Connect to share and comment

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

Meet the new face of far-right France

Marion Marechal-Le Pen: She's young, hot and very far right. She's also now a member of parliament.

Greece wasn't the only important news in European elections Sunday.

France, too, held parliamentary elections that would either strengthen or weaken new President Francois Hollande's Socialist Party.

Hollande's party won, giving him the means to govern France, which is also home to Europe's second-largest economy.

The Socialists scored an absolute majority in the lower house of parliament, giving them a mandate to fight the unpopular economic austerity measures of the previous government.

But tucked beneath the headlines in Greece and France was this little factoid:

Marion Marechal-Le Pen also won a seat in the French parliament.

The 22-year-old law student has minimal political experience, though politics is the family business: she is the granddaughter of Jean Marie Le Pen, the founder of the far right National Front.

She's also the niece of National Front leader Marine Le Pen who, incidentally, lost her seat yesterday.

GlobalPost's Senior Correspondent for Europe Barry Neild profiled the youngest Le Pen on June 9.

Here's the money quote:

While Maréchal-Le Pen is clearly seen as a more electable, more acceptable face of the FN, she denies coming under pressure to stand. She told one interviewer: “In the family, no one is ever pushed, I came to politics spontaneously, there was no obligation. It has to happen naturally."

Well, naturally or not, it happened.


Macro chatter: Could the Grexitement be over?

Around the world in business: Greeks stand by their bailout. The EU is running low on bailout funds, and one US state is bucking the world's employment trends.

Need to know:
Greek voters went with a pro-bailout party in Sunday’s elections. It may end some of the Grexitement about a Grexit, but the Grelief could be short-lived.

An analyst quoted by the Wall Street Journal put it like this: 

“In reality nothing has been resolved by this election other than giving the Greek creditors, the Troika of the IMF, ECB and the European Commission, someone talk to and voice complaints about Greece not living up to its obligations.” 

The EU already has been talking about giving Greece a little longer to pay off its loans and meet its deficit targets, but it’s not clear that will be enough. Still fear of financial armageddon was enough to keep anti-bailout leaders out of power in a nation that’s been in a recession for five years. 

Want to know: 
Facebook managed to get out of one of its big lawsuits for $10 million

The company has agreed to pay a charity that accused it of violating users’ rights to use their own nams and photos $10 million. 

The suit was filed by five Facebook members and accused the social network of violating California law by using their names and likenesses to promote advertisers using its “Sponsored Stories” feature. 

Facebook Sponsored Stories are the ones where a friend’s name, photo and the advertiser they like are highlighted in another friend’s feed. 

Many more people may have been wishing they’d sued. Reuters said early court documents suggested the suit could win billions of dollars for privacy violations impacting nearly one in three Americans. 

Dull but important: 
Ruh-roh. The euro zone has funded so many bailouts that its bailout fund is now running low on cash. 

Europe’s big bailout fund now holds about $317 billion, which according to the Institute of International Finance means it could rescue a Cyprus but not a Spain. 

The group is pushing for the euro zone to adopt a banking union that would spread the cost of supporting the continents weakest banks, the Wall Street Journal said

Just because: 
Ratings downgrades aren't just for Europe.

India could find itself being downgraded within the next year or two, CNBC's Indian network reported. Fitch Ratings has revised its outlook for the country to negative meaning a ratings downgrade could be in the emerging market giant's future.

India's economy has been cooling off, and Fitch said the country's government hasn't been able to make it a more attractive place for investors. That's choking off the country's potential. 

Strange but true: 
Unemployment may be a problem pretty much everywhere else, but more people are working in Oklahoma than ever before


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.

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. 


Macro Chatter: Every day does bring another downgrade to Europe

Around the world in business: Spain's latest credit rating hit, Greece's rising unemployment and a rap message on European austerity.

Need to know:

If it seems like every day brings another downgrade in Europe, it's because it pretty much does.

Spain's credit rating slid another three notches Wednesday as Moody's cut it to just above junk status. That status, however, may not last long. Spain is already on the list of countries facing further downgrades by Moody's.

Spain's borrowing costs also have been rising, and a $125 billion bank rescue plan hasn't done much to calm the inSpainity.

Want to know: 

The Greek unemployment rate has risen to a fresh record. 

Nearly one in four Greeks were jobless in the first quarter, Dow Jones Newswires reported. Greek unemployment hit 22.6 percent, up nearly two percentage points from the previous quarter. 

More than half of all unemployed Greeks have been looking for work for more than a year. 

Dull but important: 

JP Morgan Chase CEO Jamie Dimon told lawmakers he put a little too much faith in a key subordinates, leading to more than $2 billion in losses that have put the vocal critic of financial reform in the congressional hot seat.

Dimon said the company's since ousted chief investment officer had made so much money for the bank in the past that a trading strategy that "violated common sense" wasn't questioned.

He said risk-monitoring systems and JPM executives failed to correctly assess risks of a London derivatives portfolio. He also said that portion of JPMorgan's business wasn't scrutinized in the same way other lines of business are, Bloomberg reported.

Dimon, of course, is one of the loudest voices against the government increasing its scrutiny on the trading practices of big banks like his. 

Just because:

China's yuan is continuing to developing a larger presence outside of the country's borders. 

Hong Kong's central bank plans to begin providing yuan loans to city banks this week, Financial Times reported. The one-week loans will be offered in exchange for "high-quality" collateral like Chinese government securities. 

Strange but true: 

A rapper who shares a name with a well-known brand of emergency contraception has a whole lot to say about the state of the UK economy.

My colleague Barry Neild has the story of Ben Drew, a.k.a. Plan B, a Brit who is becoming the voice of austerity generation.


Americans' plummeting wealth: Obama blames Bush

After grim news that US family wealth had declined to 1990 levels, the White House lays out figures blaming it on George W. Bush.

Earlier this week, Americans had to swallow the kind of news that makes them queasy. Despite all their hard work, and despite the growing long-term productivity that is helping their employers earn more, US families are poorer than they were in 2007. Much poorer.

The Federal Reserve reported that between 2007 and 2010, the typical American family's income had dropped by 7.7 percent, and net worth plummeted by 38.8 percent. That meant that the median American family "had no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity," as the NY Times put it.

That's hardly the message that President Obama wanted to portray, just five months before the election.

And so the White House is fighting back. A blog post by two of the president's senior economic advisors spells out why President George W. Bush is really to blame.

It's called "More Work to be Done, But Household Wealth Up Every Year Under Obama."

Here's a sampling:


Macro chatter: Another day, another downgrade in Europe

Around the world in business: Spain's banks get downgraded by Fitch as Greeks are withdrawing their euros to stock up on groceries.

Need to know: 

Spain's pains are showing no signs of letting up. Fitch, which a day earlier cut the credit ratings for two major Spanish lenders, downgraded its outlook for another 18 Spanish banks. 

Meanwhile, yields on 10-year bonds in Spain have risen to their highest level since Spain adopted the euro.

Want to know: 

Greeks aren't standing by their banks ahead of a major election many fear could force Greece out of the euro zone. 

Greeks are withdrawing about $1 billion a day and are using at least some of that money to stock up on groceries, Reuters reported. Greeks aren't planning for the end of the world but are instead planning for the election of a leader who could bring brack the drachma. 

Dull but important: 

JPMorgan Chase CEO Jamie Dimon is headed to Capitol Hill today where he's expected to take a beating for his company's $2 billion plus in recent trading losses

Dimon tried to get a jump on the situation by releasing his planned remarks ahead of time. In his remarks, Dimon tries to deflect criticism by admitting to making some big mistakes and telling Congress taxpayers haven't had to pay for his companies losses. 

"We will not make light of these losses, but they should be put into perspective. We will lose some of our shareholders' money - and for that we feel terrible - but no client, customer or taxpayer money was impacted in this incident," McClatchey quoted Dimon as saying in his remarks. 

The hearing should be particularly interesting since Dimon has been among the most vocal critics of regulators efforts to reign in trading practices at his bank and its peers. 

Just because: 

Italy's borrowing costs are surging, and the Wall Street Journal reports Prime Minister Mario Monti's honeymoon may be over. 

Monti is facing increasing pressure to turnaround the Italian economy but the austerity measures he's pushed aren't exactly popular with rank and file Italians. 

Monti has moved to increase taxes and revamp the country's pension system. Investors and world leaders have praised him but taxpayers and pensioners haven't been so approving. 

Strange but true: 

The economy isn't the only thing under siege in Greece. History is in trouble, too. 


World Bank: Europe is ruining everything

2012 started with such hope. Then Europe got in the way. Here's what needs to happen next.

Ah, Europe.

We love you for your rolling landscapes, your rich history, your 17 million varieties of wine and all that stinky cheese.

But, increasingly, we hate you for your lame economic policy, your maddening political intraction, your rising debt and your faltering currency.

Those sentiments were pretty well echoed by the World Bank today, which — in its lovably wonkish way — says the euro zone crisis is ruining just about everything in the global economy, particularly for developing countries.


Macro chatter: Germany isn’t invincible and neither is Google

Around the world in business: Germany’s economy is under pressure. American families are poorer, and Tokyo is more expensive than you thought.

Need to know:
Germany may be doing better than many of its European peers, but it’s not invincible.

The latest economic data from Europe’s oasis of stability suggests Germany may be on shaky ground, my colleage Siobhan Dowling reports.

Trade is slowing. Industrial orders are down. Fewer BMWs are rolling off of production lines and a closely watched business index slid in May for the first time in six months.

And the euro zone’s continued struggles don’t bode well for Germany.

Contagion, anyone? 

Want to know:
Apple is getting even friendlier with Facebook.

The mobile computing giant is making it easier for people to post photos, locations and links to Facebook from Apple devices.

The partnership is supposed to make for a stronger competitor to Google, Financial Times reported. But Apple’s already picking its own fight with Google.

Apple’s unveiled a homegrown maps app that’s discplacing Google Maps as the iPhone standard. Google Maps and the iPhone go way back to the phone’s launch in 2007. Unlike Google Maps, Apple Maps will include links to Yelp reviews. 

Dull but important:
If you feel poorer than you did a few years ago, it’s because you are.

The median net worth of American families slid nearly 40 percent between 2007 and 2010, according to the Federal Reserve’s latest survey of consumer finances.

The big slip is due largely to falling incomes and home values. Declining incomes have hit the middle-class especially hard and have zapped workers optimism about their income potential, the Fed said.

Back when times were good, American families enjoyed a median net worth of $126,000. Now they’re worth about $77,000.

Just because:
Americans may not be buying as many homes as they once did, but foreigners are picking up some of the slack.

Asians, Canadians, Europeans and Latin Americans have embarked on a home buying spree as US house prices have continued to languish and several key currencies have strengthened against the dollar, the Wall Street Journal said.

International buyers accounted for nearly 9 percent of the dollars spent on residential real estate in the year ended in March, the paper said, citing data from the National Association of Realtors. That’s up 24 percent from a year earlier.

American real estate is especially popular with buyers from Canada, China, Mexico, India and the U.K. They’re shopping heavily in several states hardest hit by the housing downturn: Florida, California and Arizona.

As Elida Jacobsen Justo, who works at a Manhattan hotel with units for sale, told the Journal, “Money is always looking for a place to go." 

Strange but true:
Move over Luanda, Tokyo is now the world’s most expensive city for expats. The Japanese capital beat the last year’s winner Luanda on this year’s Mercer Worldwide Cost of Living Survey.


China aviation: Up in the air

The Wall Street Journal asked James Fallows eight questions about China. You should read this.

There are few American writers who really understand the complexities of modern day China.

There are even fewer who can clearly and entertainingly articulate that knowledge to an American audience.

James Fallows fits both of those categories.

Luckily for us, the Wall Street Journal's China Real Time Report blog caught up with Fallows to discuss his new book "China Airborne."

Here's how the Journal frames the issue:

"China’s goal of building a world-class aviation industry has so far yielded few tangible results, but not for a lack of effort: The country is spending heavily on new aircraft development and aviation infrastructure, with plans for 70 new airports by 2015 and a commercial jet, the C919, meant to compete with best-sellers from Boeing and Airbus."

Fallows, of course, is a national correspondent for The Atlantic who spent much of the past several years living in and writing about China.

He's also an instrument-rated pilot and keen observer of the global aviation industry.

So "China Airborne" is a fascinating marriage of Fallows' knowledge of China and his aviation chops.

The book is also a sharp way to frame China's booming aviation industry and — to paraphrase the China Real Time Report — makes for an interesting proxy for understanding China's larger economic development.

Real Time China asked Fallows eight questions, ranging from the specifics of China's emerging aviation infrastructure to the surprising (for China, anyway) economic decentralization in this key industry.

The interview is a great read and includes one of the smartest observations you'll hear about China and Western attempts to cover the place:


Macro chatter: Could this be the bailout before Spain's bailout?

Around the world in business: Spain's banks get a big bailout; Jamie Dimon and Warren Buffett get a little love, and even death is becoming more interactive.

Need to know:
As the voracious blogger Joe Weisenthal has tweeted, "InSpain in the membrane."

The EU has agreed to lend Spain $125 billion to bail out its banks. The figure is likely more than Spain needs but is aimed at soothing investor jitters and heading off a bank run, Reuters said.

Some speculate a full-on bailout could be next for Spain, but the Spanish government continues to insist that its reforms are sufficient to keep Spain from going the way of Greece, Ireland and Portugal.

The three countries already have received international bailouts and become locked into austerity deals. Citizens are increasingly fighting against bailout-imposed austerity, particularly in Greece, whose political and financial future remains undecided ahead of next week’s elections.

Want to know:
The New York Fed is standing by its man.

The chairman of the board of the Federal Reserve Bank of New York told the Wall Street Journal he supports JP Morgan CEO Jamie Dimon, a fellow board member critics say should relinquish his spot. Some say Dimon’s service on the board is a conflict of interest, particularly as government agencies are investigating a more than $2 billion trading loss at his bank.

Bankers are legally required to be included on the board of the New York Fed, which monitors the activities of several of the nation’s largest banks.

Regardless, Dimon won’t be sticking around too long. He’s in the last year of his second three-year term on the New York Fed’s board.

Dull but important:
China may have a little more wiggle room when it comes to economic policy.

Consumer prices in China rose at their slowest pace in two years in May, suggesting that inflation may be more stable than previously thought. Industrial production growth in the world’s second-largest economy also slowed on a year-over-year basis in May.

The data comes on the heels of China’s first interest rate cut in nearly four years and suggests the Chinese government may have more leeway to support its slowing economy than previously thought.

But there was at least one big bright spot in China in May: exports surged 15.3 percent.

Just because:
Here’s to hoping uncle Warren offers to pick up the tab.

One anonymous bidder has bought the chance to have lunch with billionaire investor Warren Buffett for $3.5 million. The figure is the most anyone has paid to eat with the Berkshire Hathaway chairman and CEO.

A foundation that provides services to the homeless in San Francisco has been auctioning off lunches with Buffett for the past 13 years. This year’s winner beat out 10 other bidders and may see it as an investment with a potentially high pay-off.

Hedge fund manager Ted Weschler, last year’s auction winner, was able to turn his lunch with Buffett into a job at Berkshire Hathaway.

Strange but true:
Tombstones have gone high-tech.

Across the nation, an increasing number of tombstones are using QR codes and geolocation services to make the grieving process more interactive, USA TODAY reported.

For $55 for five years, families can have aluminum tags with QR codes affixed to their loved one’s tombstones. The codes can link to any website the family chooses and the service.