Here are this week’s news items for business and the economy, including the financial crisis in Greece and the Euro zone, banking reform, Berkshire Hathaway’s annual meeting, and important economic data that will be reported this week. Read on for details, including charts and a video report:

FINANCIAL CRISIS IN GREECE:

Greece’s bonds were downgraded to junk status, and this created major nervousness in the financial markets this week. It looks like Greece will get a major loan from the International Monetary Fund, but will need to implement big austerity measures to qualify for the loan. Expect to see markets breathing a sigh of relief on Monday.

This news resulted in a temporary flight to safety, which favors the Dollar over the Euro. The Euro Exchange Rate Chart (courtesy of Wikipedia) shows the long term trend in the Euro exchange rate in terms of the Dollar (green), the Yen (red), and the Pound (GBP – blue). You can see that the long term trend for the Euro against the Dollar and Pound has been good – not so much against the Yen.

The weekly Euro vs. US Dollar vs. Euro chart (courtesy of BigCharts.com – a great resource for tracking your investments) shows the conversion rate for the current month, and the Dollar/Euro exchange rate has been pretty much flat for most of April.

Looking ahead, you should consider whether the euro zone can sustainably include both stronger economies like Germany and France and weaker economies like Greece, Spain, and Portugal, or whether the stronger countries will be able to keep bailing out the weaker ones to maintain confidence in the single-currency concept.

BANKING REFORM:

The Senate will continue to debate new regulation of the banking and finance industry. A partisan deadlock has been broken and debate has begun, but it remains to be seen whether or not significant legislation will be voted into law. Proposed changes include:

• Restricting banks that accept deposits from what Congress considers to be exceptionally risky activities, such as derivatives trading

• Creating a new consumer protection organization

BERKSHIRE HATHAWAY:

Berkshire Hathaway’s annual shareholder meeting is this weekend, and followers of Warren Buffett will look forward to whatever Warren has to say about the near-term outlook for business and the nation in general. The media will be showing big interest in Warren’s comments regarding the profitable investment Berkshire made in Goldman Sachs, a company that is under fire due to concerns about its mortgage trading activities.

ECONOMIC DATA:

Other economic data we expect to see reported this week includes:

• Consumer spending (expect improvements here)
• Auto sales (expect improvement here)
• Employment data (expect improvement)