dkf
dkf's JournalCNN's Erin Burnett discussed potential $6 trillion US bailout of Europe.
That is what some are estimating it may cost to stabilize Europe.
Spanish Bondholders May Rank Behind Official Loans After Aid
Investors holding bonds issued by Spain and its banks will probably rank behind official creditors in the queue for payment after the nation asked for a bailout of as much as 100 billion euros ($125 billion).
The funds will be channeled through the state-run FROB bank-rescue fund and Spain will “retain the full responsibility of the financial assistance and will sign” the agreement with the other partners, according to the statement issued yesterday. The document did not make clear whether the European Stability Mechanism, the region’s permanent support fund, which is expected to start operating in July, or the temporary European Financial Stability Facility, will make the loan.
“This is state financing, and the risks of an equity injection into the banks will stay with Spain,” said Alberto Gallo, head of European macro credit research at Royal Bank of Scotland Group Plc in London. “Spain needs a systematic restructuring of its banking system, which could entail haircuts to subordinated bank debt. Official lenders on the other hand are likely to demand seniority.”
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“The risk is now all Spanish bonds are inferior to the ESM,” Steen Jakobsen, chief economist at Saxo Bank A/S in Hellerup, Denmark, wrote in a note. “Finland already declared that if this loan is coming from EFSF they want collateral.”
http://mobile.bloomberg.com/news/2012-06-10/spanish-bondholders-to-rank-behind-official-loans-after-bailout.html
Spain Seeks EU's Fourth Bailout With $125 Billion Aid Request
June 10 (Bloomberg) -- Spain became the fourth euro member to seek a bailout since the start of the region's debt crisis more than two years ago with a request for as much as 100 billion euros ($125 billion) in loans to rescue its banking system.
"The 100 billion euros is the number that we were looking for so I'm cautiously optimistic," Olly Burrows, credit analyst at Rabobank International, said in a telephone interview from London. "We still have to find a solution to the sovereign debt crisis: it's not done yet and we still have to press on with the task of uniting Europe."
Just seven months after winning a landslide victory, Prime Minister Mariano Rajoy was forced to abandon his bid to recapitalize Spanish banks without recourse to external help as a deepening recession forced lenders to recognize spiraling losses. Concern about the banks, which are hobbled with more than 180 billion euros in problematic real estate loans and assets, drove Spanish borrowing costs to near euro-era records last month.
Economy Minister Luis De Guindos announced the aid request yesterday after a three-hour conference call with his European counterparts. He said the terms of the rescue loans are "very favorable" compared with market rates.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/06/09/bloomberg_articlesM5DDED1A74E901-M5DDE.DTL#ixzz1xMVGykMZ
The 25 Most Awkward Cat Sleeping Positions
Too funny...
http://www.buzzfeed.com/paws/awkward-cat-sleeping-positions
China’s auto sales grows by 16 percent in May, showing signs of stabilization
BEIJING — China’s auto market revved to life in May despite the weakening economy, with vehicle sales jumping nearly 16 percent from a year earlier to 1.61 million units, industry figures showed Saturday.
"the auto sales data showed no strong improvement in sales of domestic brand vehicles, with most of the gains going to foreign automakers.
General Motors Co. and its joint ventures sold 231,183 vehicles in China in May, up 21 percent from the same month in 2011 and a slight improvement from April.
More than half were minivans sold by its SAIC-GM-Wuling joint venture, which saw sales soar 36 percent to 127,749 vehicles in May.
Ford Motor Co. reported its passenger vehicle sales climbed 23 percent from a year earlier to 34,550 units. Sales of both passenger and commercial Ford-brand vehicles rose 8 percent to 48,608, it reported earlier."
http://www.washingtonpost.com/business/chinas-auto-sales-grew-by-16-percent-in-may-showing-signs-of-stabilization/2012/06/09/gJQAOu7wPV_story.html
Kudos to President Obama who saved the American auto industry! This is really THE BIGGEST thing he did for our economy.
How is President Obama supposed to get red state Governors to hire people if they don't want to?
If this is his solution for the economy I don't think it will work.
Clinton 'very sorry' for suggesting extension of Bush tax cuts
Bill Clinton said Thursday that he was "very sorry" for suggesting President Obama should support the renewal of the Bush-era tax cuts before the election, a statement some have suggested undermined President Barack Obama.
“I’m very sorry for what happened. I thought something had to be done on the fiscal cliff before the election,” Clinton told CNN in an interview set to air Thursday. "I support his position, and I think on the merits, upper-income people will have to contribute to long-term debt reduction.”
While President Obama has expressed support for extending the tax cuts for middle-income Americans, the White House has signaled that they would demand an increase in taxes for the wealthiest of Americans. But Republicans, who support making the full range of tax cuts permanent, seized on Clinton's comment last week that extending the cuts was "probably the best thing to do right now."
In the interview with CNBC, Clinton did clarify that he was only for a temporary extension, and said the president should not concede the issue of permanent cuts for the wealthy. But the GOP nevertheless argued that Clinton was supporting their position on the issue.
http://thehill.com/video/in-the-news/231603-clinton-very-sorry-for-suggesting-extension-of-bush-tax-cuts
Americans Cling To Jobs As U.S. Workforce Dynamism Fades
The deepest economic slump since the Great Depression has left its mark on both job seekers and job creators, making them more wary about taking risks in a slowly recovering labor market.
Spooked by the severity of the recession and stuck with underwater home mortgages, Americans are less inclined to leave their jobs and less willing to strike out on their own to build businesses, government data show. Even with swelling profits, companies are holding back on hiring, complaining that they can’t find skilled workers for positions they do have open.
As a result, the labor market is losing some of the dynamism for which it’s long been known. And the trend predates the recession: An aging population and the growth of two-income households have reduced Americans’ mobility to about half of what it once was, while technological gains and globalization have led to a loss of middle-income jobs. The economic slump only exacerbated the loss of vigor.
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“We have certainly moved” in the direction of Europe, with a less-dynamic labor market, Steven Davis, professor at the University of Chicago Booth School of Business, said in an email. He ticked off the similarities: “higher unemployment rates, longer unemployment spells, steep falls in the employment rate in the working-age population, a slower pace of worker flows, and a slower pace of job creation and destruction.”
http://www.bloomberg.com/news/2012-06-07/americans-cling-to-jobs-as-u-s-workforce-dynamism-fades.html
Greece Warns of Going Broke as Tax Proceeds Dry Up
As European leaders grapple with how to preserve their monetary union, Greece is rapidly running out of money.Nikos Lekkas, a government official, said banks had hindered his efforts to collect back taxes.
Government coffers could be empty as soon as July, shortly after this month’s pivotal elections. In the worst case, Athens might have to temporarily stop paying for salaries and pensions, along with imports of fuel, food and pharmaceuticals.
Officials, scrambling for solutions, have considered dipping into funds that are supposed to be for Greece’s troubled banks. Some are even suggesting doling out i.o.u.’s.
Greek leaders said that despite their latest bailout of 130 billion euros, or $161.7 billion, they face a shortfall of 1.7 billion euros because tax revenue and other sources of potential income are drying up. A wrenching recession and harsh budget cuts have left businesses and individuals with less and less to give for taxes — and growing incentive to avoid paying what they owe.
http://m.cnbc.com/id/47700847
Older Americans learn new trades in tough jobs market
After collecting unemployment checks for a year, Burklund took a part-time job at grocery chain Trader Joe's. As he watched his retirement savings bleed almost dry, he realized his situation would not turn around anytime soon.
An acquaintance suggested he train for call center work, servicing banks and insurance companies. "I said, 'Well, I may as well try that because nothing else seems to be working,'" Burklund told Reuters.
Thousands of Americans aged 55 and older are going back to school and reinventing themselves to get an edge in a difficult labor market, hoping to rebuild retirement nest eggs that were almost destroyed by the recession.
"I went into it thinking 'I am not too sure I am cut out for call center work,' and I never really wanted to sell insurance. But I was willing to try anything to gain full employment," said Burklund, who has set aside hopes to retire at 65.
Within two weeks of completing the program, he had three interviews and two job offers. In March, he started working at Marsh Insurance.
http://articles.chicagotribune.com/2012-05-31/news/sns-rt-us-usa-economy-employmentbre84u09j-20120531_1_tough-jobs-market-new-jobs-older-americans
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