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REWIND: International Business News #33

Posted on August 24th, 2012 | Author: admin

  • The fallout from the 2007 banking crisis is still working its way through the U.S. legal system.  Wednesday, a U.S. District Judge in Manhattan ruled that lawsuits against JPMorgan should be consolidated into a class action. The pension fund plaintiffs allege they lost as much as $52 million, because of fraudulent activities by JPMorgan’s London chief investment office.
  • Despite a generally slow M&A market, China is loading up on U.S. assets.  The deal volumes for Chinese acquisitions of U.S. companies reached $7.8 billion for the first eight months of 2012 alone.  Deal totals will rise substantially if ongoing negotiations between troubled natural gas fracking giant Chesapeake Energy Corp. and Sinopec come to fruition.
  • The Barclays LIBOR rigging scandal continues apace, with Barclays ex-Chief Executive Officer Robert Diamond censured by the UK Parliament for giving “unforthcoming and highly selective” evidence.  At the same time, the British Bankers’ Association’s Foreign Exchange and Money Markets Committee, representatives from the world’s largest banks who review the London interbank offered rate, remain anonymous, with no public indication of who its members and no public release of minutes of its meetings.
  • Worried about slow growth and persistently high unemployment, the U.S. Federal Reserve indicated on Wednesday that another round of stimulus measures could come “fairly soon.”  The news gave global markets a boost, outweighing poor economic data from China and Europe.  The Fed’s announcement, however, brought the dollar to a three-month low versus the Euro.  In the meantime, the dysfunction in the Euro Zone has many experts predicting the collapse of the Euro, which will have significant impacts on international trade and contracting.  European leaders will return from their summer break in September to face long odds towards keeping the Euro Zone intact.
  • As uncertainty abates, the “Arab Spring,” and resulting political, legal and economic reforms, is creating investment opportunities in the Middle East.