The fraud case has highlighted the lack of transparency in doing business in the Gulf, where banks are blamed for lending money to wealthy families almost solely on reputation.
Hashem Ahelbarra looks at the fallout for businesses in the region.
Category: News & Politics
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By Nicole Bullock in New York
Published: July 20 2009 20:39 | Last updated: July 20 2009 20:39
Sharply falling tax revenues across the US have left states facing fresh budget shortfalls and threatening further painful spending and service cuts following previous multiple rounds of belt-tightening.
In the first quarter of the calendar year, tax collections dropped by 11.7 per cent, the largest fall on record, according to the Rockefeller Institute of Government. Of 50 states, some 45 reported declines.
Early figures for April and May show an overall decline of nearly 20 per cent for total taxes, “a further dramatic worsening of fiscal conditions nationwide”, says the institute.
Billions of dollars of federal stimulus funds, combined with cuts to state employee jobs, school districts, healthcare and even the US prison system, have so far failed to close the budget gaps.
“The states are constantly trying to recalibrate their budgets to deal with a shrinking revenue base,” said Susan Urahn, managing director of state policy initiative at the Pew Center on the States.
July 15 (Bloomberg) -- China’s foreign-exchange reserves, the world’s biggest, topped $2 trillion for the first time as the nation’s economic recovery prompted overseas investors to pump money into stocks and property.
The reserves rose a record $178 billion in the second quarter to $2.132 trillion, the People’s Bank of China said today on its Web site. That dwarfs a $7.7 billion gain in the previous three months.
The Shanghai Composite Index, the world’s second-best performer, surged 75 percent this year as Premier Wen Jiabao’s stimulus package triggered unprecedented lending and surging investment. The increase in the reserves means China may buy more U.S. Treasuries as the Obama administration expands debt sales to fund a plan to revive growth.
“Hot money is flowing back,” said Sherman Chan, an economist with Moody’s Economy.com in Sydney. “China has the strongest prospects out of all major economies.”
M2, the broadest measure of money supply, rose a record 28.5 percent in June from a year earlier, the central bank said.
The yuan traded at 6.8316 against the dollar as of 4:47 p.m. in Shanghai, from 6.8329 yesterday.
The central bank has used bill sales to push up money- market rates for three weeks, seeking to tighten monetary policy without choking off a recovery as the surge in money supply increases the risk of asset bubbles, bad loans and resurgent inflation. China’s reserves are double those of Japan, the country with the second-biggest foreign currency holdings.
“The pace of foreign-exchange inflows will accelerate in coming months as China’s recovery attracts investors, and that will pose great challenges for monetary policy,” said Lu Zhengwei, an economist at Industrial Bank Co. in Shanghai.
Read entire article :
The recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad.
The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.
Here are 10 reasons we are in even more trouble than the 9.5% unemployment rate indicates:
[Commentary] David Klein
- June's total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.
- More companies are asking employees to take unpaid leave. These people don't count on the unemployment roll.
Read Full Story :
By Vincent Del Giudice
July 13 (Bloomberg) -- The U.S. budget deficit topped $1 trillion for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy.
The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed today in Washington. The excess of spending over revenue for June was $94.3 billion, the first deficit for that month since 1991, according to data compiled by Bloomberg.
Individual and corporate tax receipts are sliding even as the worst recession in five decades shows signs of easing because the jobless rate continues to rise -- reaching a 26-year high in June -- and companies have yet to see a sustained increase in demand. The shortfall is also widening as the government ramps up spending from the $787 billion stimulus program President Barack Obama signed into law in February.
“This is a difficult pill to have to swallow,” said Richard Yamarone, director of economic research at Argus Research Corp. in New York. “The economy and banking system need these funds to recover, yet it will ultimately hit Americans’ wallets hard. It’s a necessary evil.”
Treasuries fell to their lows of the day after the figures, with yields on benchmark 10-year notes rising to 3.35 percent at 3:29 p.m. in New York from 3.30 percent late yesterday.
Economists surveyed by Bloomberg News forecast a June deficit of $97 billion, according to the median of 30 estimates. Projections ranged from deficits of $109.3 billion to $70 billion.
The June deficit compares with a surplus of $33.5 billion in the same month a year earlier. Spending last month surged 37 percent to $309.7 billion and revenue fell 17 percent to $215.4 billion, the Treasury said.
The Congressional Budget Office estimates the federal budget shortfall for the first nine months of the fiscal year was also $1.1 trillion, while saying the budget deficit for June was $97 billion. For the fiscal year that ends Sept. 30, the Office of Management and Budget forecasts the deficit to reach a record $1.841 trillion, more than four times the previous fiscal year’s $459 billion shortfall.
For the fiscal year to date, the interest expense on the government’s outstanding debt was $320.7 billion, according to Treasury data released July 7. Total public debt outstanding exceeds $11.5 trillion, according to the Treasury’s July 9 statement on the government’s cash balance.
Corporate tax receipts totaled $101.9 billion through June versus $236.5 billion, a decline of 57 percent, the Treasury’s budget statement said today. Individual income tax collections were down 22 percent so far this fiscal year to $685.5 billion compared with $877.8 billion in the year-earlier period.
Sunday, July 12, 2009
A leading defense expert has projected that China will attack India by 2012 to divert the attention of its own people from “unprecedented” internal dissent, growing unemployment and financial problems that are threatening the hold of Communists in that country.
“China will launch an attack on India before 2012. There are multiple reasons for a desperate Beijing to teach India the final lesson, thereby ensuring Chinese supremacy in Asia in this century,” Bharat Verma, Editor of the Indian Defense Review, has said.
Verma said the recession has “shut the Chinese exports shop”, creating an “unprecedented internal social unrest” which in turn, was severely threatening the grip of the Communists over the society.
Among other reasons for this assessment were rising unemployment, flight of capital worth billions of dollars, depletion of its foreign exchange reserves and growing internal dissent, Verma said in an editorial in the forthcoming issue of the premier defence journal. In addition to this, “The growing irrelevance of Pakistan, their right hand that operates against India on their behest, is increasing the Chinese nervousness,” he said, adding that US President Barak Obama’s Af-Pak policy was primarily Pak-Af policy that has “intelligently set the thief to catch the thief”.
Verma said Beijing was “already rattled, with its proxy Pakistan now literally embroiled in a civil war, losing its sheen against India.” “Above all, it is worried over the growing alliance of India with the US and the West, because the alliance has the potential to create a technologically superior counterpoise.
Niels Harrit and 8 other scientists found nano-thermite in the dust from the World Trade Center.
For better results with customized versions of this video and translations, you can find the original Highbandwidth mp4 files with/without burned-in text, and the subtitle-textfile at:
A site in danish is encouraging people to stand forward demanding a new investigation here:
The full report from the scientists can be found here.
TAGS :Controlled Demolition, MUST SEE, Mainstream Media, Nano-Thermite, Nanotechnology, Niels H. Harrit, Peer Reviewed Scientific Journal, Red/Grey Chips, Research, Scholars for 9-11 Truth and Justice, Scientific Method, Super Thermite, Thermite, Twin Towers, V for Visibility, VIDEO, WTC7, Wake Up America, World Trade Center Destruction
Published: July 9 2009 19:03 | Last updated: July 9 2009 19:03
China has launched its highest-profile criticism of the dominant role of the US dollar as a global reserve currency at a meeting of the world’s biggest economies.
Dai Bingguo, Chinese state councilor, raised the issue on Thursday when he joined the leaders of four other emerging economies for talks with the leaders of the Group of Eight industrialised nations – including US President Barack Obama – in the earthquake-damaged Italian town of L’Aquila.
The remarks, in front of Mr Obama, caused concern among western leaders, some of whom fear that even discussion of long-term currency issues could unsettle markets and undercut economic recovery.
Gordon Brown, Britain’s prime minister, said he did not remember Mr Dai making the remarks. But he said the focus should be on moving the world out of recession.
“We don’t want to give the impression that big change is around the corner and the present arrangements will be destabilized,” said Mr Brown.
”We should have a better system for reserve currency issuance and regulation, so that we can maintain relative stability of major reserve currencies exchange rates and promote a diversified and rational international reserve currency system,” said Mr Dai, according to the Chinese foreign ministry.
While he did not name the dollar, Mr Dai was unequivocal in calling for the world to diversify the reserve currency system and aim at relatively stable exchange rates among leading currencies.
read the rest
By W.J. Hennigan
July 9, 2009
Los Angeles commercial real estate continues to spiral downward, according to a report released Wednesday by Real Capital Analytics Inc.
In all, 263 properties are in default, foreclosure or bankruptcy, the firm reported. At the beginning of the year there were 113, a 133% increase.
Don Walker, senior vice president of Irvine-based John Burns Real Estate Consulting, said the large numbers weren't very surprising.
He points to the skyrocketing unemployment rate, which now stands at 11.5%, and consumers' current tendency to rein in discretionary spending, as contributing factors to the downturn in the market.
Walker said the worst may be yet to come, because commercial real estate numbers traditionally lag behind residential. "We might be in the early stages of decline," he said. "I don't expect a turnaround until consumers regain confidence and the jobless numbers stop mounting."
But things could be worse, said Dan Fasulo, RCA managing director of research. Compared with the national picture, Los Angeles is faring well.
"Los Angeles has held up better than its peers," Fasulo said. "For example, you couldn't give away a commercial property in the Midwest right now."
Nationally, RCA found 5,315 troubled commercial properties valued at more than $108 billion.
The report lists hotels and retail properties as the most "problematic sectors" and goes on to note the bankruptcy filings by mall owner General Growth Properties Inc. and hotel chain Extended Stay America Inc. The report said the lack of available credit is causing properties to fall into default across the country and among every investor type.
"Excess leverage is endemic to every type of investor, all of which are facing difficulties refinancing mortgages as they come due," the study said.
The figures released Wednesday are preliminary, the report said.
But the government is apparently going to switch off the bubble-blowing machine.
China expert Michael Pettis writes:
Today bank stocks were down, on rumors that the very high and clearly unsustainable loan growth rates would soon come to an end.
And the BBC writes:
It comes as the government looks to tighten its monetary policy to prevent the risk of asset bubbles, loan defaults and rapid inflation.
Meanwhile, the Chinese city of Hangzhou has started tightening mortgage lending terms, ahead of any changes to monetary and credit policies by the national government.
The signs that China may ditch its loose monetary policy dragged down bank stocks in Hong Kong and Shanghai on Wednesday.
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July 6 (Bloomberg) -- It’s not a job Barack Obama signed up for, but it’s his nonetheless: Bond salesman-in-chief.
Such is the lot of a U.S. president overseeing an historic increase in debt issuance. Cartoonists are busily churning out depictions of Obama, who partly nationalized automakers, standing on a car lot hawking Detroit’s clunkers. It’s time to begin picturing Obama shilling bonds few may soon want.
His best customers? Asians, of course. Asia already holds about $4.5 trillion of currency reserves, most of them denominated in U.S. dollars. It’s a product of Asia’s “savings glut,” of which the cash-strapped U.S. remains a major beneficiary. That is, if Asians don’t pull the plug.
The trouble is that the U.S. seems to be taking Asia’s money for granted. That’s a grave mistake for a White House that needs to offload record amounts of debt to fund a $787 billion stimulus package -- not to mention spending plans yet to be announced. Assuming Asia’s perpetual devotion is a mistake.
It’s no coincidence that China is pushing for a new international currency at a time when it wants to diversify its almost $2 trillion of reserves. Such mutterings from Venezuela are one thing. They’re quite another coming from the biggest foreign holder of Treasuries, with about $764 billion.
“It would be important for the U.S. not to take its position for granted,” World Bank President Robert Zoellick said last week. “My guess is what you will see over time, just as the euro has developed over time, you may have some other currencies develop as an alternative.”
Not that the yuan is ready for prime time. Besides, say analysts like Marc Chandler of Brown Brothers Harriman & Co. in New York, China’s desire for the yuan to become a global invoicing currency doesn’t outweigh its need to maintain control and help exporters. Ultimately, China’s ambitions are hemmed in by the realities of a currency that still isn’t convertible.
China speaks out of both sides of its mouth on the issue. One day, a top official says China wants an alternative to the dollar. The next, someone like Vice Foreign Minister He Yafei tells reporters that “we hope that as the main reserve currency the U.S. dollar will be stable” and that he’s “not aware” of China pushing to put the subject on the agenda of the Group of Eight’s agenda this week.
The other BRICs nations -- the acronym refers to Brazil, Russia, India and China -- all have made noises about the dollar’s stability. Some more than others, of course, yet their concerns have been well reported.
Replacing the Dollar
Replacing the dollar as a long-term goal is fine. Doing it while the global financial system the dollar anchors is in tatters is ill-advised. Not surprisingly, folks in Washington are worried about a sudden move against the currency.
It hardly seems a coincidence that while Managing Director Dominique Strauss-Kahn has called China’s yuan “substantially undervalued,” the International Monetary Fund has toned down criticism over the disconnect from economic fundamentals. The softer rhetoric removes a sticking point between China and the IMF, as Asia’s second-largest economy seeks a larger role at the lender and the fund tries to increase China’s contributions.
Could the quid pro quo be that China avoid pulling the rug out from under the dollar? It’s possible. Still, Obama and Treasury Secretary Timothy Geithner shouldn’t assume Asia’s continued support. Not with the Federal Reserve holding interest rates near zero and untold waves of fresh debt flowing into uncertain markets. Rumblings about the U.S. losing its triple AAA credit rating have further raised the stakes.
Blame All Around
Granted, Asia deserves some of the blame here. Over the past decade, the region was the site of a currency-reserve arms race. While the clear winner in this game of monetary one- upmanship is China, economies like Taiwan and South Korea are holding more dollars than they would like.
It’s become the world’s biggest Ponzi scheme, really. The dollar isn’t crashing because those invested in it are propping it up and adding to their holdings. After all, the magnitude of Asia’s foreign-exchange holdings means it can’t dump the dollar without shooting its economies in the foot.
Asia should indeed be plotting how to reduce its dollar holdings. Those trillions of dollars would be better used in Asia to pay for better roads, bridges, airports and power grids and improved education and health care.
Until then, the U.S. needs to reassure Asians they won’t suffer massive losses on their dollar holdings. It can start by circulating a credible exit strategy from today’s massive stimulus efforts.
The White House also needs to convince Asia that devaluing the dollar at some point to boost U.S. exports isn’t on the table. Obama and Geithner should plan to increase financial diplomacy efforts, traveling to Asia often.
Asia has a $4.5 trillion dollar decision to make, and it’s up to the U.S. to help the region make the right one. Taking Asia’s money for granted would be a disastrous way to go.
(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: William Pesek in Tokyo at firstname.lastname@example.org
The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country’s ability to pay its debts and potentially plunging it into another recession, according to a study by the US’s own central bank.
In a 2003 paper, Thomas Laubach, the US Federal Reserve’s senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, long-term interests rates will double from their current 3.5pc.
The impact would be devastating by making it punitively expensive to finance national borrowings and leading to what Tim Congdon, founder of Lombard Street Research, called a “debt explosion”. Mr Laubach’s study has implications for the UK, too, as public debt is soaring. A US crisis would have implications for the rest of the world, in any case.
Using historical examples for his paper, New Evidence on the Interest Rate Effects of Budget Deficits and Debt, Mr Laubach came to the conclusion that “a percentage point increase in the projected deficit-to-GDP ratio raises the 10-year bond rate expected to prevail five years into the future by 20 to 40 basis points, a typical estimate is about 25 basis points”.
The US deficit has blown out from 3pc to 13.5pc in the past year but long-term rates are largely unchanged. Assuming Mr Laubach’s “typical estimate”, long-term rates have to climb 2.5 percentage points.
The Washington Note
July 2, 2009
Each month, I receive from Leo Hindery an update on “America’s effective unemployment rate” which includes not only the official unemployment figures but other data points showing off-the-books unemployed or underemployed people.
The numbers are staggering and are aggregates of official data. They matter because various Obama administration officials including the President himself started off calling for huge stimulus packages to help generate “jobs, jobs, jobs!”
But now, I have been hearing more and more from senior Obama economic team members about the jobs they hoped for coming at the very tail end of an economic recovery. Others are talking about a GDP recovery — but not a jobs recovery. They are admitting as well that they underestimated the severity of this recession and its impact on unemployment levels.
And all this while Goldman Sachs and other financial houses have seen their balance sheets get cleaned up and bonuses surge.
Here is a June 2009 version of the summary that calculates the Effective Unemployment Rate, which is now 18.70%, and the Effective Number of Unemployed, which is now 30,172,000.
There are currently 14,729,000 officially unemployed workers, as just announced. However, this figure does not include the combined 15,443,000 workers either (1) in the “labor force reserve” because they have abandoned their job searches (i.e., 4,278,000) or (2) underemployed because they are “part-time of necessity” (i.e., 8,989,000) or “otherwise marginally attached” (i.e., 2,176,000).
The effective unemployment rate is therefore 18.70%, instead of the official 9.51%.
Since the start of the recession in December 2007, the number of workers who are officially unemployed has increased by 7,188,000, while almost twice as many workers - 13,290,000 - have become effectively unemployed. And all the while, we should have been creating around 2,250,000 new jobs (i.e., 18 months times 125,000 jobs per month) just to keep up with population growth.
In June, the number of workers officially unemployed increased 218,000, while the number of workers effectively unemployed actually decreased 35,000.
It’s important to see the entire picture of America’s jobs profile — no matter how unpleasant.
I recognize that credit bubble related recoveries are hard to work out and are usually quite slow — with job growth at the back end. This all makes sense — but with Christina Romer out raising expectations again with giddy talk predicting a V-shaped recovery and given the “jobs, jobs, jobs” mantra of President Obama himself — the gap between the job figures expected and the disappointing economic realities generated may be politically consequential.
July 3, 2009
Oh, the joys of not having to get up with the first ring of the alarm clock! But then, as I laid in bed this morning wondering what to write about, it came to me in a flash: There have been numerous alarming signs and portents in the markets this week, if one knows where to look.
The FDIC announced seven bank failures after the market closed Thursday, which brings the number of banks closed this year to 52. But, if you count the number of branch offices closed this week it’s 30 branches.
|Millennium State Bank of Texas|
|First National Bank of Danville|
|Elizabeth State Bank|
|Rock River Bank|
|First State Bank of Winchester|
|John Warner Bank|
But what’s even more alarming is that if you look back over the last year of “We’re not in a Depression” bank numbers, you’ll see that the number of banks closed is nominally up to 75, but if you count up branches, the banking system has shuffled ownership of 2,969 branches.
That FDIC seems to be doing a smooth job of it - making depositors whole in each case (so far), one can’t help but wonder what’s the cost of all this to be in the longer term, especially since the real guts of the second leg down in financial markets isn’t expected till this fall.
When will FDIC have to go looking to recharge its coffers?
Meantime, at least the bad news was released after the markets were closed and has an extra day to contemplate what this all means. Answer to that should be apparent to anyone with half a brain (Depression 2.0 may be real and George may not be so crazy after all…).
If you divide the total offices closed (2,969) by 51 weeks (since July 11, 2008 is the IndyMac failure - 51 weeks back) closings have been averaging 58.21 offices per week, although admitted the data is skewed a bit by the WAMU and Downey Savings failures. Still, the count is the count.
Another one of the alarming stories this week to give ’cause to pause’ was the NY Fed Funds Rate which, if you look at the June 30th data, had someone paying 7% for overnight funds. The aberration, first caught on Karl Denninger’s “Market Ticker” site admittedly does leave one asking plenty of questions (Like: Who’d pay 7% for overnight money in this environment if they didn’t have a death-like financial mess to paper over quickly?), one can only pray that it was just someone needing quick cash for the end of Q2. The worst fear is that this is all a set up for the next collapse of the derivatives bubble which will be easily apparent as the Dow goes toward new lows in September, which is what I fear. Not to mention the possible banking and market holidays which could accompany that.
Make a note to self: Finish spreading money around to ’safe’ places. A bit more in the Treasury TIPS paper, a bit less in the Big National Bank - going instead to a couple of local banks which have weathered at least one Depression previously.
A third area where alarming developments are taking place is well-described under the headline “Financial lobby gears up for effort against Obama plan.” While it’s true that the Obama administration is trying to build a credible “Consumer Financial Protection Agency”, it’s more than equally true that the banksters are going to roll out all the big guns and pull out the stops since if this one goes through. it could have a Kondratieff cycle-long impact on the bankster coup - which means it could actually save America from financial interest/bankster domination for another 50-years. Why, who’d want to be shackled with interest rate caps and such when desperation of common folks can be turned into optimized yields on past-due accounts?You won’t read much about this fight in the MainStreamMedia, however, since the banksters have brought most of the corpgov/ MSM media to heel by simple manipulation ad budgets: “Ya’ll either toe the line, or mother banker will slash advertising on your radio/tv/newspaper chain to zip and then where will you be? Need to roll over a credit line to keep your LBO roll-up together? Lay off on the coverage of interest rate caps, then…” Or some variant of this. never ’spoken”, but that’s how the complex system works when you step back from it a ways.
Ah, the joys of having the best ‘democratic republic’ money can buy.
Related? “Washington Post cancels lobbyist event amid uproar.” You tell me. I’ve filed it under “Cookie jars and fingers.”
But there’s another point of alarm, right there. Groups like “www.firecongress.org” are popping up and they make it pretty clear that the world “revolution” which I’ve mentioned prominently ove rthe past year or so are starting to filter into the active area of language.
By the way, don’t forget to check out their poster - which you can print off on a good quality color printer and pass around:
Ballots beat bullets any old time.
Along about here, you may be figuring out that the reason the market dropped 223 points in Thursday’s trading is that it’s occurred to more people than just yours truly that there is not much stimulating going on from the over-hyped and over-sold ’stimulus’ bill.
Nassim Taleb - who wrote the famous book on statistical outlier events The Black Swan: The Impact of the Highly Improbable is being quoted by CNBC this morning as saying “The financial system is crashing and action must be taken by the US government to convert debt into equity to produce a more stable environment…”
Nice thought, that. But, in case you haven’t noticed, at the current ‘burn rate’ the only possible outcome for the economy is to have runaway inflation, which is fine from the standpoint of the powers-that-be, since the people who were marginally ready to lose their homes, are in many cases already in default and the homes owned by the bankster class, so when prices start to go wild, they ought to sell like hotcakes and new and much higher rates since the public will be retrained into the borrow and refi industries, which will be retooled to maximize profits once again.
Graceful, ain’t it?
July 3, 2009
The payroll decline was more than forecast and followed a 322,000 drop in May, according to Labor Department figures released today in Washington. The jobless rate jumped to 9.5 percent, the highest since August 1983, from 9.4 percent.
Unemployment is projected to keep rising for the rest of the year just as the income boost from the stimulus package fades, undermining prospects for a sustained rebound in household purchases, analysts said. As companies from General Motors Corp. to Kimberly-Clark Corp. cut costs, the lack of jobs will restrain growth.
Home foreclosures expected to surge in coming months
Moratoriums from banks, government to expire, setting off new wave of default actions
By Don Lee | Washington Bureau
July 6, 2009
WASHINGTON - -- Just as the nation's housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy.
Amid rising unemployment and falling home prices, mortgage loan defaults have surged to record levels this year. Until recently, many banks have put off launching foreclosure action on many troubled properties, in part because they had signed up for the home-stability plan from President Barack Obama's administration, which required them to consider the alternative of modifying loans to make it easier for borrowers to make payments.
But with many government and self-imposed foreclosure moratoriums expiring, the biggest lenders indicate they are likely to move more aggressively to clear a backlog of troubled mortgages.
Home sales have been steadying nationally, thanks largely to an abundance of cheap foreclosed properties, government incentives and record low mortgage rates. Housing construction starts have flattened out, helping to bring supply into balance with demand. The rate of housing price declines has slowed as well, even turning up again in some communities.
Read entire article :
Shanghai Silk Group, Shanghai Electric Group Co. and Shanghai Huanyu Import & Export Co. signed contracts worth 14 million yuan ($2 million) with customers in Hong Kong and Indonesia, Fang Xinghai, director general of the municipal government’s financial services office, said at a press conference today. Bank of Communications Co. and Bank of China Ltd. offered transaction services.
China, Russia and India have said the world economy is too reliant on the dollar and called for changes in how $6.5 trillion in foreign-exchange reserves are managed, before Group of Eight leaders meet this week. The settlement program and sales of yuan-denominated debt overseas are designed to make the currency more attractive for central banks to hold.
“This is a first step on the long road towards that target of making the yuan a global reserve currency,” said Nizam Idris, a strategist in Singapore at UBS AG, the world’s second biggest foreign-exchange trader. “That’s probably going to take five years or more.”
The central bank on July 2 allowed companies in Shanghai and four cities in the southern Guangdong province to settle trade in yuan with businesses in Hong Kong, Macau and Association of Southeast Asian Nations. Outside of special border trade zones, companies previously had to convert yuan into dollars or other currencies to settle international trade.
Exchange Rate Risks
“The yuan settlement program will help boost bilateral trade with Hong Kong and Asean nations,” People’s Bank of China Deputy Governor Su Ning said at the signing ceremony. “The yuan is stable compared with other major currencies. A stable yuan will help companies control exchange-rate risks.”
Read Entire article :
July 6 (Bloomberg) -- Russia and India said the world economy is too reliant on the U.S. dollar and called for changes in how $6.5 trillion in currency reserves are managed, as Group of Eight leaders prepare to meet this week.
“The dollar system or the system based on the dollar and euro have shown that they are flawed,” Russian President Dmitry Medvedev said in an interview with Corriere della Sera, repeating his proposal for a new international reserve currency.
The challenge to the dollar, a linchpin of world finance and trade since 1945, underlines the shift in relative economic power toward emerging markets and away from the developed nations that spawned the global crisis.
French Finance Minister Christine Lagarde, speaking yesterday at a conference in Aix en Provence, France, said that “we must explore better coordination of exchange-rate policy.”
Questions need to be asked about “the balance of currencies and the role of currencies in a world that has changed because of the crisis and the growing role of emerging countries,” she told reporters.
400,000 school and university students graduate this week. Many will go straight into the ranks of the unemployed. The head of the national jobs agency warned RT now is the worst time for young people to look for work.
When finance whizzkid Dmitry Marinchenko got into MGIMO University 5 years ago his future seemed made. Banks needed talent and were ready to offer a 170000 dollar starting salary, before bonuses. Today he graduates, to a different scene.
“It's a really tough job to find a job. I visited about 20-25 companies and most said I lacked job experience. Problem – a lot of layoffs, and experienced people on the market with same. I know about 10 people from my Uni’ who tried to find a job just as me… but a lot of them, well, have no response.”
The bloodiest carnage is among bankers and lawyers. But Yury Gertsiy, Head of the Federal Employment Service, says jobless numbers will rise across the board.
“This is the worst time to join the job market. Employers are most hostile to twenty somethings who have yet to prove their abilities. That's why by September the jobless rate will go up.”
In a year Russia’s official unemployment rate soared from 6 to 10%. Add those who don't register and the real rate is even higher.
These fresh-faced teens will now have to do battle with veteran barristers and financiers who've just got the sack.
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