Results for Don Miller
U.S. China Currency Dispute Heating Up
The heated debate between China and the United States over the value of its currency intensified yesterday (Thursday) when a senior Chinese trade official warned that further appreciation of the yuan could put many of its exporters out of business – something China can’t afford.
Those remarks came shortly after a key International Monetary Fund (IMF) official flatly stated that the currency is severely undervalued.
China’s Vice Commerce Minister Zhong Shan told The Wall Street Journal in an exclusive interview that the profit margins on many Chinese export goods were less than 2% and any further increase in the currency’s value would endanger more exporters’ survival.
Chinese Premier Wen Rejects U.S. & European Pleas, Says Yuan to Stay Stable
China’s Premier Wen Jiabao vigorously defended his country’s economic policies on Sunday, rejecting calls to let the yuan appreciate, and ratcheting up trade tensions with the United States where lawmakers and economists insist his stance is hindering a global recovery.
“I don’t think the renminbi is undervalued,” Wen said at a press conference in Beijing, using the Chinese currency’s official name. “We oppose countries pointing fingers at each other and even forcing a country to appreciate its currency.”
Lehman Execs Have No One to Blame but Themselves
The U.S. bankruptcy-court examiner investigating the collapse of Lehman Brothers Holdings Inc. issued a stinging report Friday that accused senior executives of freewheeling accounting practices that led to the largest bankruptcy in U.S. history and sparked the worst financial crisis since the Great Depression.
The 2200-page report, authored by Anton Valukas, chairman of the Chicago-based law firm Jenner & Block LLP, also excoriated Wall Street investment banks, including JPMorgan Chase & Co. (NYSE: JPM) and Citigroup Inc. (NYSE: C) for finally pushing Lehman over the edge by demanding more collateral and changing guarantee agreements, Bloomberg News reported.
But the report says ultimate responsibility for its collapse can be attributed to a wrong-headed business model that rewarded excessive risk and encouraged leverage – problems that were brought to a head by the investment banks and government agencies.
Foreclosures Dropped in February, Helped by Rescue Programs and Poor Weather
U.S. mortgage foreclosure filings dropped for the second straight month in February and posted the smallest annual increase in four years as government housing-rescue efforts and poor weather constrained bank repossessions, a report released by RealtyTrac Inc. showed today (Thursday).
RealtyTrac, which sells mortgage default data collected from more than 2,200 counties representing 90% of the U.S. population, said filings declined 2% from January. But filings were up only 6% from a year earlier, the smallest increase in four years.
"The 6% year-over-year increase we saw in February was the smallest annual increase we’ve seen since January 2006, when we began calculating year-over-year increases," James J. Saccacio, RealtyTrac chief executive officer said in a statement obtained by Reuters.
China’s Exports Surged by 46% in February, Adding to Currency Pressures
China exports in February rose for the third month in a row, beating forecasts and putting added pressure on government officials to rein in stimulus spending and loosen currency policies.
Exports in February jumped 45.6% from a year earlier after a…
Dubai World May Ask Banks to Take 20% “Haircut,” Delay Payments to Solve its Debt Bomb
Dubai World may ask banks to take a so-called 20% "haircut" from the face values on their loans and stretch out loan maturities when it presents a restructuring plan this month.
The banks may be able to avoid the haircut if…
AIG Sells Alico Unit to MetLife for $15.5 Billion, Raising More Cash to Pay Fed
American International Group Inc. (NYSE: AIG) today (Monday) agreed to sell its American Life Insurance Co. unit, better known as Alico, to MetLife Inc. (NYSE: MET) for $15.5 billion, taking yet another step towards paying off its U.S. government debt.
MetLife will pay $6.8 billion in cash and $8.7 billion in equity securities for Alico, AIG’s second-largest foreign life-insurance business.
With a deal inked a week ago to sell its Asian life-insurer unit, American International Assurance Ltd. (AIA), to Prudential PLC (NYSE ADR: PUK) for $35.5 billion, the Alico sale means AIG is now expected to return $32 billion in cash to the Federal Reserve Bank of New York in the coming months – provided both deals close as scheduled by yearend.
Having Served its Purpose, TALF Could Soon Turn a Profit for the Fed
The Term Asset Backed Securities Loan Facility (TALF) program has succeeded in reviving the consumer loan-backed market and may even return a profit for the Federal Reserve, according to William Dudley, one of the main architects of the facility.
In an interview with Dow Jones Newswires, Dudley, the president and chief executive officer of the Federal Reserve Bank of New York, said that the TALF program has reignited the market for securities backed by loans on vehicles and credit-card debt.
TALF was launched by the Fed to entice buyers to buy new bonds backed by auto and student loans. At the time, investors were reluctant to purchase securities backed by shaky collateral, fearing they would lose their entire investment.
Did Hedge Funds Conspire to Devalue the Euro?
The Department of Justice is investigating whether several prominent hedge funds conspired to drive down the value of the euro as the Greek debt crisis left the currency vulnerable to sophisticated trading methods employing credit default swaps and other derivatives.
Likewise, the European Commission yesterday (Wednesday) said it would examine trades in sovereign credit-default swaps (CDS) related to the Greek crisis, which has driven the euro lower and prompted officials to warn hedge funds against trying to profit from the region’s debt crisis.
The Justice Department’s antitrust division "has opened an investigation into agreements among various hedge funds that trade euro contracts," including contracts to trade euros in the "cash or the derivatives market," a person familiar with the letter told The Wall Street Journal.
Australia Increases Rates, Canada Stays Steady as Both Cast Wary Eyes Toward Inflation
Canada and Australia, two resource-rich nations that are recovering quickly from the global recession, yesterday (Tuesday) reaffirmed interest rate policies as both promised to remain vigilant about rising inflation.
The Reserve Bank of Australia (RBA) raised its cash rate target by a quarter of a percentage point to 4.00%, while the Bank of Canada (BOC) kept its benchmark interest rate at record lows. Both central banks said inflation and economic output have been higher than policymakers expected.
The target rate for overnight loans between commercial banks in Canada will remain at 0.25%, the same level it’s been since April 2009, exactly in line with predictions by 22 economists surveyed by Bloomberg News. The central bank also repeated a pledge to leave it unchanged through June unless the current inflation outlook shifts.
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