Detroit's finances 'shocking,' city manager
testifies - (www.reuters.com) Detroit's emergency manager painted a picture of a
city in dire financial straits in testimony on Monday, with budgets so strained
that bumpers were falling off police cars, as he laid out the city's case of
why a municipal bankruptcy filing was the only way back to health. Kevyn Orr,
the emergency manager, sparred with a lawyer representing city retirees in the
fourth day of Detroit's landmark bankruptcy eligibility trial. Michigan
Governor Rick Snyder began to testify Monday afternoon, a rare court appearance
by a sitting governor. Ahead of Snyder's testimony, about 100 protesters, a
handful carrying signs with photos of Snyder with devil's horns, marched
outside the Theodore Levin United States Courthouse in downtown Detroit
chanting "Hey, hey, ho, ho, Rick Snyder has got to go."
Tax
Revolts Hit Hollande as Farmers, Soccer Clubs Protest - (www.bloomberg.com) French
President Francois Hollande’s taxes, among the world’s highest, have made
strange bedfellows out of the country’s soccer clubs and farmers in Brittany. Revolts
against a series of levies have erupted with protests by farmers in Brittany
against a trucking tax on Oct. 27 leaving several people injured, and soccer
clubs refusing to play a round of league matches in November to oppose a tax on
salaries of more than 1 million euros ($1.38 million). Hollande has said he
won’t budge on the millionaire tax, while Prime Minister Jean-Marc Ayrault said today he’s suspending the levy on
truckers transporting agricultural products for now. The Socialist president,
who turned to increased taxes to narrow the country’s budget gap, has backed
down on other levies in the face of objections. On Oct. 27, he gave up on a
plan to lift taxation on savings, just weeks after backing off a new levy on
corporate earnings. The U-turns have dented his credibility at a time when the
economy is recovering and a two-year-long rise in joblessness is ending.
[Reuters]
Hollande most unpopular French president on record: poll - (www.reuters.com) Francois
Hollande has become the most unpopular French president on record, an opinion
poll showed on Monday, with the Socialist leader hit by anger over tax hikes,
unemployment and rows over the government's immigration policy. Hollande's
popularity has sunk to 26 percent of those surveyed, the first time the BVA
poll has seen a French president's approval ratings fall below 30 percent. Hollande's
approval rating had started sinking quite soon after he was elected in May 2012
but this survey shows his popularity lower than that of any other president at
any time in their term in the 32 years the BVA survey has been carried out. This
underlines the task facing Hollande and his government in reviving their
popularity at a time when record high jobless numbers and wrangling over tax
levels have clouded efforts to revitalize a sluggish economy.
The poll shows a near-unanimous unpopularity among right-wing voters: 97
percent have a bad opinion of Hollande, a level never reached by any president among
supporters of other parties, even former conservative president Nicolas
Sarkozy, although he deeply antagonized many left-wing voters.
Fed
Sees Avoiding Unprecedented Losses by Holding Mortgage Bonds - (www.bloomberg.com) The
Federal Reserve can avoid unprecedented losses by never selling mortgage-backed
securities from its record $3.84 trillion balance sheet, according to updated
estimates by Fed economists in Washington. The Fed every month is purchasing
$85 billion in Treasuries and mortgage-backed securities in a program aimed at
fueling economic growth and combating unemployment, which was 7.2 percent in
September. If interest rates quickly rise, the value of its holdings may
plunge, prompting losses that may jeopardize its annual remittance to the U.S.
Treasury. The central bank turned over a profit of $88.4 billion last year. Chairman
Ben S. Bernanke in June announced the Fed was abandoning a plan to eventually
sell mortgage debt as part of efforts to reduce the balance sheet. The central
bank instead plans to let the securities mature. The Fed, which funds its
operations with interest income from its bond holdings, currently holds $1.4 trillion in
mortgage bonds.
Exclusive:
China Central banker moves to reassure investors after rate rise - (www.reuters.com) China's
central bank sought to reassure money market traders that a spike in short-term
interest rates does not signal a dramatic tightening of liquidity, sources
said, in an apparent move to avoid a repeat of a credit panic that roiled
markets in June. The People's Bank of China also
warned against "excessive leverage", or borrowing, that would leave
banks overexposed to sudden spikes in demand for cash, said the sources, who
attended a closed-door meeting between a PBOC official and traders from major
financial institutions late last week. China's short-term interest rates began
rising sharply last week, leaving banks stretching for funds even as the
central bank repeatedly declined to inject fresh cash.
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