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

Macro chatter: Japan shops, Brazil spends

Around the world in business: Japanese retail sales are up, and Brazil's got a big stimulus plan and been hit by Moody's banking downgrades.

Need to know:
Here’s one place in the world where consumers aren’t cutting back: Japan.

Retail sales in the world’s third-largest economy were stronger than expected in May. The need to rebuild after last year’s earthquake and a government program aimed at boosting car sales helped drive up the figure, Bloomberg said.

Retail sales in Japan are up about 3.6 percent from a year ago.

Want to know:

The tablet wars are about to get a little hotter.

Google announced it plans to release a tablet with a starting price of $199. The 7-inch android Nexus 7 has a 9-hour battery and weighs less than a pound.  

Dull but important: 

Brazil’s government has a $4.1 billion plan to stimulate its economy.

Brazil is planning to use the money to buy school buses, motorcycles, ambulances and backhoes in an effort to jumpstart growth in the country.

Brazil is hoping the world won’t lose confidence in its economy, but it doesn’t seem to be working for Moody’s.

Moody’s doesn’t seem to be buying it. The ratings agency has cut its ratings on 11 Brazilian banks.

Just because:
Rupert Murdoch could have a big break up on his hands.

Murdoch’s News Corp. plans to separate its entertainment and publishing units, the Wall Street Journal reported. The paper is owned by News Corp.

The move is worrisome to the publishing sector, which generates a fraction of the revenues of News Corp.’s entertainment businesses, a group that includes 20th Century Fox and Fox News Channel.

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Macro chatter: A little good news from the US and Italy

Around the world in business: US durable goods orders rise and so does Italian business optimism. Facebook, however, isn't doing as well.

Need to know: 

Demand for durable goods in the US bounced back in May. 

Orders for long-lasting items like toasters, refrigerators, cars and airplans were up 1.1 percent, according to the latest data from the US Commerce Department. 

While it is a positive, the US manufacturing sector isn't quite back with a bang, according to Reuters. It's just not quite falling apart.

Want to know: 

It's going to be a while until Facebook shares get back up to their IPO price. 

Analyst estimates suggested it could take Facebook a year to reach that $38 a share offering price, the Wall Street Journal said

Facebook shares closed at $33.10 yesterday. 

Dull but important: 

Barclays was fined $450 million by the US and UK for attempted LIBOR manipulation.

Barclays traders worked with colleagues to tailor LIBOR estimates from the bank to benefit the banks derivatives trading positions, Financial Times said, citing a settlement between the bank and a US regulatory agency. 

LIBOR, the London interbank offered rate, impacts the interest rates on pretty much everything. 

Just because: 

Silicon Valley is heading to London

The Silicon Valley Bank, which is said to back companies including Mozilla, the brains behind the Firefox browser, is opening an east London office aimed at profiting from its growing start up scene. 

London has the third most successful ecosystem for digital innovation, GlobalPost's Barry Neild notes. 

Strange but true: 

Italian businesses grew more confident in recent months even as the euro crisis dragged on and an increasing number of its neighbors sought bailouts from the EU and IMF. 

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Macro chatter: Sheryl Sandberg's big move

Around the world in business: More downgrades in Europe, and Sheryl Sandberg breaks the Facebook ceiling.

Need to know:

Greece has picked Yannis Stournaras to serve as its next finance minister. The 55-year-old economics professor replaces the country's previous finance minister, who hadn't yet been sworn in but has already left the position due to health problems. 

Stournaras was among those who helped negotiate Greece's entry into the euro zone, The Wall Street Journal noted

Want to know: 

Sheryl Sandberg has broken the Facebook ceiling.

The Facebook chief operating officer on Monday became the first woman to be appointed to company’s board.

Sandberg once worked for Larry Summers at the US Treasury, then worked for Google and now feels okay admitting that she leaves work at 5:30 every day to have dinner with her kids

Just because:
Heard at an investment conference in Chicago this week: Moody’s is always a day late and a euro short.

Happened in Spain Monday: Moody’s cut the ratings on 28 Spanish banks after Spain officially asked the EU for the for the $125 billion bailout it’s worked out.

Dull but important: 

The UK's May budget deficit came in larger than expected casting doubt on whether Britain's leaders will be able to meet deficit targets despite an economy mired in recession.

The UK's budget deficit came in at $28 billion, Bloomberg reported.  

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Macro Chatter: The BRICs wobbly currencies

Around the world in business: The EU economic brain trust has a lot to talk about at this week's meeting, and money is losing its value in emerging markets.

Need to know:
The EU brain trust is scheduled to meet this week, and the world is eagerly waiting to hear what they have to say. 

In recent days: Spain moved closer to picking up its bank bailout euros. Fitch cut Cyprus' credit rating.

Greece got a new coalition government in place that’s trying to push back its deadline to meet EU budget deficit targets. 

Chatter about a banking union is growing louder, and everyone from George Soros to Mario Monti has been speculating on how long the euro has to live.  

Want to know:
There’s big currency trouble in emerging markets, Bloomberg reported.

Emerging market currencies including Brazil’s real, Russia’s ruble and India’s rupee are quickly losing value as investors are turning a cold shoulder to what were until recently the world’s hottest markets.

Each of these countries has more than just currency troubles, Bloomberg noted.

Brazil’s consumer default rate is at its highest level in three years. Prices for Russian oil are at an 18-month low, India’s budget deficit is growing as policy continues to hamper growth prospects and even China’s economic boom is cooling.

Dull but important:
India may have a plan to catch its falling rupee.

India’s finance ministry and central bank are expected to announce efforts to allow companies to invest more in local bond markets to help prop up the currency, the Wall Street Journal reported

Just because:

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Macro chatter: Big bank downgrades and a rush to save the euro

Around the world in business: Moody's hits the world's largest banks with downgrades and time is running out to save the euro.

Need to know: 

Thursday brought the mother of all downgrades (at least for now). 

Moody's downgraded 15 of the world's largest banks in several of the world's most powerful countries. Among the casualties: Goldman Sachs, JP Morgan Chase, Morgan Stanley and Bank of America.

The banks are into some really risky business, Moody's said. 

Want to know: 

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Moody's bank downgrade: It's a doozy

The credit ratings agency cuts the credit ratings of 15 big banks, including Citigroup and Bank of America.

As downgrades go, this one was a doozy.

Four months ago, Moody's warned banks that they were in trouble.

Today, the ratings agency followed through on that threat.

It downgraded 15 big banks in the UK, Canada, Europe and the US, including Citigroup, Bank of America and Morgan Stanley.

Yeah, it's a big deal.

Here's how Moody's explained the move, which came after the US markets closed, though not before the S&P 500 Index had dropped 2.2 percent on rumors that the bad news was coming:

“All of the banks affected by today’s actions have significant exposure to the volatility and risk of outsized losses inherent to capital-markets activities” Moody’s Global Banking Managing Director Greg Bauer said in a statement, printed in full here on Business Insider. "However, they also engage in other, often market leading business activities that are central to Moody’s assessment of their credit profiles. These activities can provide important ‘shock absorbers’ that mitigate the potential volatility of capital markets operations, but they also present unique risks and challenges."

So what's going on? And what's this likely to mean?

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Macro chatter: Operation twist and facepalm

Around the world in business: The Fed keeps twisting, Europe keeps flailing and an American billionaire buys a piece of paradise.

Need to know: 

The US Federal Reserve is betting on Operation Twist

The central bank said it would extend the quasi-stimulus program through which it swaps shorter-dated US Treasury securities for longer-dated ones until the end of the year. 

Since interest rates are already at record lows, the Fed was limited in its options and Twist was among its least controversial choices. But Twist has already been around awhile, and it's had a tough time saving the world. 

As Marketplace put it, "No matter how low our interest rates are, we can't save Greece, Spain and Cyprus with well-priced U.S. mortgage rates."

Want to know: 

Remember when GlobalPost told you Germany wasn't immune from the euro crisis? Well it isn't. 

The latest data from Germany shows German private sector output posted its steepest drop in three years. 

A key manufacturing index also fell to a nearly three-year low, and German business optimism is quickly fading.

Dull but important: 

Something concrete may yet emerge from this week's G20 meeting on the beach in Mexico: a euro zone effort to buy debt from troubled members. 

German Chancellor Angela Merkel is reported to have agreed to allow money from the euro zone's bailout fund to be used to purchase bonds from Spain and Italy. The move is aimed at holding down borrowing for the struggling euro zone borrowers. 

Just because: 

Owning a piece of paradise: priceless. 

Billionaire Oracle CEO Larry Ellison has bought Lana'i, well most of it anyway.

It's not clear how much he had to pay to join the billionaire island owners' club, but it was likely a lot. Lana'i is the Hawaiian paradise where Bill Gates held his wedding, and Ellison's purchase includes two Four Seasons resorts and two championship golf courses. 

Strange but true: 

The G20's latest communique is about as exciting a read as its predecessors.

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Macro chatter: The Fed as the Seven Samurai on fed day

Around the world in business: All eyes are on the US today, where the Federal Reserve will tell the world wether it'll twist or stand.

Need to know: 

Later today, the US Federal Reserve board will reveal whether it's going to twist, stand or do something else to boost what's been a painfully slow recovery in the world's largest economy.

Fed Chairman Ben Bernanke will take to live video to tell the world all about what the US monetary policy brain trust is thinking. But for now, the Financial Times is betting the Federal Reserve will do something to ease policy. 

That something could be Operation Twist, according to the latest Wall Street Journal Poll.

Economists surveyed by the paper think there's a 44 percent chance the Fed will embark on the plan which is one of its least controversial approaches to increasing the availability of credit 

Economists put the likelihood the Fed will swap shorter-dated securities for longer-dated ones at 44%.

Want to know: 

Fed Chairman Ben Bernanke may hint at what the Fed is thinking in his press conference today, but he probably won't do it Seven Samurai style. Thankfully, Reuters' Mark Felsenthal already has

Meet, the Fed as the Seven Samurai

 

 

Dull but true: 

Something could actually come out of this week's G20 meeting on the beach in Los Cabos, Mexico: the framework for a European banking union. 

European leaders at the summit have vowed to begin better integrating their banking systems, Dow Jones Newswires reported. The move is aimed at stemming the continent's seemingly neverending debt crisis. 

Officials said the plan will include regional deposit guarantees and share the cost of recapitalizing failing banks among euro zone members. 

Just because: 

There is one place in the world where BlackBerry is beating its keyboardless, touch screen competitors: South Africa. 

Nearly half of all smartphones in South Africa are BlackBerrys, one market researcher told my colleague Erin Conway-Smith

South African teenagers have named Research in Motions Blackberry the coolest brand in the country for the second consecutive year. Apple's rockstar iPhone didn't make the list. 

Teens are fueling BlackBerry's dominance over the iPhone in South Africa, but they aren't just being motivated by cool. They're also thinking about price. 

A low-end BlackBerry is one of the cheapest smartphone options in South Africa and flat-rate data plans for the device can be had for about $7 a month.

Strange but true: 

JPMorgan Chase & Co. gets $14 billion a year in government subsidies, Bloomberg reported

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Macro chatter: Spain's bird and Germany's white flag

Around the world in business: Spanish bond yields flip off the world. Chinese home prices are still falling, and Germany may be ready to play a little nicer with struggling euro zone banks.

Need to know:
Spanish bond yields flipped off the world
and spiked to new record Tuesday.

Yields have been hovering above 7 percent despite a $125 billion plan to rescue the nation’s banks and there doesn’t seem to be any relief in sight. 

Want to know:
Chinese home prices are still falling
as developers are increasingly offering deals to lure buyers.

Home prices in China have been sliding for eight consecutive months and fell in a record 54 of 70 cities tracked by the government in May. 

Happening today:
The US Labor Department will release one of its most interesting data sets: a look at job openings across the country.

The report includes an update on the number of job seekers vying for each open position.  

Dull but important:
The G20 may be in relaxing Los Cabos but its stressing over Europe.

The G20 is scurrying to create a single bank regulator to police its financial institution and guarantee bank deposits.

Reuters said the approach aims to break the cycle of indebted governments bailout out broke financial institutions only to go further into debt themselves. The news agency said even Germany — which hasn’t wanted to chip in for bank rescues outside its border — seems to be warming to the plan. 

Just because:
You may not be making any more money, but the high-flying executive on the other side of town still is.

Corporate CEOs are continuing to get richer despite shareholder uprisings against lavish pay packages, The New York Times reported. Median pay for the 200 highest-earning American CEOs stood at $14.5 million in 2011 as CEO salaries grew by 5 percent.

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Spanish debt: The middle finger yield

You know it's bad for Europe's debt crisis when even bond yield charts are flipping you the bird.

Who says the universe doesn't have a sense of humor?

Or, at least, a grim, twisted, very dark and slightly profane sense of humor.

That's the case on European bond markets today, where there's very little left to do but laugh.

Here's the back story:

You might think that the election victory yesterday in Greece by the New Democracy party would at least give a little relief — even temporarily — to the serious debt problems across Europe.

With Greek voters narrowly supporting the pro-bailout party — you might reasonably conclude — the chances of a disorderly Greek exit from the euro zone would decrease.

An unruly  "Grexit," of course, would put further pressure on Spain, Italy and other debt-ridden countries across Europe.

It would also unnerve the global financial system, as banks just about everywhere hold European debt.

So, phew, the pro-bailout party wins and Greece and the EU get a little more time to figure this mess out.

But check out this chart on Spanish 10-year bonds today, which our friends at Business Insider have brilliantly dubbed "The Spanish 10-Year Yield Middle-Finger Formation":

Source: Bloomberg

As the chart above illustrates, the yield — or put another way the rate at which investors are willing to accept for betting money on the Spanish government right now — surged to a record 7.2850 percent before falling back later in the day.

The result: a giant middle finger, or as Business Insider writer Eric Platt put it:

"Perhaps this is the bond market's way of saying that the elections solved nothing."

New York Times columnist and Nobel Prize-winning economist Paul Krugman also had some smart — if less visually appealing — things to say today about the Greek election.

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