Connect to share and comment

The big picture view of an ever-changing global economy.

Macro chatter: Another day, lots more downgrades for Europe

Around the world in business: A whole bunch of European banks get downgraded and so does France and a Texas-sized prison sentence for R. Allen Stanford.
2012 02 20 euro symbolEnlarge
As the euro zone crisis grinds on, an increasing number of European banks and countries are facing ratings hits. (Ralph Orlowski/Getty Images)

Need to know: 

In less than 10 years China's middle class will outnumber the entire US population. 

At the moment, 247 million Chinese people, about 18 percent of the country's population, is considered middle class. That figure is expected to jump to 607 million by 2020, the Wall Street Journal reported

Middle class Chinese households spend between $10 and $100 a day on average. By 2020, their spending is expected to rival that of the US consumers. 

Want to know: 

Texan R. Allen Stanford has been sentenced to 110 years in prison for masterminding a $7 billion Ponzi scheme. Of course, he's taking a Bart Simpson-like approach to the situation and maintains he didn't do it. 

Stanford claims the government is responsible for triggering the losses suffered by his investors around the world. At his sentencing on Thursday he said he was the victim of government "Gestapo tactics," the New York Times said. A prosecutor put it differently, saying “From beginning to end, he treated all of his victims as roadkill.”

Those victims though won't get much relief from Stanford's sentencing. They have yet to recover any of the money they had invested in CDs at Stanford's Caribbean banks, and even if they do receive financial compensation it likely won't be much.

Investors stand to share an estimated $70 million maximum on claims of $5 billion in losses, the Houston Chronicle said. For many of those investors, any hope they had for their futures has faded. As the Chronicle's Loren Steffy said: 

They have grown used to people turning their backs as they have struggled during the past three years to recover from Stanford's crimes. Many face financial ruin, shattered retirements, or the loss of medical treatments they can no longer afford.

Dull but important: 

Another day, another downgrade in Europe (again).

Dutch banks are among the latest to taking a ratings hit as the euro zone crisis grinds on. Moody's Investors Services on Thursday downgraded five Dutch banking groups, saying a recession and falling real estate prices in the Netherlands pose a risk to their balance sheets.

Moody's also downgraded three French banking groups, one Belgian banking group and a bank in Luxemburg. 

Also Thursday, Egan-Jones downgraded France's credit rating, saying the worst of the euro crisis may be yet to come for the nation's banks. 

Just because: 

Coca-Cola can't wait to get back to Myanmar. 

The company plans to start selling Coke products in Myanmar as soon as the US government clears the way for American companies to invest in the Southeast Asian country. 

Myanmar is one of only three countries where Coca-Cola isn't available. Coke products also aren't available in North Korea and Cuba. Coca-Cola was last in Myanmar 60 years ago. 

Strange but true: 

Italy values financial education so much that it's opened a new Museum of Saving dedicated to educating people about personal finance. 

One room in the museum offers a crash course in history of currency. Another exhibit brings a virtual Dante, Shakespeare and Hemingway back to life to talk about their relationships with money. 

Getting people in to listen, though, could be a challenge. Italy has 3,500 museums and is home to about 40 percent of the world's art, Time said

http://www.globalpost.com/dispatches/globalpost-blogs/macro/macro-chatter-another-day-lots-more-downgrades-europe