Brazil
politicians in huge ‘oil kickback’ probe - (www.bbc.com) Brazil's
chief prosecutor has asked the Supreme Court to investigate 54 people,
including politicians, for alleged involvement in a huge kickback scheme at the
state-run oil firm Petrobras. Investigators allege firms paid inflated prices
for Petrobras contracts and money was funnelled to the ruling Workers Party
(PT) and its allies. This has been denied by the party and President Dilma
Rousseff. The politicians' names were not released by prosecutor Rodrigo Janot.
The move takes Brazil's biggest corruption scandal, which has so far focussed
on companies, into the political sphere. The scandal has led Petrobras' shares
to drop and the company has lost about $100bn (£65bn) in value since September,
with the crisis casting a long shadow in South America's biggest country, the
BBC's Julia Carneiro reports from Rio de Janeiro. Mr Janot asked for 28
separate inquiries to be opened into the activities of politicians who
allegedly benefitted from the alleged scheme.
U.S.
Companies Are Stashing $2.1 Trillion Overseas to Avoid Taxes - (www.bloomberg.com) Eight
of the biggest U.S. technology companies added a combined $69 billion to their
stockpiled offshore profits over the past year, even as some corporations in
other industries felt pressure to bring cash back home. Microsoft Corp., Apple
Inc., Google Inc. and five other tech firms now account for more than a fifth
of the $2.10 trillion in profits that U.S. companies are holding overseas,
according to a Bloomberg News review of the securities filings of 304
corporations. The total amount held outside the U.S. by the companies was up 8
percent from the previous year, though 58 companies reported smaller
stockpiles. The money pileup, reflecting companies’ incentives to park profits
in low-tax countries, has drawn the attention of President Barack Obama and
U.S. lawmakers, who see a chance to tap the funds for spending programs and to
revamp the tax code. That effort is stalled in Washington, and there are few
signs that tech companies will bring the profits back to the U.S. until
Congress gives them an incentive or a mandate.
ECB
Glimpse of Cyprus Debt Mountain Shows Limits of Bank Cleanup - (www.bloomberg.com) There
was a time when a Cypriot on a moderate income could take a gamble on foreign
real-estate worth more than his life savings. One banking crash, 3 1/2 years of
recession and an international bailout later, 58-year-old Stelios Charalambous
is among the Mediterranean island nation’s many debtors who realize that time
has passed. “I took a 70,000-euro loan six years ago from a cooperative bank in
the days when no one asked you many questions, and I bought six plots of land
in Romania,” the Nicosia-based chiropractor said in an interview. “Now I’m
earning half what I was and no one wants to buy my Romanian land. I realized I
could afford to pay my children’s university expenses or my loan. I chose my
kids and no one can blame me.” The European Central Bank, which holds a policy
meeting in the euro area’s easternmost capital on Thursday, cares about such
cases as they add up to almost 900 billion euros ($1 trillion) of soured credit
in the region and hobble lenders’ ability to serve the economy. Yet Cyprus,
where non-performing exposures account for more than half the country’s
loan-book, also shows how politics can get in the way of a cleanup.
How
a 25-Year-Old Sparked Plunge at Lumber Liquidators - (www.bloomberg.com) Lumber
Liquidators Holdings Inc.’s stock plunge over the past week, fueled by
allegations of excessive formaldehyde in its flooring, can be traced back to a
blog post from an obscure 25-year-old short seller. Xuhua Zhou, who had dropped
out of UCLA’s doctoral program in finance and became an individual investor,
took an interest in Lumber Liquidators about two years ago. After seeing a
surge in the company’s gross profit margin, Zhou learned that it sourced some
products from China. That raised his suspicions that safety might have been
skirted in pursuit of lower costs, he said in an interview. Zhou, who was born
and raised in China, already had experience researching suppliers in the
country, so he began investigating. His digging ultimately led to lawsuits, a
“60 Minutes” report and accolades from the well-known short seller Whitney
Tilson, who also bet against Lumber Liquidators.
The
moment when an imploding Virginia college knew it was in trouble - (www.businessinsider.com) Sweet
Briar College abruptly announced Tuesday that the school would close after
the spring 2015 semester,
surprising students and faculty at the women's liberal arts college in
Virginia. However, Sweet Briar had been in trouble for some time. Like most
colleges, it was seriously affected by the economic recession in 2008, as
potential students were unable to pay tuition. As Scott Jaschik at Inside Higher Ed reported in November 2009, many colleges chose to raise the amount of
financial aid they awarded to keep their enrollment numbers steady. Jaschik
highlights Sweet Briar as a college that kept its financial aid at the same
level — and suffered the consequences. In the fall 2009 semester, Jaschik
reported, Sweet Briar ended up enrolling 605 students, rather than the 650 it
had anticipated. While that may not seem like a large number, 45 fewer students
on a campus of only a few hundred can have a major financial impact on the
college. That was when the school probably knew it was in trouble.
Global stocks pull back further from record highs - (www.reuters.com)
Euro Slides Toward Lowest Since 2003 as Data Falters Before QE - (www.bloomberg.com)
Rajan Cuts India Rates After Modi Agrees to Inflation Target - (www.bloomberg.com)
In a Zero-Rate World, Brazil’s 12% Finds Few Buyers: Currencies - (www.bloomberg.com)
Petrobras CEO Lost Job Over a $30 Billion Disagreement - (www.bloomberg.com)
Fed Sheds Light on Turbulent ’09 With Publication of Transcripts - (www.bloomberg.com)
The Price of Oil Is About to Blow a Hole in Corporate Accounting - (www.bloomberg.com)
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