Important News - Oct. 14
By Daniel at 14 October, 2009, 12:05 am
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1) Pimco Has Quit CIT Bondholder Steering Committee
“NEW YORK (Dow Jones)–The future of CIT Group Inc. (CIT) grew murkier Wednesday after the disclosure that bond fund giant Pacific Investment Management Co. had quit a steering committee that’s trying to prevent the commercial lender from collapse… The move was seen as another blow as CIT struggles to end months of uncertainty about its future. The century-old lender is scrambling to convince creditors to back sweeping debt restructuring, or the company will file for a pre-packaged bankruptcy.”
1A) CIT debt swap struggles, bankruptcy looms”
2) Credit Tightens for Small Businesses
Many small and midsize American businesses are still struggling to secure bank loans, impeding their expansion plans and constraining overall economic growth, even as the country tentatively rises from its recessionary depths.
3) BofA to charge annual fees on some credit cards
NEW YORK – Bank of America Corp . said Tuesday it will charge a limited number of its credit card customers annual fees ranging from $29 to $99 starting next year.
The Nation — It is now clear: our economy is shrinking, unemployment and underemployment are on the rise at nearly 20 percent, and a tsunami of foreclosures continues unabated–what we have on our hands is nothing less than a national emergency.
5) Foreclosures pose challenge, cost to census count (AP)
AP - Foreclosures will make it tougher and more expensive to get an accurate census count next year as families move in with relatives or are left homeless, the Census Bureau’s director said Tuesday.
6) CHART OF THE DAY: The Government Debt Explosion
While households, businesses and the financial sector reduce leverage, public sector debt growth has simply exploded. As you can see from the chart, every non-governmental sector of the economy is now in debt reduction mode while governmental debt is growing a breakneck speeds.
7) The Fed Tried To Get Goldman To Buy Wachovia Then Killed The Deal
It’s now been a year since Wachovia called off an expected merger deal with Citigroup in favor of an offer from Wells Fargo. That deal hasn’t received anywhere near the attention that the acquisition of Bear Stears or the failure of Lehman Brothers received.
GM president: China becomes GM’s largest market this year
“Interestingly, if we look at China’ s market this year, we found the market has surpassed U.S market in size for GM,” he said during his first visit to China after he became the CEO in March.
GM and its joint ventures in the Chinese mainland sold 181,148 vehicles in China in September, an all-time monthly record.
For the first nine months in 2009, GM’s sales in China totaled 1,292,549 units, up 55.6 percent than the previous year and a new record for the same period historically.
9) JAL ask it’s creditor to forgive ¥250 billion ($2.8 billion) of its debt!
“The mega banks would have to absorb large loses if the plan were implemented as discussed,” said Brett McGonegal, a managing director at Cantor Fitzgerald, in emailed comments. “The last thing the banks in Japan need right now is a big loss.”
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JAL’s largest creditor is state-owned Development Bank of Japan, which holds 40.5% of the company’s total long-term debt as of the end of the fiscal year 2008, securities filings show, according to J.P. Morgan.
10) For US banks, loan losses likely to overshadow trading profits as banks report earnings
Although trading gains could drive strong earnings for banks like JPMorgan Chase & Co. and Goldman Sachs Group Inc., mounting loan losses and the prospect of tougher capital requirements and higher deposit insurance fees are expected to eat into the banks’ profits well into 2010 and beyond.
11) China’s export/import decline in September
12) The American flag symbolizes problems: “Apartment residents told to take down U.S. flags”
But to Oaks Apartment management, Clausen said, the American flag symbolizes problems.
Resident we talked to who had been approached to take down their flags all told us the same thing: that management told them the flags could be offensive because they live in a diverse community.
13) The ‘Average American’ Is Dying Off
“The concept of an ‘average American’ is gone, probably forever,” demographics expert Peter Francese writes in 2010 America, a new Ad Age white paper. “The average American has been replaced by a complex, multidimensional society that defies simplistic labeling.”
14) “Dangerous Unintended Consequences” By Martin D. Weiss, Ph.D.
Martin here with an urgent update on the next phase of this crisis …
Fed Chairman Bernanke and Treasury Secretary Geithner are in for a rude awakening.
Even as they declare “victory” in their battle against the debt disaster on Wall Street, they face defeat in the war against four dangerous, unintended consequences on Main Street:
1) Fed Rewarding High-Roller Gamblers, While Punishing Prudent U.S. Savers!
2) U.S. Treasury Gobbling Up Available Credit, Crowding Out Nearly All U.S. Businesses!
3) Wall Street Traders Reap Gigantic Rewards; Average Workers Face Worst U.S. Job Market Ever Recorded!
4) The Debt Crisis of 2008 Has Now Been Transformed Into The Dollar Crisis of 2009-2010!
15) Britain’s CPI index drops to five-year low in September
LONDON, Oct. 13 (Xinhua) — Britain’s Consumer Prices Index (CPI) fell to an annual rate of 1.1 percent in September, the lowest in the past five years, according to figures released Tuesday by the Office for National Statistics (ONS).
Economists had predicted an annual rate of 1.3 percent. The CPI index remained unchanged between August and September this year.
TOKYO (MarketWatch) — Japanese wholesale prices fell 7.9% in September from the same month a year earlier, Bank of Japan data showed Wednesday.
17) Finance’s Five Fatal Flaws
What exactly is the function of the financial sector in our society? Simply this: Its sole function is supplying capital efficiently to aid the real economy. The financial sector is a tool to help those that make real tools, not an end in itself. But five fatal flaws in the financial sector’s current structure have created a monster that drains the real economy, promotes fraud and corruption, threatens democracy, and causes recurrent, intensifying crises.
18) The “economy recovery package” flushed away close to $1 trillion, enough to put us in debt for a generation. It included 8,600 frivolous earmarks.
Imagine what’ll happen after we start paying for this obamacare monstrosity…
The second is the 2010 election season, when most members of Congress will be out on the campaign trail. If unemployment is still near 10 percent, as many forecasters predict, that will not sit well with voters.
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