“A loss never bothers me after I take it. I forgot it overnight. But being wrong — not taking the loss — that is what does damage to the pocketbook and to the soul.” — Jesse Livermore

1. Political uncertainty in Spain and Italy spooks markets — Spanish PM Mariano Rajoy tried to fight off allegations that he and other leaders in his party took bribes, while in Italy, Silvio Berlusconi’s party is surging in the polls ahead of upcoming elections as he promises to tear up “German-imposed” austerity policies and cancel a despised property tax.
2. Oil firms, environmentalists jockey for position over California shale — Oil companies such as Occidental Petroleum (OXY), Venoco (VQ) and Hess (HES) are looking to exploit California’s Monterey Shale, whose untapped deposits are estimated at 15.4B barrels, or over four times the reserves in the Bakken Shale. However, the industry is facing stiff opposition from the state’s environmental lobby, which is concerned about the substances used in fracking and the potential for setting off earthquakes.
3. Justice Department Filed Suit Against Standard & Poor’s, a unit of McGraw Hill Cos. (NYSE:MHP) — The DOJ’s lawsuit, joined by several states, seeks $5 billion in damages for losses to pension funds, banks and other financial institutions the government alleges were caused by the way S&P rated structured investments such as collateralized debt obligations in 2007.
4. BOE leaves policy unchanged — the Bank of England (BOE) has again left its monetary policy unchanged, with its benchmark rate staying at 0.5% and its QE program dormant.
5. Ireland’s hopes rise for debt refinancing — a reluctant ECB is close to agreeing to a refinancing of Ireland’s debt after the country’s parliament authorized emergency legislation to dissolve the former Anglo Irish and Irish Nationwide banks, now merged into IBRC, and sell their remaining assets of up to €14B to a bad bank.
6. Indian Economy to Grow at Weakest Pace in a Decade — per WSJ, India’s growth will decelerate this FY to 5% from 6.2% last year, the statistics ministry has said in a forecast that is lower than a recent finance ministry outlook of +5.8%. The slowdown is due to continued weakness in manufacturing and farm output, with the economy being hampered by a lack of reform, wide fiscal and current account deficits, and high inflation.
7. Consumer Sentiments Bullish — chart below shows Newsletters are the most bullish since 2010.

The week ahead — Economic data from Econoday.com: