GLOBAL MARKETS-, dollar gains

(Refiles to fix typo in headline)

* U.S. stocks slump as fear of more bank failures grows

* Dollar rises versus yen after strong U.S. factory data

* Oil slips below $69 a barrel on equities, strong dollar

U.S. stocks fell sharply on Tuesday as growing concerns about the U.S. banking system and over whether a recent rally in equity markets is warranted drove investors to the relative safety of bonds and the dollar.

Regulatory crackdown on Goldman begins Zero Hedge

Nobel Prize winner: dollar reserve system is falling apart The Daily Crux

The calm before the financial storm The Daily Reckoning

How China is stealing our future Energy Tribune

The lie about high frequency trading liquidity The Market Ticker

Federal Reserve loses big lawsuit Zero Hedge

Insight: Do not fear falling bond prices FT

How big Swiss bank is protecting its clients against inflation Bloomberg

The prices are so cheap they’re stupid DailyWealth

Government claims that Goldman has stock manipulation software The American Prospect

European and Asian stocks extended last week’s rally on Monday and crude oil marched higher after U.S. economic news and stronger-than-expected data from the euro zone spurred expectations for economic recovery.

Risk aversion returned to markets on Thursday, supporting the U.S. dollar and government bonds, after mixed economic data, while concern about the possible failure of a small U.S. lender sparked caution following the week’s robust gains in stocks.

All this week, we’ve been sounding the alarm of the so-called economic “green shoots.” These have now been exposed as being pure propaganda designed to lure investors back into stocks and to allow banks to recapitalize through share issuances at artificially elevated prices.

“You’ve got to try the crab cakes,” I told Steve McDonald. “I live in Baltimore. Why the hell would I come to Florida for crab cakes?”  We had just concluded a full day of meetings for the Investor’s Daily Edge quarterly editors’ conference and were taking our seats around the table at Dada, one of the finer establishments in Delray Beach.

Both President Obama’s and Senator Kennedy’s healthcare plans are estimated to cost $1 trillion over 10 years.  I’ll believe it when I see it. When was the last time the government completed any project on budget?

Those elusive “green shoots” that economic optimists had been digging up lately were buried under disappointing data from the Commerce Department in Washington yesterday (Wednesday) when it was revealed that retail sales in the unexpectedly dropped in April.

China will lead the world out of this economic slow down and the money to be made is beyond your wildest dreams.

Steve McDonald of Investors Daily Edge says, “A simple corporate bond strategy can make you a ton of money in the next few years, with almost no risk to your principal. And it’s so simple it’s almost unbelievable.”