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Saturday, 11 April 2009
Polaroid, the pioneer of instant photography, must try again to auction off its assets
Polaroid, the pioneer of instant photography, must try again to auction off its assets after failing to win the approval of Judge Gregory F. Kishel of United States Bankruptcy Court for a $56.3 million sale. Last week, the private equity firm Patriarch Partners won an auction for the assets with a bid of $59.1 million. Judge Kishel reopened the auction this week, citing complaints over the procedures. Patriarch lost, and Polaroid sought court approval to sell itself to a joint venture of two liquidation companies, Hilco Consumer Capital and Gordon Brothers Brands. But Patriarch filed papers saying the auction was flawed and should be reopened so it could increase its bid to $55.7 million in cash and 15 percent equity in the new company valued at $9.75 million, a spokesman said. The judge said he would supervise another auction in his courtroom on Thursday.
Investors can force Bernard Madoff into personal bankruptcy proceedings.
Federal judge says investors can force Bernard Madoff into personal bankruptcy proceedings.Federal prosecutors and the Securities and Exchange Commission have argued that it would be unnecessary and costly for the convicted financier to file for personal bankruptcy.
But U.S. District Judge Louis Stanton disagreed in an opinion released Friday.The 70-year-old Madoff is in prison awaiting a June sentencing after pleading guilty last month to charges that he defrauded investors of billions of dollars.A court-appointed trustee is in the process of liquidating his business assets.
But U.S. District Judge Louis Stanton disagreed in an opinion released Friday.The 70-year-old Madoff is in prison awaiting a June sentencing after pleading guilty last month to charges that he defrauded investors of billions of dollars.A court-appointed trustee is in the process of liquidating his business assets.
Richie MacRitchie,filmed the woman changing at the Falls Leisure Centre on his mobile phone
Richie MacRitchie, 33, originally from County Louth, filmed the woman changing at the Falls Leisure Centre on his mobile phone in October 2006. In February, he was sentenced to four months' imprisonment suspended for two years. He was also placed on the Sex Offenders' Register for seven years and later banned from practising law. MacRitchie, who was convicted in January after originally being cleared of voyeurism, admitted filming the woman in a changing booth. At first, a direction of no case to answer was given because his victim was wearing a bikini. Because of this it was decided she was not engaged in a private act according to the Sexual Offences Act. Later, however, the Court of Appeal ordered the prosecution to proceed on a fresh charge of attempted voyeurism. Following the conviction, the Law Society of Northern Ireland referred MacRitchie's case to the independent Solicitors Disciplinary Tribunal which banned him from practising. A psychiatrist who examined him following his arrest said he was suffering from chronic stress and that he wanted to get caught.
It also emerged during the trial that MacRitchie, who worked as a non-profit making lawyer based at Conway Mill, Belfast, had been up to £100,000 in debt.
It also emerged during the trial that MacRitchie, who worked as a non-profit making lawyer based at Conway Mill, Belfast, had been up to £100,000 in debt.
Xyience filed under Chapter 11 in March of 2008
Xyience filed under Chapter 11 in March of 2008, which provides protection from creditors and allows the company to try and put together a reorganization plan to be administered by the courts.But that’s not what makes the whole story interesting.This is:
“(The) negotiations, however, were derailed by a campaign of intimidations and threats led by company founder and former CEO Mr. Pike, Terry Cardenas, Ronald Solomon and Rick Klingenberg,” he said.
“Mr. Klingenberg and his brother David Bergstrom stormed into the Xyience office, cornering (Chief Financial Officer) Michael Levy in an office and refusing to allow Mr. Levy to depart until their demands were met,” according to Sattar’s filing.If their mother wasn’t paid, Klingenberg and Bergstrom said “somebody was going to … get killed,” Sattar said. They demanded $20,000 “or else they would return the next day with guys who had a 100 percent collection rate,” according to Sattar’s filing.Frank and Lorenzo Fertitta own the UFC - it also happens that they’re creditors of Xyience with $12.5 million in unsecured claims and $5.3 million in secured claims against the troubled company according to the filing. The Fertittas and the UFC did not immediately comment on the situation.“We’re excited about the opportunity (to reorganize the company), ” he said. “Xyience has a great brand name and has a strong affiliation with the UFC.”According to the Las Vegas Review-Journal, there is more than a little drama involved in the filing - and it’s aftermath - as well.“Associates of Mr. Pike and Mr. Klingenberg made threats of physical violence against Xyience management and board members and, on at least one occasion, showed up uninvited at the home of one member of management,” Sattar said in bankruptcy court filings.
“(The) negotiations, however, were derailed by a campaign of intimidations and threats led by company founder and former CEO Mr. Pike, Terry Cardenas, Ronald Solomon and Rick Klingenberg,” he said.
“Mr. Klingenberg and his brother David Bergstrom stormed into the Xyience office, cornering (Chief Financial Officer) Michael Levy in an office and refusing to allow Mr. Levy to depart until their demands were met,” according to Sattar’s filing.If their mother wasn’t paid, Klingenberg and Bergstrom said “somebody was going to … get killed,” Sattar said. They demanded $20,000 “or else they would return the next day with guys who had a 100 percent collection rate,” according to Sattar’s filing.Frank and Lorenzo Fertitta own the UFC - it also happens that they’re creditors of Xyience with $12.5 million in unsecured claims and $5.3 million in secured claims against the troubled company according to the filing. The Fertittas and the UFC did not immediately comment on the situation.“We’re excited about the opportunity (to reorganize the company), ” he said. “Xyience has a great brand name and has a strong affiliation with the UFC.”According to the Las Vegas Review-Journal, there is more than a little drama involved in the filing - and it’s aftermath - as well.“Associates of Mr. Pike and Mr. Klingenberg made threats of physical violence against Xyience management and board members and, on at least one occasion, showed up uninvited at the home of one member of management,” Sattar said in bankruptcy court filings.
Michael Vick was back in Atlanta, the city where he rose to football stardom, but as a prisoner
Michael Vick was back in Atlanta, the city where he rose to football stardom, but as a prisoner rather than a player, an official said Friday.Felicia Ponce, Federal Bureau of Prisons spokeswoman, said the suspended Atlanta Falcons quarterback was moved to a medium-security unit in Atlanta from Virginia, where he had been held while attending a bankruptcy hearing last week.Ponce declined to say if authorities plan to move Vick back to a penitentiary in Leavenworth, Kan., where he has served most of a 23-month sentence for bankrolling a dogfighting ring.Vick, 28, is scheduled to transfer to home confinement May 21 in Hampton, Va., and is set to be released from federal custody in July.The move comes as Vick is wrestling in bankruptcy court over what he has called his "exit strategy" — a plan to repay creditors with the millions he hopes to resume earning in pro football.A federal bankruptcy judge rejected the plan last week, saying there was no guarantee Vick would be able to resume his NFL career. Vick's status will be reviewed after he is released from prison, commissioner Roger Goodell has said.Vick's plan would allow him to keep the first $750,000 of his projected annual salary; creditors would get part of the rest.Vick was once one of the league's highest-paid players, but lavish spending and poor investments, coupled with the backlash from his dogfighting case, led to his downfall. He filed for bankruptcy in July, claiming assets of $16 million and debts of more than $20 million.Vick signed a 10-year, $130 million contract with the Falcons in December 2004.
Bankruptcy proceedings by current owner, Magna Entertainment Corp.
Bankruptcy proceedings by current owner, Magna Entertainment Corp., have thrown the future of the race and the track into question.
Maryland senators have expressed misgivings about a bill that would strengthen the state's ability to acquire the Preakness Stakes horse race and the track where it is run.The measure would allow Maryland to use eminent domain law, if necessary, to acquire the second leg of the Triple Crown, plus Pimlico Race Course, Laurel Park and the Bowie Race Course Training Center.Several senators worried the state could get a "white elephant" at a time when funds are tight and interest in horse racing is dying. The bill was introduced Wednesday, and is set for a final vote Saturday in the Senate.
Maryland senators have expressed misgivings about a bill that would strengthen the state's ability to acquire the Preakness Stakes horse race and the track where it is run.The measure would allow Maryland to use eminent domain law, if necessary, to acquire the second leg of the Triple Crown, plus Pimlico Race Course, Laurel Park and the Bowie Race Course Training Center.Several senators worried the state could get a "white elephant" at a time when funds are tight and interest in horse racing is dying. The bill was introduced Wednesday, and is set for a final vote Saturday in the Senate.
Standard and Poor’s Rating Services lowered its debt ratings for Chrysler LLC and General Motors Corp
Standard and Poor’s Rating Services lowered its debt ratings for Chrysler LLC and General Motors Corp., and added that bankruptcy is likely and could lead to the break-up of Chrysler.
Obama’s auto plan calls for Chrysler to reach a deal for a merger or partnership with Italian automaker Fiat by the end of April, and for General Motors (NYSE:GM) to come up with a plan to restructure the company by the end of May.S&P Recovery Analyst Greg Maddock told Reuters news agency in an interview that he believes if Chrysler were to go into bankruptcy it would go into liquidation and sell its assets.
The agency issued the warning Friday, saying it was lowering the debt ratings because of the increased possibility of bankruptcy if the two members of Detroit’s “Big Three” automakers don’t meet deadlines set by President Barack Obama’s administration, according to numerous media reports.
Obama’s auto plan calls for Chrysler to reach a deal for a merger or partnership with Italian automaker Fiat by the end of April, and for General Motors (NYSE:GM) to come up with a plan to restructure the company by the end of May.S&P Recovery Analyst Greg Maddock told Reuters news agency in an interview that he believes if Chrysler were to go into bankruptcy it would go into liquidation and sell its assets.
Michael A. Daly, 55, of Danvers, Mass., engaged in a scheme to defraud Cisco.
Michael A. Daly, 55, of Danvers, Mass., engaged in a scheme to defraud Cisco. Daly repeatedly created fictitious personal and company names, obtained e-mail accounts related to those names, and used the fictitious names to rent private mailboxes around the United States. Daly then associated the fictitious names and particular Cisco parts with Cisco SMARTnet service contracts and subsequently used the fictitious names to contact Cisco and falsely claim that parts supposedly covered by the SMARTnet contracts were failed or defective and needed to be replaced. As a result, Cisco sent “replacement” parts to Daly’s private mailboxes, where they were then forwarded to Daly’s business address in Salisbury.
Daly also engaged in money laundering by selling the fraudulently obtained “replacement” parts to Cisco equipment resellers around the country. On a number of occasions, Daly received tens of thousands of dollars from Cisco resellers for fraudulently obtained parts. Daly generally did not return any part to Cisco and, when he did, he returned a part not covered by SMARTnet and worth little or nothing. According to a previously-filed criminal complaint, Daly carried out the fraud more than 1300 times and used private mailboxes in 39 states. On each occasion, Daly obtained equipment with a list price ranging from $995 to $25,000. Cisco estimates that the loss is approximately $15,455,695.Daly pleaded guilty to wire fraud and money laundering and admitted to the forfeiture allegations contained in the Indictment. The sentencing of Daly is schedule for July 27 at 9:00 a.m. before Judge Ronald M. Whyte in United States District Court in San Jose. The maximum statutory penalty for wire fraud in violation of 18 U.S.C. Section 1343 is twenty years, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution and 3 years of supervised release. The maximum penalty for money laundering in violation of 18 U.S.C. Section 1957 is ten years, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution and 3 years of supervised release. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Richard C. Cheng is the Assistant United States Attorney who is prosecuting the case, with the assistance of paralegal Lauri Gomez. The guilty plea is the result of an investigation by the San Francisco Field Office of the Federal Bureau of Investigation, with the assistance of the Boston Field Office of the Federal Bureau of Investigation, the Salisbury, Mass., Police Department, and Cisco Global Business Controls.
Under the SMARTnet program, Cisco agreed to provide customers with technical support, including advance hardware replacement. Advance hardware replacement allows customers to obtain replacement equipment from Cisco immediately, without having first to return the broken part.
Daly also engaged in money laundering by selling the fraudulently obtained “replacement” parts to Cisco equipment resellers around the country. On a number of occasions, Daly received tens of thousands of dollars from Cisco resellers for fraudulently obtained parts. Daly generally did not return any part to Cisco and, when he did, he returned a part not covered by SMARTnet and worth little or nothing. According to a previously-filed criminal complaint, Daly carried out the fraud more than 1300 times and used private mailboxes in 39 states. On each occasion, Daly obtained equipment with a list price ranging from $995 to $25,000. Cisco estimates that the loss is approximately $15,455,695.Daly pleaded guilty to wire fraud and money laundering and admitted to the forfeiture allegations contained in the Indictment. The sentencing of Daly is schedule for July 27 at 9:00 a.m. before Judge Ronald M. Whyte in United States District Court in San Jose. The maximum statutory penalty for wire fraud in violation of 18 U.S.C. Section 1343 is twenty years, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution and 3 years of supervised release. The maximum penalty for money laundering in violation of 18 U.S.C. Section 1957 is ten years, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution and 3 years of supervised release. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Richard C. Cheng is the Assistant United States Attorney who is prosecuting the case, with the assistance of paralegal Lauri Gomez. The guilty plea is the result of an investigation by the San Francisco Field Office of the Federal Bureau of Investigation, with the assistance of the Boston Field Office of the Federal Bureau of Investigation, the Salisbury, Mass., Police Department, and Cisco Global Business Controls.
Wednesday, 25 March 2009
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Friday, 27 February 2009
UBS raised concerns over whether Macquarie's capital levels were adequate for the current bear market
MACQUARIE Group shares pushed near decade-long lows, capping off a downbeat week for the investment bank during which it took the rare step of dousing rumours that it was preparing to undertake a capital raising.However, the pressure remained after brokerage UBS raised concerns over whether Macquarie's capital levels were adequate for the current bear market. The report is likely to reset old tensions between Macquarie and UBS banking analyst Jonathan Mott.A downbeat report released by Mr Mott in August last year helped trigger a 10 per cent share dive for Macquarie in a single day. At the time, Mr Mott slashed his share price target for Macquarie, saying the bear market would continue to place pressure on it and its satellite funds.Mr Mott issued a further negative report when Macquarie reported its interim results in November.The latest report by Mr Mott said ongoing market volatility put continued pressure on its asset values and capital.While Macquarie this week said it had some $2.9 billion of capital in excess of regulatory minimum, Mr Mott said regulatory minimum was "not the appropriate benchmark" given the current environment.
With the value of Macquarie's holdings of listed and unlisted investments coming under pressure, any large write-downs in asset values would soon start pressuring the capital held in the non-banking arm, he said.
With the value of Macquarie's holdings of listed and unlisted investments coming under pressure, any large write-downs in asset values would soon start pressuring the capital held in the non-banking arm, he said.
But it was not all bad news for Macquarie: a second brokerage, Citigroup, yesterday upgraded its rating on Macquarie to "buy". Citigroup analyst Mike Younger said Macquarie would be able to accommodate as much as $2.5 billion in write-downs across its funds and other assets without impacting Tier 1 capital levels. Macquarie is expected to take at least $2 billion worth of write-downs this year."(Macquarie Group) has very strong funding and liquidity locked in, adequate capital for now and underlying earnings that continue to track ahead of awful market trends," Mr Younger said.Macquarie yesterday said its capital ratios "continue well in excess" of the regulatory minimum required by the Australian Prudential Regulation Authority.While Macquarie said it had "no current plans for a capital raising", the investment bank is believed to have first heard talk of the potential raising through its own stockbroking arm.Several dealers at rival brokerages contacted by BusinessDay yesterday queried the depth of the rumours. One said talk of a share placement was no stronger than day-to-day market chatter.Focus on Macquarie comes at a critical time for the investment bank, with the Federal Government weighing up whether to lift the ban on the short-selling of financial stocks. Its shares ended down 2.9 per cent at $16.98. In total Macquarie's shares were down 17 per cent for the week.
European Central Bank has denied that it has suffered billions in losses due to loans to banks guaranteed with toxic assets.
European Central Bank has denied that it has suffered billions in losses due to loans to banks guaranteed with toxic assets. In a message from the ECB, they reacted to indiscretions published today by economic daily "Financial Times Deutschland" (Ftd), stating that "in 2008 substantially positive results have been attained" and added that "no losses were registered as the result of transactions with the Eurozone". The German daily wrote, citing the ECB, that the sum of credit that they must recover from transactions that have already arrived at their deadline, totals 10.2 billion euros. The actual total of the losses, added FTD, will be assessed only when the assets given as collateral to the ECB by the banks are sold. The causes of these deficiencies are found, according to the daily, in the failure of some of the largest banks, like American Lehman Brothers in 2008. FTD also wrote that only on Thursday, when the ECB presents its annual balance, will it be possible to evaluate the entity of the collateral deposited by banks at the ECB. It was underlined that a hurried sale of these assets could hit the ECB with even higher losses, as well as worsen the financial market situation.
Thursday, 26 February 2009
Royal Bank of Scotland on Thursday reported a loss of 24.1 billion pounds for 2008
Royal Bank of Scotland on Thursday reported a loss of 24.1 billion pounds for 2008, the biggest in British corporate history, and said it planned to place 325 billion pounds in assets in a state insurance scheme.
The government will also provide another 13 billion pounds of capital through the issuance of B shares.
Under the government backed insurance scheme designed to extend another lifeline to banks, RBS will be responsible for the first 19.5 billion pounds of losses -- or 6 percent of the asset value. The government will bear 90 percent of any losses after that, and RBS incurs the remaining 10 percent.
The government will also provide another 13 billion pounds of capital through the issuance of B shares.
Tuesday, 17 February 2009
Trump Entertainment Resorts Inc, Donald Trump's casino group, filed for Chapter 11 bankruptcy protection
Trump Entertainment Resorts Inc, Donald Trump's casino group, filed for Chapter 11 bankruptcy protection on Tuesday, court documents show.The casino operator had assets of about $2.1 billion and total debts of about $1.74 billion on December 31, 2008, it said in its filing with the U.S. Bankruptcy Court for the District of New Jersey.
Wednesday, 11 February 2009
UBS revealed the devastating effect of the credit crunch yesterday as full-year losses hit Sfr19.7bn (£11bn) in 2008
UBS revealed the devastating effect of the credit crunch yesterday as full-year losses hit Sfr19.7bn (£11bn) in 2008, the largest in Swiss corporate history.These includes the Sfr4.6bn deal with the Swiss National Bank, a Sfr1.6bn credit charge and Sfr700m restructuring of the investment bank. UBS added that it has taken steps to cut costs, including slashing bonuses, axing 2,000 more employees and overhauling the business structure. Its chief executive, Marcel Rohner, said the bank had shelved its full-year dividend. Mr Rohner remained upbeat after a quarter he described as the "worst environment ever for investment banking", and predicted a return to profit this year. "While we leave a bad year behind us, we can nevertheless report substantial progress," he said. In the last three months of the year alone UBS lost Sfr8.1bn. The Swiss giant, which released its results the day before rival Credit Suisse, remains heavily exposed to leveraged finance and monolines, which contributed to a Sfr3.7bn loss. The wealth management arm, the group's core business, saw investors continue to pull cash well into the fourth quarter. This led to total outflows for the year hitting Sfr123bn. Clients also pulled Sfr103bn from its asset management arm. However, the bank said so far this year net new money has turned positive at both divisions.The group announced yesterday it was to overhaul its wealth management business. It has reorganised the group with a "new structure [that] refocuses UBS on its Swiss core businesses, on the large scale and strengths of its international wealth management franchise in Switzerland, and on the growth potential of its on-shore business globally".
The investment banking division suffered badly, but the group reaffirmed it was "core" to the business. This followed rumours it had been looking to sell.
UBS added that it would reduce the division's balance sheet and overall risk and cut staff to 15,000 this year, down from 17,171. UBS talked of an "encouraging" start to the year, but warned that "financial market conditions remain fragile as company and household cash flows continue to deteriorate". It backed the measures taken by governments around the world to ease fiscal and monetary conditions, but said "our near-term outlook remains cautious". The group said that in 2008 it had slashed costs by 22 per cent, with personnel expenses down more than a third, "primarily due to lower performance-related compensation, mainly in the investment bank". The bank cut staffing levels by 1,782 to 77,783 in the last quarter of the year, with most of the cuts coming in the investment bank. It has announced a total of 7,500 job cuts.
The investment banking division suffered badly, but the group reaffirmed it was "core" to the business. This followed rumours it had been looking to sell.
UBS added that it would reduce the division's balance sheet and overall risk and cut staff to 15,000 this year, down from 17,171. UBS talked of an "encouraging" start to the year, but warned that "financial market conditions remain fragile as company and household cash flows continue to deteriorate". It backed the measures taken by governments around the world to ease fiscal and monetary conditions, but said "our near-term outlook remains cautious". The group said that in 2008 it had slashed costs by 22 per cent, with personnel expenses down more than a third, "primarily due to lower performance-related compensation, mainly in the investment bank". The bank cut staffing levels by 1,782 to 77,783 in the last quarter of the year, with most of the cuts coming in the investment bank. It has announced a total of 7,500 job cuts.
Sunday, 1 February 2009
Banks in Florida, Maryland and Utah were closed, bringing the total number of failed banks this month to six, the worst month for failures
Banks in Florida, Maryland and Utah were closed, bringing the total number of failed banks this month to six, the worst month for failures since the current crisis started. It's almost a quarter of the 25 that failed last year. None of the trio was large: the biggest asset pool in them was $360 million in the Florida failure.
Two were sold to other banks, but worryingly, the third in Utah, couldn't be sold by the close of business Friday and looks like being closed. The failures signal that the financial crisis is continuing to destroy financial institutions and the confidence the public has in them. So the talk over the weekend in the US and European papers of the Obama Administration revealing a so-called "big bang" announcement on a banking bailout, is timely, and much needed. The $US700 bailout fund set up by the Bush Administration is broken; it's wasted money and hasn't controlled bank excesses or forced them to lend more money, especially to housing.
A centrepiece of the new program will be to revamp the fund to ensure that taxpayer money is not used to fund excessive pay, bonuses and dividends to shareholders.
The media reports say the "big bang" approach is being driven by former New York Fed boss, Tim Geithner, now Treasury secretary, and Lawrence Summers, Obama's National Economic Council director. The Financial Times and Bloomberg both made it clear (from briefings of course) that Mr Geithner intends to present a comprehensive plan that policymakers hope will command market confidence. Details of the new approach have yet to be approved by President Obama, but it may include both the purchase of toxic assets by a so-called "bad bank" and insurance-style guarantees for problem assets remaining on bank balance sheets. That's a combination of approaches from the Savings and Loan clean up in the 1980s and the approach the UK government has taken to try and get bank lending back underway. But several media reports say that the plan is likely to refrain from imposing tougher restrictions on executive compensation at most firms receiving government aid but instead will keep the looser requirements (initially at least) included in the original $US700 billion program.
That will almost certainly guarantee it a rough ride in Congress, especially from Democrats after the Merrill Lynch $US4 billion bonus scam last month, the sacking of Merrill's former CEO, John Thain, for his part in those bonuses and spending $1.2 million on new office facilities, and the stupid move by Citigroup to spend $US50 million on a new corporate jet until it reserved the decision under pressure from the government and the media. This omission of tougher controls on pay, bonuses and management appears to be at odds with President Obama's criticism of the news that US bankers were paid bonuses of $US18 billion in 2008, according to an estimate published last week. "That is the height of irresponsibility," he was reported as having told the media. "It is shameful." Mr. Obama noted that US taxpayers have bailed out numerous failing financial institutions in recent months. He did not seem to be mollified by that fact that the report said bonuses actually fell 44% from 2007. The aim of the new program for helping banks will contain a range of initiatives to jump-start the consumer credit markets, provide aid to struggling homeowners, and motivate banks to increase lending. The plan will also offer banks more capital and buffer them against losses on portfolios of "toxic" assets, backed by failing mortgages and other troubled loans. A big part of the new approach will be a direct attempt to try and take the pressure off foreclosures. Anti-foreclosure efforts are likely to focus on subsidising programs that reduce unsustainable monthly mortgage payments, though there may also be support for schemes that subsidise the partial write-down of loans that exceed the value of the home. Treasury may also unveil new efforts to revitalise frozen securitisation markets to try and get some recycling of capital under way. Several major banks, including City, JPMorgan and Bank of America, plus the struggling Fannie Mae and Freddie Mac, have schemes in place to try and modify' mortgages to lessen the risk of foreclosure. It's costly and time-consuming, and it doesn't necessarily ease the burden in the end because the surge of job losses across the US is adding to the pressures on the financial position of struggling homeowners. Meanwhile, reports in London said the German government has rejected a single 'bad bank' approach for its troubled banks and instead will go for a series of individual structures for each institution aided. These will be like the so-called off balance sheet things called conduits or structured investment vehicles that featured in the first round of the credit crunch and housing bust. Now the structures will be used to house dodgy securities, loans, etc held by troubled German banks. These 'bad banks' would be issued with state guarantees by the government's existing bank rescue fund. Once rid of these assets, the banks could apply to the fund for fresh capital. The government's original 500 billion euro bank rescue package included 400 billion of credit guarantees for new bank debt as well as fresh capital for cash-strapped lenders. The package is distinct from the 50 billion euro fiscal stimulus package approved last week by the government for the economy as a whole. German's second biggest property lender, Hypo Real Estate (HRE), is likely to be one of the first banks in the new program. It's had over 40 billion euros of new capital from the bailout fund, but that hasn't stabilised the losses or the black hole. HRE has had three distinct capital injections and its problems are complicated by big losses reported in its Dublin based bank, Depfa
Two were sold to other banks, but worryingly, the third in Utah, couldn't be sold by the close of business Friday and looks like being closed. The failures signal that the financial crisis is continuing to destroy financial institutions and the confidence the public has in them. So the talk over the weekend in the US and European papers of the Obama Administration revealing a so-called "big bang" announcement on a banking bailout, is timely, and much needed. The $US700 bailout fund set up by the Bush Administration is broken; it's wasted money and hasn't controlled bank excesses or forced them to lend more money, especially to housing.
A centrepiece of the new program will be to revamp the fund to ensure that taxpayer money is not used to fund excessive pay, bonuses and dividends to shareholders.
The media reports say the "big bang" approach is being driven by former New York Fed boss, Tim Geithner, now Treasury secretary, and Lawrence Summers, Obama's National Economic Council director. The Financial Times and Bloomberg both made it clear (from briefings of course) that Mr Geithner intends to present a comprehensive plan that policymakers hope will command market confidence. Details of the new approach have yet to be approved by President Obama, but it may include both the purchase of toxic assets by a so-called "bad bank" and insurance-style guarantees for problem assets remaining on bank balance sheets. That's a combination of approaches from the Savings and Loan clean up in the 1980s and the approach the UK government has taken to try and get bank lending back underway. But several media reports say that the plan is likely to refrain from imposing tougher restrictions on executive compensation at most firms receiving government aid but instead will keep the looser requirements (initially at least) included in the original $US700 billion program.
That will almost certainly guarantee it a rough ride in Congress, especially from Democrats after the Merrill Lynch $US4 billion bonus scam last month, the sacking of Merrill's former CEO, John Thain, for his part in those bonuses and spending $1.2 million on new office facilities, and the stupid move by Citigroup to spend $US50 million on a new corporate jet until it reserved the decision under pressure from the government and the media. This omission of tougher controls on pay, bonuses and management appears to be at odds with President Obama's criticism of the news that US bankers were paid bonuses of $US18 billion in 2008, according to an estimate published last week. "That is the height of irresponsibility," he was reported as having told the media. "It is shameful." Mr. Obama noted that US taxpayers have bailed out numerous failing financial institutions in recent months. He did not seem to be mollified by that fact that the report said bonuses actually fell 44% from 2007. The aim of the new program for helping banks will contain a range of initiatives to jump-start the consumer credit markets, provide aid to struggling homeowners, and motivate banks to increase lending. The plan will also offer banks more capital and buffer them against losses on portfolios of "toxic" assets, backed by failing mortgages and other troubled loans. A big part of the new approach will be a direct attempt to try and take the pressure off foreclosures. Anti-foreclosure efforts are likely to focus on subsidising programs that reduce unsustainable monthly mortgage payments, though there may also be support for schemes that subsidise the partial write-down of loans that exceed the value of the home. Treasury may also unveil new efforts to revitalise frozen securitisation markets to try and get some recycling of capital under way. Several major banks, including City, JPMorgan and Bank of America, plus the struggling Fannie Mae and Freddie Mac, have schemes in place to try and modify' mortgages to lessen the risk of foreclosure. It's costly and time-consuming, and it doesn't necessarily ease the burden in the end because the surge of job losses across the US is adding to the pressures on the financial position of struggling homeowners. Meanwhile, reports in London said the German government has rejected a single 'bad bank' approach for its troubled banks and instead will go for a series of individual structures for each institution aided. These will be like the so-called off balance sheet things called conduits or structured investment vehicles that featured in the first round of the credit crunch and housing bust. Now the structures will be used to house dodgy securities, loans, etc held by troubled German banks. These 'bad banks' would be issued with state guarantees by the government's existing bank rescue fund. Once rid of these assets, the banks could apply to the fund for fresh capital. The government's original 500 billion euro bank rescue package included 400 billion of credit guarantees for new bank debt as well as fresh capital for cash-strapped lenders. The package is distinct from the 50 billion euro fiscal stimulus package approved last week by the government for the economy as a whole. German's second biggest property lender, Hypo Real Estate (HRE), is likely to be one of the first banks in the new program. It's had over 40 billion euros of new capital from the bailout fund, but that hasn't stabilised the losses or the black hole. HRE has had three distinct capital injections and its problems are complicated by big losses reported in its Dublin based bank, Depfa
Too big to fail massive giveaway of public money has been devoted to a wide range of fraudulent programs
Using the “too big to fail” scare tactic, the U.S. government has kept a number of terminally ill Wall Street gamblers on an expensive life-support system that is estimated to cost taxpayers $8.5 trillion [1]. In light of the fact that (according to IRS Data Book) there were 138 million taxpayers in 2007, this figure represents a burden of $61,594.20 per tax payer. Or, to put it differently, it represents a burden of $28,333.33 per man, woman and child for the entire U.S. population.This massive giveaway of public money has been devoted to a wide range of fraudulent programs, including asset purchases of insolvent institutions, loans and loan guarantees, equity purchases in troubled financial companies, tax breaks for banks, assistance to a relatively small number of struggling homeowners, and a currency stabilization fund.
The theory of “liquidity trap” has been corroborated by empirical evidence from the Great Depression of the 1930s, as well as from the recent financial difficulties in Japan—known as “Japan’s lost decade.” It is also evidenced in the current credit crunch in global markets.There is strong evidence that major money-center banks (such as Citigroup and Bank of America) that have received huge sums of the bailout money are technically bankrupt, but they are not declared as such out of a fear that it may cause turbulence in global financial markets. “Here is the ugly, unofficial truth that neither Wall Street nor the government will acknowledge: the pinnacle of the US financial system is broke—with perhaps $2 trillion in rotten financial assets on the books. Nobody knows, exactly. The bankers won’t say, and regulators won’t ask, or at least don’t dare tell the public” [2].By virtue of years of Wall Street’s expanding bubble, which came to a burst in the late 2007 and early 2008, these banks managed to accumulate huge sums of fictitious capital on their balance sheets. However, since there is no transparency and the extent of toxic assets thus accumulated is not disclosed, nobody really knows the amount of the worthless assets that are hidden in the books of major Wall Street banks and brokerage houses [3].
One thing is certain, however: the amount of these toxic assets is in terms of trillions or (as some experts point out) tens of trillions of dollars [4]. There is simply not enough money—in the United States or in the entire world—to bailout these toxic assets. Although not many people know of this fraudulently kept secret, the banks of course know it. And that’s why inter-bank lending has come to a standstill, as the banks do not trust each other or, for that matter, businesses and consumers.This explains what happened to hundreds of billions of bailout dollars that government bestowed upon Wall Street mega banks: they simply grabbed the loot and stashed it into their coffers, without dispensing a single penny of it as credit to businesses or consumers.It also explains the continued freeze of credit markets and the ongoing financial or market stalemate: neither the giant financial institutions (in collusion with government policy makers) are willing to accept the consequences of their gambling policies and submit to their deserved fate of bankruptcy; nor is there enough money to bailout all of their toxic assets.
Either of these two options could remove the massive toxic assets from financial markets and restore confidence in lending. But since the former alternative is not acceptable to the powerful financial interests and the latter option is not feasible due to insufficient money to buy a ton of worthless assets, the oppressive debt overhang continues to keep credit markets frozen and the economy paralyzed—hence, the persistent stalemate and prolonged crisis.In a subtle but real sense, this stalemate is a reflection of two opposing forces: on the one side stand the competitive forces of market mechanism that require exposure, transparency and the cleansing of the balance sheets of the insolvent mega banks. On the other side stand the monopolistic power of these financial giants, supported by government policy makers, that is preventing the forces of competition from determining the value of their toxic assets.The apparent rationale behind the refusal to acknowledge the bankruptcy of Wall Street mega banks is that they are “too big to fail,” implying that admission of their failure may cause major turbulence in global financial markets. A closer examination of this claim reveals, however, that it is more of a scare tactic designed to protect the powerful interests vested in these financial giants than a genuine rationale to protect national interests.While it is true that exposing Wall Street mega banks for what they are—bankrupt—may cause a severe short-term jolt to global financial markets, such a short-term turbulence would be a necessary price to pay for a “clean break” from the current financial stalemate and a long, protracted economic malaise. It would also serve as an effective way to prevent massive redistribution of resources from taxpayers to Wall Street gamblers. In the history of socio-economic developments such cataclysmic but inescapable shocks are variously called “regenerative or creative destruction,” “shock therapy,” or “birth pangs” of a new dawn and a fresh start.The alternative to a painful but swift cleansing of the mega banks’ toxic assets is to keep these technically bankrupt banks on a financial life-support system that, like parasites, would suck taxpayers’ metaphorical blood, drain national resources, and eventually corrupt or devalue the dollar. What’s more, there is no timeframe as to how long these mega banks should or would be kept on the costly crutches provided by the taxpayers, which means the financial stalemate and economic paralysis can go on for a long time. Two historical precedents can be instructive here.In the face of the Great Depression of the 1930s, the Hoover administration, using the “too big to fail” scare tactic currently used to bail out the insolvent Wall Street Gamblers, created the Reconstruction Finance Corporation that showered the influential bankers with public money in an effort to save them from bankruptcy. All it did, however, was to postpone the inevitable fate of the banking industry: almost all of the banks failed after nearly three years of extremely costly bailouts policies.In a similar fashion, when in the mid- to late-1990s major banks in Japan faced huge losses following the bursting of the real estate and/or lending bubble in that country, the Japanese government embarked on a costly rescue plan of the troubled banks in the hope of “creating liquidity” and “revitalizing credit markets.” The results of the bailout plan have been disastrous.Although the amount of sour assets has never been disclosed, it is obvious (in retrospect) that such worthless assets must have been colossal. For despite a number of huge bailout giveaways, no noticeable improvement in the ailing conditions of Japan’s troubled banks is visible.Not surprisingly, more than a decade after the debt overhang of Japan’s troubled banks first came to surface in 1997-98, most of the affected banks continue to be vulnerable, the nation’s credit market still suffers from a lack of trust, and the broader economic activity remains anemic.So, the undisclosed, tightly-kept-secret tons of toxic assets simply cannot be bailed out. Not only will efforts to do so fail, they are also bound to make things worse by draining public finance, redistributing national resources in favor of incompetent and irresponsible financial institutions, accumulating national debt, weakening national currency, and prolonging economic crisis.Only by burying the oppressive deadweight of mountains of fictitious assets and cleansing the market off their toxic effects can trust be restored in credit markets. This requires opening the books of the troubled financial institutions and letting them go belly up if they are technically bankrupt. As William Greider of The Nationmagazine puts it, “Facing facts will be painful, but it’s better than continuing a costly charade” [5].The current policy of keeping the toxic assets of insolvent financial institutions on costly crutches is nothing short of price fixing. The logical way to realistically evaluate the price of these assets is, therefore, to do away with the current policy of price fixing and let market forces determine the price. As Mike Whitney points out,The appropriate way to establish a price for complex securities in a frozen market is to create a central clearinghouse where they can be auctioned off to highest bidder. That establishes a baseline price, which is crucial for stimulating future sales. . . . Bernanke [the head of the Federal Reserve Bank] would be better off letting the market decide what these debt-instruments are really worth. There are always buyers if the price is right [6].
While pulling the plug on the insolvent banks and letting them go belly up may cause short term convulsions in financial markets, it will have several advantages that would far outweigh such temporary pains.
To begin with, this would shorten the wrenching economic crisis and usher in a clean start. Second, it would avoid rewarding mismanagement, inefficiency and irresponsibility. As Jim Rogers, founder of the Quantum Fund, points out:
Obviously, this means that, while Citigroup’s ownership remains legally in the existing private hands, taxpayers have, in fact, paid for the company’s net market value of $20.5 billion 17 times over with the $351 billion paid to date (351 = 20 + 25 + 306).With varying degrees, what is true in the case of Citigroup is also true in the case of a number of other mega banks. For example, Bank of America has received $45 billion cash and $118 billion worth of guarantees against bad assets. Yet, its market value as of January 20th, 2009, was estimated to be only $33 billion—down from $228 billion in mid-2007 [10] This means that, like the case of Citigroup, taxpayers have purchased (paid for) Bank of America many times over.That the ownership of these banks remains, nonetheless, in the existing private hands is indicative of the fact that government policy makers are more committed to the interests of Wall Street gamblers than those of taxpayers.
The rationale behind this unprecedented taxpayer rip-off is that the current economic crisis is largely due to the ongoing credit crunch in financial markets; and that government injection of money into financial institutions will help unfreeze the credit market by absorbing toxic assets off their balance sheets.Despite the massive infusion of public money into the coffers of Wall Street giants, however, the banking industry has shown no interest in lending. Government’s showering mega banks with taxpayers’ money is thus very much like throwing people’s money into a black hole without any questions asked as to where it all ended up, or how it was spent. Not surprisingly, the credit crunch continues unabated and economic conditions deteriorate out of control.The question is why? If “illiquidity is the core economic problem,” as policy makers argue, why is then the government’s injection of enormous amounts of liquidity failing to unfreeze the credit market?The answer is that government policy makers, Wall Street financial gamblers, and the mainstream media are misrepresenting the ongoing financial difficulties as a problem of illiquidity or lack of cash. In reality, however, it is not a problem of illiquidity or lack of cash, but of insolvency or lack of trust and, therefore, of hoarding cash. The current credit crunch is a symptom, not a cause, of the paralyzed, unreliable financial markets.
John Maynard Keynes, the well-known British economist, attributed this type of credit crunch to what he called “liquidity trap,” not lack of liquidity, implying that under market conditions of widespread insolvency and distrust lending comes to a standstill not because money is scarce but because it is hoarded, or “trapped,” as a safe instrument of preserving assets.
The theory of “liquidity trap” has been corroborated by empirical evidence from the Great Depression of the 1930s, as well as from the recent financial difficulties in Japan—known as “Japan’s lost decade.” It is also evidenced in the current credit crunch in global markets.There is strong evidence that major money-center banks (such as Citigroup and Bank of America) that have received huge sums of the bailout money are technically bankrupt, but they are not declared as such out of a fear that it may cause turbulence in global financial markets. “Here is the ugly, unofficial truth that neither Wall Street nor the government will acknowledge: the pinnacle of the US financial system is broke—with perhaps $2 trillion in rotten financial assets on the books. Nobody knows, exactly. The bankers won’t say, and regulators won’t ask, or at least don’t dare tell the public” [2].By virtue of years of Wall Street’s expanding bubble, which came to a burst in the late 2007 and early 2008, these banks managed to accumulate huge sums of fictitious capital on their balance sheets. However, since there is no transparency and the extent of toxic assets thus accumulated is not disclosed, nobody really knows the amount of the worthless assets that are hidden in the books of major Wall Street banks and brokerage houses [3].
One thing is certain, however: the amount of these toxic assets is in terms of trillions or (as some experts point out) tens of trillions of dollars [4]. There is simply not enough money—in the United States or in the entire world—to bailout these toxic assets. Although not many people know of this fraudulently kept secret, the banks of course know it. And that’s why inter-bank lending has come to a standstill, as the banks do not trust each other or, for that matter, businesses and consumers.This explains what happened to hundreds of billions of bailout dollars that government bestowed upon Wall Street mega banks: they simply grabbed the loot and stashed it into their coffers, without dispensing a single penny of it as credit to businesses or consumers.It also explains the continued freeze of credit markets and the ongoing financial or market stalemate: neither the giant financial institutions (in collusion with government policy makers) are willing to accept the consequences of their gambling policies and submit to their deserved fate of bankruptcy; nor is there enough money to bailout all of their toxic assets.
Either of these two options could remove the massive toxic assets from financial markets and restore confidence in lending. But since the former alternative is not acceptable to the powerful financial interests and the latter option is not feasible due to insufficient money to buy a ton of worthless assets, the oppressive debt overhang continues to keep credit markets frozen and the economy paralyzed—hence, the persistent stalemate and prolonged crisis.In a subtle but real sense, this stalemate is a reflection of two opposing forces: on the one side stand the competitive forces of market mechanism that require exposure, transparency and the cleansing of the balance sheets of the insolvent mega banks. On the other side stand the monopolistic power of these financial giants, supported by government policy makers, that is preventing the forces of competition from determining the value of their toxic assets.The apparent rationale behind the refusal to acknowledge the bankruptcy of Wall Street mega banks is that they are “too big to fail,” implying that admission of their failure may cause major turbulence in global financial markets. A closer examination of this claim reveals, however, that it is more of a scare tactic designed to protect the powerful interests vested in these financial giants than a genuine rationale to protect national interests.While it is true that exposing Wall Street mega banks for what they are—bankrupt—may cause a severe short-term jolt to global financial markets, such a short-term turbulence would be a necessary price to pay for a “clean break” from the current financial stalemate and a long, protracted economic malaise. It would also serve as an effective way to prevent massive redistribution of resources from taxpayers to Wall Street gamblers. In the history of socio-economic developments such cataclysmic but inescapable shocks are variously called “regenerative or creative destruction,” “shock therapy,” or “birth pangs” of a new dawn and a fresh start.The alternative to a painful but swift cleansing of the mega banks’ toxic assets is to keep these technically bankrupt banks on a financial life-support system that, like parasites, would suck taxpayers’ metaphorical blood, drain national resources, and eventually corrupt or devalue the dollar. What’s more, there is no timeframe as to how long these mega banks should or would be kept on the costly crutches provided by the taxpayers, which means the financial stalemate and economic paralysis can go on for a long time. Two historical precedents can be instructive here.In the face of the Great Depression of the 1930s, the Hoover administration, using the “too big to fail” scare tactic currently used to bail out the insolvent Wall Street Gamblers, created the Reconstruction Finance Corporation that showered the influential bankers with public money in an effort to save them from bankruptcy. All it did, however, was to postpone the inevitable fate of the banking industry: almost all of the banks failed after nearly three years of extremely costly bailouts policies.In a similar fashion, when in the mid- to late-1990s major banks in Japan faced huge losses following the bursting of the real estate and/or lending bubble in that country, the Japanese government embarked on a costly rescue plan of the troubled banks in the hope of “creating liquidity” and “revitalizing credit markets.” The results of the bailout plan have been disastrous.Although the amount of sour assets has never been disclosed, it is obvious (in retrospect) that such worthless assets must have been colossal. For despite a number of huge bailout giveaways, no noticeable improvement in the ailing conditions of Japan’s troubled banks is visible.Not surprisingly, more than a decade after the debt overhang of Japan’s troubled banks first came to surface in 1997-98, most of the affected banks continue to be vulnerable, the nation’s credit market still suffers from a lack of trust, and the broader economic activity remains anemic.So, the undisclosed, tightly-kept-secret tons of toxic assets simply cannot be bailed out. Not only will efforts to do so fail, they are also bound to make things worse by draining public finance, redistributing national resources in favor of incompetent and irresponsible financial institutions, accumulating national debt, weakening national currency, and prolonging economic crisis.Only by burying the oppressive deadweight of mountains of fictitious assets and cleansing the market off their toxic effects can trust be restored in credit markets. This requires opening the books of the troubled financial institutions and letting them go belly up if they are technically bankrupt. As William Greider of The Nationmagazine puts it, “Facing facts will be painful, but it’s better than continuing a costly charade” [5].The current policy of keeping the toxic assets of insolvent financial institutions on costly crutches is nothing short of price fixing. The logical way to realistically evaluate the price of these assets is, therefore, to do away with the current policy of price fixing and let market forces determine the price. As Mike Whitney points out,The appropriate way to establish a price for complex securities in a frozen market is to create a central clearinghouse where they can be auctioned off to highest bidder. That establishes a baseline price, which is crucial for stimulating future sales. . . . Bernanke [the head of the Federal Reserve Bank] would be better off letting the market decide what these debt-instruments are really worth. There are always buyers if the price is right [6].
While pulling the plug on the insolvent banks and letting them go belly up may cause short term convulsions in financial markets, it will have several advantages that would far outweigh such temporary pains.
To begin with, this would shorten the wrenching economic crisis and usher in a clean start. Second, it would avoid rewarding mismanagement, inefficiency and irresponsibility. As Jim Rogers, founder of the Quantum Fund, points out:
What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent. . . . What’s happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics.“Governments are making mistakes. They’re saying to all the banks, you don’t have to tell us your situation. You can continue to use your balance sheet that is phony…. All these guys are bankrupt, they’re still worrying about their bonuses, they’re still trying to pay their dividends, and the whole system is weakened [7].Many smaller but financially sound regional and community banks could greatly benefit from the opportunity to buy out the realistic, market-based or devalued assets of the insolvent mega banks. Not only will this benefit the healthier financial institutions, it will also lighten taxpayers’ bailout burden.Third, in light of the fact that the bailout giveaway dollars represent a subtle redistribution of national resources from taxpayers to Wall Street gamblers, declaring these gamblers bankrupt would protect taxpayers from having to shoulder the costly bailout burdens, thereby helping to protect the nation from further plunging into debt. There is absolutely no reason why taxpayers should bailout giant banks, insurance companies, investment banks, and hedge funds.Indeed, for all the money that the government is (or would be) paying for the insolvent banks’ toxic assets, taxpayers could actually own those banks if they are let to be priced according to realistic market values, which are bound to be only a small fraction of their inflated book values.
For example, in exchange for the $20 billion bailout money that the Citigroup received on November 23rd, 2008, the government/taxpayers could technically take the possession of the bank since its net market worth at the time was estimated to be only equal to $20.5 billion—down from $255 billion in mid 2007 [8].But Citigroup has received much more than $20 billion of taxpayers’ money. The $20 billion injection was in addition to the $25 billion the company had received the month before (October 2008) under the Troubled Asset Relief Program (TARP). More importantly, at the same time that Citigroup received the $20 billion injection, it also “received $306 billion of U.S. government guarantees for troubled mortgages and toxic assets to stabilize the bank after its stock fell 60 percent last week” [9].
Obviously, this means that, while Citigroup’s ownership remains legally in the existing private hands, taxpayers have, in fact, paid for the company’s net market value of $20.5 billion 17 times over with the $351 billion paid to date (351 = 20 + 25 + 306).With varying degrees, what is true in the case of Citigroup is also true in the case of a number of other mega banks. For example, Bank of America has received $45 billion cash and $118 billion worth of guarantees against bad assets. Yet, its market value as of January 20th, 2009, was estimated to be only $33 billion—down from $228 billion in mid-2007 [10] This means that, like the case of Citigroup, taxpayers have purchased (paid for) Bank of America many times over.That the ownership of these banks remains, nonetheless, in the existing private hands is indicative of the fact that government policy makers are more committed to the interests of Wall Street gamblers than those of taxpayers.
Prices for all car bands could fall by between 40 and 50 percent during the next three months as a result of the global economic downturn.
Nissan Middle East has shrugged off rumours that car prices will fall this year pointing out that the high appreciation of the Japanese yen made such a move unfeasible, it said on Sunday.The company was responding to comments made by GCC bloggers that suggested prices for all car bands could fall by between 40 and 50 percent during the next three months as a result of the global economic downturn.
During a recent visit to the GCC by Nissan’s president and CEO, Carlos Ghosn, it was confirmed that a short-term slowdown in GCC sales was expected, but overall the company was optimistic about the growth potential in the Middle East. "Talk of car prices dropping dramatically over next three or four months are not true. The high appreciation of the Japanese yen is one factor that makes such price drop speculation unfeasible and unrealistic", said Monal Zeidan, general manager, marketing and corporate communications at Nissan Middle East. "Some in the car trade may use promotions and marketing campaigns but Middle East automotive experts agree no dramatic drop in car prices will follow as speculated by those citing local rumours," added Zeidan.The global financial crisis had had a negative impact on the automotive industry in mature markets but the Middle East’s car market might slow down but would not shrink negatively, he said.Experts estimate nearly one million local people are employed in automotive related sectors in the Arab world. Nissan Middle East witnessed 34 percent growth with 183,000 units sold in 2007 versus 2006. The current fiscal year ends in March 2009.
During a recent visit to the GCC by Nissan’s president and CEO, Carlos Ghosn, it was confirmed that a short-term slowdown in GCC sales was expected, but overall the company was optimistic about the growth potential in the Middle East. "Talk of car prices dropping dramatically over next three or four months are not true. The high appreciation of the Japanese yen is one factor that makes such price drop speculation unfeasible and unrealistic", said Monal Zeidan, general manager, marketing and corporate communications at Nissan Middle East. "Some in the car trade may use promotions and marketing campaigns but Middle East automotive experts agree no dramatic drop in car prices will follow as speculated by those citing local rumours," added Zeidan.The global financial crisis had had a negative impact on the automotive industry in mature markets but the Middle East’s car market might slow down but would not shrink negatively, he said.Experts estimate nearly one million local people are employed in automotive related sectors in the Arab world. Nissan Middle East witnessed 34 percent growth with 183,000 units sold in 2007 versus 2006. The current fiscal year ends in March 2009.
Monday, 19 January 2009
Satyam Computer Services Ltd ,State Farm Insurance Co has terminated its contract
Fraud-hit Satyam Computer Services Ltd said on Monday a U.S.-based client had cancelled its contract, dealing a blow to the embattled Indian outsourcer caught in the country's biggest corporate scandal. State Farm Insurance Co has terminated its contract, a Satyam spokeswoman said, confirming a report in India's Mint newspaper on Monday, but she declined to give details of the contract."While we are disappointed in State Farm's decision to discontinue services, our executives are reaching out to clients around the world, and at this point, well over 90% of our clients have committed to continuing with Satyam," she said.A tech sector analyst with a Mumbai brokerage firm said State Farm was one of the top 10 clients for Satyam, who together accounted for a third of the outsourcing firm's revenue in the July-September quarter last year.The analyst, who asked not to be named as he was not allowed to speak to the media, said he was briefed about Satyam's top clients and their revenue contribution a few months back by the company's management.
Satyam, India's No. 4 software services exporter, was plunged into crisis after founder Ramalinga Raju resigned as chairman earlier this month, revealing profits had been falsified for years and $1 billion of cash on the books did not exist.
Some of other Satyam's clients might cancel orders, wary of business risks in the fraud-hit company, analysts said."Any customer dealing with Satyam at this point in time will be concerned with what is happening at the company now," said R.K. Gupta, managing director at Taurus Asset Management.A government-appointed board at Satyam said on Saturday it was talking to banks about funding, saying all efforts were being made to ensure staff salaries were paid on time.The board, which also discussed scheduling of vendor payments, said it had received expressions of support from clients. It said it was still looking for a new chief executive and chief financial officer for the outsourcing firm.Shares in Satyam (SAY), which have tumbled about 85% since the scandal broke, ended up 4.1% at 25.45 rupees in a Mumbai market that edged up 0.1%.The Economic Times newspaper said on Monday Satyam's new board was looking to appoint up to three investment banks to explore the possibility of finding a buyer.But analysts said finding a buyer for Satyam, which specializes in business software, would be difficult until the extent of the fraud was detected and measures to streamline operations were taken. "A buyer will have to take the responsibility for the company, and I don't think any one will take a shot in the dark before the accounts are restated and the legal issues are resolved," said Kevin Trindade, an analyst with KR Choksey Shares and Securities.
Satyam, India's No. 4 software services exporter, was plunged into crisis after founder Ramalinga Raju resigned as chairman earlier this month, revealing profits had been falsified for years and $1 billion of cash on the books did not exist.
Some of other Satyam's clients might cancel orders, wary of business risks in the fraud-hit company, analysts said."Any customer dealing with Satyam at this point in time will be concerned with what is happening at the company now," said R.K. Gupta, managing director at Taurus Asset Management.A government-appointed board at Satyam said on Saturday it was talking to banks about funding, saying all efforts were being made to ensure staff salaries were paid on time.The board, which also discussed scheduling of vendor payments, said it had received expressions of support from clients. It said it was still looking for a new chief executive and chief financial officer for the outsourcing firm.Shares in Satyam (SAY), which have tumbled about 85% since the scandal broke, ended up 4.1% at 25.45 rupees in a Mumbai market that edged up 0.1%.The Economic Times newspaper said on Monday Satyam's new board was looking to appoint up to three investment banks to explore the possibility of finding a buyer.But analysts said finding a buyer for Satyam, which specializes in business software, would be difficult until the extent of the fraud was detected and measures to streamline operations were taken. "A buyer will have to take the responsibility for the company, and I don't think any one will take a shot in the dark before the accounts are restated and the legal issues are resolved," said Kevin Trindade, an analyst with KR Choksey Shares and Securities.
The former chairman, managing director and chief financial officer of Satyam were moved to police custody on Sunday after spending nearly a week in jail. Under custody, the accused are held in a police lock-up to help investigators with interrogation. The former executives are expected to stay in police custody until Wednesday.An application against the former executives being held in jail has been deferred to Thursday, Raju's lawyer Bharat Kumar told Reuters. He did not give any reason for the postponement from Monday.Maytas Infra Ltd, in which Raju and his family hold a 36% stake, said on Monday its chief executive had resigned. Maytas is Satyam spelt backwards.In December, Satyam announced plans to buy Maytas Infra and Maytas Properties, a deal which was hastily abandoned in the face of a shareholder revolt. In his Jan. 7 resignation letter, Raju said the deal was his last attempt to resolve the problem of fictitious assets on the Satyam balance sheet.
Thursday, 15 January 2009
Anglo Irish Bank nationalised
The Irish government said on Thursday it would nationalise Anglo Irish Bank (ANGL.I) because its viability was of systemic importance to Ireland, adding that the bank remained solvent and would continue to trade.Under the initial bank bailout plan announced last month, the government was set to inject an initial 1.5 billion euros ($1.97 billion) of core tier 1 capital via preference shares, which was to give the state 75 percent of all voting rights in the bank."Anglo has a balance sheet of some 100 billion euros with a substantial deposit base which the state is determined to safeguard," the ministry said in a statement on Thursday.Anglo Irish shareholders were due to vote on Friday on the earlier state bailout plan.The niche commercial lender shocked the financial industry last month when then-chairman Sean FitzPatrick said he had kept shareholders in the dark about 87 million euros ($114 million) of loans from the bank, triggering a purge of senior management."The funding position of the bank has weakened and unacceptable practices that took place within it have caused serious reputational damage to the bank at a time when overall market sentiment towards it was negative," the government said
Wednesday, 14 January 2009
Santander, the Spanish owner of Abbey and Alliance & Leicester, looks likely to miss its ambitious €10 billion (£9 billion) profit target for 2008
Santander, the Spanish owner of Abbey and Alliance & Leicester, looks likely to miss its ambitious €10 billion (£9 billion) profit target for 2008 after suffering hits from the Bernard Madoff scandal and the collapse of Lehman Brothers.Speculation about Spain’s biggest bank came as more details emerged about Mr Madoff’s frantic attempts to prevent the collapse of his scheme and as American prosecutors boosted their efforts to jail the fund manager.Santander, which had emerged relatively unscathed from the credit crunch, said in June that it was aiming for a net profit of €10 billion for 2008. Banking sources in Spain said, however, that Santander’s private bank faced compensating wealthy clients who lost millions of euros on Lehman bonds after the investment bank collapsed last September.It is also possible that Santander will have to compensate customers who lost money in the Madoff scandal after investing in the bank’s Optimal strategic US equity fund. The Switzerland-based fund lost about €2.33 billion of clients’ cash put in Mr Madoff’s fund. Santander itself lost €17 million that it invested with Mr Madoff.The fund manager was arrested on December 11 after confessing that he had been running a fraudulent scheme in which he used funds invested by new clients to pay fake returns to existing investors. The scam unravelled after clients became nervous because of the financial downturn and asked for $7 billion of their cash back.Yesterday, it emerged that Mr Madoff had tried to prop up the scheme by taking $250 million (£165 million) from Carl Shapiro, one of his long-time supporters, in the weeks before his arrest. Mr Shapiro, 95, an entrepreneur and philanthropist who is one of Mr Madoff's oldest friends, lost an estimated $400 million in the fraud and his charitable foundation lost a further $100 million.
Ira Sorkin, Mr Madoff’s lawyer, told the court on Monday that the items were family heirlooms sent in innocence. Mr Litt said yesterday that one parcel contained 13 watches, a diamond necklace, an emerald ring and two sets of cufflinks. The prosecutor said that the collective value of this parcel could exceed $1 million.
“Two other packages containing a diamond bracelet, a gold watch, a diamond Cartier watch, a diamond Tiffany watch, four diamond brooches, a jade necklace and other assorted jewellery, also were sent to relatives,” Mr Litt wrote in his evidence.
Judge Ronald Ellis must decide whether Mr Madoff's activities warrant revocation of his $10 million bail.Irving Picard, the trustee appointed to unwind Mr Madoff’s affairs, has uncovered about $830 million in cash in the company and about $850 million in liquid assets.
Mr Madoff, 70, is on bail, staying at his penthouse in Manhattan, but yesterday prosecutors stepped up their efforts to have him jailed after he allegedly broke the terms of his bail. Marc Litt, Assistant US Attorney, told a court in Manhattan on Monday that Mr Madoff had posted valuables over Christmas and new year to his sons, his brother, Peter, and to an unnamed couple. The fund manager had been ordered not to move any assets while investors who lost money try to recover their cash.
Ira Sorkin, Mr Madoff’s lawyer, told the court on Monday that the items were family heirlooms sent in innocence. Mr Litt said yesterday that one parcel contained 13 watches, a diamond necklace, an emerald ring and two sets of cufflinks. The prosecutor said that the collective value of this parcel could exceed $1 million.
“Two other packages containing a diamond bracelet, a gold watch, a diamond Cartier watch, a diamond Tiffany watch, four diamond brooches, a jade necklace and other assorted jewellery, also were sent to relatives,” Mr Litt wrote in his evidence.
Judge Ronald Ellis must decide whether Mr Madoff's activities warrant revocation of his $10 million bail.Irving Picard, the trustee appointed to unwind Mr Madoff’s affairs, has uncovered about $830 million in cash in the company and about $850 million in liquid assets.
Saturday, 10 January 2009
UIQ Technology, which develops the interface for Symbian UIQ, seems no longer able to meet its debts and is in bankruptcy.
The company UIQ Technology, owned 50:50 by Sony Ericsson and Motorola, will soon close its doors. It has just been placed under the Swedish bankruptcies, being short of cash and can not find any external support to reinvest in these times of economic crisis.Although the future of UIQ is now linked to the development of the Symbian Foundation, which should emerge by 2010 a new mobile operating system open source, the first layoffs began in June.Activity was stopped for two months and, for Johan Sandberg, CEO of UIQ Technology, “there is no opportunity for a revival of activity in the current financial climate.” The company developed an interface for Symbian able to respond to public needs and professional thanks to its flexibility.
Unfortunately, apart from Sony Ericsson, which was commonly used for its range of professional terminals (such as the Sony Ericsson P1i), UIQ interface failed to win, despite advantages such as support for interfaces tactile.UIQ Technology is now under the management of the district administrator in Blekinge (southern Sweden), which will be responsible for dismantling the company’s assets and terminate the contracts of some 200 employees remaining.
Unfortunately, apart from Sony Ericsson, which was commonly used for its range of professional terminals (such as the Sony Ericsson P1i), UIQ interface failed to win, despite advantages such as support for interfaces tactile.UIQ Technology is now under the management of the district administrator in Blekinge (southern Sweden), which will be responsible for dismantling the company’s assets and terminate the contracts of some 200 employees remaining.
FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks
The FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership.
This list includes banks which have failed since October 1, 2000.
Bank Name Closing Date Updated Date
Sanderson State Bank, Sanderson, TX
En Español December 12, 2008 December 12, 2008
Haven Trust Bank, Duluth, GA December 12, 2008 December 12, 2008
First Georgia Community Bank, Jackson, GA December 5, 2008 December 5, 2008
PFF Bank and Trust, Pomona, CA November 21, 2008 November 21, 2008
Downey Savings and Loan, Newport Beach, CA November 21, 2008 November 21, 2008
The Community Bank, Loganville, GA November 21, 2008 November 21, 2008
Security Pacific Bank, Los Angeles, CA November 7, 2008 November 7, 2008
Franklin Bank, SSB, Houston, TX November 7, 2008 November 7, 2008
Freedom Bank, Bradenton, FL October 31, 2008 October 31, 2008
Alpha Bank & Trust, Alpharetta, GA October 24, 2008 October 24, 2008
Meridian Bank, Eldred, IL October 10, 2008 October 10, 2008
Main Street Bank, Northville, MI October 10, 2008 October 10, 2008
Washington Mutual Bank, Henderson, NV and Washington Mutual Bank FSB, Park City, UT September 25, 2008 October 20, 2008
Ameribank, Northfork, WV September 19, 2008 October 20, 2008
Silver State Bank, Henderson, NV
En Español September 5, 2008 October 20, 2008
Integrity Bank, Alpharetta, GA August 29, 2008 December 23, 2008
The Columbian Bank and Trust, Topeka, KS August 22, 2008 October 20, 2008
First Priority Bank, Bradenton, FL August 1, 2008 October 27, 2008
First Heritage Bank, NA, Newport Beach, CA July 25, 2008 October 20, 2008
First National Bank of Nevada, Reno, NV July 25, 2008 December 9, 2008
IndyMac Bank, Pasadena, CA July 11, 2008 October 27, 2008
First Integrity Bank, NA, Staples, MN May 30, 2008 October 20, 2008
ANB Financial, NA, Bentonville, AR May 9, 2008 October 27, 2008
Hume Bank, Hume, MO March 7, 2008 October 27, 2008
Douglass National Bank, Kansas City, MO January 25, 2008 October 20, 2008
Miami Valley Bank, Lakeview, OH October 4, 2007 October 20, 2008
NetBank, Alpharetta, GA September 28, 2007 December 23, 2008
Metropolitan Savings Bank, Pittsburgh, PA February 2, 2007 October 20, 2008
Bank of Ephraim, Ephraim, UT June 25, 2004 April 9, 2008
Reliance Bank, White Plains, NY March 19, 2004 April 9, 2008
Guaranty National Bank of Tallahassee, Tallahassee, FL March 12, 2004 October 20, 2008
Dollar Savings Bank, Newark, NJ February 14, 2004 April 9, 2008
Pulaski Savings Bank, Philadelphia, PA November 14, 2003 July 22, 2005
The First National Bank of Blanchardville,
Blanchardville, WI May 9, 2003 October 20, 2008
Southern Pacific Bank, Torrance, CA February 7, 2003 October 20, 2008
The Farmers Bank of Cheneyville, Cheneyville, LA December 17, 2002 October 20, 2004
The Bank of Alamo, Alamo, TN November 8, 2002 March 18, 2005
AmTrade International Bank of Georgia, Atlanta, GA
En Español September 30, 2002 September 11, 2006
Universal Federal Savings Bank, Chicago, IL June 27, 2002 April 9, 2008
Connecticut Bank of Commerce, Stamford, CT June 26, 2002 October 20, 2008
New Century Bank, Shelby Township, MI March 28, 2002 March 18, 2005
Net 1st National Bank, Boca Raton, FL March 1, 2002 April 9, 2008
NextBank, N.A., Phoenix, AZ February 7, 2002 October 20, 2008
Oakwood Deposit Bank Company, Oakwood, OH February 1, 2002 October 20, 2008
Bank of Sierra Blanca, Sierra Blanca, TX January 18, 2002 November 6, 2003
Hamilton Bank, N.A., Miami, FL
En Español January 11, 2002 October 20, 2008
Sinclair National Bank, Gravette, AR September 7, 2001 February 10, 2004
Superior Bank, FSB, Hinsdale, IL July 27, 2001 October 20, 2008
The Malta National Bank, Malta, OH May 3, 2001 November 18, 2002
First Alliance Bank & Trust Company, Manchester, NH February 2, 2001 February 18, 2003
National State Bank of Metropolis, Metropolis, IL December 14, 2000 March 17, 2005
Bank of Honolulu, Honolulu, HI October 13, 2000 March 17, 2005
This list includes banks which have failed since October 1, 2000.
Bank Name Closing Date Updated Date
Sanderson State Bank, Sanderson, TX
En Español December 12, 2008 December 12, 2008
Haven Trust Bank, Duluth, GA December 12, 2008 December 12, 2008
First Georgia Community Bank, Jackson, GA December 5, 2008 December 5, 2008
PFF Bank and Trust, Pomona, CA November 21, 2008 November 21, 2008
Downey Savings and Loan, Newport Beach, CA November 21, 2008 November 21, 2008
The Community Bank, Loganville, GA November 21, 2008 November 21, 2008
Security Pacific Bank, Los Angeles, CA November 7, 2008 November 7, 2008
Franklin Bank, SSB, Houston, TX November 7, 2008 November 7, 2008
Freedom Bank, Bradenton, FL October 31, 2008 October 31, 2008
Alpha Bank & Trust, Alpharetta, GA October 24, 2008 October 24, 2008
Meridian Bank, Eldred, IL October 10, 2008 October 10, 2008
Main Street Bank, Northville, MI October 10, 2008 October 10, 2008
Washington Mutual Bank, Henderson, NV and Washington Mutual Bank FSB, Park City, UT September 25, 2008 October 20, 2008
Ameribank, Northfork, WV September 19, 2008 October 20, 2008
Silver State Bank, Henderson, NV
En Español September 5, 2008 October 20, 2008
Integrity Bank, Alpharetta, GA August 29, 2008 December 23, 2008
The Columbian Bank and Trust, Topeka, KS August 22, 2008 October 20, 2008
First Priority Bank, Bradenton, FL August 1, 2008 October 27, 2008
First Heritage Bank, NA, Newport Beach, CA July 25, 2008 October 20, 2008
First National Bank of Nevada, Reno, NV July 25, 2008 December 9, 2008
IndyMac Bank, Pasadena, CA July 11, 2008 October 27, 2008
First Integrity Bank, NA, Staples, MN May 30, 2008 October 20, 2008
ANB Financial, NA, Bentonville, AR May 9, 2008 October 27, 2008
Hume Bank, Hume, MO March 7, 2008 October 27, 2008
Douglass National Bank, Kansas City, MO January 25, 2008 October 20, 2008
Miami Valley Bank, Lakeview, OH October 4, 2007 October 20, 2008
NetBank, Alpharetta, GA September 28, 2007 December 23, 2008
Metropolitan Savings Bank, Pittsburgh, PA February 2, 2007 October 20, 2008
Bank of Ephraim, Ephraim, UT June 25, 2004 April 9, 2008
Reliance Bank, White Plains, NY March 19, 2004 April 9, 2008
Guaranty National Bank of Tallahassee, Tallahassee, FL March 12, 2004 October 20, 2008
Dollar Savings Bank, Newark, NJ February 14, 2004 April 9, 2008
Pulaski Savings Bank, Philadelphia, PA November 14, 2003 July 22, 2005
The First National Bank of Blanchardville,
Blanchardville, WI May 9, 2003 October 20, 2008
Southern Pacific Bank, Torrance, CA February 7, 2003 October 20, 2008
The Farmers Bank of Cheneyville, Cheneyville, LA December 17, 2002 October 20, 2004
The Bank of Alamo, Alamo, TN November 8, 2002 March 18, 2005
AmTrade International Bank of Georgia, Atlanta, GA
En Español September 30, 2002 September 11, 2006
Universal Federal Savings Bank, Chicago, IL June 27, 2002 April 9, 2008
Connecticut Bank of Commerce, Stamford, CT June 26, 2002 October 20, 2008
New Century Bank, Shelby Township, MI March 28, 2002 March 18, 2005
Net 1st National Bank, Boca Raton, FL March 1, 2002 April 9, 2008
NextBank, N.A., Phoenix, AZ February 7, 2002 October 20, 2008
Oakwood Deposit Bank Company, Oakwood, OH February 1, 2002 October 20, 2008
Bank of Sierra Blanca, Sierra Blanca, TX January 18, 2002 November 6, 2003
Hamilton Bank, N.A., Miami, FL
En Español January 11, 2002 October 20, 2008
Sinclair National Bank, Gravette, AR September 7, 2001 February 10, 2004
Superior Bank, FSB, Hinsdale, IL July 27, 2001 October 20, 2008
The Malta National Bank, Malta, OH May 3, 2001 November 18, 2002
First Alliance Bank & Trust Company, Manchester, NH February 2, 2001 February 18, 2003
National State Bank of Metropolis, Metropolis, IL December 14, 2000 March 17, 2005
Bank of Honolulu, Honolulu, HI October 13, 2000 March 17, 2005
Secret loans to Anglo Irish Bank directors.
Mr Neary bowed out after a report was presented to the board of the Financial Regulator on the loans scandal at State bailed-out Anglo Irish Bank.The report heavily criticised the failure of regulatory staff to take action over the hiding of the directors' loans.The chief executive of the Financial Regulator paid the price after it emerged that officials in the watchdog had known that
The secret loans scandal has now claimed four scalps at the troubled bank.
former Anglo Irish chairman Sean FitzPatrick had kept shareholders in the dark about €87m worth of loans he received from the bank.The conclusions of the probe into the secret loans affair, and how it was handled by regulators, was released last night and it catalogues a string of failures by regulators.The report refers to a "failure to take appropriate and timely actions in relation to what was a serious matter and to escalate the matter to the authority".The report went on: "In summary, in relation to dealing with the issue of directors' loans in Anglo Irish Bank, the committee concluded that there was a breakdown in terms of internal communications and process and in the regulatory follow-up and response of the organisation."The report, compiled by a committee of the board of the regulator, also called for a review of staffing in the regulatory body, the speeding up of a strategic review of the organisation and better internal communication.Mr Neary issued a statement at 9pm last night tendering his resignation, with effect from January 31. But he insisted he was not aware of the loans when they were first discovered by regulators early last year.His statement said: "So far as I am concerned, I was not advised of any such matters in early 2008 and there has been no oral, written or email escalation of these issues to me or to the Authority over the period until the matter was raised with me by the minister on December 10, 2008."The probe into the Anglo Irish loans scandal was ordered by Finance Minister Brian Lenihan who discovered the existence of the loans when reading the annual report of Anglo Irish Bank.The findings of the report were discussed at a lengthy meeting of the board of the Financial Regulator yesterday afternoon, with Mr Neary dramatically tendering his resignation afterwards.The board was understood to have been furious to be told that regulatory staff became aware of the loans as far back as January 2008.Despite knowing about the loans, their existence was kept a secret by staff in the regulator's office.Now the Financial Regulator is to undergo a root and branch review of how it carried out banking supervision.Father of three Mr Neary had been due to appear before a parliamentary sub-committee on Tuesday, when he was set to be grilled on the matter.But even before last month's loans controversy at Anglo Irish erupted Mr Neary had been repeatedly called on to resign because of what was seen as his failure to rein in the huge exposure of Irish banks to property loans.Trinity College, Dublin's, associate professor of finance, Brian Lucey said: "There has been a lot of concern about the regulatory laxity of the Irish system. The perception is one of a regulator asleep at the wheel." And Sunday Independent business editor Shane Ross was among those who consistently called on Mr Neary to step aside.
The secret loans scandal has now claimed four scalps at the troubled bank.
Higher gas price with transit tariff unchanged will bankrupt gas transportation system
Ukrainian President Viktor Yushchenko says increase in the Russian natural gas price without a simultaneous increase in the cost of its transit via the territory of Ukraine may cause bankruptcy of the Ukrainian gas transportation system. He expressed this opinion during his joint press conference in Kyiv with Czech Prime Minister Mirek Topolanek.“A rise in the gas price with the old transit tariff, exactly gas accounting for 85% of it, would make the transit system go bankrupt,” he said. Yushchenko added that the principles of forming the prices of gas, its transit and storage, must be interconnected, because a discussion when a certain price is called without any proofs or arguments takes us away from rational talks. The President called setting of a single European gas price a “good idea”. 'Yet, to my mind, to have this price it is first necessary to have a single European gas policy, which is unlikely in the nearest future,' the head of state noted. In his turn, the Czech Prime Minister noted that he backed a tripartite agreement between the European Commission, OJSC Gazprom and SJSC Naftogaz of Ukraine on the supply of gas to Europe. Mr Topolanek also says the price of Russian gas for Europe may fall to USD 250 per 1,000 cubic meters. Particularly, he noted, the EU gas price is set with the use of a “mathematical model”, pegging that price to the price of petroleum and the US dollar rate. Until recently, that price was USD 450, particularly for the Czech Republic. Yet, Topolanek does not rule out that the price may fall to USD 250. He added that Ukraine and Russia must work out their own model for setting the gas price for Ukraine.
metro Atlanta observers are already calling the city the epicenter for U.S. bank failures
2008 ranked as one of the worst years for banking since the Great Depression. 2009 may become the worst ever. Bankers, industry experts and insiders are already projecting the new year will be a watershed for banks throughout metro Atlanta and Georgia, potentially setting a new record for the number of banks seized within the state in a calendar year.There have been five failures in the last five months, a rate not seen in decades.An informal survey of bankers, attorneys and analysts shows they generally expect that this year no less than 15 banks will fail in Georgia. That would be more than double the previous records, when seven banks were seized in both 1989 and 1991 during the height of the Savings and Loan Crisis.Estimates vary from as few as 15 to as many as 50 bank failures — or about one a week on average —in Georgia this year. The bulk of any failures, industry insiders said, will be among metro Atlanta banks, which led the charge in new bank creation earlier this decade...The collapse was so dramatic, and concentrated in metro Atlanta, that national observers are already calling the city the epicenter for U.S. bank failures
Indian software company Satyam
Ramalinga Raju, who said the firm had exaggerated cash reserves by some $1bn (£661m), and his brother Rama have been charged with criminal conspiracy. founder of scandal-hit Indian software company Satyam is to be held in custody until 23 January, after he admitted falsifying its accounts.
Police have also detained Vadlamani Srinivas, Satyam's chief financial officer, for questioning. The affair is India's biggest-ever corporate fraud. Mr Raju, formerly chairman, and his brother, formerly managing director, have been charged with criminal conspiracy, forgery, criminal breach of trust and falsifying documents, S.K Kumudi, a senior police officer, said. They could face life in prison, he added.
Fighting for life The company, which employs 53,000 people and brought in about $40bn last year, is now fighting for its life. Its clients include Nestle, General Electric and Ford. The Satyam case is an aberration Satyam is a publicly traded company, but, in exceptional circumstances, the government can step in. The government said on Saturday that a new board would meet within seven days. "We are working on the names," Prem Chand Gupta, the Corporate Affairs Minister, told reporters.The scandal comes at a tough time for Indian companies, already hit by the global slowdown and faltering growth in India, one of Asia's tiger economies. Mr Gupta expressed concern that the affair could blight India's reputation.
"The Satyam case is an aberration," he said. "The credibility of the Indian corporate sector in general, and IT sector in particular, should not be allowed to suffer because of this." Satyam's shares fell to 11.50 rupees on Friday, their lowest level since March 1998. Last year they hit a high of 544 rupees.
Police have also detained Vadlamani Srinivas, Satyam's chief financial officer, for questioning. The affair is India's biggest-ever corporate fraud. Mr Raju, formerly chairman, and his brother, formerly managing director, have been charged with criminal conspiracy, forgery, criminal breach of trust and falsifying documents, S.K Kumudi, a senior police officer, said. They could face life in prison, he added.
Fighting for life The company, which employs 53,000 people and brought in about $40bn last year, is now fighting for its life. Its clients include Nestle, General Electric and Ford. The Satyam case is an aberration Satyam is a publicly traded company, but, in exceptional circumstances, the government can step in. The government said on Saturday that a new board would meet within seven days. "We are working on the names," Prem Chand Gupta, the Corporate Affairs Minister, told reporters.The scandal comes at a tough time for Indian companies, already hit by the global slowdown and faltering growth in India, one of Asia's tiger economies. Mr Gupta expressed concern that the affair could blight India's reputation.
"The Satyam case is an aberration," he said. "The credibility of the Indian corporate sector in general, and IT sector in particular, should not be allowed to suffer because of this." Satyam's shares fell to 11.50 rupees on Friday, their lowest level since March 1998. Last year they hit a high of 544 rupees.
South Korea's 5th largest automaker, Ssangyong Motor Co., has gone bankrupt
The US automakers are not the only ones that have been hit hard by the high price of gas last year followed by the global economic meltdown. According to CNN, South Korea's 5th largest automaker, Ssangyong Motor Co., has gone bankrupt due to the global economic crisis. The credit crunch has impacted the automaker and higher gas prices affected the sales of the SUVs that the company produced. Vehicles sales were down for the company by 30% last year.