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Posts tagged ‘Bloomberg Television’

Banking Elites Stole $1.2 Trillion Thanks to the FED

DB Briefs: Banking Elites Stole $1.2 Trillion Thanks to the FED / Is Ben Bernanke Insane? / Biden Tells China “You Are Safe”

Tuesday, August 23, 2011 – by Staff Report

Wall Street Aristocracy Got $1.2 Trillion from the FED

Fed Chairman Ben S. Bernanke‘s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. … according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress. “These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.” – Bloomberg

full story at source:http://www.thedailybell.com/2835/DB-Briefs-Banking-Elites-Stole-12-Trillion-Thanks-to-the-FED-Is-Ben-Bernanke-Insane-Biden-Tells-China-You-Are-Safe

European inflation accelerated to the fastest pace in two and a half years

European inflation accelerated to the fastest pace in two and a half years and confidence in the economic outlook declined as surging energy prices threatened to undermine growth.

Inflation in the 17-nation euro region quickened to 2.8 percent in April from 2.7 percent, the European Union’s statistics office in Luxembourg said today in an initial estimate. Economists had expected inflation to remain unchanged, according to the median of 34 forecasts in a Bloomberg News survey. An index of executive and consumer sentiment slipped to 106.2 from 107.3 in March, the sharpest drop since May 2010, and unemployment held at 9.9 percent, separate reports showed.

Crude-oil prices have soared 38 percent in the past six months, pushing inflation above the European Central Bank’s 2 percent limit and prompting policy makers to raise interest rates this month for the first time in almost three years. At the same time, higher raw-material costs are weighing on consumption and company profits, just as governments across the region cut spending to narrow budget deficits.

“The inflation numbers support the view that the ECB will deliver another interest rate hike before long,” said Aline Schuiling, senior economist at ABN Amro Bank NV in Amsterdam. “Growth was exceptionally strong in the first quarter, but will slow from here. The labor market is still very sluggish and paired with inflation that’s not good for purchasing power.”

German Output

The euro was little changed after the data were released, trading at $1.4867 at 11:31 a.m. in Brussels, up 0.2%.

European services and manufacturing growth unexpectedly accelerated in April, driven by higher output in Germany and France, the region’s largest economies. Still, European investor confidence declined as faster inflation and higher interest rates may hurt the recovery. Euro-region growth will slow to 1.6 percent this year from 1.8 percent in 2010, the European Commission forecast last month.

To contact the reporter on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

High-Deficit European Nations May Default, Restructure Debt, Pimco Warns

Some high-deficit euro-area nations will probably need to reorganize or default on their debt, said Andrew Bosomworth, a Munich-based fund manager at Pacific Investment Management Co.

“There’s a number of people around the table, the AAA countries, the taxpayers and all of these countries undergoing the fiscal reform, all trying to participate in the solution, but there’s one seat empty at the table and that’s the senior bondholders, the senior creditors, and ultimately they’re going to have to join the table,” he said today in an interview on Bloomberg Television’s “Countdown” withMark Barton.

Asked whether it’s likely some nations will need to default or reorganize their debt, Bosomworth replied: “I think it is.”

The fund manager said countries with top credit ratings such as Germany and France will have to contribute more to solve the problem even though that might have a negative impact on their own bonds.

“One way or another, the AAA countries will have to contribute more to make the monetary union work better,” he said. “That doesn’t necessarily mean writing a blank check. A credit contribution is going to be needed and that’s going to have a negative impact on the duration of those bonds.”

He cautioned that debt restructuring is a short-term solution and indebted countries will have to work to address their structural problems.

Defaulting in itself will solve a solvency problem, but these countries do have a competitiveness problem,” he said. “They will have to make themselves more competitive by keeping inflation low. That’s a long hard road ahead for these countries to find a way of growing out of the problem.”

To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net; Paul Dobson in London at pdobson2@bloomberg.net

To contact the editor responsible for this story: Keith Campbell at k.campbell@bloomberg.net

Lawsuit against the European Central Bank

DAVOS/SWITZERLAND, 24JAN08 - Jean-Claude Trich...

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Bloomberg News filed a lawsuit against the European Central Bank, seeking the disclosure of documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis.

The lawsuit asks the European Union’s General Court in Luxembourg to overturn a decision by the ECB not to disclose two internal documents drafted for the central bank’s six-member executive board in Frankfurt this year. The notes show how Greece used swaps to hide its borrowings, according to a March 3 cover page attached to the papers obtained by Bloomberg News.

ECB President Jean-Claude Trichet withheld the documents after the EU and International Monetary Fund led a 110 billion- euro bailout ($144 billion) for Greece. The dossier should be disclosed to stop governments from employing the derivatives in a similar way again and to show how EU authorities acted on information they had on the swaps, according to the suit, filed by Bloomberg Finance LP, the parent of Bloomberg News.

The EU is dependent “on member states taking an open and transparent approach in relation to their levels of debt,” Bloomberg said in its suit. “If Greece has failed to take such an approach in the past, there is a compelling public interest in relevant information being disclosed.”

An ECB spokeswoman declined to comment on the lawsuit, which is based on the EU’s freedom of information rules.

Freedom of Information

The ECB case follows a 2008 lawsuit by Bloomberg LP seeking disclosure of the U.S. Federal Reserve’s records on emergency lending under the Freedom of Information Act. A group of banks is appealing to the Supreme Court over lower-court decisions ordering the Fed to identify loan recipients.

“Bloomberg is committed to transparent markets all over the world,” said Matthew Winkler, editor-in-chief of Bloomberg News. “Decisions made behind closed doors helped contribute to the global economic havoc of the last few years. Money flees secrecy and unanswered questions undermine the financial system and give some participants an unfair advantage. Confidence in markets grows with information,” he said. “Bloomberg wants the ECB, as well as the Federal Reserve and other financial institutions around the world, to end this damaging opacity.”

The Greek government didn’t originally disclose the swaps, designed to help it comply with the deficit and debt rules it agreed to meet when it joined the euro in 2001. Eurostat, the EU’s statistics agency, said last month the swaps added 5.3 billion euros to the country’s debt, without giving details. Repeated revisions of Greece’s national accounts, beginning last year, spurred a surge in borrowing costs that pushed the country to the brink of default and triggered a region-wide debt crisis.

Public Confidence

The ECB must consider demands for access to public documents under a March 2004 EU directive. Individuals and companies can then appeal to the European Ombudsman, which reports to the European Parliament, and the European Court of Justice.

“The information contained in the two documents would undermine the public confidence as regards the effective conduct of economic policy,” Trichet wrote in an Oct. 21 letter, turning down Bloomberg’s request for the documents. Disclosure “bears, in the current very vulnerable market environment, the substantial and acute risk of adding to volatility and instability.”

ECB officials first spotted “a swap operation in unusual terms” in April 2009, seven months before the Greek crisis erupted, according to the March 3 cover note.

“It is wholly unclear what (if anything) the ECB did at that time to investigate further,” Bloomberg’s suit says.

‘Need to Know’

“Disclosure would help prevent these situations repeating themselves,” said Michael Spence, winner of the Nobel Prize for Economics in 2001 for his research on asymmetric information in markets. “It’s a tough call. Not everything can be disclosed, but markets need to know.”

Greece entered into a “large” number of private, off- market swaps from 2001 through 2007, Luxembourg-based Eurostat said in a report on Nov. 15. The agreements, which led to higher debt, were analyzed “in detail,” Eurostat said. A follow-up report on Greek data including swaps is due in weeks, a spokesman said at the time.

“We entered the European Union with great effort,” George Petalotis, a Greek government spokesman, told reporters in Athens today. “We don’t tolerate anyone doubting that. Whoever possesses different evidence can bring it out.”

To contact the reporters on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net; Alan Katz in Paris at akatz5@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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