Top officials, including the finance ministers of the G7, have called an emergency meeting over the European sovereign debt crisis. Observers wonder whether these ministers can succeed where the European Union, European Central Bank and International Monetary Fund have already failed. The special focus will be on Spain. It is deemed by some to be “too big to fail” because a bailout could strain the fund created by the region’s governments to aid nations with overwhelming deficits and high borrowing costs. The White House press secretary said ahead of the meeting: “Markets remain skeptical that the measures taken thus far are sufficient to secure the recovery in Europe and remove the risk that the crisis will deepen.” But Treasury Secretary Tim Geithner already has visited the region several times and tried to both beat and shame the EU nations to do more to fix the financial problems of its weakest countries. One more meeting is unlikely to offer a ready solution.

Eurozone PMI

Research firm Markit reported that the eurozone Purchasing Managers Index reached a three-year low in May, which puts it back to recession levels. If any more proof was needed that the region is in a period of GDP contraction, this is it. Commenting on the broad measure of the Composite Index, Markit wrote:

At 46.0 in May, down from 46.7 in April, the Markit Eurozone PMI Composite Output Index signalled the steepest rate of decline in manufacturing and services output in the single currency area since June 2009.

In addition:

May services PMI data indicates that the sector has fallen into a steepening downturn, in tandem with the stronger decline in the goods-producing sector signalled by Markit’s manufacturing data last week. There were also further signs of weakness spreading from the non-core to core nations, with even Germany slipping back into contraction.

Germany’s figure of 49.3 was a 34-month low. France’s 44.6 was a 37-month low. Spain’s PMI collapsed to 41.2. There is no reason, based on data about GDP and unemployment in the region, to think any of these numbers will improve soon.

Sorting Out MF Global

The actions of MF Global CEO Jon Corzine finally may have caught up to him. The former chief of Goldman Sachs (NYSE: GS) may be taken to court by the trustee charged with sorting out the reasons for the financial firm’s Chapter 11. By most accounts, tens of millions of dollars in customer money were used for trading bets. When these did not work out, MF Global essentially became insolvent. A total of $1.6 billion of customer funds disappeared in the process. In his report, trustee James Giddens wrote:

The Trustee believes that claims, including claims for breach of fiduciary duty and negligence, may be asserted against former MF Global CEO Jon Corzine, former MF Global CFO Henri Steenkamp, and former MF Global Assistant Treasurer Edith O’Brien, among others. The Trustee is already consulting with commodities’ customers’ class action counsel about actions against officers and directors and other employees, and the Trustee has also communicated with relevant insurers.

Corzine will know in a few weeks whether he will have to defend himself — with the help of attorneys.

Galaxy S3 U.S. Release

The Samsung Galaxy S III, which is considered by many observers of the smartphone market to be an iPhone killer, will launch across all four U.S. wireless carriers next week. The handset has been a huge hit in Europe. AT&T (NYSE: T), Sprint-Nextel (NYSE: S), Verizon Wirelesss and T-Mobile will release the smartphone at $199 with a two-year subscription plan. Notably, this is within the range of prices for the Apple (NASDAQ: AAPL) iPhone 4S, which costs $199 to $399, depending on features. Some experts believe the Galaxy S III has two advantages over the iPhone. First, it runs the popular Google (NASDAQ: GOOG) Android OS, which now has 50% of the U.S. wireless OS market. The other is that the Samsung phone works on the superfast 4G networks that the wireless firms have marketed so relentlessly because the speed of these networks rivals broadband. Apple will not have a phone with that capacity until later this year.

Douglas A. McIntyre

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