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Argentine bonds suffer as U.S. hearing fuels default fear -
(www.reuters.com) Argentina's debt insurance costs and bond yields soared on Thursday
after a U.S. appeals court hearing intensified fears that the country is
heading for its second default in little over a decade. Argentina's lawyers
faced tough questions during Wednesday's hearing, the latest in a long-running
battle between the country and "holdout" investors who rejected two
exchanges of defaulted bonds to seek full repayment in the courts. Judge Reena
Raggi said the role of the 2nd U.S. Circuit Court of Appeals was to enforce
contracts and "not to rewrite them." Such comments fuelled
expectations for a ruling favouring the holdouts. "The consensus from all
the analyses of yesterday's hearing is that the ruling will go against Argentina and exchange
bond-holders and that is the main takeaway ... that this is headed for
technical default," said Kevin Daly, a portfolio manager at Aberdeen Asset
Management in London.
Colorado orders
Abound Solar to clean up hazardous waste at four sites -
(www.denverpost.com) Colorado health and environment officials have ordered Loveland-based
Abound Solar, the bankrupt solar-panel maker, to clean up hazardous waste at
four Front Range locations. The Abound facilities are storing thousands of
"unsellable" solar panels and thousands of gallons of toxic liquids,
according to Colorado Department of Public Health and Environment reports. "The
Department views these 2,000 pallets of solar panels as a characteristic
hazardous waste for cadmium," a report on a Denver warehouse said. In
January, the health department issued a compliance advisory, which is "an
informal enforcement action," said Joe Schieffelin, manager of the
department's solid- and hazardous-waste program. It is the first step in
requiring a cleanup.
Bankia Posts Record 21.2 Billion Euros After-Tax Loss - (www.bloomberg.com) BFA-Bankia (BKIA), whose
collapse last May helped push Spain into a European banking bailout, posted a
record after-tax loss of 21.2 billion euros ($27.6 billion) as it cleansed
soured assets from its balance sheet. The loss widened from 4.95
billion euros in 2011, Madrid- based Bankia said in a filing to regulators
today. The firm booked 26.8 billion euros in provisioning charges in 2012 after
its listed Bankia unit posted a net loss of 19 billion euros compared to a loss
of 2.98 billion euros in 2011, it said. Spain sought as much as 100 billion
euros in European bailout funds last year on concerns that mounting losses at
Bankia, crafted from a merger of seven savings banks, would pile pressure on
government finances. After the group took 18 billion euros of state aid,
Chairman Jose Ignacio Goirigolzarri is targeting earnings of 1.2 billion euros
in 2015 as he shifts soured real estate to Spain’s new bad bank, sheds about
6,000 staff and closes 39 percent of its branches.
European Recovery Path in Danger as Politics Menace Growth -
(www.bloomberg.com) The euro region’s path to recovery is facing a new challenge from
Italy’s political stalemate. Growth and job-creation in the 17-nation euro area
were showing a mixed picture before the results of Italy’s vote sparked a new
round of market turmoil on
Feb. 26. While German and euro-region business confidence rose
in February, services and manufacturing both contracted and the European
Commission last week forecast the bloc’s first-ever back-to-back recession in
2013. The election highlights the risk that Europe’s recovery turns into a slog lasting years, especially
if voters continue to stream toward anti-austerity populists such as Italy’s
Beppe Grillo, said economists from ABN Amro Bank NV to Daiwa Capital Markets. With European Central Bank interest rates already
at record lows, officials may have little choice other than to let Europe grind
its way out of the slump.
Remember
That $83 Billion Bank Subsidy? We Weren't Kidding - (www.bloomberg.com) Our calculation, in a Feb. 21 editorial, showing that the
top 10 U.S. banks receive a taxpayer subsidy worth $83 billion a year has
generated some, um, discussion. It's a big number, and the subsidy is a big
issue for the banks. How did we get there? To recap, the largest banks can
borrow money at a lower rate because creditors assume the government, on behalf
of taxpayers, will rescue them in an emergency. In a 2012 study, two economists --
Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of
the University of Mainz -- estimated the
value of that too-big-to-fail subsidy at about 0.8 percentage point. We
multiplied that number by the top 10 U.S. banks' total liabilities to come up
with $83 billion a year. Some said that we shouldn't have used total
liabilities in the calculation. A lot of those liabilities are customer
deposits, the argument went. Since these are explicitly guaranteed by the
Federal Deposit Insurance Corp., why would the subsidy apply to them?
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