G-20 Wrestles Currency Tension as Zhou Says Bubble Has Burst

Zhou Xiaochuan, governor of China’s central bank, told a meeting of Group of 20 finance ministers in Ankara that a stock-market bubble in his country had “burst,” according to Japan’s Taro Aso. Another official present at the talks said China had presented the country’s situation as a new normal.

China is on the defensive as its slowing economy and market turbulence send shock waves through emerging markets just as the U.S. is preparing to raise interest rates. With the MSCI emerging market index down 18 percent so far this year, a draft communique prepared before the meeting cited “recent volatility in financial markets” and the need to monitor potential spillovers.

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Greece Ousted from Index of ‘Developed’ Countries

Like other countries within the region that are yet to go into full-blown crisis, Greece failed from the beginning, and what’s more is that it was known. A second supporting link can be found here, from Spiegel Online.

The latest setback for Greece: booted the euro-zone member from its index of developed countries.

The decision, announced late Tuesday, is the first time the index provider demoted a country from its “developed” to its “emerging-market” category since the launch of its flagship emerging-markets index in 1987.

It affirms what investors have believed for years. Multiple bailouts by the European Union and the International Monetary Fund, a sharp contraction in gross domestic product and a still-large debt burden mean Greece now has more in common with Hungary than France. Continue reading

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