What's Important in the Financial World (9/26/2012)

Strikes in Greece

Spain is not the only nation with the problem of citizens who have taken to the streets to attack austerity. In Greece, the protesters numbers as high as hundreds of thousands — impressive in a nation with such a small population. These strikes threaten more than a toppled government; each day many people refuse to work is another blow to Greece’s gross domestic product. Its GDP already is falling at a rate of more than 6% year-over-year. According to the Wall Street Journal:

The 24-hour strike, called by the country’s two giant umbrella unions–GSEE and ADEDY–is the first since a three-party coalition government led by Prime Minister Antonis Samaras took office in June, and represents the first real test of public opposition to the cutbacks.

The strike brought public services to a standstill across the country, closing government offices, schools, museums and courts, while hospitals were operating on skeleton staff. A partial transit strike in the Greek capital, Athens, affected early morning commuters, while train and ferry operations around the country were suspended.

A three-hour walkout by air traffic controllers disrupted flight schedules around Greece, while bank workers, teachers, lawyers, merchants and doctors were also joining the strike.

Cyber Attacks on Banks

Wells Fargo & Co. (NYSE: WFC) joins J.P. Morgan Chase & Co. (NYSE: JPM) and Bank of America Corp. (NYSE: BAC) as its major consumer customer site apparently was hacked and service completely disrupted. All of these attacks have caused a concern that deposits eventually would be at risk. Whether that will be damaging to electronic payments and e-commerce is too early to say. But the problem is at least a possibility. Reuters reports:

Wells Fargo’s problems came the same day that an unidentified person on the Internet called on “cyberspace workers” to attack the bank’s site. In a posting on pastebin.com, the person also warned of attacks later this week against U.S. Bancorp and PNC Financial Services Group Inc.

Trading in Iranian Oil

Reuters reports that the world largest oil trader — Vitol — continues to buy and sell Iranian oil. This could cripple efforts by Europe and the United States to pressure Iran to slow or stop its weapons program by cutting off its major source of government funds. The news service reports:

Vitol last month bought 2 million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders, Reuters established in interviews with 10 oil trading, industry and shipping sources in Southeast Asia, China and the Middle East. A spokesman for Vitol declined to comment.

Swiss-based Vitol is not obliged to comply with a ban imposed in July by the European Union on trading oil with Iran because Switzerland decided not to match EU and U.S. sanctions against Tehran.

Douglas A. McIntyre