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Treasury to tap pensions to help fund government - (www.washingtonpost.com) The Obama administration will begin to tap federal retiree programs to help fund operations after the government lost its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt. Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With that limit reached Monday, Geithner isundertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills. Geithner, who has already suspended a program that helps state and local government manage their finances, will begin to borrow from retirement funds for federal workers. The measure won’t have an impact on retirees because the Treasury is legally required to reimburse the program.
US car loan providers move into subprime - (www.ft.com) Obviously banks and lenders have not learned much in past 3 years :-)
North American car loan providers have stepped up sharply their exposure to risky subprime buyers as economic conditions improve and lenders seek better profit margins. According to CNW, an Oregon-based market research firm, the credit score of new-car buyers reached a five-year low in early May. Buyers with scores below 670 on the widely used Fico scale – which ranges from 300 to 850 – made up 14.5 per cent of the total. Jim Landy, chief executive of California-based CarFinance Capital, a recent entrant in subprime car loans, said: “This market has been under-served and there’s growing demand.” CarFinance, backed by Perella Weinberg’s asset-based investment vehicle, expects that used vehicles will make up about 80 per cent of its business. “There is a lot of interest in the sector because the fundamentals are so strong and the market is so large”, Mr Landy added.
Money Troubles Take Personal Toll in Greece - (www.nytimes.com) His face contorted with anguish, Anargyros D. recounted how he had lost everything in the aftermath of the Greek economic collapse — the food-processing factory founded by his father 30 years ago, his house, his car, his Rolex, his pride and now, he said, his will to live. “Many times I have thought of taking my father’s car and driving it into a wall,” he said, declining to give his last name because he was reluctant to draw attention to himself under these circumstances. Hunched over and shaking, he sat last week in the spartan office of Klimaka, a social services organization here that provides help to the swelling numbers of homeless and depressed Greek professionals who have lost their jobs and their dignity. “We were the people in Greece who helped others,” he said. “Now we are asking for help.”
Arrest of IMF chief raises questions about organization‘s leadership amid European debt crisis - (www.washingtonpost.com) The sexual assault charges against Dominique Strauss-Kahn, the head of the International Monetary Fund, have cast uncertainty over global efforts to prevent Europe’s debt crisis from spinning out of control and raise questions about the future of one of the world’s most powerful financial institutions. At the Washington-based IMF, which makes emergency loans to struggling economies, Strauss-Kahn has been a muscular advocate for aiding Greece, Ireland and Portugal as they have fought to avoid insolvency. A default by a developed European economy would shock the global financial markets and endanger the nascent economic recovery in the United States. The IMF on Sunday named Strauss-Kahn’s second-in-command, former banker John Lipsky, as his replacement.
Home Builder Sentiment Stagnates in May - (www.cnbc.com) U.S. homebuilder sentiment was unchanged at low levels in May as on-going foreclosures and tight credit kept buyers reluctant to get into the market, the National Association of Home Builders said Monday. The NAHB/Wells Fargo Housing Market index held at 16, the group said in a statement. Economists polled by Reuters had expected the index to rise to 17. Readings below 50 mean more builders view market conditions as poor than favorable. The index has not been above 50 since April 2006. High gasoline prices further exacerbated consumers' anxiety, NAHB said. "Builder confidence has hardly budged over the past six months as persistent concerns regarding competition from distressed property sales, lack of production credit, inaccurate appraisals, and proposals to reduce government support of housing have continued to cloud the outlook," NAHB chairman Bob Nielsen said in a statement.
OTHER STORIES:
Greece to Plead for Aid in Talks Clouded by Strauss-Kahn Arrest - (www.bloomberg.com)
India Inflation Climbs More Than Estimated - (www.bloomberg.com)
Euro Crisis May Hit Eastern European Recovery - (www.bloomberg.com)
Biggest Gasoline Price Rise in Three Years in India May Fuel Inflation - (www.bloomberg.com)
Manufacturing in New York Slows More Than Estimated on Raw-Material Costs - (www.bloomberg.com)
A vocal Fed dissenter prepares to bow out - (www.washingtonpost.com)
Brown Faces Quandary Pushing Taxes as California Revenue Beats Forecasts - (www.bloomberg.com)
Second-Largest U.S. Refinery Threatened as Mississippi Floods In Louisiana - (www.bloomberg.com)
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