money

Barbados Debt Higher Than Cyprus Prompts Firing of 3,000

"Barbados will fire 3,000 public sector workers by March and freeze wages as the eastern Caribbean island’s debt burden soars and the International Monetary Fund says 'urgent adjustments' are needed. Barbados’s ratio of debt to gross domestic product reached 94 percent in September, the IMF said today, more than the 93 percent that forced Cyprus to seek a European Union-brokered bailout in March. Finance Minister Chris Sinckler told lawmakers yesterday that the government risks 'further hemorrhaging' of its reserves and the local currency’s peg to the dollar if nothing is done. Barbados’s financial struggles are mirrored across much of the Caribbean, which has seen eight debt defaults since 2003." Continue reading →

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Visa, MasterCard $5.7 Billion Swipe Fee Accord Approved

"Visa Inc. (V) and MasterCard Inc. (MA) won approval for a $5.7 billion settlement that ended years of litigation with U.S. merchants over allegations that credit-card swipe fees are improperly fixed. U.S. District Judge John Gleeson said that he was satisfied with the settlement, which was estimated to be the largest-ever U.S. antitrust accord. 'For the first time, merchants will be empowered to expose hidden bank fees to their customers, educate them about those fees and use that information to influence their customers’ choices of payment methods,' Gleeson wrote in his ruling today in federal court in Brooklyn, New York." Continue reading →

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Bill Bonner: Is This the World’s Cheapest Commodity Play?

"Brazil has made its share of bad decisions… and suffered its share of bad policies. Generals, dictators, repression, depression and hyperinflation – Brazil has seen it all. In the 1980s, Brazil’s consumer price increases went wild. In constant currency, a taxi ride that might have cost 4 cruzeiros in 1980 would have cost 5 trillion cruzeiros in 1994. The government tried to head off inflation by introducing a new currency, the cruzado. Then came the new cruzado. Then came the cruzeiro back. And finally, the government introduced the real. With prices rising so rapidly, it was impossible for investors and business people to make reasonable projections." Continue reading →

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Central banker: Aussie dollar needs to fall further

"Reserve Bank of Australia governor Glenn Stevens has indicated he wants an Aussie dollar closer to 85 US cents, while pointing to 'promising signs' that the economy is transitioning away from the mining boom. But he said that turning the lower currency into a real depreciation that spurs growth would require real wage cuts. 'I thought [US]85 cents would be closer to the mark than [US]95 cents . . .but really, I don't think we can be that precise. I just think that if things over the medium term evolve as we're presently assuming – and I think it's reasonable to make these assumptions – it's going to be surprising if a nine at the front is the right number,' he said." Continue reading →

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Dismantle the euro, says Nobel-winning economist who backed it

"A Nobel prize-winning economist will on Thursday withdraw his support for the euro saying it has created a 'lost generation' unemployed youngsters and should be broken up. Sir Christopher Pissarides was once a key proponent of a single currency but will on Thursday accuse the euro of 'dividing Europe' and say action is needed to 'restore the euro’s credibility in international markets' and the 'trust that Europe’s nations once had in each other', according to the Daily Mail. The Cypriot-British economist, who won the Nobel prize in 2010, is speaking days after Christine Lagarde, the head of the International Monetary Fund, insisted the crisis in the eurozone was not yet over." Continue reading →

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Bitcoin and Intrinsic Value: a Layman’s Response to Alan Greenspan

"Once upon a time, at the end of the last millennium, I founded and led the first games company to sell virtual goods or virtual currency for real money. We sold (and still sell) ‘credits’ – virtual currency that is bought for real money, which players can use to buy other things in our games. When I first started selling credits, a lot of people, including almost everyone in the games industry who was aware of what we were doing, thought it was ridiculous. The general criticism was along the lines of: 'Why would someone pay real money for a fake sword?' 16 years later, people are still buying these credits, and they’re even used to pay other people for third-party services around our games." Continue reading →

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China bitcoin arbitrage ends as traders work around capital controls

"The price gap between bitcoins trading in Chinese yuan and those sold for other currencies has evaporated in recent days, highlighting the porous nature of China's capital controls. A key driver of the price gap was China's capital controls, which make it difficult for speculators to swap yuan proceeds from the sale of high-priced Chinese bitcoins into dollars. Analysts say the price convergence also reflects the rapid evolution of the bitcoin market, which began with technology enthusiasts but quickly expanded to include those with the financial know-how to evade China's strict capital controls." Continue reading →

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2013: Year Of The Bitcoin

"Although bitcoin has attracted a lot of attention in the last few months, Babin-Tremblay pointed out that the currency actually started to gain popularity earlier this year as a result of the Cyprus banking crisis. In March the government of Cyprus announced a bail-in for banks, meaning that the financial institutions would have to impose losses on their shareholders, debt holders and even large depositors. After the bail-in was announced people ended up rushing to their bank accounts to withdraw funds. Many put the money into bitcoin, where governments could not touch it. 'Bitcoins were growing slowly until Cyprus. Cyprus was the catalyst for the big increase in the price,' he said." Continue reading →

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Korea decides not to recognize Bitcoin as real currency

"Korean financial authorities said Tuesday that they have decided not to recognize Bitcoin, or cyber currency, as a real legal currency. The conclusion came after a week of debate among officials of the Ministry of Strategy and Finance, the Bank of Korea, the Financial Services Commission and the Financial Supervisory Service. Officials said Bitcoin, which can be traded between individuals online without going through financial institutions such as banks, does not meet standard regulations governing the transactions of currencies via the Internet or commercial institutions. A Bank of Korea official said the currency has been facing high volatility as it does not have an 'intrinsic value.'" Continue reading →

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Croatian central bank establishes that Bitcoin is legal in Croatia

"Croatian national bank (CNB) gave its opinion that Bitcoin is legal, and the most notable mention was a piece on Bitcoin that got aired on 19:30 national television news on Monday. CNB took the very liberal stand that echoes European central bank document on virtual currency schemes from October 2012, noting that Bitcoin is not illegal in Croatia. They noted that it is not electronic money since it's not debt to the issuer (although it has some similarities with electronic money), and that it is not legal tender in Croatia but can be legally used." Continue reading →

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