Tag: bailout

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Europe’s big banks need a bailout

David Weidner, Marketwatch: “Give me a swap line on currency and I will bet the farm….I am shocked that the market is rallying this much today on this news [European markets up about 10pc in dollar terms].”

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David Weidner interviewed by Evan Newmark of Mean Street.

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Auditor Says F.H.A. Could Need Bailout – NYTimes.com

WASHINGTON — The Federal Housing Administration has a “close to 50” percent chance of requiring a bailout if the housing market deteriorates next year, the agency’s independent auditor said in a report released Tuesday.

The F.H.A., which offers private lenders guarantees against homeowner default, has just $2.6 billion in cash reserves, the report found, down from $4.7 billion last year.

The agency’s woes stem from the national foreclosure crisis. In the last three years, the F.H.A. has paid $37 billion in insurance claims against defaulting homeowners, shrinking its cash cushion.

via Auditor Says F.H.A. Could Need Bailout – NYTimes.com.

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Italy Nears Tipping Point as Bond Yields Spike – WSJ.com

Less than two weeks after European leaders unveiled an agreement that was designed to bolster confidence in the region, the yield on Italy’s 10-year debt drew close to the 7% mark, a line in the sand of both practical and psychological importance to the market. Psychologically, 7% has become a beacon due to the fact that Greece, Portugal and Ireland each sought bailouts soon after their debt reached these levels. While analysts said it is too simplistic to say that Italy will be forced to ask for support if its 10-year debt yields 7%, they said the recent selloff is taking the country to the tipping point.

via Italy Nears Tipping Point as Bond Yields Spike – WSJ.com.

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Papandreou’s Hold on Power Weakens – WSJ.com

ATHENS—-Embattled Greek Prime Minister George Papandreou has called an emergency cabinet meeting later Tuesday amid an open revolt in his Socialist party that could topple his government.

“Papandreou is trying to control a growing revolt in the party after the defections and calls for him to resign. The future of the government may be decided at the cabinet meeting,” a senior party official told Dow Jones Newswires…….

The referendum is seen as a high-stakes gamble aimed at quelling a public backlash against controversial austerity policies but at the risk of derailing plans aimed at solving the euro zone’s debt crisis.

via Papandreou’s Hold on Power Weakens – WSJ.com.

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China buys its banks – macrobusiness.com.au

Central Huijin Investment Ltd, an arm of China’s sovereign wealth fund, bought shares in four major Chinese State-owned banks on the secondary market on Monday, the company told Xinhua.

The four banks include the Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB), according to the company.

The move is aimed at supporting the steady operation and development of major financial institutions and stabilizing their stock prices, the company said.

via China buys its banks – macrobusiness.com.au | macrobusiness.com.au.

Could be the first step in a bailout.

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German Parliament Approves EFSF’s Expansion – WSJ.com

German Chancellor Angela Merkel’s fractious coalition won a brief reprieve on Thursday, as lawmakers from the center-right ruling parties closed ranks and passed legislation to expand the euro-zone’s bailout fund.

……A total of 523 lawmakers voted in favor of the EFSF reform bill; 85 voted against, with three abstentions. The overall result includes the votes of the opposition Social Democrats and the environmentalist Greens, who unanimously backed the bill in stark contrast to Ms. Merkel’s unruly coalition.

……The 17 euro-zone governments agreed in March and July to expand and reform the EFSF, boosting the lending capacity of the fund to €440 billion ($596 billion) from €250 billion. The fund also will receive additional powers, such as the ability to extend credit lines to banks and buy bonds on the secondary market.

…….The temporary EFSF is set to expire in 2013 and to be replaced by a permanent European Stability Mechanism.

via German Parliament Approves EFSF’s Expansion – WSJ.com.

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EU Super-Bailout Option Slips Away – WSJ

Financial markets rallied around the globe Monday as investors saw the first glimpse of real hope for containing the European debt crisis. Problem was that the lead advocates of the deal, the IMF’s Christine Lagarde and the European Commission’s Olli Rehn, are bureaucrats who don’t have to answer to electorates every few years.

Decidedly not on board were the actual governments of the 17 euro-zone nations. Euro-zone finance ministers came home from Washington doubting they could sell more risk to voters already grumbling at past and present tax money being put behind insolvent state treasuries in Greece, Portugal and Ireland.

via EU Super-Bailout Option Slips Away – The Source – WSJ.

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