1 Eurozone slowdown cools bounce back hopes (Graeme Wearden in The Guardian) Private sector growth across the eurozone has slowed this month, bringing job creation to a standstill and dampening hopes that Europe’s weak economy will rebound robustly from its recent stagnation.
The latest monthly index of purchasing managers (PMI) found that France’s economy continues to struggle. French manufacturing activity is falling at its fastest rate in 15 months. The composite PMI for the eurozone fell to a two-month low of 52.8 this month, down from 53.8 in July. Factory output weakened, with the eurozone manufacturing PMI falling to a 13-month low of 50.8, closer to the 50-point mark that separates expansion from contraction.
Firms also reported that job creation had slowed to near-stagnation in August, suggesting that progress in cutting eurozone unemployment is stalling. Concerns over the eurozone have risen, after figures last week showed that the economy stagnated in the April to June quarter, with German GDP shrinking by 0.2%. August’s PMIs suggest that the eurozone will only manage modest growth in the third quarter of 2014.
America’s factory sector appears to be growing strongly this month: the US manufacturing PMI jumped to 58.0, the highest reading since April 2010, as companies put last winter’s slowdown behind them.
2 Bank of America in $17bn mortgage settlement (BBC) Bank of America has agreed to pay a record $16.7bn to US authorities for misleading investors about the quality of loans it sold. The loans were sold by Countrywide Financial and Merrill Lynch before Bank of America bought them in 2008, at the height of the financial crisis. The associate attorney general said “no institution is either too big or too powerful to escape” punishment.
The settlement will cut the bank’s third-quarter profits by $5.3bn. Bank of America will pay a total of $9.65bn in cash and provide consumer relief worth about $7bn, much of which will go towards homeowners struggling with their mortgages. The case centred on Countrywide Financial, the biggest lender at the time of the crisis, and Merrill Lynch selling mortgage loans to investors but not explaining the full extent of the risk involved.
3 Ferguson and the militarization of US police (Khaleej Times) The death of teenager Michael Brown in a suburb of the city of St Louis, in the state of Missouri, US, on August 9 has shone a harsh spotlight on a development that has taken place beyond public scrutiny. That development is the astonishing and dangerous level of the militarisation of local police forces in the US.
“The St. Louis County Police Department’s annual budget is around US$160 million,” Newsweek had reported. “By providing law enforcement agencies with surplus military equipment free of charge, the National Defense Authorization Act encourages police to employ military weapons and military tactics.” The disastrous result of such a piece of legislation can be seen in local American communities which have unknowingly inherited the spoils of foreign wars — from Iraq to Afghanistan. It is the stockpiling of uncounted tonnes of military hardware, the samples of which have appeared on the streets of Ferguson amid increasing street protests.
Only this June, the American Civil Liberties Union released a report that pointed to the acquisition of military equipment by local police as proof that police forces in the US are being transformed into something potentially dangerous.
If there is a small hope to seize upon in the tale of Ferguson, Missouri, it is that the public protests there and all over the US, in solidarity, may coalesce into a movement that reacts to why Americans have been shocked. The message of the protestors is that a violent state response against communities will not be tolerated, and that ordinary Americans cannot rely on the political system alone to address such a problem. Perhaps Ferguson will prove to be the spark of the peace movement that America so desperately needs.