- Teetering U.S. Stocks Add New Dimension to Global Selloff
The Bloomberg August 21, 2015
The floor of the New York Stock Exchange. Share prices around the world tumbled on Friday.CreditRichard Drew/Associated Press
Currencies and stocks from Hong Kong to Johannesburg and London were already faltering. Then the U.S. joined in.
Stresses that have been building in global markets roared ashore in America on Thursday as the Standard & Poor’s 500 Index tumbled the most in 18 months and helped send the MSCI All-Country World Index to the lowest since January. Until now, the S&P 500 had been a source of stability amid China’s slowdown, Greece’s debt crisis and a plunge in emerging market currencies.
That status was shaken as the Chicago Board Options Exchange Volatility Index soared 49 percent this week. Global equities fell anew on Friday.
The S&P 500’s drop “is really showing that people are now questioning the rate of growth in the U.S. and mostly the impact of the developments in China and currencies on the American economy,” said Francois Savary, chief investment officer at Reyl & Cie. in Geneva. His firm oversees about $11 billion. “I don’t think there is evidence that the world economy is going to slow significantly but there is this uncertainty and people are reassessing, taking a step back.”
The MSCI Emerging Markets Index is heading for its biggest weekly loss since 2013, while the MSCI All-Country World Index has retreated 3.2 percent for the period, the most since December. The Stoxx Europe 600 Index slid 0.6 percent at 10:26 a.m. in London, heading for a correction.
Gains Wiped
Losses earlier in the week in American shares were limited as the rout in emerging-market assets deepened, with developing-nation equities sinking to the lowest level since 2009 and currencies from Malaysia to Kazakhstan tumbling. That changed Thursday as the S&P 500 closed below its average level of the past 200 days, wiping out gains for 2015 as investors sought the safety of gold and Treasuries.
“Unless you are the staunchest contrarian, then these are times to be very cautious,” Chris Weston, Melbourne-based chief market strategist at IG Ltd., wrote in a note to clients. “U.S. markets have held up well of late, being viewed as somewhat of a safe haven. This view seems to have deteriorated somewhat with the S&P 500 closing below its multi-month trading range.”
While declines of this magnitude are more common in Asian and European stock markets, the S&P 500 has gone more than three years without a drop of more than 10 percent, the longest stretch since 2004.
What’s important “is whether current weakness is just a correction or the start of a new bear market,” said Shane Oliver, the Sydney-based global strategist at AMP Capital Investors Ltd., which manages about $119 billion. “Periodic sharp falls in the range of 5 percent to even 20 percent are quite normal and healthy in that they help the market let off steam and the rising trend resume.”
- Greece's Prime Minister Tsipras resigns, calls for early elections
CNN August 21, 2015
Greece's PM Tsipras resigns, calls for early elections 02:35
(CNN)Greek Prime Minister Alexis Tsipras announced Thursday he was resigning and called for early parliamentary elections, resetting the debt-ridden country's government after members of his own party opposed economic reforms that European lenders demanded for Greece's latest bailout.
"With your vote, you will decide who ... will lead Greece into this difficult but hopeful (path forward)," he said in a televised address. "I will ask for the vote of the Greek people in order to govern and unfold our program."
The announcement by Tsipras, who came to power only last January, comes a month after Parliament agreed to severe economic measures -- such as raising certain sales taxes and overhauling the pension system -- so that Greece could receive a fresh bailout worth as much as 86 billion euros ($95 billion).
After Tsipras' address, he met late Thursday with President Prokopis Pavlopoulos, to whom he handed his resignation. The date of the election wasn't immediately announced.
Tsipras made the move after a key vote on August 14 in which Parliament approved the third bailout deal. Although the deal passed, it relied on the support of opposition lawmakers, as a significant number of members of his own party voted against it. The rebellion from his party effectively showed that he no longer had enough support to sustain a governing coalition.
He could have called for a vote of confidence but opted instead to resign and go straight for early elections.
The bailout, which helps prevent Greece's exit from the euro currency, is the country's third in roughly five years. Greece received the first installment of the latest bailout -- 26 billion euros ($29.1 billion) -- on Thursday. Athens in turn made a 3.2 billion euro ($3.6 billion) loan repayment to the European Central Bank.
Tsipras' own left-wing Syriza party rallied against the reforms, but Tsipras and the Parliament accepted them in July as the country reached the brink of bankruptcy.
- North Korea and South Korea Trade Fire Across Border, Seoul Says
The New York Times AUG. 20, 2015
South Koreans at a shelter in Yeoncheon County on Thursday. A county official said about 220 people were sent underground. CreditAhn Young-Joon/Associated Press
SEOUL, South Korea — The North Korean leader Kim Jong-un ordered his front-line military units to go on a “semi-war state” on Friday after South Korea said the two Koreas had exchanged rocket and artillery fire in the first major armed clash across their border in five years.
No casualties were immediately reported from the exchange of fire that took place across one of the world’s most heavily armed borders on Thursday. But tensions remained high on Friday, as Mr. Kim ordered his front-line units to be prepared to attack South Korean loudspeakers along the border unless they stopped blaring propaganda broadcasts by Saturday evening.
South Korea, currently in the middle of large-scale joint military exercises with the United States, rejected the North Korean demand. Instead it stepped up its own military vigilance, vowing to retaliate against any provocations from the North.
Mr. Kim ordered all front-line units to go on a “semi-war state,” one of his country’s highest military alerts, from 5 p.m. Friday during an emergency meeting of his Central Military Commission, the north’s official Korean Central News Agency said on Friday.
North Korea issued the same sort of alert in 1968, when it hijacked the American spy ship Pueblo, and in 1993, when the standoff with Washington over its nuclear weapons program first flared.
“Commanders were appointed and dispatched to the relevant sectors of the front to command military actions” to destroy the South Korean loudspeakers and counter possible retaliations from the South, the North’s news agency said. The front-line units “should enter a wartime state to be fully battle ready to launch surprise operations,” it added.
The Kim regime has frequently issued bellicose statements, claiming that the divided Korean Peninsula was “on the brink of war” whenever the United States and South Korea conduct one of their joint annual war games, which it called rehearsals for invasion. But the latest threat followed a highly unusual exchange of artillery shells across the two Koreas’ land border.
- F.D.A. Approves Addyi, a Libido Pill for Women
The New York Times AUG. 18, 2015
The big question now is how many women will use Addyi, which is made by Sprout Pharmaceuticals.CreditAllen G. Breed/Associated Press
The first prescription drug to enhance women’s sexual drive won regulatory approval on Tuesday, clinching a victory for alobbying campaign that had accused the Food and Drug Administration of gender bias for ignoring the sexual needs of women.
The drug — Addyi from Sprout Pharmaceuticals — is actually the first drug approved to treat a flagging or absent libido for either sex. Viagra and other drugs available for men are approved to help achieve erections, or to treat certain deficiencies of the hormone testosterone, not to increase desire.
Advocates who pressed for approval of Addyi, many of them part of a coalition called Even the Score, said that a drug to improve women’s sex lives was long overdue, given the many options available to men.
“This is the biggest breakthrough for women’s sexual health since the pill,” said Sally Greenberg, executive director of the National Consumers League.
But critics said the campaign behind Addyi had made a mockery of the system that regulates pharmaceuticals and had co-opted the women’s movement to pressure the F.D.A. into approving a drug that was at best minimally effective and could cause side effects like low blood pressure,fainting, nausea, dizziness and sleepiness.
In announcing the approval, Dr. Janet Woodcock, a senior F.D.A. official, said the agency was “committed to supporting the development of safe and effective treatments for female sexual dysfunction.”
The F.D.A. decision on Tuesday was not a surprise since an advisory committee of outside experts had recommended by a vote of 18 to 6 in June that the drug be approved, albeit with precautions required to try to limit the risks and ensure that it was not overused.
Addyi’s label has a boxed warning — the strongest kind — saying the drug should not be used by those who drink alcohol, since that can increase the risk of severely low blood pressure and fainting. It is also not to be used with certain other drugs and by people with liver impairment.
The pill can be prescribed or dispensed only by doctors and pharmacists who watch an online slide presentation and pass a test of their comprehension. Women are advised to stop using the drug if they see no effect after eight weeks.
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