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Tuesday, May 1

1st May: US "decouples" again

Again some strong numbers from the US. After the talk couple of months ago that the US economy had decoupled from Europe, the optimists were gravely disappointed - I guess this time people will be a little less enthusiastic about the strong numbers. Besides, stock prices have already risen and Europe is not looking hot at all - so I guess after a month or so of "decoupling", US will again revert to the mean. The alternative would be that Europe would suddenly start growing briskly. Somehow I find that a bit hard to swallow.

Here are the US closing regulars and some article links. You can get update notifications by following ‘MoreLiver’ on Twitter or Facebook. Contact me with any questions or suggestions.
Markets – Between The Hedges
The Closer – alphaville / FT

Debt crisis: live – The Telegraph
Europe Crisis Tracker – WSJ
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank

The Europe Crisis from a European PerspectiveChris Martenson
The purpose of this report is to give readers the essential background to the economic problems in Europe and to bring you up-to-date in what has become a fast-moving situation. At the time of writing, there has been a lull in the news flow, but that does not mean the problems are under control. Far from it.

Growth: There is an alternative to austerityFree exchange / The Economist
…the robotic push for national-level austerity across the euro zone is undermining integration and thereby exacerbating the crisis…Now of course, long-run euro-zone success depends on institutions that limit the impact of moral hazard on national budgets. No part of that sentence implies that Spain must embrace crash austerity now. Quite the opposite; crash austerity now is the best way to ensure that in the long run, the euro zone is dead.

The rise in the Eurozone money supply has not improved credit conditionsSober Look
While M3 is increasing, but lending to private sector is decreasing.

European Leaders to Weigh New Capital Requirements for BanksNYT
European Union finance ministers are expected to wrangle on Wednesday over how much capital the Union’s 8,300 banks should be required to hold, a further demonstration of the difficulties of managing a 27-member economic bloc.

Austerity, Spending & the Black Market in the RoomTF Market Advisors
I am not sure how the debate has turned into austerity versus growth? Growth, or at least sustainable debt levels is the goal. Austerity and Spending are ways of achieving that sustainable debt level… Spain has an official unemployment rate of 24%. They project it to be 22% in 2015. This is structural.

Bank of Spain Confirms Foreigners Dump Spanish Bonds; Spanish Banks Foolishly Load UpMish’s
There was "help" alright, help by ECB president Mario Draghi to allow German, French, and Italian banks to dump Spanish debt hand over fist to fools in Spain…Who should pay for the idiocy of loading up on Spanish debt once it implodes? The answer of course is the banks and the bondholders. But No!

Dear Bank of Japan: So you tried the easing thing a gazillion times…  – alphaville / FT
One question that keeps on popping up is, what is stopping Japan from adopting a currency peg a lá the Swiss National Bank? If repeated easing seems to have no real effect why not get explicit?

Dark inventory, a volatility shock absorberalphaville / FT
From oil to copper, something strange is going on with commodity inventories. Official stocks are rising across numerous commodities, but analysts and traders swear fundamentals remain tight, while prices stay supported.

US ISM ManufacturingBNY Mellon
US: Super strong ISMDanske Bank (pdf)