Tuesday, July 26, 2011. 9:25 a.m.
Economic growth in the United Kingdom continues to slow, close to no growth. It was reported this morning that the U.K. economy grew only 0.2% in the 2nd quarter, after growth of only 0.5% in the 1st quarter.
India's central bank raised its key interest rate again last night, in an unexpectedly aggressive move of 1/2% to 8%, as it continues its year-long efforts to bring rising inflation under control. The central bank also raised its inflation forecast, now expecting inflation to be at 7% by next March, up from its previous forecast of 6%, apparently expecting to continue to lose the battle. The India stock market closed down 1.9% on the rate hike.
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Moody's warns that Greece will almost certainly default on its debt in spite of the big new rescue plan last week.
Yesterday, Spain and Italy again had to pay sharply higher yields than a month ago to move bonds in their bond auctions, a sign that the euro-zone remains troubled in spite of last week's deal on another bailout for Greece.
Although pushed off the headlines by concerns about the debt crisis in Europe and the debt ceiling stalemate in the U.S., the protests and attempted revolutions in Middle East and North African countries continues.
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The pro-democracy riots in Egypt were thought to have been resolved with the ouster of the Mubarak regime in February and its temporary replacement by the military establishment. But protesters are back in the streets, angry at the military leaders for refusing to more quickly implement the promised demands of the revolution.
In Syria, the savagery of the Assad regime's response to demands for reforms has escalated the protests to demands for regime change. The costs of the reprisal are reported to have the Assad family, which accounts for a third of Syria's economy, running out of money as well as global allies.
In Libya, the conflict that is tearing the country apart is is estimated to have cost its oil-driven economy more than $50 billion, a huge amount considering the size of its economy. Meanwhile, for other nations the decision to provide limited NATO help to rebels fighting to overthrow dictator Gadhafi has escalated into a costly mini-war. Although the bulk of the military strikes are being carried out by European NATO forces, and most of the arms embargo is being enforced by European and Canadian warships, the cost to the U.S. so far is over $800 million and escalating.
Corporate Earnings, Even Losses, Mostly Better Than Estimates.
As usual, corporations have guided Wall Street analysts on their earnings or losses, and the analysts have successfully set their estimates below the guidance, so everything is looking great in spite of the slowing economy.
But all is not quite as rosy as the more publicized reports make it appear.
Of this morning's reports so far:
Ford (F) reported its 2nd quarter earnings fell 8%.
UPS (UPS) reported its 2nd quarter profits were up 26% over last year, but warned its outlook for the future is less stellar.