Germany’s PMI contracts. Germany’s PMI contracted for the first time since September 2009, and to the lowest level since July 2009 — in the midst of the recession. This signals that the slowdown in Europe has increased in pace. Germany is the region’s largest and strongest economy. Once it falters, the EU is more likely to drop into a new recession. In addition, Germany’s ability to act as the EU bank of last resort will disappear, which will leave the fate of Greece and other weak regional economies in doubt. The struggles of Greece now take a back seat once again to the larger problems of Europe.
Sony losses continue. Sony (NYSE: SNE) announced that it will have its fourth consecutive year of losses. The company may never recovery from the six years of management by CEO Sir Howard Stringer. Sony has fallen so fair behind firms like Apple (NASDAQ: AAPL), Samsung and HTC that it may no longer have the time or financial wherewithal to be turned around.
Mystery of Greek bailout vote continues.The mystery continues about why Greek Prime Minister George Papandreou has called for a national referendum on austerity measures needed for a rescue by the EU. Some observers believe that an approval of his plans by the Greek electorate will allow him to stay in power. Still others believe that Papandreou has so badly miscalculated reactions from Germany and France to the announcement that they will pull out of a rescue if the Greek PM does not quickly change his mind.
Fed press conference. Federal Reserve chief Ben Bernanke will hold his traditional press conference after a regular two-day meeting of the members of the central bank. Observers will watch to see if the Fed has decided to begin QE3 to further help the economy. Many experts believe this is unlikely because a large minority of members think more monetary stimulus will drive inflation — even though a faltering U.S. economy would seem to make upward price pressure improbable.
Douglas A. McIntyre
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