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The big picture view of an ever-changing global economy.

Macro chatter: "Too big to fail" banks now even bigger

Around the world today in business and economics. Need to know, want to know, and strange but true.
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A sign outside JP Morgan Chase headquarters on Park Avenue in New York City. (Mario Tama/Getty Images)

Need to know:
The World Bank gave the US what it wanted and picked physician and Dartmouth College president Jim Yong Kim as its new president.

Not everyone is happy about it. Some of the world’s strongest emerging economies are disappointed to see the status quo persist, and they're are making it known they don’t think the World Bank’s selection process wasn't fair. 

South Africa's finance minister criticized the World Bank's selection process for not being transparent enough or merit-based, Bloomberg said

Meanwhile, Kim answered five questions for the Wall Street Journal through which he tried to assure the world that he has the support of the world.  

Want to know:
India is hoping an interest rate cut will revive an economy that is now growing at its slowest pace in three years.

The Reserve Bank of India said it would cut a key interest rate by half a percentage point to 8 percent in hopes it will spur expansion in Asia’s third-largest economy. The decrease is the first since 2009. 

Most analysts had been expecting a .25 percentage-point rate cut, Bloomberg said

Dull but important:
Remember how those “too big to fail” banks in the US were supposed to get further away from ever needing another bailout? They haven’t.

The largest US banks are now bigger than they were before the financial crisis, Bloomberg reported.

Five of the country’s largest banks – JPMorgan, Bank of America, Citigroup, Wells Fargo and Goldman Sachs – held a combined $8.5 trillion in assets at the end of last year, the news agency said. That’s equal to about 56 percent of the US output.

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New World Bank President Jim Yong Kim speaks

The Wall Street Journal lands the first interview following Obama's pick to head the World Bank. So what did he say?
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Jim Yong Kim arrives at the Finance Ministry in the Brazilian capital for an audience with Finance Minister Guido Mantega on April 5. (PEDRO LADEIRA/AFP/Getty Images)

Jim Yong Kim has had a big day.

As for emerging economies that hoped the World Bank would break a 66-year tradition and pick a non-American to head the key international economic institution?

Not so much.

The Dartmouth College President — and US President Barack Obama's choice — beat out Nigerian finance minister Ngozi Okonju-Iwela, as well as former Colombian finance minister Antonio Ocampo to become the World Bank's new president.

It was reportedly the first time the World Bank's board considered more than one nominee, as the spot traditionally goes to an American — though the South Korean-born Kim is the second World Bank chief to be born outside the US (former president James Wolfensohn was born in Australia and later immigrated to the US).

The Wall Street Journal landed a brief interview with Kim today following the news. (Read the full interview here).

Here's what the new World Bank President had to say about the historic challenge he received from Nigeria's and Colombia's candidates, particularly as it relates to the legitimacy of his own candidacy:

"You know, I’ve been now to so many different countries. I’ve both been listening and I’ve been presenting my credentials, and we’ve gotten a lot of support," Kim told the Journal. "The ministers and the heads of central banks and others I’ve spoke with have been very supportive. I’ve presented my credentials as a development specialist, as someone who has spent his whole life working on, investing in humans in order to enable them to go down the path of growth. I am quite sure that once I am in office on July 1 that we’ll have a very strong consensus around moving forward at the bank."

And what will those priorities be?

Preparing the way for economic growth around the world.

 

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Apple's share price is tanking

Analysis: Has the wildly-hyped gadget maker’s value peaked?
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Apple share prices have been on a roller coaster ride, and Apple is scheduled to release its latest quarterly earnings report after the bell today. (AFP/AFP/Getty Images)

Disclosure: The writer owns shares in Apple. 

The price of Apple shares is falling. Fast.

Just last Tuesday, the stock closed at a high of over $640. Today, it closed at $580.13 — a loss of about 10 percent.

Why is this happening?

Of course, no one understands for certain the whims of Mr. Market. But Apple has suffered several bruises this month, perhaps making investors think twice about the company's value.

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Macro chatter: It's decision time at the World Bank

Around the world today in business and economics. Need to know, want to know, and strange but true.
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US Secretary of State Hillary Clinton at Cafe Havana in Cartagena, Colombia on April 15, 2012. (STR/AFP/Getty Images)

Need to know:
China’s yuan now has a little more wiggle room.

Chinese officials this weekend announced they would let China’s currency rise or fall by up to 1 percent a day, Bloomberg said. That’s twice as much as before and a step toward the freer float much of the world has been lobbying for.

China is hoping the change will boost domestic demand, the Wall Street Journal said.

The world’s advanced economies, particularly the US, have been pressuring China to let the yuan appreciate more quickly, a move that would make Chinese exports more expensive to the rest of the world.

Advanced economies argue China's currency is undervalued and gives China an unfair trading advantage. 

Want to know:
A record one in five Greeks is out of work, according to the latest numbers from the Greek government. For young Greeks, the situation is even worse. One in every two is unemployed.

Greece’s unemployment rate is nearing 20 percent as the country continues to struggle with a heavy debt load and a shrinking economy.

Elsewhere in Europe, Spanish borrowing costs are continuing to surge, spurring more talk of a potential bailout. Spanish bond yields are now above 6 percent, the BBC said.

Dull but important:
The World Bank is expected to announce its new president Monday, CNNMoney reported.

The competition is down to two candidates: the US pick, Dartmouth College president Jim Yong Kim, and Nigerian finance minister Ngozi Okonjo-Iweala.

Kim is the favorite, according to Reuters, but Okonjo-Iweala is seen as a better representative of emerging markets nations that have been pushing for more clout within the World Bank.

Just because:
While Hillary Clinton went dancing and a bunch of secret service agents got busted with prostitutes, US trade officials in Cartagena were working out the details of the US Colombia free trade agreement.

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China GDP: The real number to watch

In China, it's all about the spending.
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A Chinese stock investor checks his share prices at a security firm in Hefei, east China's Anhui province on February 22, 2012. (STR/AFP/Getty Images)

There have been plenty of headlines today about China's latest economic report.

And for good reason: what happens in China, the world's second largest economy after the US, matters to the rest of the planet.

So here's the quick news:

The country's gross domestic product slowed to 8.1 percent in the first quarter of this year.

That's the slowest rate in three years.

Even more troubling was how that number looks on a quarter-by-quarter comparison.

By that measure China's economy is growing at a rate that's below the government's target for the year.

All of this is made more urgent by this year's leadership change in Beijing, an uneasy political transition underlined by the stunning fall of former Chinese Communist Party boss Bo Xilai, which this week took yet another surprising twist.

But the economic news out of Beijing today isn't all bad.

In fact, in one very important way things are going exactly as planned.

Here's why:

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Macro chatter: NYC gets pricier, but it's no Mumbai

Around the world today in business and economics. Need to know, want to know, and strange but true.
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Indian sales executives take in the view from a luxury high-rise in Mumbai. Mumbai developers have been busy building dream homes for a rapidly-growing list of Indian millionaires, and property prices have skyrocketed. (Punit Paranjpe /AFP/Getty Images)

Need to know:
China’s economy is slowing down, but it’s still growing at more than 8 percent a year.

Chinese GDP grew at an annual rate of 8.1 percent in the first quarter. The decline marks 15 months of contraction in the Chinese economy, and puts China on track for its weakest year in a decade.

But the news isn’t all bad.

China’s economy grew more quickly than its government had aimed, and a look behind the numbers show Chinese consumption is increasing, something both China and the rest of the world have been pushing for.

Want to know:
Google, the tech company whose shares have a higher price tag than Apple’s, made a profit of nearly $3 billion during the first quarter.

Google is still refusing to reward its shareholders with the cash dividend they’ve been asking for, but it did cough up a stock dividend. It's a token gesture that Marketwatch said would help founders Larry Page and Sergey Brin tighten their already steely grip on the company.

Dull but important:
A US agency charged with protecting consumers is making it easier for credit card companies to charge fees that another government agency has already deemed unfair.

The Consumer Financial Protection Bureau wants to make it easier for companies to charge a wider array of fees to provide credit cards to less-than-worthy borrowers. This comes as credit card companies are increasingly targeting those borrowers

The bureau has proposed reversing an earlier rule from the Federal Reserve that sought to protect cardholders from such exorbitant charges, the Washington Post said.

Just Because:
Mumbai has the world’s least affordable real estate, according to Bloomberg News.

A swanky pad in India’s bustling financial capital costs the equivalent of 308 years – yes years – of the country’s average annual income. A similar place would cost about 136 years of income in London, 78 years in Paris and 48 years in New York.

Strange but true:
What’s growing faster than the Chinese economy? Rents in Manhattan.

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Macro chatter: China's slowdown and the cost of aging

Around the world today in business and economics. Need to know, want to know, and strange but true.
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Shoppers buy Chinese made clothing at a discount stall in Beijing on March 22, 2012. (Mark Ralston /AFP/Getty Images)

Need to know:
China won't release its first quarter GDP report until tonight, but the World Bank has a preview of what 2012 might look like for the economic giant.

The World Bank is betting the Chinese economy will grow 8.2 percent this year. That's worse than it has done in the past 13 years but way better than the US and Europe are doing.

Meanwhile, China may be on the verge of making it easier for Chinese corporations to borrow yuan abroad for investments back home, the Wall Street Journal reported.

That could bring the yuan one step closer to becoming a global currency and challenge the dominance of the US dollar.

Want to know:
Apple
still isn’t a $600 billion company, but it is about to be worth more than the nearly 500 public companies in Spain, Portugal and Greece combined, Bloomberg said.

Back in November 2007, those companies were worth 11 times as much as Apple. They’ve since lost $1 trillion and Apple has launched the iPad.

Apple shouldn’t celebrate too much, though. Apple is being sued by the US Department of Justice for colluding with publishers on e-book pricing.

Dull but important:
The kind of subprime lending that helped spark the financial crisis is making a comeback in the US.

Credit card and auto lenders are making more loans to consumers with bad credit, The New York Times said. Still, banks haven’t yet opened their spigots to subprime mortgage borrowers, Time said

Banks say they've learned their lesson, but they could just be too busy sending out new credit cards.

Just Because:
Aging is more expensive than we thought. Advanced economies are underestimating how long their citizens might live and may eventually have to pay for their mistakes.

The International Monetary Fund said the world’s advanced economies are shortchanging their citizens by an average of three years. Pension funds and government programs are ill prepared to deal with beneficiaries’ longer life spans, and countries bottom lines could suffer as a result. 

The cost of caring for aging populations already is straining government budgets, particularly in Europe, and costs only expected to escalate in the decades to come.

Strange but true:
As long as you’re not a lumberjack your job is better than somebody’s.

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Macro chatter: Apple, Bush tax cuts and glowing quarters

Around the world today in business and economics. Need to know, want to know, and strange but true.
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Canada plans to release a glow-in-the-dark quarter in mid-April. The mint is selling the coins for about $29.95 on its website, where you can flip the coin and see what it looks like when its glowing skeleton bones. (Screengrab/Screengrab)

Need to know:
France is no Spain, but its economy isn’t growing either.

France isn’t technically in a recession, but the Euro zone’s second largest economy didn’t grow at all from January through March, Reuters said. There’s no sign of a rebound on the horizon.

Of course, that’s not the only bad news in Europe today. Spain is freaking out about how much it has to pay to borrow money, and Bloomberg reported voters in one town outside Barcelona rejected a plan to raise money by growing marijuana. 

Want to know:

Apple is worth even more money.

Apple shares soared high enough Tuesday to make the company worth $600 billion. But they didn’t stay there. By the time the market closed, Apple's value had slid to a mere almost $600 billion.

Apple is only the second company ever to be worth that much money. Apple's arch nemesis Microsoft was once worth around that much. Microsoft is now worth around $300 billion. Word on the street is Apple could become the world's first $1 trillion company.

Dull but important:
European companies are swapping bank loans for the corporate bond market.

Europe’s corporate giants borrowed more from the bond market than from banks in the first three months of the year, the Wall Street Journal reported.

It’s a big deal because banks usually do most of the lending in Europe. But with Europe in a financial crisis, banks haven’t been as willing to lend as bond markets have been.

Just Because:
Former US President George W. Bush feels bad for the tax cuts bearing his name.

The Bush tax cuts are set to expire at the end of this year. President Barack Obama wants to replace them with the Buffett rule, which would make super rich people like billionaire investor Warren Buffett pay higher taxes.

“If they’re called some other body’s tax cuts, they’re probably less likely to be raised," Bush said at an event in New York. 

The event was sponsored by the Bush Institute, which Bush opened after leaving the Oval Office.  

Strange but true:
If you’re still crying about Canada getting rid of its penny, quit. There’s a glow-in-the-dark quarter coming next week.

Seriously.

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Macro chatter: Billion dollar photos and phonebooks

Around the world today in business and economics. Need to know, want to know, and strange but true.
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A demonstration in Madrid on March 29, 2012. Spaniards staged a general strike against labor reforms, spending cuts and soaring unemployment. (Dani Pozo /AFP/Getty Images)
Around the world today in business and economics. Need to know, want to know, and strange but true.
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Greek TV anchor pelted with eggs and, yes, yogurt (VIDEO)

The Greek debt crisis takes a turn for the absurd. Again.
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Covering the Greek debt crisis is never easy. Especially when yogurt is involved. (Screengrab)

Covering the Greek debt and economic crisis isn't easy, for a lot of very good reasons.

It's a complex subject.

Greek politics can be arcane.

The relationship between Athens and European Union officials in Brussels can be difficult to decipher.

And, of course, there are the eggs.

And the yogurt.

A Greek TV anchor learned about that last bit the hard way.

Here's the video, courtesy of our friends at CNN International.

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