IMF Cuts World Growth Forecast
The International Monetary Fund said today it revised down its forecast for global growth by twenty basis points to 3.9 percent in 2013, warning it could grow even more slowly should the European Union fail to create measures that would steer the region out of the crisis. It added that the European Central Bank had room to be even bolder in its easing policies, and it called for more fiscal integration in the Eurozone. The IMF, which acts as a lender of last resort for nations in difficulty, also slashed its growth projection for the U.K., predicting a 1.2 percent expansion next year, down from a 2 percent estimate in April. The U.S. also received a stern warning: the country is facing a “fiscal cliff” if lawmakers in Washington don’t find a compromise on tax-break extensions and spending cuts.
Syria Conflict Given Civil War Status
The Red Cross gave the conflict in Syria the status of “civil war.” The change in definition means combatants are now subject to the Geneva Convention, and could be prosecuted for war crimes. Meanwhile, the government has denied attacks on civilians and fighting has continued to escalate. Morocco declared the Syrian ambassador persona-non-grata and Russia still refuses to support any resolution that would lead to Syrian president Bashar al-Assad leaving office.
LIBOR: U.S. Prosecutors Investigate
Prosecutors from New York and Connecticut joined the U.S. Department of Justice, some U.S. cities, and U.K. regulators in investigating banks that contributed to setting Libor between 2005 and 2009. It also emerged that Bob Diamond, Barclays’ former chief executive officer who was forced to resign when the scandal broke, gave clear instructions to lower the rate submitted to the British Bankers’ Association, the bank lobby that compiles and publishes Libor every day. This was done to prevent markets from panicking, as the rate is a good indicator of the bank’s financial health. Turns out, rigging the rate is so easy to do “no conspiracy was needed,” experts said. Find out why you really should care about Libor.
Bank Analysts Give Early Access to Certain Hedge Funds
The New York Times has obtained documents that show financial analysts at various banks have been giving a small circle of hedge funds early access to their changes in views, allowing them to buy or sell before reports are made public. Because analyst upgrades and downgrades can cause stock prices to rise or plummet, this kind of information is normally well regulated. European regulators are already looking into it, but the Securities Exchange Commission hasn’t yet said whether it would investigate the practice.
Romney Fights Back
After a weekend of attacks by President Obama’s campaign on his record at Bain Capital, Republican Candidate Mitt Romney is going on the offensive, calling the claims “falsehoods.” He also dismissed requests to release more of his tax returns, using the fact that Teresa Heinz, John Kerry’s wife, didn’t release hers either when her husband ran for the Democratic Party in 2004. Team Romney released a memo saying that despite the attacks, the candidate is doing well in the polls. In other news, he could announce a running mate as early as this week.
Yahoo! Poaches Google’s Mayer for CEO
Marissa Mayer, top executive at Google, was hired as a chief executive officer at struggling Yahoo!. This move makes the 37-year-old one of the most prominent women in tech. She has a steep climb ahead, given that Yahoo! has failed to maintain its status as one of the most innovative internet-based companies.
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