Good morning. Here’s what you need to know.
- Asian markets were lower in overnight trading with the Nikkei falling 0.86%, markets in China and Hong Kong were closed. Korea also got crushed. European markets are surging on new buzz about bank recapitalization, and U.S. markets opened lower.
- European Union leaders spoke of plans to recapitalize European banks. EU economic and monetary affairs commissioner Olli Rehn said Europe, and not just member states, need to make a co-ordinated effort to shore up banks.
- Meanwhile, the IMF said Europe needs about $266 billion to recapitalize banks and has urged the ECB to step up response efforts and cut interest rates if risks persist. It also warned that the ECB may need to offer longer term loans because capital buffers are low at a significant number of European banks. Now here is a fantastic overview of the economy and where markets stand right now >
- Moody’s cut Italy’s credit rating three notches to A2 from Aa2 with a negative outlook. This comes after S&P’s downgrade of Italy last month. The ratings agency said the downgrade was because of concerns that it would be difficult to reduce the region’s debt because of its anemic growth. Despite the downgrade, Italy is up 2.26%. Now here’s who will get crushed if Italy goes bust >
- U.K. economy grew at 0.1% from the first quarter, lower than the 0.2% previously announced. Year-over-year GDP growth climbed 0.6%. This has raised pressure on the Bank of England to begin another round of quantitative easing.
- ADP jobs report beat expectations with 91K new jobs, and ISM non-manufacturing for August came in at 53 >
- Franco-Belgian bank Dexia will be restructured in coming days according to France’s central bank governor, but he said the impact on public finances and the banking sector should be limited. Moody’s has extended its downgrade review of the bank because of concerns over its liquidity position. Check out the 16 strongest banks in the world >
- Samsung is looking for a sales ban on Apple’s iPhone 4S in France and Italy on claims of patent-infringement. Samsung is expected to file motions with courts in Paris and Milan. This comes after Apple claimed earlier this year that Samsung’s Galaxy devices copied the iPad and iPhone.
- Senate majority leader Harry Reid is considering a tax on the nation’s highest earners to defray costs for President Obama’s $447 billion jobs act. It is however expected to fail because Republicans have promised to kill any plan that aims at tax increases.
- Restaurant chain Friendly’s filed for bankruptcy today and announced that it would be closing 63 underperforming restaurants. The restaurant holds $250 million in debt, and this comes after Real Mex restaurants filed for bankruptcy yesterday. Check out the next 11 big companies that could go bankrupt >
- BONUS – Amanda Seyfried has said she regularly meets with a therapist to deal with panic attacks brought on by being in the public eye.