In March 2012, Greece became the first modern, advanced economy to default on its debts since World War II. On Wednesday, the IMF published a post-mortem (pdf) about its attempts to bail out the country with other members of the so-called troika—the European Central Bank and representatives of other euro zone countries.
Thomson Reuters is taking the heat for a glitch that on Monday (June 3) caused the US’s ISM manufacturing data to go out to high-frequency traders 15 milliseconds before it was supposed to.
It’s easy to look at southern Europe and see why workers might choose to do informal work without paying taxes. With record unemployment and steep barriers to entry to some professions (e.g. taxi guilds in Italy), it’s often easier for both would-be employers and would-be employees to skip the paperwork and exchange goods and services under the table. So it’s not surprising that about 20-25% of GDP in Spain, Italy, Portugal, and Greece is probably earned in the “shadow economy,” according to a new study by the Institute of Economic Affairs (pdf).
On Monday, US regulators named lender GE Capital and insurance giants Prudential Financial and AIG as non-bank systemically important financial institutions (SIFIs)—aka non-bank firms whose failure could disrupt the entire US economy (paywall). The three firms will now be required to disclose more financial information and face stricter oversight from the Federal Reserve.
Atop Çamlıca, a hill on Istanbul’s Asian side, a 15,000 square meter (161,000 sq foot) mosque is being built. If all goes according to prime minister Recep Tayyip Erdogan’s plan, the structure will be not only enormous, but visible to the entire city, too.
The Nikkei 225—Japan’s most highly cited stock index—has been on a wild ride this year. On May 22, the index was up 50% since the start of the year. But after four days of approximately 500-point losses, the Nikkei has erased 23% of its gains. The index fell 3.7% today alone.
Euro zone policymakers generally issue official statements in English. Unfortunately, many don’t do it so well.
Slovenia’s economy contracted at an annual rate of 4.8% in the first quarter of 2013. The country’s GDP has now fallen for four straight quarters on a year-over-year basis, and the situation is only continuing to worsen.
As banks continue to swell in size, the public might conclude that legislators have gone back on their promise to never again let a bank grow “too big to fail.” But making banks smaller was never what legislators—most of them, anyway—had in mind.
Traders have been fussing about rising interest rates on US Treasurys, steep declines in the Nikkei, and increasing market volatility. The VIX, Wall Street’s “fear index,” had been hovering at all-time lows recently, but then it turned around and steadily rose over the last month.
Yesterday, the US Treasury charged virtual currency exchange Liberty Reserve in a $6 billion money-laundering scheme. The company, which used its own transferable tokens (Liberty dollars) to move money from anonymous account to anonymous account and in and out of other currencies, highlights bigger problems plaguing the cryptocurrency bitcoin and its exchanges.
Moody’s Ratings agency cut its rating on bonds issued by Alcoa from Baa3 to Ba1 today, which qualifies the company’s debt as “junk” in the fixed income world. One of the world’s largest aluminum producers, Alcoa has been plagued by falling aluminum prices and sluggish demand for building materials.
The value of loans made in the euro zone to the private sector fell by 0.9% in April (pdf), the twelfth month in a row that credit extended to the private sector fell from the same period a year before. In fact, lending to the private sector hasn’t risen year-over-year since April of 2012.
Measures intended to make banks safer are actually putting them, in some ways, at greater risk. That’s the cautious conclusion of a report yesterday (pdf) from the Bank for International Settlements (BIS).
Thai finance minister Kittiratt Na-Ranong said today that government officials are working on new rules (paywall) meant to stem the flood of capital into the country, particularly into short-term government bonds. New regulations could also force investors to hedge some baht-denominated investments.
Both German and French measures of business confidence rose on a monthly basis. Germany’s Ifo survey of business confidence hit 105.7, topping a long-term average of 100. The French business climate measure rose to 92 from 88.
Tudor Investment Corporation’s Paul Tudor Jones today found himself in the middle of a firestorm of his own making when the Washington Post published a video of a speech he gave last month. During that speech, the hedge fund billionaire told the audience:
Japan’s major stock index, the Nikkei 225, plunged 7.3% today. For a country that’s supposedly growing at a rate of 3.5% per year, such a large one-day drop is out of character.
Bitcoin backers have big dreams—dreams of reinventing the financial system based around a currency not issued by governments and not subject to the whims of central banks. But the cryptocurrency’s volatility over the last few months has raised questions about whether most people would want to depend upon it to pay for goods and services.
Bloomberg terminals have become pretty much indispensable to investors, and one of the key reasons, besides their news and data, is their private chat feature, where much of Wall Street’s conversation happens. Since the company’s journalists were caught peeking at data about users’ activities, the users have somewhat lost trust in that privacy. But is that enough to pave the way for a new player?
Vodafone’s and Telefónica’s dismal results for the beginning of 2013 show serious weakness in southern Europe. Today, Vodafone reported its worst annual fall in service revenues in five years (paywall) in its fourth quarter, and blamed its problems (pdf) on “headwinds from a combination of continued tough economic conditions, particularly in Southern Europe, and an adverse European regulatory environment.”
A few months ago, strategists warned of a “great rotation” away from bonds, which are currently earning investors record-low yields, into equities, which might be more lucrative. “Equities will become more attractive because they are geared to growth and offer returns that investors simply cannot get from their bond portfolios,” John Bilton, European investment strategist at BofA Merrill Lynch, said late last year (paywall).
Building the World’s Largest Ship from Maersk Line on Vimeo.
There are many perils associated with Facebook faux pas (for example, “liking” an ex-girlfriend’s bikini photo or unfriending a former boss), but some are becoming more serious than others—and ending in legal battles. Turns out, seemingly innocuous Facebook clicks have deeper meanings.
