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Trading Shares in Spain's Bankia Suspended -- The trading of shares in Spain's troubled Bankia bank has been suspended ahead of a board meeting this afternoon. The board plans to ask the government for about 15 billion euros to keep the country's fourth largest bank afloat. While the other big Spanish banks have been seen their ratings downgraded by the rating agencies of late, the official word is that Bankia's woes are an exceptional case. However, it is no coincidence that this trouble occurs at the same time that rumors of German flexibility on eurobonds are rising. Spain, and not Greece, is where the eurozone will sink or swim. [25 May]
Massachusetts is Romney's Achilles Heel, Not Bain -- The media and political parties are having a grand time trying to decide whether being an asset-stripping capitalist suits Willard Mitt "Crassus" Romney to be president. To the extent history has anything to say, businessmen tend to fail in the White House (Hoover, Carter, both Bush the Elder and Bush the Lesser). But a far more relevant part of Mr. Romney's resume is his single term as Governor of Massachusetts, a job comparable to the presidency save for the scale and foreign affairs. Here, Mr. Romney comes up short. [24 May]
CBO Says US Fiscal Crunch May Bring Recession -- The Congressional Budget Office has joined the anti-austerity camp with a warning yesterday that the scheduled tax increases and spending cuts due at the end of 2012 would likely push the US economy into recession. Actually, the CBO says the country will fall off a "fiscal cliff." The GDP for the first half of 2013 would shrink by 1.3% if Congress does nothing. A second half rise of 2.3% would leave the full-year growth rate at an increase of just 0.5%, a level more often seen in Europe than the US. The solution is to delay things for another year. [23 May]
OECD Says Europe is World's "Single Biggest Downside Risk" -- If there were any doubt that Europe's austerity-driven attempt to fix its finances has failed, the Organization for Economic Development and Cooperation has removed it. The OECD has said the eurozone crisis is the "single biggest downside risk facing the global outlook." The OECD issued a new report this morning that suggests growth in the eurozone will be a negative 0.1% this year and will rebound to a positive 0.9% next year, lagging both the US and Japan. The OECD specifically recommends government spending to fix this. [22 May]
NASDAQ Bumbles Facebook IPO -- The initial public offering of Facebook stock was supposed to have been a shining moment of glory for all concerned. It wasn't. The expected surge in the price never really happened as the stock finished up just 23 cents on the day. The underwriters appear to have been supporting the $38 level on a few occasions throughout the day. But the most egg wound up on the face of NASDAQ, which had trouble actually opening trading. Despite test runs, NASDAQ ran into problems it couldn't easily handle. [21 May]
Copyright 2011 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.
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