India's antitrust regulator has fined major automakers over anti-trust violations.

India’s antitrust regulator has fined major automakers over anti-trust violations, just days after authorities in China imposed similar penalties. The commission found that carmakers were able to charge high prices by providing spare parts only to authorized repair shops. A total fine of 25.4B rupees ($420M) was slapped on 14 automotive groups including Tata Motors (NYSE:TTM) and the local units of Honda (NYSE:HMC), Volkswagen (OTCQX:VLKAY), Fiat (OTCPK:FIATY), BMW (OTCPK:BAMXY), Ford (NYSE:F), General Motors (NYSE:GM), Mercedes-Benz (OTCPK:DDAIY), Nissan (OTCPK:NSANY) and Toyota (NYSE:TM).

Argentina is looking to push bondholders to swap defaulted debt for new notes, in order to dodge a U.S. ruling that prevents the government from paying creditors. Argentina's last interest payment of $539M was blocked by a NY court, resulting in the country's sovereign default on July 30. President Cristina Fernandez has continued to argue that Argentina is not in default, and has called for a new bond swap as a result of the ruling.

Wall street Weapons of mass destruction back again.

They were called weapons of mass destruction! But that was back in 2008. Six years hence Wall Street seems to have found its lost love for derivatives. And the too big to fail banks are once again at the forefront of creating new toxic products. Names like JP Morgan and Goldman Sachs were associated with toxic instruments like CDOs post Lehman bankruptcy. It seems these firms have learnt no lesson and are back to their notorious tactics putting the global financial system at risk! As per Bloomberg, Goldman Sachs is planning as much as 10 billion Euros (US$ 13.4 billion) of structured investments that bundle debt into top-rated securities. J P Morgan Chase is offering a swap contract that makes it easier for investors to wager on the debt. Thus while the big banks are back to vetting investors' risk appetite, the regulators are hardly prepared to avert another 2008 like crash. One can only hope that Western central banks, including the US Fed, take the RBI's warning signals more seriously!

Eurozone banks are expected to borrow about €250B from ECB under LTRO

Eurozone banks are expected to borrow about €250B in cheap four-year money from the European Central Bank in September and December under the ECB’s "targeted long-term financing operations". The new loans would come on top of the more than €1T in cheap finance the ECB pumped into the financial system between late 2011 and 2012 to avert a financial crisis, and are expected to boost lending to the region’s credit-starved businesses.

Japan's economy contracted sharply in the second quarter.

Japan's economy contracted sharply in the second quarter after a national sales tax in April rose 3% and triggered a sharp decline in consumer spending. Real GDP shrank 6.8% in the three months through June on an annualized basis from the prior quarter. Prime Minister Shinzo Abe will have to address the tax issue again soon. A sales tax increase (which will raise the rate to 10%) has been approved by the Japanese government and will take effect in October 2015.

The Treasury Department posted a U.S. budget deficit of $95B at the end of July, down 3% from $98B in the same period last year. Fiscal year-to-date, the deficit of $460B is off 24% from the same period a year ago, and the lowest for the first ten months of the fiscal year since 2008. Receipts last month totaled $211B, up 5% from the year-ago period, and spending totaled $305B, up 3% from July 2013.

RBI keeps key rate unchanged

In the first quarter Monetary Policy review today, the RBI kept the key lending rate (repo rate) unchanged. Repo rate or the rate at which at the central bank lends money to commercial banks remains unchanged at 8.0%. Even the cash reserve ratio (CRR) stayed at 4%. However, in an effort to ease some liquidity the statutory liquidity ratio (SLR) was reduced from 22.5% to 22%. In the last policy review too, the central bank had chosen to tinker with the SLR, while keeping other rates unchanged.