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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

Sequestation is no medical term

Amusing as ever, the Wall Street Journal and the Financial Times try to sell us two different worlds this morning. As for WSJ:

Meanwhile, the economy is improving, central banks continue to pump money into the financial system, corporate earnings aren’t horrible and turmoil in Washington has waned.

While elsewhere, the FT announces “US faces fresh financial shock.” Well, that’s confusing. The problem at hand is the sequester, another beast of $1.2tn in automatic spending cuts, passed in 2011 and in effect from March 1. It cuts the Pentagon’s budget by $600bn until 2023, while the same amount is cut from other discretionary government spending.

Unlike the fiscal cliff deals – which was widely anticipated – the sequester would cause a big hit to 2013 growth forecasts. According to forecasting firm Macroeconomic Advisers, the sequester would knock 0.7 percentage points off growth in 2013, taking its forecast down from 2.6 to 1.9 per cent.

In the business of fixing rates, the attention shifts to Singapore, where internal reviews have uncovered a scheme to fix rates for non-deliverable foreign exchange forwards. When the Libor scandal broke lose in London, Singapore’s regulator ordered financial institutions to review their rate submission processes to the Association of Banks in Singapore, which publishes the benchmark. JP Morgan, UBS, HSBC and DBS are the most active players in Singapore’s offshore FX market. read article

In ItalyMonte dei Paschi di Siena is looking for a new investor. He should have at least €720m lying around to pay a potential fine for derivatives trades between 2006 and 2007, and not be part of any center-left political movement. A dislike of moral high horses would also come in handy. read article

Otherwise, Toyota is once again the world’s largest car manufacturer according to 2012 figures, taking its old place at the top back from General Motors.

So long.

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One Response

  1. […] continuous decline and China’s war on Japanese manufacturing of any kind, the company had nudged General Motors from the pole position of global  car producers. Now, Toyota is recalling 1.1 million cars worldwide, with the majority (752,000) sold in the US, […]

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