Emerging Market Stocks Fall Lower On Fears Of Falling Growth And Exhaustion Of Carry Trade Investing

Financial Market Report for March 12, 2012

Competitive currency devaluation is underway with the the Brazilian Real, BZF, the Australian Dollar, FXA, causing the World Stocks, VT, and the World Small Caps, VSS, Emerging Markets, EEM, and the BRICS, EEB, trading lower with Semiconductors, XSD, and the Copper Mining, COPX, trading lower on fears of falling global growth and exhaustion of carry trade investing

In Iran and Afghanistan, we are witnessing the beginning of the end of Anglo American hegemony with increased hostility between native peoples and foreign troops.

Capitalism is dying on the failure of fiat money and exhaustion of central bank credit. Through creative destruction, regional global governance will arise to provide diktat as well as money and credit.

National Bank of Greece, NBG, Greece, GREK, and the European Financials traded lower. Expropriation challenged, Argentina, ARGT, sovereign debt challenged, Israel, EIS, global growth challenged Thailand, THD, and Malaysia, EWM, traded lower.  Brazil Financials, BRAF, led Brazil, EWZ, Brazil Infrastructure, BRXX, and Brazil Small Caps, EWZS, traded lower, as the government extended the transaction tax on foreign borrowing, and as carry trade investing unwound.

Shane Romig of Dow Jones News Service reports On last Thursday, the government asked the company to reinvest its earnings from the last two years in exploration and production instead of paying dividends to shareholders. Shareholders were unimpressed. The request comes amid an intense government campaign to force YPF, which is majority-owned by Spain’s Repsol, YPF, to boost production. Argentina’s President Cristina Kirchner and government officials have blasted YPF repeatedly in recent months for failing to raise output at a time when Argentina faces a growing and increasingly expensive energy deficit.  Speculation that the government is considering nationalizing the company has sent share prices plummeting in recent weeks.

Deus Forex Machina writes that Australian Dollar, FXA, is trading lower on fears of lower growth.The Aussie Dollar is under a little more pressure, no doubt because it is directly related to the slowdown in China that people are now talking about. In similar vain Market Insider writes The Australian dollar has slumped to its lowest level in almost seven weeks as markets continue to react to weak Chinese trade figures

The chart of DTE Energy, DTE, shows it leading Utilities, XLU, higher.

US Infrastructure stocks, trading lower included MTW, ARII, GBX, TEX, CX, TRN

Viterra, VT.TO, blasted higher to 14.21 after media mentioned a possible buyout.

World Major Currencies, DBV, and Emerging Market Currencies, CEW, traded lower.

In news of Estonia, Slovenia, and Slovakia, that  is of developing Europe, ESR, and GUR, Open Europe reports an interview with Italian daily La Repubblica yesterday, German Finance Minister Wolfgang Schäuble said, “If we were facing a similar crisis [as Greece is] we would do everything to remain in the eurozone…Greece’s minimum wages have now been cut to the level of Spain’s. One should listen to Estonians, Slovenians or Slovakians: the reforms Greece has been asked to implement are less than half those accepted by those countries after 1989.” He also warned, “Nobody can rule out that Greece will need another [aid] package.”

Open Europe continues Social democrats triumph in Slovakian elections as anti-bailout party loses half of its seats Slovakia’s social democratic SMER Party gained 44% of the vote at yesterday’s elections, winning an absolute majority in the Slovakian Parliament. The elections were held early after the previous coalition government collapsed over the country’s contribution to the eurozone bailouts. Richard Sulik’s Freedom and Solidarity party, which opposed the bailouts, lost around half of its seats. SMER leader Robert Fico has said he will be a reliable partner for the EU, arguing that: “we draw so much money from the EU that we have to demonstrate our solidarity”. However, Fico’s campaign promises of increased social spending could clash with his commitment to reducing Slovakia’s budget deficit, and may also violate the EU’s Stability and Growth Pact. BBC Economist EUobserver IHT FT WSJ EurActiv Süddeutsche Welt Welt 2 Les Echos La Tribune

Finnish Foreign Minister: “We should move forward” with EU military HQ without the UK. EUobserver  reports that Finnish Foreign Minister Erkki Tuomioja has complained about the lack of political will among EU member states to make progress towards a common EU foreign policy. Citing the UK’s opposition to creating a joint command centre in Brussels for EU military operations as an example, he said, “The UK is reluctant to go ahead with this but everybody else wants to, so we should move forward.”

Der Spiegel reports that, in a joint letter to the Danish EU Presidency, the finance ministers of nine EU member states – including Germany, France and Italy – have argued, “We are convinced that a financial transaction tax should be introduced at the European level and we would welcome if the Presidency speeds up the negotiation process.” Der Spiegel Irish Times Süddeutsche

In a draft letter seen by the BBC, seven top EU airline companies, including British Airways, Airbus and Virgin Atlantic, are urging politicians to consider a ‘compromise solution’ for the recently introduced EU carbon tax which they fear will seriously effect jobs and trade, suggesting putting the tax on hold until a global plan for carbon emissions is reached. BBC FT CityAM WSJ EurActiv Welt Le Figaro

Danish Foreign Minister Villy Søvndal has said “there’s no need” for a new EU Constitution as called for by his German counterpart, Guido Westerwelle. Jyllands Posten Reuters

EUobserver reports that the External Action Service (EEAS), headed by Catherine Ashton, will spend €15m on private security firms this year in an effort to protect diplomats overseas.
Michael Pinto-Duschinsky, a member of the Commission appointed by the UK Coalition Government to look into the possibility of a British Bill of Rights replacing the European Convention on Human Rights has resigned, claiming that he had been pressured not to argue in favour of the UK Parliament having the right to override the Strasbourg Court, and that “it’s now clear that it’s been intended all along to issue a report in favour of the status quo.” Mail Sun Express Spectator Coffee House: Nelson Conservative Home: Montgomerie

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