Economy: New fears of a global slowdown
The U.S., Europe, and China all appear to be slipping into an economic slowdown together, said Jon Hilsenrath and Joshua Mitchell in The Wall Street Journal. Last week, new data showed that American businesses are scaling back planned orders for durable goods like computers, aircraft, and machinery, while in Europe concerns about the Continent’s ongoing fiscal problems are sapping business confidence. China’s factories registered their seventh straight month of declining activity, and emerging economies like India, South Africa, and Brazil are reporting new signs of weakness. Economic activity appears to be “slowing in sync around the globe.”
Europe’s troubles remain the “biggest single threat” to the global economy, said Don Lee and Henry Chu in the Los Angeles Times, but lackluster U.S. growth and inflation concerns in developing economies also pose serious risks. As a result, economists expect global growth to slow sharply this year, with world trade rising at just half last year’s pace. Countries like Brazil and India won’t be able to pick up the slack, since their economies are smarting from Europe’s dwindling demand for goods. And analysts worry that China, now growing at its slowest rate in 13 years, could be headed for a hard landing “that would ricochet around the world.”
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Law: Dewey & LeBoeuf files for Chapter 11
The once-storied law firm of Dewey & LeBoeuf filed for bankruptcy this week, “marking the biggest collapse of a law firm in U.S. history,” said Joseph Ax and Sakthi Prasad in Reuters.com. The firm had been in free fall for months, as crippling debts prompted most of its roughly 300 partners to leave. Dewey owes $315 million, $225 million of it to banks and the rest to thousands of creditors, including former employees. Legal consultant Kent Zimmermann said many other firms are asking, “If Dewey could go down, could we?”
Energy: China seeks oil in the Americas
China’s global “buying binge for oil and other energy assets” has come to North and South America, said Steve Hargreaves in CNNMoney.com. PetroChina, the state-controlled oil giant, is reportedly close to buying an oil refinery in Aruba, and China has expressed interest in building a pipeline to carry 300,000 barrels of Colombian oil a day to the Pacific coast. Last year, Chinese companies also invested billions in Canadian oil sands and shale gas properties, and purchased a $7 billion share in Brazil’s deepwater oil assets.
Tech: Facebook mulls phone launch
Facebook “might be getting into” the smartphone game, said Nick Bilton in NYTimes.com. People briefed on the social-media company’s plans say that it hopes to release its own handset by next year, and that at least half a dozen former iPhone engineers have been hired for the project. As a newly public company, Facebook needs to find new sources of revenue, and it sees mobile as a promising avenue for growth. CEO Mark Zuckerberg “is worried that if he doesn’t create a mobile phone in the near future, Facebook will simply become an app on other mobile platforms,” a Facebook employee said.
Banking: Wells Fargo to pay up for race bias
Wells Fargo, the largest home lender in the U.S., pledged $432.5 million this week to end a discrimination lawsuit brought by the city of Memphis, said Dakin Campbell in Bloomberg.com. The bank had been accused of targeting minority communities with predatory lending practices, steering nonwhites to unnecessarily large loans with higher rates and fees. As part of the settlement, Wells Fargo will make $425 million in mortgages available over the next five years and will invest $7.5 million in Memphis and surrounding Shelby County.
