UBS announced a net profit of $1.4 billion for the second quarter of 2019.Earningsread more
Japan and South Korea are part of a complex and tightly linked supply chain that produces electronic goods such as smartphones and laptops.Technologyread more
Michael Kugelman from the U.S.-based Wilson Center says other issues take precedence in the bilateral dialogue between the United States and Pakistan — namely, Afghanistan and...Asia Politicsread more
Beijing says it can still meet its 2019 growth target of between 6% and 6.5% and continues to roll out stimulus measures to prop up activity. China set a 2019 industrial...China Economyread more
A different oil pricing dynamic has been evolving with new supply calculations based on the U.S. as the world's largest producer.Market Insiderread more
The Massachusetts senator's alarm-sounding on consumer debt neglects to measure it against the growth in the economy and the ability to pay.Economyread more
Stocks in Asia Pacific edged up on Tuesday, as investors await closely-watched central bank meetings in the coming days.Asia Marketsread more
More than half of Venezuela's 23 states lost power on Monday, according to Reuters witnesses and reports on social media, a blackout the government blamed on an...World Politicsread more
Equifax will give consumers a range of options for monitoring their credit or making claims of fraud or data misuse, part of a $425 million restitution fund.Technologyread more
The deal between the White House and Democrats was earlier expected to raise the debt ceiling for two years and permanently end the sequester.Politicsread more
Britain's Antstream is jumping into the cloud gaming battle with a streaming platform for retro titles. And Tencent just backed the company.Technologyread more
Political chaos in the euro zone's third-biggest economy won't be going away anytime soon, according to International Monetary Fund former chief economist Olivier Blanchard, who on Tuesday issued an ominous assessment of the country.
Panic roiled markets Tuesday as a political fight in Italy prompted one of its worst market sell-offs in years. Underlying investor fear was the prospect of Italy leaving the euro and others following suit, which Blanchard, now an economics professor at the Massachusetts Institute of Technology, described as more of a psychological fear than a realistic threat.
The potential concern, rather, involves Italy's creditors, who would have to "move carefully," the economist told CNBC's Joumanna Bercetche in Paris. The rest of Europe may avoid a domino effect, but Italy looks to remain mired in a quagmire.
"I suspect in this case the EU will do whatever is needed to prevent contagion, so I'm not terribly worried about contagion," Blanchard said. "I'm very worried about Italy. Not worried about the rest of Europe. It will be tough, but the rest of Europe, the rest of (the) euro will be OK. "
The winners of Italy's last elections — the populist Five Star Movement (M5S) and the far-right Lega party — made Paolo Savona their pick for economy minister. His euroskeptic views match the parties' anti-establishment agenda.
The trigger for the sell-off took place over the weekend when Italian President Sergio Mattarella rejected Savona, effectively thwarting the winning parties' ability to form a government.
Mattarella's veto threw Italian politics into chaos and have mandated fresh elections to take place as early as July. Meanwhile, former IMF official Carlo Cottarelli has been appointed to oversee a temporary caretaker government until the new elections are held.
While analysts believe a departure from the single currency is unlikely, a continent-wide confidence crisis hit the euro hard, putting the shared currency down 0.7 percent to $1.1540 against the dollar. Italian bonds suffered their ugliest day since 1992, with the yield on the 2-year bond spiking by 150 basis points to a brief day high of 2.73 percent.
The country's benchmark stock index was down 2.3 percent Tuesday amid an across-the-board fall in stock markets across Europe and the United States, where the Dow plummeted intraday by more than 460 points before finishing the session 391 points lower.
"The writing was on the wall," Blanchard said. "When you have capital mobility, and you give signals that you might not stay in the euro ... then you expect investors to move, and I think that's what we are seeing."
Markets were already nervous about M5S and Lega's economic plans for Italy. Though the parties did not in fact pledge to leave the euro, they signaled a disregard for the EU's fiscal rules, such as those limiting states' deficit levels. The parties' leaders have pitched plans to cut taxes, boost public spending and introduce guaranteed basic income, among other costly proposals.
Italy has the highest debt in the euro zone, which at 132 percent of GDP is twice that of Germany's and far above the euro zone's 87 percent. It also has a raft of bad loans in its banking sector.
Asked if there may be positives to the standoff in the form of EU concessions for Italy in order to prevent a pull-out, Blanchard responded, "No. I am not optimistic."
Unsurprisingly, he described himself as very bearish on the country.
The best-case scenario, the economist said, would be for the winners of the next elections to provide a program that satisfies the voter base — victory is predicted for the populist parties again — but remains fiscally responsible.