Thursday, January 8, 2015

Euro Falls to a 9-Year Low on Greek Fears - Fortune

  • http://time.com/3653428/euro-greece-ecb/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

  • Geoffrey Smith / Fortune
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Jan. 5, 2015
    
The euro fell to its lowest level against the dollar in nine years Monday, driven by fears of political turmoil in Greece and hopes for more monetary stimulus from the European Central Bank.
By lunchtime in Europe, the single currency had fallen to $1.1914 and has now fallen over 2c against the dollar since the start of the year.
It had already lurched lower on Friday, the first trading session of 2015, on the back of comments by ECB President Mario Draghi in an interview with a German newspaper saying that the risks of it undershooting its inflation target had increased. That added to speculation that the ECB will announce a bigger program of bond-buying, or so-called quantitative easing, at its first policy meeting of the year on Jan. 22.
The ECB is keen to play up that fact that its policy is getting easier even as the Federal Reserve prepares to tighten monetary policy in the U.S.. That outlook will keep the euro cheap on foreign exchange markets, helping the area to boost growth through the export channel.
Hopes for QE, coupled with pessimism over the Eurozone’s growth outlook, have already driven bond yields to unprecedented lows. Yields on German bonds are negative all the way out to 2019, while even Italy’s 10-year bonds yield only 1.79%.
The other factor weighing on the euro is the fear that the radical left-wing Syriza party will win Greece’s parliamentary elections at the end of January, starting a process that may lead to Greece leaving the Eurozone. The German magazine Der Spiegel reported at the weekend that Chancellor Angela Merkel was confident that the Eurozone could cope with a Greek exit.
That confidence is far from being universally shared by financial markets. Marc Ostwald, a strategist with ADM ISI in London, called a Greek exit “the ultimate example bar none of why the Euro project is doomed to failure if no progress on moving to some form of fiscal transfer union is made.”

The euro’s decline is only side of a general rally in the dollar. The dollar index, which measures the greenback’s strength against a basked of major world currencies (although, importantly, not China’s), is also at a nine-year high, after rising over 12% last year.

Korean Air’s ‘Nut Rage’ Executive Is Facing Serious Charges - TIME

Jan. 7, 2015
    
Cho Hyun-ah, center, former vice president of Korean Air Lines, arrives at the Seoul Western District Prosecutors' Office in Seoul on Dec. 30, 2014 Ahn Young-joon—AP

"Nut rage," punishable by up to 15 years in prison, doesn't pay

South Korean prosecutors filed charges against the daughter of the chairman of Korean Air Lines on Wednesday for delaying a flight — and, prosecutors allege, endangering its safety — because she was unhappy about how she was served nuts.
Police have held Heather Cho Hyun-ah, formerly head of in-flight service at her father’s airline, in custody since Dec. 30, after she threw a tantrum when a flight attendant gave her macadamia nuts in a bag, not on a dish. Dubbing the fiasco the nut-rage incident, media have struggled to decide if it should inspire disgust over the entitlement of South Korea’s ultra-rich or a chuckle at their expense.

Yet the charges against Cho, who has resigned from her posts at the South Korean airline, are anything but chuckle-worthy. They include violations of aviation-safety regulations for allegedly disrupting the South Korea–bound plane’s flight plan by forcing it to return to New York City’s John F. Kennedy airport shortly after leaving the gate. The Financial Times reports that Cho, if convicted, could face up to 15 years in prison.