Most Wall Street experts are far better equipped to analyze a corporate risk over a political threat. But today, it's political unrest in the Middle East and beyond that's driving world markets. So we asked Ian Bremmer, president of political risk consultancy The Eurasia Group, to break down the major developments and what investors should expect.
Stocks closed broadly if modestly higher Friday on light volume as traders avoided making any big bets ahead of a long holiday weekend. The equity markets closed up for the third straight day and extended their winning ways to a third consecutive week.
Leaders of 20 major economies on Friday refused to back a U.S. push to make China boost its currency's value. Despite some face-saving rhetoric, that will keep alive fears of a global trade and currency war amid criticism that cheap Chinese exports are costing American jobs.
For a host of reasons, other countries would love to free their economies from the stranglehold of the U.S. dollar's influence, especially now, when the Fed's stimulus actions are pushing the dollar lower, and everything else higher. Global finance expert Peter Cohan has a simple answer: The Mondo.
As the G-20 meets in South Korea, many world leaders have stepped up their complaints about the Fed's $600 billion quantitative easing program, as well as the rapid flow of capital into emerging markets. Some countries are installing capital controls in response, but those won't be enough, says global finance expert Peter Cohan.
On the eve of an economic summit in South Korea, disturbing signs of discord are emerging over currency valuations and trade between the U.S. and its major trading partners. Failure to achieve an agreement could set off more "currency wars."
The U.S. finds itself on the wrong side of the currency manipulation argument this week, as many G20 countries criticize the Fed's $600 billion bond buying plan, which could further devalue the dollar. World leaders say the move breaks the vow of unity made during the last G-20 summit.
The G-20 has a second chance to diffuse exchange-rate tensions Friday and Saturday, when finance ministers and central bank governors meet in South Korea. World leaders failed to resolve the currency issue two weeks ago in Washington.
The U.S. will not weaken the dollar in order to boost its exports, Treasury Secretary Timothy Geithner promised. "It is not going to happen in this country," Geithner told Silicon Valley business leaders of devaluing the dollar.
The tough new restrictions will likely fuel demands for similar curbs in the U.S. But not everyone is convinced that the new rules will have the intended effect of changing bankers' riskiest practices.
BP CEO Tony Hayward is traveling to Moscow to meet with Igor Sechin, a top deputy to Russian Prime Minister Vladimir Putin. The meeting comes as Russian President Dmitry Medvedev is calling for a levy on oil companies to finance a fund to pay for cleaning up the industry's environmental disasters.
Putting a united face on a divisive issue, the G-20 leaders meeting in Toronto agreed on Sunday to a schedule for reducing their budget gaps. But the agreement doesn't entail hard deadlines. Rather, it sets up as a goal that the nations will cut their deficits in half by 2013.
As G-8 leaders wrapped up their summit in Huntsville, Ontario, and prepared to travel south to Toronto for the full G-20 summit, the city witnessed some of the most violent protests in its history. What city would ever want to host a summit again?
It's hard to top American politicians when it comes to strong-arming other countries about economic policy. The G-20 summit, which featured a showdown between the opposing American and German camps, offers the latest vivid example.
