Need to know:
China’s quarter point interest rate cut has the world worried about just how bad May might have been for the Chinese economy.
The rate cut is the first in four years and has investors worried economic data due out of China this weekend could be uglier than anyone had been expecting, Reuters said.
Chinese growth has been slowing for six consecutive quarters, and China is on track for its slowest year of growth since 1999.
Want to know:
Fed Chairman Ben Bernanke must have a great poker face.
While his number 2 suggested on Wednesday that QE3 could be the way ahead for the US economy, during a hearing on Capitol Hill Fed Chairman Ben Bernanke failed to give a clear signal of what the central bank might do when it meets later this month.
Bernanke did however say he doesn’t endorse breaking up the nation’s largest banks even though the six largest US financial institutions hold assets equal to about two-thirds of US GDP.
He also told Congress he sleeps “pretty well” since he does “lots during the day” and needs to be well-rested.
Dull but important:
Europe seems to be taking steps toward creating some of type of centralized banking union. The European Commission has proposed a framework for dealing with failing banks that calls for countries to share the costs of recapitalizing cross-border banks, the Economist said.
This comes as the Cyprus is expecting it may need $2 billion to rescue its second-largest bank and has Portugal is embarking on a $8.2 billion bailout of three of its largest banks.
Spain’s bank also are in need of what could be a $50 billion bailout, according to Reuters.
Spain already has made plans to bail out its fourth-largest bank but the European Union isn’t a fan of the plan. German Chancellor Angela Merkel told Reuters Europe is ready to do whatever it has to keep the euro stable in the wake of the latest cuts to Spain’s credit rating.
Fitch cut Spain’s credit rating to a BBB Thursday, and if the US doesn’t get its finances in order the ratings agency said a ratings cut could be in its future.
Fitch Ratings is planning to cut the credit rating of the world’s largest economy next year unless Washington can get its deficits under control, Reuters reported.
Fitch also plans to cut credit ratings for Cyprus, Ireland, Italy, Spain and Portugal if Greece makes a Grexit.
Strange but true:
Porn is having trouble, too.
Like the music, movies and journalism, porn has been under siege by a proliferation of free content that’s driving down wages and leaving profits limp, BBC reported.
The average sex scene now pays just $150, a sum that’s forcing some female performers to work as prostitutes on the side, BBC said.
And porn is one of few sectors where women typically earn more than men.