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Detroit Mayor on Unions "They can't read, they can't add, they can't comprehend"; 33% of Detroit is Vacant Lots or Abandoned Homes - (Mish at globaleconomicanalysis.blogspot.com/) Three cheers to Detroit mayor Dave Bing for his truthful comments about unions: 'Either they can't read, they can't add or they can't comprehend' Mayor Dave Bing today criticized leaders of the city's largest union for foot-dragging on contract negotiations, saying it's costing the financially strapped city $500,000 a month and could result in more layoffs. "Either they can't read, they can't add or they can't comprehend," Bing said at a press conference this morning in his office at City Hall. "It has to be one of the three. "Everyone is running with a deficit in their budgets. It's leadership or a lack of leadership that has got us to where we are." Bing said he's ready to impose a contract on the American Federation of State, County and Municipal Employees Council 25 but said the city must follow the law. Both parties are now in fact-finding, a process which could last until July. Bing has been at odds for months with AFSCME leaders over calls for concessions, including 10 percent pay cuts through 26 furlough days and fringe benefit cuts. The union represents about 3,600 workers such as landscapers, street pavers and crossing guards.
Banks Bet Greece Defaults on Debt They Helped Hide - (www.nytimes.com) Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin. Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers. These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit. “It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich. As Greece’s financial condition has worsened, undermining the euro, the role of Goldman Sachs and other major banks in masking the true extent of the country’s problems has drawn criticism from European leaders. But even before that issue became apparent, a little-known company backed by Goldman, JP Morgan Chase and about a dozen other banks had created an index that enabled market players to bet on whether Greece and other European nations would go bust.
Hummer Faces Shutdown After Chinese Sale Collapses - (www.nytimes.com) Hummer, the off-road vehicle that once symbolized America's love for hulking SUVs, faces a shutdown after its sale to a Chinese heavy equipment maker collapsed. Sichuan Tengzhong Heavy Industrial Machines Co. said Wednesday it pulled out of the deal to buy the company from General Motors Co. Tengzhong failed to get clearance from Chinese regulators within the proposed timeframe for the sale, the Chinese manufacturer said. GM said it will continue to honor existing Hummer warranties. ''We are disappointed that the deal with Tengzhong could not be completed,'' said John Smith, GM vice president of corporate planning and alliances. ''GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner.'' GM has been trying to sell the loss-making brand for the last year and signed a deal with Tengzhong in October. However, resistance from Chinese regulators, who have been putting the brakes on investment in the fast-growing Chinese auto industry, created difficulties from the start.
Mayor Bing's Plan To Shrink Detroit - (www.detnews.com) Mayor Dave Bing said Wednesday he "absolutely" intends to relocate residents from desolate neighborhoods and is bracing for inevitable legal challenges when he unveils his downsizing plan. In his strongest statements about shrinking the city since taking office, Bing told WJR-760 AM the city is using internal and external data to decide "winners and losers." The city plans to save some neighborhoods and encourage residents to move from others, he said. "If we don't do it, you know this whole city is going to go down. I'm hopeful people will understand that," Bing said. "If we can incentivize some of those folks that are in those desolate areas, they can get a better situation." "If they stay where they are I absolutely cannot give them all the services they require." He said there's no timeline, price tag or estimate on the number of people who would have to be moved, but said federal funding would be needed. Bing said he plans to focus on the neighborhoods in which Detroit Public Schools plans to build schools with $500.5 million in bonds voters approved last year.
China’s state lenders plan $11bn cash call - (www.ft.com) China’s state-controlled banks are rushing to raise money from public markets to shore up their balance sheets after a year of unprecedented loan growth and the introduction of stricter capital requirements by regulators. This week alone, Chinese lenders have announced plans to raise up to Rmb76bn ($11bn) through equity and bond sales, with at least Rmb150bn ($22bn) of bank fundraising in the pipeline, analysts say. The cash calls come as Beijing tries to limit new lending to the white-hot property market and the investment vehicles of local governments. China’s banking regulator has also raised capital requirements in anticipation of deteriorating asset quality resulting from a lending spree that saw banks issue Rmb9,600bn in new loans last year, double the amount extended in 2008.
Laid-off CTA workers upset with unions, management - (www.chicagotribune.com) Ralph Cleveland says getting a job driving a bus for the Chicago Transit Authority was the best thing that happened to him since moving up North 10 years ago. "When I came to Chicago in 2000 from Bibb County, Alabama, I was so proud about having a uniform on," said Cleveland, 56, who started with the CTA almost 6 1/2 years ago. "I stood in the mirror, and I couldn't believe the Lord had blessed me with that." He looked forward to getting up in the morning and going to work at the transit agency's 77th Street bus garage, then coming home to take care of his wife, who has severe arthritis and other ailments. But the couple was dealt a serious setback this month when Cleveland became one of 1,059 CTA workers laid off because of CTA service cuts that slashed bus service by 18 percent. Like many of his former co-workers, Cleveland says his labor union, the Amalgamated Transit Union, has let him and others down, almost abandoned them, to preserve the pay raises and full benefits for almost 7,000 union brothers and sisters with more seniority, who the CTA did not let go. He has seen larger and larger deductions from his paycheck in recent years for union dues and other union expenses, Cleveland said.
OTHER STORIES:
Obama may compromise on consumer agency to pass financial regulation - (www.washingtonpost.com)
Greece Risks Downgrade Within Month on Struggle to Cut Budget - (www.bloomberg.com)
China Feels the Pinch From Tighter Credit - (online.wsj.com)
ECB Officials Reject IMF-Proposed Inflation Target - (www.bloomberg.com)
Brazil’s Central Bank Boosts Reserve Requirements - (www.bloomberg.com)
European Economic Confidence Unexpectedly Worsens - (www.bloomberg.com)
China warns US over future Taiwan arms sales - (www.washingtonpost.com)
India May Grow 8.2% Next Year, Allowing Stimulus Exit - (www.bloomberg.com)
Jobless Claims in U.S. Unexpectedly Rose Last Week - (www.bloomberg.com)
U.S. Durables Orders Rose in January; Fell Ex-Transportation - (www.bloomberg.com)
Bernanke paints gloomy picture - (www.ft.com)
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