Brazil
takes stand over Greek bailout funds - (www.ft.com) Brazil’s representative to the International Monetary
Fund’s
executive board abstained from approving the fund’s new €1.8bn contribution to
Greece this week and issued a stinging criticism, arguing Athens may be unable
to repay its rescue loans. Paulo Nogueira Batista, who represents 11 central
and South American countries on the IMF board, said Greece’s political and
economic difficulties “confirm some of our worst fears”, and said the fund’s
own economists were making “over-optimistic” assumptions about economic growth
and the sustainability of its debt. “Never-ending economic depression and
severe unemployment levels have led to political discord,” Mr Batista wrote.
“The widespread perception that the hardship brought on by draconian adjustment
policies is not paying off in an any way has further undermined public support
for the adjustment and reform programme.” Developing countries have long been
uncomfortable about the outsized fund resources being devoted to the eurozone
crisis, with Brazil in particular voicing concern that an organisation aimed at
helping poorer countries is being used to shore up some of the world’s largest
economies.
Bankrupt
Detroit Receives Less U.S. Aid Than Colombia - (www.bloomberg.com) President Barack Obama proposed giving Colombia about $323
million in aid next year, mostly to combat drug trafficking and violence. Detroit, with an 81 percent higher homicide rate, will
get $108.2 million. As Michigan’s largest city entered a record $18 billion
municipal bankruptcy on July 18, the message from Congress and the White House
was that no new money would be forthcoming. Detroit’s implosion has rekindled
debate over how and whether a federal government that managed to provide more
than $700 billion in aid to banks and automakers in 2008 and 2009 should help
cities with unsustainable retirement debt, hollowed-out tax bases and
diminished services that endanger the public. From 1990 to 2010, the percentage
of the U.S. population that
lives in urban areas grew to 81 percent from 75 percent, according to Census
Bureau figures.
Company pensions in peril as shortfalls hit
record - (www.cnbc.com) Young
workers may want to start counting on something other than company pensions to
fund their retirements. It turns out that the plans of S&P 500 companies
are underfunded to the tune of $451.7 billion, a number that has grown some 27
percent in just the last year alone, according to data released Wednesday by
S&P Dow Jones Indices. While firms have plenty of cash to cover older
workers currently on the payroll or in pension plans, that may not be the same
once the younger generation gets ready to stop working. "The good news for
current retirees is that most S&P 500 big-cap issues have enough cash and
resources available to cover the expense," Howard Silverblatt, senior
index analyst at S&P Dow Jones Indices said in a report. "The bad news
is for our future retirees, whose benefits have been reduced or cut and will
need to find a way to supplement, or postpone, their retirement." Pension
underfunding has been a persistent problem for corporate America for years.
Analysis:
France asks Hollande: recovery - what recovery? - (www.reuters.com)
Facing TV cameras on the sun-dappled lawn of
the Elysee Palace earlier this month, Francois Hollande berated the French for
their notorious pessimism and told them a long-awaited economic recovery had
already arrived. It was part of the president's unashamedly upbeat drive to
give what he calls a "jolt of confidence" to Europe's second largest
economy: things will start looking better if only you believe they are. Yet for
the ordinary person in the street right up to the boardrooms of France's
biggest companies, the outlook still looks a lot less comforting than it does
from the manicured gardens of the Elysee. "There's less and less work and
more and more people fighting for it," said Nicolas, 42, self-employed for
the past month after he had to shut down the kitchen installation company he
launched 13 years ago. "Things are not getting better, on the contrary,
the crisis is there to stay," he said as he took a break from work at a
fast-food venue in central Paris.
China
Stocks World’s Worst Losing $748 Billion on Slump - (www.bloomberg.com) Four
years after China’s growth helped
lead the global economy out of a recession and won the admiration of luminaries
from billionaire George Soros to Nobel laureate Joseph Stiglitz, the
nation’s stock market has lost more money for investors than any other in the
world. The Shanghai Composite Index (SHCOMP), which doubled in 10 months through August
2009 as the government poured $652 billion of stimulus into building roads,
railways and housing, has tumbled 43 percent from its high, destroying $748
billion in market value. Only Greece’s ASE Index (ASE) has
fallen more in percentage terms. The Standard & Poor’s 500 Index, the
benchmark gauge of American equity, erased all of the losses from the worst
recession since the Great Depression and has gained 68 percent since the China
peak, reaching a record this month.
Germany’s Retail Sales Unexpectedly Declined in June - (www.bloomberg.com)
German Unemployment Declined in July Amid Recovery - (www.bloomberg.com)
German Unemployment Declined in July Amid Recovery - (www.bloomberg.com)
JPMorgan
Accused by Siena Prosecutors in Monte Paschi Probe - (www.bloomberg.com)
Investors on edge as central bank decisions, data loom - (www.reuters.com)
Investors on edge as central bank decisions, data loom - (www.reuters.com)
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