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STORIES:
Dutch bank rescue shows Europe's problems continue - (money.cnn.com) Nationalization of a Dutch
bank Friday provided a stark reminder that Europe is still struggling to shake
off the legacy of the financial crisis and find a way to let banks fail without
loading up governments with debt. The Dutch government was forced to rescue SNS
REALL to protect savers' deposits after the banking and insurance group racked
up huge losses on real estate lending. Attempts to find a private buyer or
investor failed. "I therefore had to use the instrument of last resort,
which is nationalization," said Finance Minister Jeroen Dijsselbloem, in a
statement. "Nationalization would safeguard financial stability and
prevent serious damage to the economy."
Yale Suing Former Students Shows Crisis in Loans to Poor -
(www.bloomberg.com) The government answer to
people defaulting on their Perkins loans?? Increase the Perkins loan pot from
$1B to 8.5B and have government back the loans instead of the universities… ;-)
Needy
U.S. borrowers are defaulting on almost $1 billion in federal student loans
earmarked for the poor, leaving schools such as Yale
University and the University of Pennsylvania with little
choice except to sue their graduates. The record defaults on federal Perkins
loans may jeopardize the prospects of current students since they are part of a
revolving fund that colleges give to students who show extraordinary financial
hardship. Yale, Penn and George
Washington University have all sued former students over
nonpayment, court records show. While no one tracks the number of lawsuits,
students defaulted on $964 million in Perkins loans in the year ended June
2011, 20 percent more than five years earlier, government data show. Unlike
most student loans -- distributed and collected by the federal government --
Perkins loans are administered by colleges, which use repayment money to lend to
other poor students.
Obama to propose short-term package to put off spending cuts
- (www.reuters.com) The answer, as always, is to
kick the can down the road a little bit further!!!
President
Barack Obama will propose on Tuesday that Congress pass a small package of
spending cuts and tax reforms to delay larger, automatic cuts from going into
effect and give Washington more time to agree on a broader budget deal. Republican
House of Representatives Speaker John Boehner largely rejected Obama's proposal
in advance. Huge cuts to defense and domestic programs are slated to go into
effect in roughly three weeks, a threat that has caused uncertainty and could
hurt economic growth. Obama welcomed efforts in the House and the Senate to
come up with a budget that would address the U.S. fiscal challenges, but time
was short to get that done, a White House official said.
Chinese Firms Shrug at Rising Debt - (online.wsj.com) Chen Qiang runs a Chinese
shipbuilding company that expects to post a net loss for 2012 and whose $4.5
billion in debt is six times what it was three years ago. In the first half of
last year it received only two new orders. Mr. Chen is unfazed. The chief
executive of China Rongsheng Heavy Industries Group Holdings Ltd.
plans to maintain staffing levels and even start hiring globally as part of
efforts to win orders for ships used in offshore energy drilling—a new business
that he says could generate half of the company's new ship orders within three
to five years. As for its heavy debt load, Mr. Chen is confident the company's
state-run lenders are satisfied with the firm's health. "The government
supports us because they see a bright future," he explains.
McGraw-Hill, S&P Sued by U.S. Over Mortgage-Bond Ratings
- (www.bloomberg.com) A U.S. Justice Department
lawsuit against McGraw-Hill Cos. (MHP) and
its Standard & Poor’s unit seeks to punish conduct central to the worst
financial crisis since the Great Depression, Attorney General Eric Holder said.
The “egregious” conduct “goes to the very heart of the recent financial crisis,”
Holder said today at a news conference in Washington.
The complaint “is an important step forward in our ongoing efforts to
investigate and punish the conduct that is believed to have contributed to the
worst economic crisis in recent history.” The U.S. Justice Department filed a
civil complaint yesterday in Los Angeles accusing McGraw-Hill and S&P of
three types of fraud, the first federal case against a ratings company for
grades related to the credit crisis. Attorneys general from six states and the
District of Columbia joined Holder today and additional states were expected to
file also, he said.
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