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Stocks Fall; European Black Market Booming; Dollar Rallies

Stocks Fall as Investors Consider Stimulus (Bloomberg)

Stocks fell today, after the S&P 500??s Index rallied yesterday from a three-week low, as economists predicted that the Federal Reserve may reduce its stimulus in September and equities had mixed results. ??We definitely think that equities are going to be more volatile with all the talk of Fed tapering,? David Lafferty, a Boston-based investment strategist at Natixis Global Asset Management, said. ??You can see that volatility in the market jitteriness in the past days.?

Europe’s Black Market Economy Booming (CNBC)

Increasing taxation and labor market overregulation is causing many Europeans to abandon formal employment and enter the murky world of shadow economies worth billions of dollars, according to a pan-European study published today. The study was carried out by Freidrich Schnedier, professor of economics at Johannes Kepler University in Austria, and Colin Williams, professor of public policy at Sheffield University. “High levels of government spending and front-loaded tax rises have pushed both individuals and businesses into illicit employment. This is a dangerous cycle,” Schneider and Williams stated. “As more people have been forced into the shadow economy, [government tax authorities have] lost tax revenue. This in turn has pushed up tax rates, stimulating black market employment even more.”

Dollar Rallies Against Yen but Still Vulnerable (Reuters)

The dollar recovered against the yen today as investors bought back the greenback at lower levels, while a rally in Japanese stocks spurred risk appetite and curbed the need to hold the yen for safety. “There was a squeeze on long dollar positions, but we know that wasn’t going to last because the long-term bullish outlook on the dollar is well entrenched,” said Vassili Serebriakov, currency strategist at BNP Paribas in New York.

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