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Europe Risks 'Endless Depression' in Pursuit of Austerity - (www.cnbc.com) One of the U.K.'s largest asset managers has
warned that the continued focus on austerity in Europe could lead to
"almost endless depression" for the region. The comments come as
George Soros and the U.S. Treasury Secretary Jack Lew have urged Europe's
leaders to do more to boost growth after Portugal's top court rejected some of
the country's austerity measures, on which its bailout depends. "The
prospects for GDP [gross domestic
product] recovery in the euro zone in 2013 or 2014 are diminishing by the
month," John Greenwood, chief economist at U.K. asset manager Invesco
Perpetual wrote in his quarterly outlook on Tuesday.
S&P 500 may fall more than 40% by Fall, 2013 - (finance.yahoo.com) Even though the S&P 500 (^GSPC)
and Dow Jones Industrial Average (^DJI) are hovering at all-time highs,
Chris Martenson, author of PeakProsperity.com and the “Crash
Course” Series, is forecasting a major market correction. Martenson predicts
the S&P could fall 40% to 60% to the 600-800 level by this fall. His last
major market call was in March 2008, before the financial crisis. The Daily
Ticker’s Lauren Lyster sat down with Martenson at the 2013
Wine Country Conference in support of Les Turner
ALS Foundation to get his market and economic predictions. "I
see recessionary signs all over the landscape. In particular, Europe is already
in recession [and] Japan is already in recession," he says. "We are
looking at global economic slowdown." As for corporate earnings, a
stronger U.S. dollar could bring down profits this year, Martenson believes.
Corporate profits currently account for 11% of GDP, which is way outside the
norm of 6% of U.S. growth. He's also bearish on the U.S. economy and sees
weakness in sectors that have shown improvement like the housing market.
Slovenia faces 'severe banking crisis', warns OECD - (www.telegraph.co.uk) The OECD said that
"excessive risk taking, weak corporate governance of state-owned banks and
insufficiently effective supervision tools" had led to a "protracted
bust [...] compounded by domestic structural weaknesses and the European debt
crisis." "Slovenia faces risks of a prolonged downturn and
constrained access to financial markets. " it said in a report on Tuesday. "Banks’
and firms’ balance sheets have been severely impaired and their necessary
deleveraging is depressing growth, as credit is declining [...] Additional and
far reaching reforms are needed as soon as possible to head off such daunting
outcomes." Slovenia's three-largest banks are owned by the state, and have
been recapitalised several times due to a high level of risky loans accumulated
during the pre-crisis boom.
France Faces 'Devastating Scandal' as Economy Stalls - (www.cnbc.com) France's economy is at near-stall speed, trade
and budget deficits widened last month and the country is embroiled in increasing
political uncertainty. The Bank of France forecast on Tuesday that
the French economy posted growth of 0.1 percent in the first quarter of 2013,
in line with its estimates, meaning that the euro zone's second largest economy
will have narrowly averted recession after its economy contracted by 0.3
percent in the last quarter of 2012. But such low growth could lead France's
government to miss its budget deficit targets, which are based on growth of 0.8
percent this year. The news came on top of widening trade and budget deficits
in February and a decline in business confidence in the services sector,
according to a monthly survey.
The International Bank Heists Have Begun - (finance.yahoo.com) Last month, the financial
press churned out a veritable encyclopedia-length discourse on the death of
Cyprus’s financial sector. However, one glaring question remains: How did
everybody miss it? Actually, the puzzle is far more perverse, because not only
did the experts fail to foresee the Cypriot banking debacle, these very
professionals who were responsible for recognizing the good banks and rooting
out the bad ones were, in fact, lauding Cypriot banks throughout their entire
decline. The chart above depicts a sampling of the accolades that the global
finance community bestowed on the Bank of Cyprus during its six-year trek into
insolvency. Starting with the bank’s 2008 award for best bank from Global
Finance Magazine, the trail of tributes continued in 2009 and 2010, when the
bank received quality recognitions from The Banker magazine and JP Morgan
Chase. Even as late as 2012, with the bank’s shares down 98% from their
all-time high, the Bank of Cyprus still received a 2012 private banking award
from the internationally renowned financial journal Euromoney. The Bank of
Cyprus website described its bookending tribute from Euromoney this way: “This
is yet another major international distinction which confirms the successful
path taken by the Bank of Cyprus Group, placing it among the world’s top
financial institutions offering private banking services.”
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