Snapshot of today

The US Federal Reserve has cut its growth forecast for 2012 from 3.5% to 2.7%, and is still predicting low inflation, but has not reduced interest rates.

People who bet that market volatility would reduce after the eurozone agreement have been caught out by Greece’s announcement of a referendum. Now that the referendum has been cancelled it remains to be seen whether markets will calm.

Europe’s voters are increasingly dissatisfied with their governments over the crisis, as Washington has been. Though Britain’s politicians stress the benefits to the UK of being outside the Eurozone, Spain (a similar economy) has grown over twice as fast as the UK since 2008, without the advantage of the UK’s 20% currency depreciation over the past four years. The reason is that Spain has cut imports by 18% since 2008, Britain by only 7%.

While the Securities and Exchange Commission lines up to file charges against more firms in relation to the sale of mortgage linked securities, and CME Group tries to wriggle out of blame for the collapse of MF Global, people in China are ‘yearning for a new moral code’. China’s economy has slowed dramatically as the property market (driver of much of the Chinese boom) cools as credit dries up. Steel, copper and cement are all down, while shipyard orders January to September are down 43% on the same period in 2010.

Russia, meanwhile, has cleared the final hurdle to join the party and the World Trade Organisation. Agreement to follow WTO rules would open its $1,900bn economy to greater competition and foreign investment, boosting annual growth by an estimated 1% or $19bn.

And while loss-making Sony is reducing the number of televisions it makes (South Korea and Taiwan have lower costs), chipmaker Qualcomm is flying as people continue to buy mobile and especially smartphones, despite the economic conditions, and many more devices (such as ipads) contain their chips. Mastercard also reports strong growth (revenue by 27%, earnings 43%), as consumers continue to use credit cards, some banks switched from Visa to Mastercard, and increasing numbers of the 85% of the world’s transactions that are in cash switch to plastic.

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