One
Way Greece Can Keep Its Banks Alive - (www.bloomberg.com) An outflow of deposits from Greek banks will
put pressure on the government to limit how much money people can withdraw or
transfer outside the country as European Union nations lose patience with
providing a lifeline. Imposing capital controls, as Cyprus did two years ago
when its banks faced a crisis, would buy time for Prime Minister Alexis
Tsipras’s government to negotiate debt relief, according to economists
including Daniel Gros, director of the Centre for European Policy Studies in
Brussels. “Capital controls may be the only option to stop the bleeding in the
banking system,” Gros said in an interview. The European Central Bank told
Greece Wednesday that its banks can no longer use their nation’s government bonds as
collateral to access direct ECB funding. While the Frankfurt-based central bank
said Greek banks are able to borrow indirectly through their own central bank
for now, talks between Greece and euro-area countries could drag on for months.
Petrobras,
$262 Billion Poorer, Exposes Busted Brazil Dream - (www.bloomberg.com) When Brazil emerged from the global financial
crisis as one of the world’s great rising powers, Petrobras was the symbol of
that growing economic might. The state-run oil giant was embarking on a $220
billion investment plan to develop the largest offshore crude discovery in the
Western hemisphere since 1976 and was, in the words of then-President Luiz
Inacio Lula da Silva, the face of “the new Brazil.” Today the company
epitomizes everything that is wrong with a Brazilian economy that has been
sputtering for the better part of four years: It’s mired in a corruption
scandal that cost the CEO her job this week; it has failed to meet growth
targets year after year; and it’s saddling investors with spectacular losses.
Once worth $310 billion at its peak in 2008, a valuation that made it the
world’s fifth-largest company, Petroleo Brasileiro SA is today worth just $48
billion. While Brazil’s decline on the international stage has been playing out
since the commodities-driven economic boom first began to fizzle in 2011, the
corruption case at Petrobras deepens the growing sense of crisis in the South
American country.
Strong
dollar hurting South Fla. luxury housing - (www.cnbc.com) On
Florida's tony Fisher Island, bulldozers are moving again. For seven years,
that was not the case, as the housing crash hit even the highest-end housing
markets. Now, two new luxury condominium towers, Palazzo del Sol, are going in.
The first just topped off, and its penthouse is under contract for $35 million to
a Russian buyer. "On the Russian side, they buy the trophy
properties," said Dora Puig, sales director at Palazzo del Sol. "A
lot of them are already living in London or the south of France, and they
already have their money out of their country. We're getting a lot of wire
transfers from Europe." But just across the bay in Miami, where luxury condos sell for half the price
of Fisher Island, it is a very different story.
US probes Moody's over
mortgage ratings: Report - (www.cnbc.com) Moody's
Investors Service is
under investigation by the U.S. Justice Department for its actions in advance
of the 2008 financial crisis, the Wall Street Journal reported on Sunday, with
regulators probing why it issued favorable ratings to mortgage deals that
ultimately went bust. Citing people familiar with the investigation, The
Journal said DoJ officials have quietly met with numerous former executives of
Moody's to discuss the agency's grading of key securities before the crisis.
The investigation is in its early stages, and may not yield a lawsuit, the
newspaper said, citing unnamed sources. Still, the DoJ has already targeted
Standard & Poor's Ratings, as well as major banks, for their role in the
crisis. According to reports, Justice officials are close to a settlement with S&P.
Bulk
Shipping Bankruptices Begin As Baltic Dry Collapse Continues - (www.zerohedge.com) With
one of the world’s leading dry bulk shipping companies, Copenhagen-based D/S
Norden, having made huge losses for the last 2 years and expected to report
dramatic losses in 2014 also, it is hardly surprising that the smaller bulk
shipping firms are struggling as The Baltic Dry Index collapses ever closer to
record all-time lows. As Reuters reports, privately-owned shipping company
Copenship has filed for bankruptcy in Copenhagen after losses in the dry bulk
market, with the CEO exclaiming, "we have reached a point where there
is not more to do." We suspect, given the crash in shipping fees,
that this is the first of many...
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