to foreigners. The won currency moved little, dipping slightly after the North Korean statement.

Employers at the Kaesong complex faced uncertainty as the 53,000-strong North Korean workforce stayed away. A spokesman for textile company Taekwang Industrial and at least two other firms said production had stopped.

About 475 South Korean workers and factory managers remain in Kaesong, which generates $2 billion in trade for the impoverished North. The Seoul government said 77 would return on Tuesday.
North Korean workers at the park have appeared increasingly agitated in recent days, refusing to talk to their colleagues.

Many Southerners connected with the park bedded down at budget hotels in a nearby South Korean town in the hope that an order would come from the North to re-open.
"I have been feeling anxious now and then. Now it's really preposterous facing this," said Shing Dong-chul, 55, a South Korean worker who transports wire made in Kaesong.

"North Korean workers didn't talk a lot, but they appeared to have complaints about Kaesong being closed. They worried whether they would be working or not."Addressing a cabinet meeting, South Korean President Park Geun-hye described the suspension of Kaesong as "very disappointing" and said investors would now shun the North.

Few experts had expected Pyongyang to jeopardize Kaesong, which employs more than 50,000 North Koreans making household goods for 123 South Korean firms.

LAST VESTIGE

The zone is practically the last vestige of the "Sunshine Policy" of rapprochement between the two Koreas and a powerful symbol that the divided country could one day reunify.
South Korean companies are estimated to have invested around $500 million in the park since 2004.
World leaders have expressed alarm at the crisis and the prospect of a conflict involving a country claiming to be developing nuclear weapons.

China, the North's sole diplomatic and financial ally, issued a new call for calm and restraint, though Beijing's leaders have shown increasing impatience with Pyongyang.

"We ask all the relevant sides to bear in mind regional peace and stability and earnestly protect the legal rights and safety of citizens," Chinese Foreign Ministry spokesman Hong Lei told a briefing.
A Russian foreign ministry spokesman, in a statement on the ministry's website, said Moscow was in solidarity with all G8 industrialized countries "as regards the rejection of Pyongyang's current provocative and bellicose line of conduct".

The North is also angry at weeks of joint U.S.-South Korean military exercises off the coast of the peninsula, with B-2 stealth bombers dispatched from their U.S. bases.But the United States announced the postponement last weekend of a long-planned missile launch, a move officials said was aimed at easing tensions on the peninsula.

U.S. Secretary of State John Kerry visits Seoul this week and the North holds celebrations, and possibly military demonstrations, next Monday to mark the birth date of its founder, Kim Il-Sung - the current leader's grandfather.

In Washington, U.S. Deputy Defense Secretary Ashton Carter urged China to use its influence with the North and said Moscow wanted similar action from Beijing.But Chinese criticism of North Korea is unlikely to mean tough new action against Pyongyang because China would see any collapse of its troublesome neighbor as a disaster.

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News Source: www.marketwatch.com

Stocks Earnings are 1st big stock test since market high...

U.S. stocks, which reached all-time highs at the end of March, will face the first real test of their resiliency in the coming weeks as investors parse a flood of first-quarter earnings reports due to hit the market.

Since the benchmark Standard & Poor’s 500 Index reached a new closing high of 1,569.19 on the last trading day of the first quarter, the index SPX -0.01% has met resistance at that level, not straying past 1,573.66, a few points below the all-time intraday high of 1,576.09. On Friday, weak jobs data drove the index down to close at 1,553.28, marking its worst week of the year.

As a drumbeat of lowered analyst estimates and increasingly negative outlooks fills the air, investors who are planning on going long in the market should look past the initial negative hype and concentrate on what the company is making and how they are making it, said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Upon further inspection of the earnings, initial pullbacks because of negative numbers can be exploited as buying opportunities.

After all, the fourth quarter saw all-time highs in capital expenditure spending, and 2012 saw all-time highs in corporate cash, dividends, and cash flow, Silverblatt said, who expects those metrics to grow going forward, or at worst be flat.

He said it was noteworthy that most of these strong corporate metrics came during a time when the average investor and consumer was being assaulted daily not only with the uncertainty of the November elections, but also with budget showdowns and the specter of the so-called fiscal cliff.

“The consumer is still spending mostly because they’re tired of hearing how the world is coming to an end,” Silverblatt said. Barring another big flare-up in fighting in Washington, D.C., or on the Korean peninsula for that matter, consumer spending should continue and provide wide support for earnings, he said.

On Friday, the Federal Reserve said February consumer credit jumped the most in six months, rising $18.1 billion, with credit card debt increasing by less than 1% to $532 million.

How that played out in the rest of the first quarter will become more evident toward the end of April and into May when consumer staples and consumer discretionary company earnings start coming out in full force.    

McDonalds Corp. MCD -0.36% , Coca-Cola Co. KO +0.77% , and PepsiCo Inc. PEP +0.66% report the week beginning April 15. While classified as a tech company, the consumer is the life blood of Apple Inc. AAPL +0.19% , which reports during the week beginning April 22, along with other consumer bellwethers like Procter & Gamble Co. PG +0.41% and Amazon.com Inc. AMZN +0.34% . After that, major retailers including Wal-Mart Stores Inc. WMT +0.77% , Target Corp. TGT +0.23% , and Home Depot Inc. HD +0.84% come out in mid-to-late May.

The current bottom-up, operating earnings per share estimate for the S&P 500 is $25.45, according to Silverblatt. That’s two cents above the all-time high of $25.43 set in the second quarter last year, and a 5% increase from the year-ago quarter, so even if it falls a few cents short, it’s the second-highest earnings on record, he said.  

While it may be one of the most negatively forecast earnings seasons in a while, some analysts say the consensus is still too high. Consensus earnings estimates have already fallen 6.5% over the first quarter alone, according to Silverblatt’s data.

Alcoa may be traditional first, but banks are bigger

Even though Alcoa Inc. AA +0.06% is scheduled to report results after the bell Monday and kick off the unofficial start of earnings season, the biggest earnings of the week by far will be in the banking sector with both J.P. Morgan Chase & Co. JPM +0.09% and Wells Fargo & Co. WFC -1.24% reporting on Friday.

Expect fundamentals, such as loan growth and margins to remain challenges for the sector, said Paul Miller at FBR in a recent note. The analyst said that business loan growth slowed dramatically in the first quarter. Also, mortgage originations may fall short of expectations because of seasonal weakness, something to think about with Wells Fargo, the largest U.S. originator or mortgages.

On the other hand, Miller expects capital markets to do well with strong equity and debt underwriting to boost results. Expect that to be a big factor in the results of J.P. Morgan, which has fought with Goldman Sachs Group Inc. GS -1.16% recently for dominance in the capital markets sector.

But unless a significant number of companies beat bottom-line results, it doesn’t appear that earnings growth is in the cards this season. The high frequency of negative outlooks has John Butters, senior earnings analyst at FactSet, expecting a 0.6% decline in earnings for the first quarter.

In the run-up to earnings season, 86 out of the 110 companies on the S&P 500 that have offered an outlook have issued one that falls below the Wall Street consensus. That 78% negative outlook from companies giving forecasts is well above the five-year average of 61%, Butters said in a recent note.

Other S&P 500 components scheduled to report in the coming week all happen on Wednesday and include Bed Bath & Beyond Inc. BBBY +1.14% , CarMax Inc. KMX +2.37% , Constellation Brands Inc. STZ +1.63% , Family Dollar Stores Inc. FDO -0.77% , and Fastenal Co.

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Asad Rasheed
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Here is another blog that provides regular news and information and is very useful for Forex Signals. 

News Source: www.marketwatch.com