TOP
STORIES:
With No Vote, Taxpayers Stuck With Tab on Bonds - (www.nytimes.com) Surprised local taxpayers from Stockton, Calif., to Scranton, Pa., are
finding themselves obligated for parking garages, hockey arenas and other
enterprises that can no longer pay their debts. Officials have signed them up
unknowingly to backstop the bonds of independent authorities, the special
bodies of government that run projects like toll roads and power plants. The
practice, meant to save governments money, has been gaining popularity without
attracting much notice, and is creating problems for a small but growing number
of cities.
Data from Thomson Reuters suggests that local
taxpayers are backing so-called enterprise debt at five times the rate they did
10 years ago.
Biggest U.S. Banks Shrinking Loan Portfolios as Regional
Lenders Fill Gap - (www.bloomberg.com)
The biggest U.S. banks are extending less credit amid a faltering
economic recovery as regional lenders step in to fill the gap. Total loans at
the four largest U.S. banks -- JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C) andWells Fargo & Co. (WFC) --
fell 4.9 percent to $3.04 trillion in the first quarter from the same period in
2010, according to data compiled by Bloomberg. Lending by the 17 smallest of
the 24 firms in the KBW Bank Index
(BKX) increased 9.8 percent to $1.27 trillion. The big banks
are trimming assets to satisfy stricter capital rules and regulatory demands to
dispose of risky loans, while regional lenders, most less than one-tenth the
size of JPMorgan, are picking up customers. That could mean lower earnings and
profitability for the largest firms, said David Trone, an analyst at JMP Securities LLC
in New York.
Public Pensions Face Wider Deficits Under New Rules - (www.bloomberg.com) State and local governments coping with years of underfunding and weak
investment returns will be forced to clarify the extent of pension deficits
under rules set today that will widen the gaps for some plans. The measures
adopted by the Governmental Accounting Standards Board alter methods of
calculating liabilities and assets by the retirement systems. The changes will
mean pensions for public workers in Illinois, New Jersey, Indiana and Kentucky have less than 30
percent of assets needed to meet liabilities, according to the Boston College
Center for Retirement Research. “We’re expecting some troubled credits to look
worse,” Richard Ciccarone, managing
director of McDonnell Investment Management LLC in Oak Brook, Illinois, which oversees $8 billion
in municipal securities, said by telephone. “That will cause some shock and
awe.”
Germany Pressed to Scrap Senior Status on Spain Rescue Loans
- (www.bloomberg.com) Germany faces pressure to surrender
preferred status on rescue loans to Spain’s banks in a standoff that echoes
Chancellor Angela Merkel’s rejection
of debt sharing to fight Europe’s deepening
financial crisis. Along with Finland and the Netherlands, Germany wants
official loans of as much as 100 billion euros ($125 billion) to Spain to be
repaid first in the event of a default, putting bondholders at a disadvantage,
said two European officials. Finance ministers from the three AAA rated
countries stood their ground last week, said the officials who asked not to be
named because the talks were private. The decision next goes to Merkel and
fellow government leaders who have been forced to renounce previous attempts to
put taxpayers ahead of investors in structuring bailouts.
Bank bailout to spark firesale of corporate Spain - (www.reuters.com) The European bailout for Spain's banks will push them to sell an empire
of stakes in the nation's top companies, ending a cozy culture of
corporate-banking links and prompting a wider shake-up in ownership of the
company landscape. Spain formally
requested euro zone rescue loans to recapitalize debt-laden former savings
banks on Monday, but those who receive funds will be subject to European Union
state-aid rules that include selling equity assets. With the price of such
assets languishing as the euro zone's financial crisis drags on, that will
involve the likely fire sale of big chunks of Spain's corporate titans,
including telecoms leader Telefonica, oil major Repsol and power firm
Iberdrola.
No comments:
Post a Comment