Gangster
Bankers: Too Big to Jail - Matt Taibbi - (www.rollingstones.com) - That
nobody from the bank went to jail or paid a dollar in individual fines is nothing
new in this era of financial crisis. What is different about this settlement is
that the Justice Department, for the first time, admitted why it decided to go
soft on this particular kind of criminal. It was worried that anything more
than a wrist slap for HSBC might undermine the world economy. "Had the
U.S. authorities decided to press criminal charges," said Assistant
Attorney General Lanny Breuer at a press conference to announce the settlement,
"HSBC would almost certainly have lost its banking license in the U.S.,
the future of the institution would have been under threat and the entire
banking system would have been destabilized.
Six
reasons the White House's Obamacare defense stinks - (www.washingtonpost.com) Obamacare
was sold as a means of promoting job mobility, delinking insurance from work.
Now the White House says it is delinking workers from work... All this leads me
to believe that the White House, as it has done with each rotten bit of news
and instance of Obamacare's unworkability, is saying whatever it needs just to
get through a few news cycles. Because it will not admit any design flaws in
the fundamental structure of the bill, it must resort to silly and
self-contradictory talking points -- or simply misrepresent facts, as the
president did when he first claimed you could keep your insurance plan and
later denied he said you could keep your insurance plan.
Emerging
markets risk repeating eurozone blunder of synchronised tightening - (www.telegraph.co.uk) Where have seen this screenplay before? A string
of countries tighten policy at the same time – some drastically – in order to
prevent capital flight and show investors how tough they can be. Turkey, South
Africa, and India all raised rates last week. Brazil and Indonesia did so
before. Chile, Peru, Hungary, and others need to loosen but dare not do so.
Russia is spending $2bn a week in FX reserves propping up the rouble,
automatically tightening its internal credit conditions in the process. The
tougher they are, the more praise they win from emerging market analysts. This
from Bartosz Pawlowski from BNP Paribas: Much of the media (and not only on the
financial pages) seems to be vying to produce the most bearish story on
emerging markets. Arguments against owning anything in emerging markets are
being thrown around carelessly and hardly anyone is reporting the other side of
the story." We think that policy responses in countries such as Turkey,
South Africa, India and even Brazil should be sufficient to show that central
banks ‘mean business’ and that if there is a need to do more, they will
deliver.
Puerto
Rico eyes new vehicle to help sell bonds -sources - (www.reuters.com) Puerto
Rico is teeing up sizeable debt deals that may include securities from an
untested borrowing agency, financial industry sources said, a move that could
take on new urgency after Standard & Poor's cut the island's credit rating
to junk. The deals, which may total as much as an estimated $2 billion, are
seen by analysts and many investors as vital to ensuring the big borrower has
adequate financial liquidity to pay its bills and debts. Government officials,
courting potential investors wary of possible financial engineering, aim to
position the newly created Municipal Financing Corp as a distinct entity among
the commonwealth's stable of municipal bond issuers, even though it will tap
sales-tax revenues as does the island's mainstay, COFINA.
GPIF’s
$709 Billion Bonds a Lost Opportunity, Utsumi Says - (www.bloomberg.com) Japan’s government pension fund is in “extreme
danger” from investing mostly in local bonds with yields depressed by
central-bank buying, said Makoto Utsumi, who helped shape the world’s largest
retirement savings pool. Yields are abnormally low due to the Bank of Japan’s
asset purchase program, said Utsumi, a member of an advisory panel on the 2006
establishment of the Government Pension Investment Fund who is now president of
debt-rating firm Japan Credit Rating Agency Ltd. GPIF, which held 58 percent of
its 124 trillion yen ($1.2 trillion) portfolio in domestic bonds as of Sept.
30, will lose out on the chance for better returns by keeping them until
redemption, he said.
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