TOP STORIES:
SPAIN IS THE NEW GREECE: And This Time It's Big Enough To Matter... - (www.businessinsider.com) Spanish trade unions are holding a general strike across the country today to protest new labor reforms, and by all accounts it has been a largely peaceful protest. While for the most part conditions on the ground are relatively normal, photos from Madrid, Barcelona, and Pamplona indicated that some young protestors are escalating the angst, painting symbols supporting anarchy on walls, and causing small bouts of destruction. Such events are reminiscent of similar protests in Syntagma Square, Greece, where groups of youthful protestors turned riotous despite generally calm strikes. Two major points give us particular trepidation: the fact that these and similar protests closely resemble early protests in Greece a few years ago—when almost no one realistically considered the possibility of a Greek debt restructuring—and the sheer scale of Spanish youth unemployment.
Illinois Joins States With Biggest Debts Gauged by Fitch - (www.bloomberg.com) Illinois (STOIL1) joins Connecticut (STOCT1) and Hawaii (STOHI1) among U.S. states with the largest debt burdens relative to residents’ personal income, when pension obligations are added, according to new measurements from Fitch Ratings. The figures “provide a more complete comparative indicator of long-term burdens” by combining each state’s net tax- supported debt with unfunded pension obligations, according to a Fitch report released today. The median value for all states measured is 6.9 percent of personal income, or more than double the 3.1 percent rate for levy-backed debt. “Fourteen of the 43 states rated by Fitch have a combined liability greater than 10 percent,” Douglas Offerman and other Fitch analysts in New York said in the study. “States with the highest combined metrics, including Hawaii, Illinois, Connecticut, and Kentucky, have seen credit deterioration in recent years reflecting in part their liability burdens.”
MF Global execs ignorance, silence stymie Congress - (www.reuters.com) An MF Global executive who has become a central figure in the desperate shifting of funds before the brokerage's collapse, refused to answer questions from Congress on Wednesday, frustrating lawmakers probing why an estimated $1.6 billion of customer money is missing. The failure of Assistant Treasurer Edith O'Brien and her MF Global (MFGLQ.PK) colleagues to clear up how the money seemingly vanished drew considerable mocking from lawmakers, who alternated between anger and disbelief. Appearing before the investigations panel of the House Financial Services Committee, none of the four executives, who also included a senior lawyer and two top finance officials, explained why the money is missing or who was at fault.
MF Global's Edith O'Brien Talks Deal with Justice – (www.fins.com) The star witness in a congressional hearing about MF Global Holdings Ltd.'s collapse has told Justice Department representatives through her lawyers details about transactions that ended up dipping into customer funds, people familiar with the matter said. But Edith O'Brien, the assistant treasurer at MF Global, isn't expected to reveal those details when she appears at Wednesday's hearing of the House Financial Services Committee's oversight and investigations subcommittee. O'Brien plans to invoke her constitutional right against self-incrimination and to decline to answer questions, people familiar with the matter said.
FHA is the Next Housing Bailout - (www.cagw.org) An FHA audit released on November 15, 2011 revealed that the insurance fund has a 50 percent chance of requiring a bailout in the near term. The audit exposed the fact that the fund has only $2.6 billion in cash reserves to back up $1.1 trillion in FHA-insured mortgages. The reserves were $4.7 billion in 2010. This marks the fourth year in a row that the fund has operated below its statutorily required minimum capital requirements of 2 percent. At this level, the FHA is operating with a 422:1 leverage ratio, yet FHA officials have deemed the chances of an FHA bailout slim. However, that prediction is only as reliable as the FHA’s shaky underlying assumptions. For example, the audit estimates that housing prices will rise by 18 percent over the next several years, when most analysts expect housing prices to rise by no more than about 8 percent, if at all. Should housing prices fall short of the FHA’s predictions, the audit projects a “situation in which the current portfolio would require additional support” from the taxpayers, possibly as much as $43.2 billion.
No comments:
Post a Comment