Who
Gets to Pay for the Italian Banking Crisis? - (www.wolfstreet.com) Six years after Europe’s sovereign debt crisis
began, the Eurozone’s third largest economy, Italy, has finally decided to do
what just about every other country has done when facing a full-blown, almost
out-of-control banking crisis: to set up a bad bank to hide its worst debt. It
was only a matter of time: in the last six years, Europe’s economies have been
drowning in an ever-expanding vitrine of bad debt — and none more so than Italy,
where non-performing loans have soared to more than 350 billion euros, a fourfold increase since the end of 2008. At
18%, Italy’s ratio of nonperforming loans is more than four times the European
average (and Europe’s banks are in worse shape than America’s). It’s the
equivalent of 21% of GDP in a country that boasts Europe’s second highest
public debt-to-GDP ratio (130%), just behind Greece, and where the banks hold
over 70% of the country’s debt.
Goldman Sachs Calls Brazil a ‘Mess’ After
Warning on Depression - (www.bloomberg.com) Goldman
Sachs Group Inc. said the crisis in Brazil will get worse before it gets better
after the bank last year warned that Latin America’s largest economy was being
dragged into a depression. “Brazil is a mess,” Alberto Ramos, the chief Latin
America economist at Goldman Sachs, said at an event organized by the
Brazilian-American Chamber of Commerce in New York on Wednesday. “Number 10
used to mean Pele. Now it’s inflation rate, unemployment rate and the popularity
rate of the president." President Dilma Rousseff’s popularity is among the
lowest of any Brazilian president on record as her party fights corruption
allegations while inflation above 10 percent erodes purchasing power and the
sinking economy sheds jobs. The nation is headed toward the deepest recession
in a century amid the threat of further credit-rating downgrades after Brazil
was cut to junk last year.
Capital controls no longer taboo as emerging
markets battle flight - (www.ft.com) Faced with big outflows more policymakers are
suggesting unorthodox methods. When
Haruhiko Kuroda, governor of the Bank of Japan, suggested last week that China should use capital controls to
support its currency, it was as if he had broken a taboo. Asked if she
approved, Christine Lagarde, managing director of the International Monetary
Fund, sitting with Mr Kuroda on a panel at the World Economic Forum in Davos,
dodged the question — although she did agree that it would be unwise for
Beijing to burn through
its foreign exchange reserves
to support the renminbi.
Another
Town Just Got Caught Covering Up Lead Contamination In Its Water Supply - (www.zerohedge.com) Residents
in Sebring, Ohio, can commiserate with those in Flint, Michigan, considering
their water supply has also been contaminated with lead that “exceeds the
action level,” according to the state’s EPA. Like Flint, the case of
Sebring — involving some 8,100 water customers in Sebring, Beloit, Maple Ridge,
and parts of Smith Township —already has the appearance of criminal negligence
and a possible cover-up. “The first the notifications were discussed with the
EPA and my staff was [Thursday] morning [January 21],” said Village of
Sebring Manager Richard Giroux, as reported by WKYC. This statement is virtually
inexplicable, as evidenced by an Ohio EPA notice posted by WKBN,
dated the same day, that the village was in violation for its failure to
inform residents back in November of elevated lead levels in the drinking
water supply.
US energy M&A hits 5-year low as oil patch
enters 'survival mode': Report - (www.cnbc.com) Dealmaking
in America's oil patch plunged to a five-year low in the fourth quarter as
corporations preserved cash in the face of falling crude prices and tight
capital markets. The U.S. energy sector announced 42 deals worth $50 million or
more for a total of $31.6 billion in mergers and acquisitions in the closing
months of 2015, according to PricewaterhouseCoopers. For the full year, 179
deals worth a combined $196.1 billion were announced, down from 278 deals worth
$304.4 billion in 2014. The declines in energy M&A came as global
dealmaking across industries surpassed $5 trillion in 2015 for the first time
on record.
Asian Stocks Retreat After Fed as Financial Shares Lead
Declines - (www.bloomberg.com)
China's Money-Market Operations Inject Most Cash in Three Years - (www.bloomberg.com)
Fed's Nod to Global Risks Lowers Chance of March Rate Increase - (www.bloomberg.com)
China's Money-Market Operations Inject Most Cash in Three Years - (www.bloomberg.com)
Fed's Nod to Global Risks Lowers Chance of March Rate Increase - (www.bloomberg.com)
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