Archive for the ‘Economy’ Category
2009
“…CIT needs time to strike deals with bondholders to reduce debt after the U.S. declined to give the firm a second bailout. CIT, which reported $3 billion of losses in the last eight quarters, received a $2.33 billion rescue in December after converting to a bank holding company to be eligible to sell bonds backed by the Federal Deposit Insurance Corp.
We still think it is a losing effort in the intermediate term although some bondholders may end up better than others with this structure,” said David Hendler, an analyst at CreditSights Inc. in New York. “The wholesale model is dead and creating a branch deposit system from scratch is too expensive for CIT and takes too long to build to help any time soon…’”
via bloomberg.com
“The Internal Revenue Service has stepped up scrutiny of offshore accounts and foreign income, an enforcement campaign that could sweep up tens of thousands of taxpayers.
The push to recover some of the billions of dollars lost each year to offshore tax evasion goes beyond the government’s high-profile effort to force Swiss bank UBS AG to release the names of 52,000 American account holders in order to nab tax evaders.
The IRS is using a once-obscure tax form called the Foreign Bank…”
via wsj.com
“…Error One was to permit a bubble in the 1980s. Error Two was to wait a decade before opting for monetary “shock and awe” through quantitative easing.
The US Federal Reserve has moved faster but already seems to think the job is done. “Quantitative tightening” has begun. Its balance sheet has contracted by almost $200bn (£122bn) from the peak. The M2 money supply has stagnated since January. The Fed is talking of “exit strategies”.
Is this a replay of mid-2008 when the Fed lost its nerve, bristling over criticism that it had cut rates too low (then 2pc)? Remember what happened. Fed hawks in Dallas, St Louis, and Atlanta talked of rate rises. That had consequences. Markets tightened in anticipation, and arguably triggered the collapse of Lehman Brothers, AIG, Fannie and Freddie that Autumn.
The Fed’s doctrine – New Keynesian Synthesis – has let it down time and again in this long saga, and there is scant evidence that Fed officials recognise the fact. As for the European Central Bank, it has let private loan growth contract this summer…”
via telegraph.co.uk
“1. It would reward failure. Like the largest banks that have been bailed out, the Fed was a co-author of the destruction. During the past twenty-five years, it failed to protect the country against reckless banking and finance adventures. It also failed in its most basic function–moderating the expansion of credit to keep it in balance with economic growth. The Fed instead allowed, even encouraged, the explosion of debt and inflation of financial assets that have now collapsed. The central bank was derelict in enforcing regulations and led cheers for dismantling them. Above all, the Fed did not see this disaster coming, or so it claims. It certainly did nothing to warn people…”
via globaleconomicanalysis.blogspot.com
“Good news all around, unless one looks for the rest of the story. Notice the housing starts change was a range of from -7.7% to +14.9%. Hard to find much certainty in that. Housing starts might be up — Then, again they might be down. As far as the medium home price goes, remember that “those who know” have been forecasting that bigger houses were entering foreclosure so that the median home price is expected to rise from that alone – and that’s bad, not good.”
via zerohedge.com
“…Bob Chapman [Internationalforecaster.com] revealed that the US State Dept has advised embassies worldwide to stock up on a year’s worth of the local currency in anticipation of collapse of the US dollar. Look for a temporary banking shutdown timed for around September 2009. As under Roosevelt, some banks won’t reopen. 96% of bank reserves are currently held with the Federal Reserve who tells the banks not to loan the money, but rather to save it for further banking acquisition and consolidation. Chapman foresees a bank holiday lasting 4-5 days. Chapman thinks this first bank holiday presages a much more significant bank holiday months to years later which will involve simultaneous devaluations of multiple currencies as well as other significant changes in the banking system…”
via dprogram.net