rescue

Video: Kenny Says Ireland’s Corporate Tax Rate to Remain Intact

by on March 17, 2011

March 17 (Bloomberg) — Irish Prime Minister Enda Kenny talks with Bloomberg’s Margaret Brennan about the country’s corporate tax rate and his desire to win changes to the rescue package for the nation’s banks by the European Union and the International Monetary Fund. They spoke in Washington yesterday. (This is an excerpt of the full interview. Source: Bloomberg)

Here is the original post:
Video: Kenny Says Ireland’s Corporate Tax Rate to Remain Intact

Euro Faces Pressure as Irish Junior Party Balks at Rescue

by on November 23, 2010

Euro Faces Pressure as Irish Junior Party Balks at Rescue

View original post here:
Euro Faces Pressure as Irish Junior Party Balks at Rescue

Inder Sidhu: When Stars and Teams Align: A Lesson from the Miraculous Rescue of Chile’s Miners

October 14, 2010

“Chi-Chi-Chi, Le-Le-Le. Los mineros de Chile!” If these words don’t make your heart sing or your eyes water, what possibly will? More than two months in the making, the rescue of the 33 miners trapped in Chile is one of those rare moments that the entire world can enjoy simultaneously. It’s especially uplifting as the global recession drags on, and American elections devolve into mud-slinging. Thanks to achievements in Chile, there’s reason to sing. From the images of loved ones tearfully reuniting at Camp Hope to the sight of a grateful President embracing the rescuers, the saga in San Jose is an inspiration for all. It’s also a powerful lesson about the value of individual achievement and teamwork. As most professionals know, superstars and teams do not always mix easily. But when they do so successfully, they can create enough force to move a mountain–or at least tunnel through it, as in Chile. Give credit to the organizers behind the unprecedented rescue. Faced with a challenge of monumental proportions, they had the foresight to recruit individual superstars with specialized skills, and develop capable teams that could carry out an array of critical tasks. By doing both , organizers accomplished what few thought possible: They kept alive nearly three dozen men trapped 2,100 feet underground for 69 days. And they did it in one of the most remote places on earth. Remarkable in every way. Take the escape shaft. To rescue the miners, officials needed to bore directly into the chamber where the men were trapped. That meant drilling a tunnel through 2,000 feet of shifting rock at an 80-degree angle to an exact spot. In the mining world, there aren’t many people with the confidence and skill required to take on this task, especially with so many lives at stake. In need of a superstar like no other, Chilean mining officials put out a call to American Jeff Hart. They located him in Afghanistan, where he was drilling wells for American troops. Hart flew to Chile and immediately got to work. While two other drillers tried to reach the miners through different routes, Hart’s “Plan B” was the only one to break through. Though he later downplayed his accomplishment, TV commentators and mine officials were effusive with their praise. After reaching the miners on Saturday, the 40-year old father of two from Denver became a national hero. So did other superstars, including the doctors who provided medical and psychological advice, and the NASA engineer who devised the now-familiar “Fenix” rescue capsule. Of all the superstars who contributed to the rescue, perhaps none was more important than Luis Alberto Iribarren. A 54-year old Chilean shift supervisor, he was the last miner to be rescued. While underground, he took charge of the workers and helped improve morale and safety. He rationed food and provided a map of the chamber for rescuers above. During the darkest days of the ordeal, when escape seemed uncertain, he corralled his colleagues to exercise, eat and maintain their hygiene. He also encouraged them to sing with gusto, inspiring teams of construction crews and logistical experts above ground. The importance of teamwork both above and below the ground cannot be overstated. Take Hart’s contributions. Though he was the lead driller, he was supported by a cast of hundreds. South African construction giant Murray & Roberts, for example, provided a drill and six engineers. Other nations sent geologists and construction experts to aid in the cause. Then there were the Chileans themselves. They quickly organized into teams that provided everything from medial support to communications assistance to the 2,000 members of the media who converged on the mountain to cover the event. In all, government and mining officials coordinated hundreds of teams of food workers, sanitation experts, transportation providers and safety officials. Below the surface, teamwork was equally impressive. Mario Sepulveda, a 40-year old electrician, managed food distribution. Victor Segovia worked as underground reporter, chronicling every event that happened, while Jonny Barrios, the son of a diabetic mother, served as the miners’ unofficial medical expert. By leveraging the contributions of individual superstars and well-coordinated teams, Chile pulled off a magnificent rescue that will never be forgotten. With a song in its heart and a tear in its eye, a grateful world stands in awe. Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco , and the author of Doing Both: How Cisco Captures Today’s Profits and Drives Tomorrow’s Growth . Follow Inder on Twitter at @indersidhu .

Read the full article →

Video: Blue Says Coast Guard Rescued Platform Workers in Gulf: Video

September 2, 2010

Sept. 2 (Bloomberg) — Coast Guard Chief Petty Officer Thomas Blue talks with Bloomberg’s Mark Crumpton about the rescue of workers from a platform owned by Mariner Energy Inc. in the Gulf of Mexico that exploded and caught fire. Thirteen workers were on the platform at the time of the blast and they evacuated into the water, according to the Coast Guard. (Source: Bloomberg)

Read the full article →

Bernanke, Fed Made Used Taxpayer Money To Buy Junk Bonds Without Congress Knowing

July 1, 2010

July 1 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke and then-New York Fed President Timothy Geithner told senators on April 3, 2008, that the tens of billions of dollars in “assets” the government agreed to purchase in the rescue of Bear Stearns Cos. were “investment-grade.” They didn’t share everything the Fed knew about the money. The so-called assets included collateralized debt obligations and mortgage-backed bonds with names like HG-Coll Ltd. 2007-1A that were so distressed, more than $40 million already had been reduced to less than investment-grade by the time the central bankers testified. The government also became the owner of $16 billion of credit-default swaps, and taxpayers wound up guaranteeing high-yield, high-risk junk bonds.

Read the full article →

Video: Salas Discusses Fed Secrecy on Assets Bought in Bear Aid: Video

July 1, 2010

July 1 (Bloomberg) — Bloomberg’s Caroline Salas discusses the credit quality of assets the government purchased in the rescue of Bear Stearns Cos. and the Federal Reserve’s secrecy during the financial crisis. Salas speaks with Deirdre Bolton on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

Read the full article →

Greek Debt Default Is Seen by 73% in Poll of Investors Doubtful on Trichet

June 9, 2010

By Rich Miller June 9 (Bloomberg) — Global investors have little confidence in Europe’s efforts to contain its debt crisis or in European Central Bank President Jean-Claude Trichet , with 73 percent calling a default by Greece likely. Only 23 percent say they expect the region’s almost $1 trillion rescue package to both keep the European monetary union together and prevent a debt default by a government, according to a quarterly poll of investors and analysts who are Bloomberg subscribers. More than 40 percent say Greece is likely to abandon the euro. “There is clearly a risk of a breakup of the euro,” says Geoff Marson , managing director at a Guernsey subsidiary of London-based Odey Asset Management, which oversees about $6 billion. Trichet, whose ECB supported the rescue package by buying bonds of Greece and other European governments, saw his approval rating tumble from a January Bloomberg poll. A plurality — 48 percent — give the 67-year-old central banker an unfavorable rating in the latest poll, while 41 percent view him favorably. In January, Trichet received a 60 percent approval rating, with 27 percent regarding him negatively. “Trichet has sacrificed the ECB’s independence by helping to rescue Greece,” says Cyril Boudin , a participant in the poll and a derivatives trader at Unicredit Group in London. Market Slump Stock markets worldwide have slumped and the euro has plunged as Europe has struggled to defuse its debt crisis. The Stoxx Europe 600 Index has fallen 12 percent from its 2010 high on April 15, while the euro has lost about 17 percent against the dollar since the start of the year. More than 60 percent of those surveyed say they expect the euro to fall further against the dollar over the next three months. While the European currency may be due for a “corrective bounce” in the short run, “longer term, the market has parity in its sights,” says Marson, who took part in the poll. The euro traded at $1.1973 at 5 p.m. yesterday in New York. European investors are more optimistic about the ability of their region to resolve its problems than were their counterparts elsewhere. Thirty percent of those polled in Europe say they expect the rescue package to succeed. U.S. investors are the most pessimistic, with only 14 percent expecting Europe’s efforts to work. A quarter of investors in Asia are also in that camp. Overall, 40 percent of investors worldwide say European defaults were possible even with the package, while another 35 percent see some countries dropping out of the euro zone. Lacking Fortitude Investors in all three regions agree that Greece is the most likely country to default on its debt. “The Greek government will not have the long-term fortitude to control spending,” says Robert Knox , a poll participant and chief executive officer of Park City, Utah- based broker-dealer RG Knox Co. Thirty-five percent of those surveyed say a default by Portugal was likely, while more than a quarter say the same about Spain. Outside of Europe, the country seen as most likely to miss a debt payment was Argentina, with 31 percent. “I see a lot of similarities between Spain’s situation now and emerging markets in the past 20 years,” says Alvaro Teixeira , the head of Latin American equities at Prebon Canada Ltd. in Toronto. They include “high debt, high unemployment, growing social distress,” and a currency that’s too strong for the Spanish economy. Dumping the Euro Fifteen percent of those polled say it’s likely Spain would be forced to dump the euro as its currency to help ease the pain on its economy. One in five see Portugal making that move. “This crisis could be a significant step that leads to an eventual breakup of the euro zone,” says William Aston-Reese , vice president of money-market sales at New York-based broker Tradition Asiel Securities Inc. and a poll participant. Investors in Europe are about evenly split on Trichet’s performance at the central bank. Forty-eight percent give him an unfavorable rating, while 46 percent see him in a positive light. The rest have no opinion. American investors are the most down on Trichet, with 56 percent seeing him in an unfavorable light. In Asia, 34 percent of poll participants agree with that view. In contrast, more than two-thirds of investors worldwide approve of the job being done by U.S. Federal Reserve Chairman Ben S. Bernanke . U.S. Vulnerable Still, the sovereign debt problems in Europe will hurt the U.S. economy, according to more than 85 percent of global investors surveyed. About two-thirds say the turmoil won’t be enough to send the U.S. back into recession. The quarterly Bloomberg Global Poll of investors, traders and analysts in six continents was conducted June 2-3 by Selzer & Co. , a Des Moines, Iowa-based firm. It is based on interviews with a random sample of 1,001 Bloomberg subscribers, representing decision-makers in markets, finance and economics. The poll has a margin of error of plus or minus 3.1 percentage points. To see the methodology and exact wording of the poll questions, click on the attachment tab at the top of the story. To contact the reporter on this story: Rich Miller in Washington rmiller28@bloomberg.net

Read the full article →

Greek Default Seen by Almost 75% in Poll Doubtful About Trichet

June 9, 2010

By Rich Miller June 9 (Bloomberg) — Global investors have little confidence in Europe’s efforts to contain its debt crisis or in European Central Bank President Jean-Claude Trichet , with 73 percent calling a default by Greece likely. Only 23 percent say they expect the region’s almost $1 trillion rescue package to both keep the European monetary union together and prevent a debt default by a government, according to a quarterly poll of investors and analysts who are Bloomberg subscribers. More than 40 percent say Greece is likely to abandon the euro. “There is clearly a risk of a breakup of the euro,” says Geoff Marson , managing director at a Guernsey subsidiary of London-based Odey Asset Management, which oversees about $6 billion. Trichet, whose ECB supported the rescue package by buying bonds of Greece and other European governments, saw his approval rating tumble from a January Bloomberg poll. A plurality — 48 percent — give the 67-year-old central banker an unfavorable rating in the latest poll, while 41 percent view him favorably. In January, Trichet received a 60 percent approval rating, with 27 percent regarding him negatively. “Trichet has sacrificed the ECB’s independence by helping to rescue Greece,” says Cyril Boudin , a participant in the poll and a derivatives trader at Unicredit Group in London. Market Slump Stock markets worldwide have slumped and the euro has plunged as Europe has struggled to defuse its debt crisis. The Stoxx Europe 600 Index has fallen 12 percent from its 2010 high on April 15, while the euro has lost about 17 percent against the dollar since the start of the year. More than 60 percent of those surveyed say they expect the euro to fall further against the dollar over the next three months. While the European currency may be due for a “corrective bounce” in the short run, “longer term, the market has parity in its sights,” says Marson, who took part in the poll. The euro traded at $1.1973 at 5 p.m. yesterday in New York. European investors are more optimistic about the ability of their region to resolve its problems than were their counterparts elsewhere. Thirty percent of those polled in Europe say they expect the rescue package to succeed. U.S. investors are the most pessimistic, with only 14 percent expecting Europe’s efforts to work. A quarter of investors in Asia are also in that camp. Overall, 40 percent of investors worldwide say European defaults were possible even with the package, while another 35 percent see some countries dropping out of the euro zone. Lacking Fortitude Investors in all three regions agree that Greece is the most likely country to default on its debt. “The Greek government will not have the long-term fortitude to control spending,” says Robert Knox , a poll participant and chief executive officer of Park City, Utah- based broker-dealer RG Knox Co. Thirty-five percent of those surveyed say a default by Portugal was likely, while more than a quarter say the same about Spain. Outside of Europe, the country seen as most likely to miss a debt payment was Argentina, with 31 percent. “I see a lot of similarities between Spain’s situation now and emerging markets in the past 20 years,” says Alvaro Teixeira , the head of Latin American equities at Prebon Canada Ltd. in Toronto. They include “high debt, high unemployment, growing social distress,” and a currency that’s too strong for the Spanish economy. Dumping the Euro Fifteen percent of those polled say it’s likely Spain would be forced to dump the euro as its currency to help ease the pain on its economy. One in five see Portugal making that move. “This crisis could be a significant step that leads to an eventual breakup of the euro zone,” says William Aston-Reese , vice president of money-market sales at New York-based broker Tradition Asiel Securities Inc. and a poll participant. Investors in Europe are about evenly split on Trichet’s performance at the central bank. Forty-eight percent give him an unfavorable rating, while 46 percent see him in a positive light. The rest have no opinion. American investors are the most down on Trichet, with 56 percent seeing him in an unfavorable light. In Asia, 34 percent of poll participants agree with that view. In contrast, more than two-thirds of investors worldwide approve of the job being done by U.S. Federal Reserve Chairman Ben S. Bernanke . U.S. Vulnerable Still, the sovereign debt problems in Europe will hurt the U.S. economy, according to more than 85 percent of global investors surveyed. About two-thirds say the turmoil won’t be enough to send the U.S. back into recession. The quarterly Bloomberg Global Poll of investors, traders and analysts in six continents was conducted June 2-3 by Selzer & Co. , a Des Moines, Iowa-based firm. It is based on interviews with a random sample of 1,001 Bloomberg subscribers, representing decision-makers in markets, finance and economics. The poll has a margin of error of plus or minus 3.1 percentage points. To see the methodology and exact wording of the poll questions, click on the attachment tab at the top of the story. To contact the reporter on this story: Rich Miller in Washington rmiller28@bloomberg.net

Read the full article →

European Finance Ministers Seal Rescue-Fund Package to Rein in Debt Crisis

June 7, 2010

By Jonathan Stearns and Meera Louis June 7 (Bloomberg) — European finance ministers put the finishing touches on a rescue fund being backed by 440 billion euros ($526 billion) in national guarantees, seeking to halt the spread of Greece’s debt crisis. The European Financial Stability Facility would sell bonds backed by the guarantees and use the money it raises to make loans to euro-area nations in need, the finance ministers decided today in Luxembourg. The new mechanism would sell debt for lending only after an aid request is made by a country. The ministers aim for ratings companies to assign a AAA rating to the facility, whose bonds would be eligible for European Central Bank refinancing operations. The entity will be based in Luxembourg. “We’ve sent a clear signal of stability,” Austrian Finance Minister Josef Proell told reporters at the Luxembourg meeting. “We’ve opened the rescue umbrella and I’m convinced it’s working.” The fund, being created for three years, is the main part of a 750 billion-euro aid package that European Union finance ministers hammered out a month ago to combat a sovereign debt crisis. Another 60 billion euros will come from the European Commission — the EU’s executive arm — and 250 billion euros from the International Monetary Fund. Prodded by the U.S. and Asia to stabilize markets, European governments approved the unprecedented financial backstop on May 9-10 in a bid to end speculation that the euro area might break apart because of a debt crisis that started in Greece. A 110 billion-euro loan package for Greece unveiled on May 2 after the country was cut off from markets failed to stem a surge in Portuguese and Spanish borrowing costs. Euro-Area Fund Governments abandoned the aid model for Greece, based on national loans, when crafting the euro-area fund, which is simpler because it avoids the need for domestic action on disbursement. Delays by Germany in approving its share of the rescue for Greece led to speculation that the Greek package might falter. All euro-area countries plan to be shareholders of the European Financial Stability Facility, or EFSF. The holding of each country will correspond to its share of the ECB’s capital. “National legal procedures to participate in the facility are well on track,” the euro area said in a statement on the fund’s operations. To ensure the highest credit rating for debt sold by the facility, the finance ministers approved a 120 percent guarantee of each country’s pro rata share for each bond issue, according to the statement. Cash Reserve In addition, the ministers authorized the creation, when any loans are made, of a “cash reserve to provide an additional cushion or cash buffer for the operation of the EFSF,” according to the statement. EU Economic and Monetary Affairs Commissioner Olli Rehn said last week he hopes the “sheer size” of the euro-area rescue fund, along with the extra 60 billion euros in possible support from the commission, “will help to stabilize markets” and make aid unnecessary. “No euro has been yet consumed and I hope that no euro will have to be consumed,” Rehn told a June 2 conference in Brussels. Any loans from the rescue fund would impose the kinds of budget-austerity conditions on recipients that Greece faces as part of a program for receiving quarterly aid disbursements under the May 2 accord, Rehn said. “In case any country would have to resort to this European financial stabilization mechanism, it would work in the same principles as we are now working with Greece,” Rehn said. To contact the reporters on this story: Jonathan Stearns in Luxembourg at jstearns2@bloomberg.net ; Meera Louis in Luxembourg at mlouis1@bloomberg.net .

Read the full article →

Gretchen Morgenson: Banks Bilking Taxpayers By Refusing To Buy Back Toxic Loans They Sold To Fannie And Freddie

June 5, 2010

From the earliest days of the credit crisis, the nation’s big financial institutions have been less than forthcoming about ballooning loan losses buried inside their books. To some degree this is understandable: denial is a powerful thing, after all, and writing off troubled loans during a period of severe stress is, for bankers, the equivalent of getting a root canal. As profits rebound at many of these institutions, however, artful dodging becomes more disturbing. And when disguising problems winds up harming the taxpayer — the same folks who rode to the rescue of banks with billions of dollars — the denial is downright exasperating.

Read the full article →

Gretchen Morgenson: Banks Bilking Taxpayers By Refusing To Buy Back Toxic Loans They Sold To Fannie And Freddie

June 5, 2010

From the earliest days of the credit crisis, the nation’s big financial institutions have been less than forthcoming about ballooning loan losses buried inside their books. To some degree this is understandable: denial is a powerful thing, after all, and writing off troubled loans during a period of severe stress is, for bankers, the equivalent of getting a root canal. As profits rebound at many of these institutions, however, artful dodging becomes more disturbing. And when disguising problems winds up harming the taxpayer — the same folks who rode to the rescue of banks with billions of dollars — the denial is downright exasperating.

Read the full article →

Euro’s Decline Buoys Export-Driven Rebound as Austerity Aids Europe

May 27, 2010

By Vernon Silver May 27 (Bloomberg) — “The crisis is over.” So says Emeric Challier , a money manager at Avenir Finance Investment Managers in Paris. Rather than being alarmed by the plunging euro — down 4.1 percent against the dollar in the week before the European Union’s nearly trillion-dollar bailout for debt-saddled members and 3.1 percent the week after — he cites the economic boost a weaker currency provides. “The advantage of the euro drop is it will continue to support the recovery,” says Challier, who is betting that Spanish, Portuguese and Italian government bonds will rise. German exports and Spanish and Greek vacations become cheaper for Americans and Asians, Bloomberg Markets magazine reports in its July issue. The benefit is especially significant if the euro is depressed a year or more, he says. The fiscal discipline that comes as a condition of the rescue package will also benefit European economies after the initial pain of government spending cuts and tax increases, says Christoph Kind , head of asset allocation at Frankfurt Trust, which manages about $17 billion. There are some precedents. South Korea and Indonesia flourished after the Asian currency crisis of the late 1990s ushered in budgetary restraints and financial reforms, Kind says. “Hopefully history repeats itself, and these austerity packages lead to substantial improvement here,” he says. Shares Benefit Kind is bullish on European equities, especially shares of manufacturers that will benefit from the cheaper euro. “Automakers, capital goods producers are in good shape — companies like Siemens,” he says. Siemens AG , the maker of electronics and railroad equipment based in Munich, rose 8 percent in the week after the bailout plan was completed on May 10. The shares are up 10 percent so far this year, through yesterday. Before Europe’s finance ministers hammered out the giant loan package, the region’s sovereign debt crisis had been deepening for months. Yields on Greek two-year bonds reached 18.85 percent — topping the interest rate on a Visa Gold card available in Greece. As Greek, Spanish, Portuguese and Irish borrowing costs rose, the budget deficits that triggered the crisis became more intractable, says Christopher Pryce , a director at Fitch Ratings in London who studies sovereign debt. He says the rescue, which includes funds from the International Monetary Fund and sovereign debt purchases directed by the European Central Bank, broke that cycle. Europe’s Disciplinarian German Chancellor Angela Merkel is Europe’s disciplinarian. She was reluctant to join the bailout amid resentment at home over fiscal recklessness elsewhere in Europe. The day the rescue was done, Merkel called for stricter enforcement of EU rules on deficits. Greek Prime Minister George Papandreou , Spanish Prime Minister Jose Luis Rodriguez Zapatero and other European leaders are trying to fall in line. Papandreou has announced three rounds of deficit-reduction measures so far this year — even amid violent protests against cuts to wages and pensions. His socialist government is increasing levies on fuel, alcohol and tobacco. Following the bailout, Spain announced a 5 percent cut in public sector wages. Portugal has pledged to slash wages and raise taxes to trim its budget deficit . Of course, there’s no guarantee that European leaders will keep taking their medicine. Bets Against the Euro Luca Cazzulani , senior fixed-income strategist at UniCredit SpA in Milan, Italy’s biggest bank, says investors who doubt Europe’s resolve have turned from betting against sovereign debt — now protected by the bailout — to wagering against the euro instead. Currency investors have been overwhelmingly bearish on the euro this month. Net short positions in the euro versus the dollar — the difference between bets on a decline and bets on a gain — jumped to a record 113,890 contracts on May 11, according to the U.S. Commodity Futures Trading Commission. The euro fell as low as $1.2144 on May 19, its weakest since April 2006. Euro skeptics say the forced spending cuts and tax increases across Europe’s southern tier will scuttle a recovery before it takes hold. “The fiscal austerity measures will be a big drag on growth,” says Andrew Wilkinson , senior market analyst at Interactive Brokers Group in Greenwich, Connecticut. ‘Long-Term Gain’ The attack on the euro may end later this year as more investors begin to believe in Europe’s fiscal discipline, fixed- income investor John Stopford says. “By implementing economic reform and taking some pain, there’s long-term gain,” says Stopford, co-head of fixed income at Investec Asset Management Ltd. in London, which oversees about $65 billion. “European countries are learning the right way to confront this situation,” says Fabrizio Fiorini , head of fixed income at Aletti Gestielle SGR SpA in Milan, who manages about $8 billion. “And the market will discover this is strong for European bonds, stocks and the euro. In one or two years, everyone will discover we did the right thing.” To contact the reporter on this story: Vernon Silver in Rome at vtsilver@bloomberg.net

Read the full article →

Sarkozy Threatened To Pull Out Of Euro

May 14, 2010

Share prices have dropped across Europe and the euro has slid to an 18-month low against the dollar on fears that the eurozone bailout of Greece will fail and reports that French president Nicolas Sarkozy threatened to pull his country out of the single currency altogether to force Germany to agree to the rescue plan.

Read the full article →

Record High for Gold as Sovereign Credit Risks Survive EU Rescue Effort

May 12, 2010

Record High for Gold as Sovereign Credit Risks Survive EU Rescue Effort

Read the full article →

Greece: Bailout Deal Reached To Save Country From Debt Crisis

May 2, 2010

ATHENS, Greece — Greece reached agreement with the European Union and the International Monetary Fund on rescue loans to keep Athens from defaulting on its debts, a deal that will impose harsh cuts on the county’s 11 million people for years. The first ever bailout of one of the 16 countries using the euro will require tax increases and salary and pension cuts for civil servants to cut the deficit to within EU limits by 2014, the Greek finance minister said Sunday. “We are called on today to make a basic choice. The choice is between collapse or salvation,” George Papaconstantinou said. The full amount of the three-year IMF/eurozone package will be announced in Brussels after an emergency eurozone finance ministers’ meeting, where Papaconstantinou was heading after his Athens news conference. He said the amount would be “close to” widely reported figures. French and other officials have said it would be euro120 billion ($160 billion) Papaconstantinou said savings worth euro30 billion through 2012 would be achieved through public service and pension pay cuts, higher taxes and streamlining government. Annual holiday bonuses will be capped at euro1,000 ($1,330) per year for civil servants and scrapped for those with gross monthly salaries over euro3,000 ($3,995), he said. Pensioners’ bonuses will also be capped at euro800 and canceled for those paid more than euro2,500 ($3,330). Salary cuts will not extend to the private sector, as had been widely feared. Greeks receive their annual pay in 14 salaries, receiving extra at Christmas, Easter and for their summer vacations. Taxes would also be increased, including further hikes on fuel, alcohol and tobacco. The top bracket of sales tax rises from 21 percent to 23 percent. Papaconstantinou said his country’s debt would reach 140 percent of GDP in 2013 and start falling from 2014, while economic output is set to contract by 4 percent in 2010 and by 2.6 percent in 2011 before it starts recovering slowly beginning in 2012. The new austerity measures were seen as essential for the EU and IMF to unblock the rescue package, which Athens asked for last week and which will see other eurozone countries and the IMF extend loans to Greece. Germany, which has the eurozone’s largest economy and would be the largest single contributor, had been highly reluctant to release any funds without Athens implementing more harsh spending cuts. After Papaconstantinou’s announcements, EU Commission President Jose Manuel Barroso said the new measures were “solid and credible” and that he was recommending the EU activate the rescue package. “The Commission considers that the conditions for responding positively to the request by the Greek government are met and recommends that the coordinated European mechanism for assistance to Greece be activated,” he said in a statement in Brussels. Barroso said the aid will be “decisive” in getting Greece back on track and protect the financial stability of the 16 nations using the euro currency. Papaconstantinou said the government hoped to be able to return to borrowing on the market soon, but that the plan would allow the government breathing space to implement its austerity program and put its finances in order. “We are confronted with international markets that do not give us the time to make the necessary adjustments,” he said. Greece has seen its borrowing costs skyrocket to more than four times those of Germany on the international market in recent weeks. Earlier, Prime Minister George Papandreou announced his government had reached an agreement in tough negotiations with the IMF and EU on the measures. “The avoidance of bankruptcy is the national red line,” he said in a televised speech to his Cabinet. “I want to be clear to all. I have done and will do everything so the country does not go bankrupt.” Papandreou called on Greeks to make “great sacrifices” to avoid a catastrophe, and said the country’s problematic civil service would bear the brunt. There will also be deep cuts in defense spending and hospital procurement, the prime minister said. “The alternative course would be a catastrophe and greater pain for all,” he said. Greek unions planning a general strike Wednesday against the new cuts. Violent clashes broke out Saturday during anti-government protests at May 1 Labor Day rallies. “These are the harshest, most unfair measures ever enacted. That is why our reaction will be decisive and dynamic. You can’t always make the workers pay for the results of failed policies,” Stathis Anestis, spokesman for Greece’s largest umbrella union, GSEE, told The Associated Press. Anestis indicated the union wants the EU to offer more labor protections. “We are asking all Europeans to think again: What kind of Europe do they want? What kind of society? What kind of employees?” he said. The government will submit special emergency legislation to Parliament that was agreed upon with the EU and the IMF at a negotiating session Saturday. Parliament is expected to approve the measures by Friday. “Economic reality has forced us to take very harsh decisions,” Papandreou said, adding that “This is the only way we will finance our euro300 billion debt.” Some economists believe that Greece’s adjustment will be painful, but no more so than when the country devalued its then currency, the drachma, twice in the 1980s and once in the 1990s. Platon Tinios, an economics professor at Piraeus University said the previous austerity programs demanded a lot, but that eventually leaders gave up on them for political reasons. Past experience does not make him confident that politicians will stick to their commitments, he said. ____ Associated Press writers Demetris Nellas in Athens and Raf Casert and Elena Becatoros in Brussels contributed to this report.

Read the full article →

Greece: Bailout Deal Reached To Save Country From Debt Crisis

May 2, 2010

ATHENS, Greece — Greece reached agreement with the European Union and the International Monetary Fund on rescue loans to keep Athens from defaulting on its debts, a deal that will impose harsh cuts on the county’s 11 million people for years. The first ever bailout of one of the 16 countries using the euro will require tax increases and salary and pension cuts for civil servants to cut the deficit to within EU limits by 2014, the Greek finance minister said Sunday. “We are called on today to make a basic choice. The choice is between collapse or salvation,” George Papaconstantinou said. The full amount of the three-year IMF/eurozone package will be announced in Brussels after an emergency eurozone finance ministers’ meeting, where Papaconstantinou was heading after his Athens news conference. He said the amount would be “close to” widely reported figures. French and other officials have said it would be euro120 billion ($160 billion) Papaconstantinou said savings worth euro30 billion through 2012 would be achieved through public service and pension pay cuts, higher taxes and streamlining government. Annual holiday bonuses will be capped at euro1,000 ($1,330) per year for civil servants and scrapped for those with gross monthly salaries over euro3,000 ($3,995), he said. Pensioners’ bonuses will also be capped at euro800 and canceled for those paid more than euro2,500 ($3,330). Salary cuts will not extend to the private sector, as had been widely feared. Greeks receive their annual pay in 14 salaries, receiving extra at Christmas, Easter and for their summer vacations. Taxes would also be increased, including further hikes on fuel, alcohol and tobacco. The top bracket of sales tax rises from 21 percent to 23 percent. Papaconstantinou said his country’s debt would reach 140 percent of GDP in 2013 and start falling from 2014, while economic output is set to contract by 4 percent in 2010 and by 2.6 percent in 2011 before it starts recovering slowly beginning in 2012. The new austerity measures were seen as essential for the EU and IMF to unblock the rescue package, which Athens asked for last week and which will see other eurozone countries and the IMF extend loans to Greece. Germany, which has the eurozone’s largest economy and would be the largest single contributor, had been highly reluctant to release any funds without Athens implementing more harsh spending cuts. After Papaconstantinou’s announcements, EU Commission President Jose Manuel Barroso said the new measures were “solid and credible” and that he was recommending the EU activate the rescue package. “The Commission considers that the conditions for responding positively to the request by the Greek government are met and recommends that the coordinated European mechanism for assistance to Greece be activated,” he said in a statement in Brussels. Barroso said the aid will be “decisive” in getting Greece back on track and protect the financial stability of the 16 nations using the euro currency. Papaconstantinou said the government hoped to be able to return to borrowing on the market soon, but that the plan would allow the government breathing space to implement its austerity program and put its finances in order. “We are confronted with international markets that do not give us the time to make the necessary adjustments,” he said. Greece has seen its borrowing costs skyrocket to more than four times those of Germany on the international market in recent weeks. Earlier, Prime Minister George Papandreou announced his government had reached an agreement in tough negotiations with the IMF and EU on the measures. “The avoidance of bankruptcy is the national red line,” he said in a televised speech to his Cabinet. “I want to be clear to all. I have done and will do everything so the country does not go bankrupt.” Papandreou called on Greeks to make “great sacrifices” to avoid a catastrophe, and said the country’s problematic civil service would bear the brunt. There will also be deep cuts in defense spending and hospital procurement, the prime minister said. “The alternative course would be a catastrophe and greater pain for all,” he said. Greek unions planning a general strike Wednesday against the new cuts. Violent clashes broke out Saturday during anti-government protests at May 1 Labor Day rallies. “These are the harshest, most unfair measures ever enacted. That is why our reaction will be decisive and dynamic. You can’t always make the workers pay for the results of failed policies,” Stathis Anestis, spokesman for Greece’s largest umbrella union, GSEE, told The Associated Press. Anestis indicated the union wants the EU to offer more labor protections. “We are asking all Europeans to think again: What kind of Europe do they want? What kind of society? What kind of employees?” he said. The government will submit special emergency legislation to Parliament that was agreed upon with the EU and the IMF at a negotiating session Saturday. Parliament is expected to approve the measures by Friday. “Economic reality has forced us to take very harsh decisions,” Papandreou said, adding that “This is the only way we will finance our euro300 billion debt.” Some economists believe that Greece’s adjustment will be painful, but no more so than when the country devalued its then currency, the drachma, twice in the 1980s and once in the 1990s. Platon Tinios, an economics professor at Piraeus University said the previous austerity programs demanded a lot, but that eventually leaders gave up on them for political reasons. Past experience does not make him confident that politicians will stick to their commitments, he said. ____ Associated Press writers Demetris Nellas in Athens and Raf Casert and Elena Becatoros in Brussels contributed to this report.

Read the full article →

Papandreou Slammed by Greek Unions, Opposition for Requesting Rescue Funds

April 23, 2010

By Maria Petrakis April 23 (Bloomberg) — Greek unions and opposition political parties slammed Prime Minister George Papandreou for seeking a bailout from the European Union and International Monetary Fund that will bring more austerity measures. ADEDY, the Athens-based federation representing the more than 500,000 Greek civil servants who have seen wages cut this year, said the move signaled a new and “barbaric attack,” and called a protest rally for April 27. Another demonstration has been set by the opposition Syriza party for today in Athens. “This is a premeditated crime against Greek society,” Alexis Tsipras, the head of Syriza said in an e-mailed statement. “The majority of the Greek people are being tossed helplessly in the tempest of insecurity, unemployment and poverty.” He called for a referendum on the decision to seek IMF support. Papandreou, who announced today he will trigger the rescue is under fire from voters and unions for raising taxes and cutting wages to reduce a budget deficit that is more than four times bigger than European Union rules allow. Greeks fear the EU and IMF package, crafted to stem the country’s soaring borrowing costs, will mean lower pensions and benefits, more wage cuts and produce a deeper recession. Taxes, Wages The premier won elections in October promising to raise wages of public workers and step up stimulus spending. Within weeks of coming to power, the new administration discovered they faced a 2009 budget deficit of 12.7 percent of gross domestic product, more than twice the shortfall the defeated New Democracy government had revealed. EU officials revised the deficit further to 13.6 percent of GDP yesterday. The shortfall derailed Papandreou’s spending plans and forced him to raise taxes and cut wages to try to make good on a pledge to cut the shortfall to 8.7 percent this year. Investors shunned Greek bonds leaving the government struggling to finance its debt. Papandreou’s popularity has declined, particularly among the public workers who suffered the pay cuts and are the traditional base of his socialist party. “Papandreou needs to persuade the population that Greece must take ownership of the adjustment program,” said Marco Annunziata , chief economist for UniCredit Group in London. “They are not a punishment arbitrarily inflicted by the IMF or by the markets.” Hungary Precedent In Hungary, the first European Union member to turn to the IMF, voters this month ousted the ruling Socialist party two years after they accepted an IMF bailout after the global credit crisis choked investments. Fiscal conditions attached to the $27 billion loan exacerbated the country’s recession as unemployment soared to a record, souring support for the government. A full dispersal of funds may have to wait as German Chancellor Angela Merkel tries to win a regional election in North Rhine-Westphalia next month in the face of voter opposition to any Greek bailout. Merkel said today that Greece must satisfy “very stringent conditions” if it’s to get the funds. Activating the rescue mechanism and turning over economic policy to EU and IMF oversight is “a new Odyssey for Greece,” Papandreou said. “But we know the road to Ithaca and have charted the waters,” he said, referring to the return of mythological hero Ulysses to his island home after a decade. Confidence in Papandreou’s handling of the economy dropped this month on deepening fears of new austerity measures. The share of people trusting his management of the crisis fell to 47 percent from 55 percent in February, according to a survey of 540 Greeks by Public Issue for Skai radio . Greek Harm? Ninety-one percent of those surveyed said they expect a wave of new fiscal measures from the IMF, around the same proportion as in an April 18 poll for Eleftheros Typos newspaper. The poll showed 51 percent believe the IMF will harm the country, compared with 27 percent who said it would be of benefit. ADEDY has held four 24-hour national walkouts so far this year. GSEE, the umbrella group representing 2 million private- sector workers will meet next week to decide “how and when” to strike, spokesman Stathis Anestis said. “Papandreou spoke of a new Odyssey: heaven only knows how long that will be,” Antonis Samaras , the leader of the main opposition party, the center-right New Democracy which was defeated by Papandreou’s socialist Pasok party in October. Samaras said that while he had taken responsibility for the previous government’s failures in some policies “the borrowing crisis is exclusively the achievement of Pasok.” To contact the reporter on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net

Read the full article →

Duffys Rocks » Commercial and Residential Real Estate Investing …

December 13, 2009

Investors who are prepared to deal with the challenges of multi-family real estate investing can come to the rescue of multi-family property owners for whom commercial real estate investing has lost its luster, purchase the properties …

Read the full article →

AIG Will Settle With Ex-CEO Greenberg, May Pay $150 Million in Legal Fees

November 25, 2009

By Hugh Son and Dakin Campbell Nov. 25 (Bloomberg) — American International Group Inc. , the insurer bailed out by the U.S., agreed to settle all legal disputes with former Chief Executive Officer Maurice “Hank” Greenberg and may reimburse as much as $150 million in fees. A third party will determine how much AIG must pay in legal fees for Greenberg and former finance chief Howard Smith , the New York-based insurer said today in a regulatory filing. Greenberg, 84, has been locked in court disputes since AIG, once the world’s largest insurer , ousted him in March 2005. A tangle of lawsuits has kept AIG and its former top executive in court together since his departure. “The resolution of these long-running disputes will remove a significant distraction and expense and allow AIG to better focus its efforts on paying back taxpayers and restoring the value of our franchise,” said Chief Executive Officer Robert Benmosche, in the filing. Greenberg will get access to archival materials to write his memoirs as part of the deal. AIG and Greenberg agreed that Layn R. Phillips will review legal expenses. Former New York Attorney General Eliot Spitzer sued Greenberg and Smith in 2005, alleging they mislead regulators and investors. Spitzer dropped portions of the suit in 2006 and Greenberg asked a court to dismiss the rest. Spitzer’s Case AIG, based in New York, eventually restated earnings and agreed to pay $1.64 billion to settle claims by Spitzer and other regulators, without admitting or denying wrongdoing. In court papers filed in July 2006, Greenberg argued AIG’s 2005 restatement was unnecessary and designed to force him to retire. He denied any wrongdoing in the New York civil suit. The insurer had sued Starr International Co., the investment firm Greenberg runs, claiming they improperly took $4.3 billion of AIG stock from an employee compensation plan. Earlier this year, a federal jury rejected those claims. The company said in July it would pursue a suit against Greenberg and other former executives. Greenberg and AIG later said they had agreed to binding arbitration to resolve the legal disputes. An arbitrator was to begin work by Oct. 15 and finish by March 31, according to the statement. In August, Greenberg agreed to pay $130 million to settle shareholder suits brought against the company in 2004 and 2005, and separately, U.S. Securities and Exchange Commission allegations that he manipulated AIG’s earnings . Government Rescue Greenberg took the top job at AIG in 1967, and eventually boosted AIG’s assets more than a thousand-fold, making $50 billion in acquisitions to reach 50 million customers in 130 countries. Under his tenure, AIG’s market capitalization grew to $166 billion, before its near-collapse amid the credit crisis. AIG was rescued by the government last year after wrong-way bets on securities tied to U.S. subprime mortgages brought it to the brink of collapse, threatening to cause a financial-system meltdown. The insurer reported a $99 billion net loss last year. The $182.3 billion bailout includes a $60 billion credit line, a Treasury Department investment of as much as $69.8 billion, and a $52.5 billion pledge to buy mortgage-linked assets owned or backed by the insurer. AIG agreed to turn over a majority stake to the U.S. in exchange for the rescue. To contact the reporters on this story: Jamie McGee in New York at jmcgee8@bloomberg.net ; Dakin Campbell in New York at dcampbell27@bloomberg.net

Read the full article →

Lynn Tilton: Ending Joblessness in America

October 24, 2009

Although considered a woman of Wall Street, I have long seen the world from a perspective quite distinct. With over 73 companies, all of which we purchased on the precipice of destruction, and over 100,000 employees, I have a view and vision of this country that cannot be seen from a trader’s window. I fear that America will soon be a country characterized by a populace of the permanently unemployed. Every day, the disconnect between Wall Street, Washington and Main Street deepens. While the stock market continues to rise towards alternate realities and Washington remains comfortably insulated with robust government spending, Main Street Americans are suffering under the weight of job losses, home foreclosures and hopelessness. Rising unemployment numbers and the duration and permanence of that joblessness are ignored as irrelevant. And, moreover, the numbers being released by Washington do not represent fairly the depth and breadth of America’s jobless reality. In truth, today, one out of every 5 Americans is unemployed. In September, the Bureau of Labor Statistics (BLS) reported that, since the start of the recession, unemployed persons in America had increased by 7.6 million to 15.1 million, and that the unemployment rate had doubled to 9.8%. But if we turn to the household survey that seeks to determine whether or not people are working by asking individuals their job status, rather than querying the companies that employ them, the September job loss figure is not 263,000 but instead closer to 785,000. Adding insult to injury, household net worth has declined by 14 trillion dollars since the onset of the recession and household financial distress is further exacerbated by diminishing employment. And the cycle of destruction continues. Underemployment, U-6, which includes both part-time workers who lust for full time employment and discouraged workers, “the marginally unattached,” reached staggering new heights at 17%. Alan Abelson quantified well the situation in an October 5, Barrons column: if we add 9.2 million of involuntary part time workers to the 2.2 million of the marginally unattached and the 15.1 million of reported unemployed, the equation sums to 26 million Americans out of work. Until job loss turns to job creation, we have little chance for a true economic recovery. Absent job creation, little else matters. Consumers cannot spend, businesses will not invest and government budgets cannot balance. I believe employment is the leading indicator of our economy, and I take umbrage to the blind claim of laggard. Jobs are not created by big businesses that house under 20% of America’s labor force, but rather by SMEs – small and mid-sized companies. These companies, the backbone of the American economy, have lost access to the traditional working capital loans upon which they depend to manage their businesses. As a consequence of the sudden dearth of capital available in this market, companies that might otherwise rationalize and survive the current economic downturn are laying off workers — layoffs that will result in permanent job losses as, without access to capital, these companies have no choice but to liquidate. This phenomenon is driving not only permanent job losses, but also the eclipse of technology and the destruction of transferable industrial knowledge. Our firm, Patriarch Partners, is built upon the premise that making money and making the world a better place are not mutually exclusive options. Since 2001, Patriarch has saved over 150 companies from liquidation and almost 250,000 jobs. And because this is what we do, we have a unique perspective on the number of companies that are on a desperate quest for capital in order to survive. As we do our diligence on these companies, we are touring America and the small towns whose livelihoods are deeply dependent on these companies and their survival. Let me touch on some of my most recent visits and what I see – in Little Falls, Minnesota, a third generation boat manufacturing town, employment sits well below 50% of 2008 levels and the town’s restaurants and shops are shuttered because boat production is off by 70%. In Detroit, where we are in the process of a large automotive acquisition, unemployment nears 30% and the average home price has fallen from $90k in 2007 to $8,000 today because automotive suppliers have walked a quiet path towards forced liquidations and consolidation. Job losses will not be stemmed until the liquidation of SMEs is stopped. This feat can be accomplished only by enabling access to capital. Lenders and borrowers face challenging credit conditions due to the economic downturn, while dealing with diminished revenues and depreciating collateral values. As such, in the face of this perfect storm, the most direct and rapid solution to stem job losses must be to incent private enterprise to originate and monetize rescue-financing loans for struggling SMEs. I have a plan: The SME Rescue Loan Program (“RLP”) will access unused TARP funds already set aside for the PPIP Legacy Securities Program. Treasury originally intended that $75-$100 billion of TARP funds be used for PPIP programs to purchase toxic loan assets from bank balance sheets. Yet, as of today, only $30 billion has been allocated for use. The PPIP Rescue Loan Program will initially use $30 billion for equity and debt investments. The RLP will be structured based upon similar constructions to those announced in the existing PPIP programs. Pre-selected investment managers will raise a minimum of $150 million in equity capital, which will then be used along with $50 million of equity contributed by the Treasury. Private sector equity capital will serve as the first loss layer to both the loans and equity capital

Read the full article →

CIT Said to Consider Financing From Citigroup, Barclays as Deadline Nears

September 30, 2009

By Pierre Paulden and Kristen Haunss Sept. 30 (Bloomberg) — Citigroup Inc. and Barclays Capital are offering to provide financing to CIT Group Inc., the commercial lender that’s struggling to avert bankruptcy, according to people familiar with the situation. The 101-year-old company’s bondholders are also seeking to provide about $2 billion in loans as a restructuring deadline approaches tomorrow, said the people, who declined to be identified because the negotiations are private. New York-based CIT may choose other options, the people said. CIT said in July it may seek court protection from creditors after Chief Executive Officer Jeffrey Peek failed to win a second government bailout and had to turn to bondholders for $3 billion in rescue financing. The company said in an Aug. 17 regulatory filing that it has to come up with a plan “acceptable” to the majority of a bondholder steering committee that provided it with the emergency cash by Oct. 1. “Some sort of secured financing is a likely component of the company’s restructuring plan, launched in conjunction with a debt exchange,” Brian Charles , a debt analyst at brokerage firm RW Pressprich & Co. in New York, said in a telephone interview. CIT needs to raise $5 billion to $6 billion in financing to be able to make loans, he said. Bonds Rally CIT’s $750 million of 4.25 percent notes due in February climbed 2.5 cents yesterday to 77 cents on the dollar, and have gained 14 cents since the end of August, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The company’s shares rose 53 cents, or 32 percent, to $2.20 in New York Stock Exchange composite trading. Citigroup, Barclays Capital and CIT spokesmen in New York declined to comment. About $9.14 billion of CIT loans and bonds mature through 2010, including $1.15 billion of debt securities by the end of this year, data compiled by Bloomberg show. The restructuring plan for CIT, which had a net loss of $1.62 billion in the second quarter, may include selling business lines or assets, debt-for-equity-swaps and offers to extend debt maturities, CIT said in the Aug. 17 filing. The company may be able to create $6 billion to $9 billion of capital by exchanging $30 billion of unsecured notes through debt swaps, Charles at Pressprich wrote in a Sept. 9 report. CIT bonds rose last week on speculation the lender was in talks with Citigroup and Bank of America Corp. to refinance a $3 billion loan with an $8 billion to $10 billion secured-loan facility, New York-based fixed-income research firm CreditSights Inc. said in a Sept. 27 report. Fed Approval Needed CreditSights said it couldn’t confirm the validity of the speculation and that the Federal Reserve would need to approve any transaction. Danielle Robinson , a spokeswoman for Charlotte, North Carolina-based Bank of America, declined to comment. While the financing would get management “out from under the thumb of the steering committee,” the extra debt doesn’t reduce the risk of an exchange offer or prepackaged bankruptcy, CreditSights analyst Adam Steer said. “The company is going to need to raise equity to appease the regulators and ultimately re-establish its business,” he said in an interview. Bank of America and Citigroup arranged CIT’s five-year, $2.1 billion bank line that needs to be repaid in April 2010, according to Bloomberg data. Barclays, the documentation agent for that loan, was the administration agent on CIT’s $3 billion rescue financing in July. Stock Decline CIT, whose stock has fallen 52 percent this year through yesterday, turned to its bondholders after failing to gain access to the Federal Deposit Insurance Corp.’s program to guarantee debt sales. Newport Beach, California-based Pacific Investment Management Co., Centerbridge Partners LP in New York, Los Angeles-based Oaktree Capital Management LLC, Boston-based hedge fund Baupost Group LLC, Capital Research & Management Co. of Los Angeles, and Silver Point Capital LP in Greenwich, Connecticut, made up the group that initially provided the $3 billion in emergency funding and are part of the steering committee. Under terms of the rescue loan, CIT had to complete a tender offer to exchange $1 billion of floating-rate notes that matured in August. Holders of 59.8 percent of the notes tendered the debt after CIT raised its offer 5 cents to 87.5 cents on the dollar. Bondholders that provided the rescue financing agreed to tender their holdings. To contact the reporters on this story: Pierre Paulden in New York at ppaulden@bloomberg.net ; Kristen Haunss in New York at khaunss@bloomberg.net .

Read the full article →

Consumer Spending: What If Americans Dont’ Start Buying Again?

September 25, 2009

If Americans don’t start buying a lot of stuff again, can the world economy be saved? What’s the global Plan B? These are fundamental questions at the summit of the Group of 20 industrialized and developing nations in Pittsburgh. In previous global downturns, Americans have come to the rescue, getting out their credit cards and buying up what the rest of the world produces. “Our spending is currently equal to the entire economies of China and India added together and then doubled,” as Fareed Zakaria has pointed out, representing the single biggest chunk of the world economy.

Read the full article →