Venezuela
Default Seen by Harvard Economist as Arrears Grow - (www.bloomberg.com) As
Venezuela racks up billions of dollars of arrears with importers that are
fueling the worst shortages on record, one of the nation’s top economists is
questioning the government’s decision to keep servicing its foreign bonds. A
“massive default on the country’s import chain” is part of what has allowed the
nation to keep paying its foreign bonds, Ricardo Hausmann, a former Venezuelan planning minister who is
now director of the Center for International Development at Harvard University
in Cambridge, Massachusetts, said by phone from Boston. “I find the moral
choice odd. Normally governments declare that they have an inability to pay way
before this point.”
Treasury
to Decide in ‘Near Future’ on Inversions: Lew - (www.bloomberg.com) The
Treasury Department will decide in the “very near future” what actions it can
take to deter U.S. companies from cutting tax bills by moving their addresses
to other countries, Treasury Secretary Jacob J. Lew said today. In a speech in Washington, Lew again urged Congress to revamp the U.S.
tax code and pass a retroactive law to curb the deals known as inversions. With
Congress deadlocked, the Treasury “is completing an evaluation of what we can
do to make these deals less economically appealing, and we plan to make a
decision in the very near future,” Lew said during a speech at the Urban
Institute in
Washington. “Any action we take will have a strong legal and policy basis, but
will not be a substitute for meaningful legislation - - it can only affect part
of the economics,” Lew said.
Schumer
Anti-Inversion Tax Plan Could Reach Back to 1994 - (www.bloomberg.com) A
top Senate Democrat’s proposal to limit future deductions for companies that
moved tax addresses out of the U.S. as many as 20 years ago would penalize
dozens of so-called inversion deals. The proposal by Charles Schumer of New York, the No. 3 leader in the
Senate’s Democratic majority, would reduce the amount of deductible interest
for inverted companies to 25 percent of U.S. taxable income from 50 percent,
according to a draft obtained by Bloomberg News. President Barack Obama has included a similar provision in his
annual budgets, and this is the first time the language made it into a
legislative proposal, Robert Willens, a New York-based independent consultant on
corporate taxes, said by phone yesterday.
CLO
surge prompts regulatory concerns - (www.ft.com) Sales
of bonds backed by riskier US corporate loans have surged to their highest
level in seven years, helping to fuel a leveraged lending boom that is
concerning regulators. So-called collateralised loan obligations, or CLOs, have
staged a striking recovery in the years since 2008, when securitised bundles of
subprime mortgages were blamed for inflating the housing bubble and
exacerbating the ensuing financial crisis. Bonds backed by home mortgages not
guaranteed by the US government’s housing financiers have since largely disappeared, but sales of CLOs comprised of leveraged
loans made to low-rated companies are poised to overtake levels last seen in
the 2006-2007 credit boom as investors look for higher-yielding assets and
companies take advantage of low borrowing costs. Some analysts predict this
year’s issuance volume could eclipse the record $97bn worth of deals sold at the height
of the credit bubble back in 2006. On Friday, analysts at JPMorgan Chase
increased their forecast for full-year sales from $90bn-$100bn to
$105bn-$115bn.
Scottish
Independence Looms as Iceberg Moves Toward U.K. - (www.bloomberg.com) Scottish
independence increasingly looks like an iceberg that could sink Prime Minister David
Cameron’s
government and the opposition Labour Party. And like the passengers on the Titanic, they
never saw it coming. Yesterday’s YouGov Plc (YOU)
poll putting the Yes vote on 51 percent sparked a fresh effort from supporters
of the union to urge Scots to come back from the brink. About 100 Labour
lawmakers will travel to Scotlandthis week to campaign for a No vote, while
Conservative Chancellor of the Exchequer George
Osborne offered
more powers over taxes and spending to the Scottish Parliament -- if voters opt
to stay part of the U.K.
Fed's Powell says alternative to Libor needed
as soon as practical - (www.cnbc.com)
New Jersey Reduced One Level to A by Fitch on Budget Deficit - (www.bloomberg.com)
New Jersey Reduced One Level to A by Fitch on Budget Deficit - (www.bloomberg.com)
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