Merkel, Hollande Press for Greek Austerity
The relationship between Germany and France on the one hand and Greece on the other spins from accommodation to exasperation in an almost regular cycle. Despite support of the euro, in concept, Angela Merkel and Francois Hollande told the Greek government that they would not relent on their insistence that the southern European nation adopt radical austerity programs to get bailout funds. Many experts expect that if Greece cannot comply, it will be forced from the European Union, which will shred the alliance. Reuters reports that Hollande recently said:
We want, I want, Greece to be in the euro zone, it's a desire we have expressed since the start of the crisis. It's up to the Greeks to make the effort that is essential for that goal to be met.
Hollande's opinion probably will change if a collapse of Greece threatens the financial security of France.
HSBC Seeks to Settle Money-Laundering Charges
Bloomberg reports that HSBC (NYSE: HBC) has gone into talks with federal officials to settle charges that it helped launder money for interests in Sudan and Iran. Other banks may be caught in related investigations. Standard Chartered already has agreed to penalties from the banking superintendent of New York State. Standard Chartered does not, however, have a deal with the U.S. government. These banks, and others charged with similar infractions, have no leverage with federal officials. Public opinion against rich institutions that may have aided governments or people in Iran is bound to be entirely negative. Banks could be forced to relinquish rights to do business in America. This makes quick, and probably very expensive, settlements likely. But analysts have not questioned whether the fines will be large enough to hurt the banks badly on the balance sheet. The payments are just a sort of way to doing business.
Gas Prices Still Rising Ahead of Labor Day
Two months ago, almost all predictions about gasoline prices were that they were falling and would stay down, or even drop more. Crude prices had fallen. Oil and gas supplies were abundant. Trouble with Iran did not look like it would block shipments of oil from the Middle East. Supply interruptions in the North Sea were short-lived. It only took a month for sentiment to change almost entirely. Hopes that large governments will stimulate their economies and renewed worries about Iran have pushed WTI crude prices back near $100. Gas prices have risen most days in the past six weeks. As the Labor Day weekend is just a few days away, the price on average of a regular gallon of gas nationwide has risen to $3.730, according to measurements taken yesterday for the AAA Fuel Gauge. That is up from $3.716 a week ago and $3.485 a month ago. In some parts of the nation, gas prices have risen 10% in the past 30 days. Drivers will pay a good deal more than they might have expected a month ago as they go on Labor Day trips. And, if money is as tight as most economist believe, these drivers will not be in a mood to spend when they return.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Market Open Tagged: HBC