Greece Seen Needing Third Bailout as Bonds Insufficient - (www.bloomberg.com) Greece’s return to bond
markets after a four-year exile hasn’t convinced economists it can avoid a
third bailout. Six out of 10 economists in a Bloomberg News survey said Greece
will need to top up the 240 billion euros ($325 billion) of loans received from
Europe and the International Monetary Fund since 2010, when it lost access to
bond markets. The IMF forecasts Greece will have a 12.6 billion-euro financing
gap next year. “Greece’s ability to generate sufficient funds to cover that is
not sufficient,” said Gianluca Ziglio, executive director of fixed-income
research at Sunrise Brokers LLP in London, referring to the financing
shortfall. “Eventually the European partners will have to come up with
something to basically bridge the funding needs that Greece has from now to the
time in which it can establish a regular and sizable market access.”
The Fed in Danger - (www.nysun.com) It would surprise us if Chairman Janet Yellen of the
Federal Reserve were not already huddling with lawyers about the danger ahead.
That’s our take-away from her testimony this week with the oversight committees
in the House and Senate. We don’t mean to suggest that Mrs. Yellen is in peril
for any personal wrongdoing. We do, though, sense a whiff of danger for the Fed
itself. The danger stems from a growing sense in Congress that the Fed has,
with its program of quantitative easing and ultra-low interest rates,
lengthened the Great Recession. The House is now considering legislation to
require the Fed to establish and follow certain rules. The bill, proposed by
Congressmen Scott Garrett and William Huizenga, is called the Federal Reserve Accountability and
Transparency Act of 2014.
Another Billion-Dollar US Company Just Moved Across The
Pond - (www.businessinsider.com) There has been another tax inversion. Earlier this
morning, AbbVie, which is based in Illinois, announced a deal to acquire
Ireland-based Shire in a $53 billion deal that will
allow the drugmaker to move its tax base to Jersey, an island in the English
Channel. A "tax inversion" is a deal in which a company, say one
based in the U.S., acquires another based in Ireland and moves its tax base to
pay a lower corporate tax rate. U.S. lawmakers
don't like this, because they no longer get a company's tax revenue. In
2013, AbbVie's income tax expense was $1.2 billion. The AbbVie-Shire deal
is the latest in a series of moves by companies in the pharmaceutical industry
to shift their corporate domiciles to enjoy more favorable tax treatments. Earlier
this week, Mylan announced a deal to acquire
Abbott Laboratories' non-U.S. developed generic drugs business in a $5.3
billion all-stock deal. The deal involves the creation of a new public company that will be
domiciled in the Netherlands, and Mylan said it expects the new company's tax
rate to fall into the high-teens within its first couple years.
China Bailouts Questions as Second Company Faces
Default - (www.bloomberg.com) China’s corporate bond
market is facing its second default after a builder said it may fail to make a
payment next week, fueling speculation the government is stepping back from its
practice of bailing out borrowers. The average yield on one-year interbank notes
rated AAA jumped 10 basis points, the most in eight months, to 4.88 percent yesterday
after Huatong Road & Bridge Group Co. said it may miss payment on a 400
million yuan ($64.4 million) note due July 23. One-year swaps have jumped 38
basis points this week, the biggest increase in more than a year, to 4.11
percent as of 12:24 p.m. in Shanghai. Shanghai Chaori Solar Energy Science
& Technology Co. (002506) marked China’s first onshore corporate bond
default in March when it missed a coupon payment. Huatong Road would be the
first to fail to pay both interest and principal, and would also be the first
default in the interbank note market, the nation’s biggest bond bourse.
Questions
Surround NBC's Removal Of Ayman Mohyeldin From Gaza - (www.huffingtonpost.com) When
Israel invaded Gaza in early 2009, Ayman Mohyeldin was one of the only journalists present to bear witness. He covered Israeli air strikes on Gaza in late 2012, and
on Wednesday he movingly reported on an attack that killed four Palestinian children playing on a
beach. But Mohyeldin, one of the most experienced reporters when it comes to
Gaza, was not there Thursday as Israel launched a ground invasion aimed at
rooting out Hamas. He didn’t report on the conflict from another city in the
region, such as Jerusalem or Cairo. And Moyheldin didn't surface on social
media, where he's built a large following and regularly provides on-the-ground
tweets, photos and videos. NBC News' decision to pull Mohyeldin from Gaza has angered and baffled fellow journalists, inside
and outside the network, as well as fans of his reporting worldwide. The
network declined to comment on why he is no longer reporting from Gaza. The
Intercept's Glenn Greenwald reported Thursday that NBC executives said privately
that the move was motivated by "security concerns" as Israel prepared
a ground invasion. A source, who is not authorized to speak publicly about the
situation, confirmed to The Huffington Post that executives stressed security
as the reason behind the decision. But just as Moyheldin was pulled out, NBC
sent Richard Engel, the network's chief foreign correspondent, into Gaza.
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