US PMI weak; EU PMI expanding; Greeks ok austerity; China can't stomach reform; office construction binge; UST 10yr yield 1.85%; oil and gold lower; NZ$1 = 67.7 US¢, TWI-5 = 71.6

Its interesting that the Chinese Central Bank don't want to allow the currency to correct downwards . Under normal conditions , a market adjustment downwards would be a good thing , as it generally stimulates exports, and shelters citizens from more pain later

Problems will arise when the market overtakes the Central Bank , the currency is too strong , and its forced to adjust by a much wider margin . The consequent rise in food and transport (fuel) costs may cause social unrest

In China, reports are emerging that their central bank has lost interest in letting the market determine the price of its currency. It can't give up control of the process or stomach the risks of the transition.

Did the Fed ever give up control by other means?

Federal Reserve Chairman Ben Bernanke on Monday defended the central bank's aggressive easing of monetary policy, saying while it was aimed at bolstering the U.S. economic recovery, it was helping other countries as well.

The Fed's asset-purchase programs, aimed at keeping long-term borrowing costs down and spurring investment, have been criticized overseas for their adverse impact on emerging market currencies.

But the Fed chief, fresh from a grilling from Congress on the potential domestic risks of his quantitative easing measures, countered the rhetoric about "currency wars," though he did not use the term specifically.

In prepared remarks to a group of academics in London, Bernanke said the integrated nature of the global economy meant the whole world benefits from a sturdier U.S. outlook.

"Because stronger growth in each economy confers beneficial spillovers to trading partners, these policies are not 'beggar-thy-neighbor' but rather are positive-sum, 'enrich-thy-neighbor' actions," he aid. Read more

Glasgow now has a significantly lower male life expectancy than Vietnam (71 years against 75, in case you were wondering), but it doesn’t make much sense to re-classify Britain as a “developing” country just because some bits are very poor. There are similar pockets of deprivation within most advanced economies.

For all the talk of global poverty and inequality, the world has been making remarkable progress towards higher levels of prosperity. Take the World Bank’s extreme poverty measure, which it defines as living on less than $1.90 a day. Thirty years ago, that covered close on 40pc of the world’s population. Now it is less than 10pc. That is a dramatic shift in a relatively short period of time.

http://www.telegraph.co.uk/business/2016/05/23/why-the-title-of-develop…

Financialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.
http://www.oftwominds.com/blog.html