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Posts Tagged ‘Financial Crisis’

Greece asks Obama to impose tougher rules on hedge funds

March 10th, 2010

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Greek prime minister George Papandreou has called on US president Barack Obama to introduce tougher regulation on currency traders and hedge funds.

George Papandreou

The European country is currently in the midst of a financial crisis which has seen three packages of cuts passed in the past three months by the government.

Last week, further debt-cutting measures were introduced including pay cuts for citizens working in the public sector, as well as tax rises on goods such as fuel.

Mr Papandreou has stated that hedge funds are making the economic situation worse in Greece by betting on the country defaulting on its debts.

“Europe and America must say ‘enough is enough’ to those speculators who only place value on immediate returns, with utter disregard for the consequences on the larger economic system,” he stated.

Last month, Fitch Ratings downgraded the credit rating of four top Greek banks in response to the growing crisis.

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Tags: Barack Obama, Consequences, Credit Rating, Currency Traders, Debts, Economic Situation, Economic System, Europe And America, Financial Crisis, Fitch Ratings, George Papandreou, Greek Banks, Greek Prime Minister, Hedge Funds, Midst, Mr Papandreou, Public Sector, Speculators, Three Months, Utter Disregard

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Dubai World repayments plan to be presented to creditors

March 9th, 2010

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Dubai World’s proposals on how it wishes to restructure its debts to creditors will be presented to banks owed money this month, it has been confirmed.

Newspaper reports had suggested that a plan would be put forward as early as this week and Dubai World have confirmed that the process will occur before April.

“A formal proposal will be presented by Dubai World to creditors in March,” a government spokesman told AFP.

Last November, the state-owned company announced it was seeking to restructure its debts to banks around the world – sparking a loss of confidence in Dubai across global financial markets.

Dubai had borrowed heavily to fund its property boom, but the financial crisis saw house prices plummet by 50 per cent between 2008 and 2009.

Many of the banks most exposed to Dubai World are British – with Royal Bank of Scotland, Lloyds and Standard Chartered all reportedly owed in excess of $5 billion by the firm.

Its total debt is believed to stand in the region of $60 billion.

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Tags: Bank Of Scotland, Banks, Confidence, Creditors, Debts, Dubai, Exposed, Financial Crisis, Formal Proposal, Global Financial Markets, Government Spokesman, House Prices, Last November, Lloyds, Newspaper Reports, Owned Company, Property Boom, Proposals, Repayments, Royal Bank Of Scotland

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S&P 500 Faces ‘Heavy’ Fibonacci Resistance

March 3rd, 2010

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(Bloomberg) — The Standard & Poor’s 500 Index recouped half its bear-market loss, pushing for a second time to a level that might herald more gains, according to some analysts who follow the Fibonacci system of forecasting prices.

The benchmark for U.S.

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Tags: Bank Of Canada, Bear Market, Clos, Contraction, Fibonacci Number Sequence, Financial Crisis, Lehman Brothers, Lehman Brothers Holdings, Lehman Brothers Holdings Inc, Leonardo Of Pisa, Liber Abaci, Managing Director, Rbc Capital Markets, Retracement, Royal Bank Of Canada, S 500, Second Time, Slump, Subprime Mortgages, Technical Resistance

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Citigroup CEO to receive over $128,000 as a salary for 2009

March 2nd, 2010

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Vikram Pandit, chief executive officer (CEO) at Citigroup, is to receive $128,751 as a salary for 2009, a new filing has claimed.

According to the document submitted to the Securities and Exchange Commission (SEC), Mr Pandit agreed to accept a salary of $1 for 2009 in February of last year until the bank made a profit.

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Tags: Base Salary, Ceo, Chief Executive Officer, Citi, Citigroup, Committee Members, Compensation Committee, Financial Crisis, Fiscal Aid, Incentive Award, Performance Incentive, Priorities, Securities And Exchange, Securities And Exchange Commission, Stock, Substantial Progress, Us Government

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Goldman Sachs unpopular due to its success, ex-CEO claims

March 2nd, 2010

Before You Invest

Investment bank Goldman Sachs is unpopular because of its success, a former-chief executive officer (CEO) has claimed.

Jon Corzine, who also used to be chairman of the bank, made the comments during an interview with Bloomberg.

He told the news provider: “When you’re successful it brings envy.”

“People are broadly frustrated with the financial institutions, and since it is the leader of the industry and has shown great success over a long period of time, I think it’s more vulnerable.”

However, Mr Corzine added that bankers should also be more humble “in the overall scheme of public society” due to the anger provoked by the size of many compensation schemes unveiled by banks which have used state bailouts to remain in business.

Profits for Goldman Sachs during 2009 reached $13.4 billion after it benefitted from $10 billion worth of taxpayer aid as part of the Troubled Asset Relief Program during the financial crisis.

“People are very frustrated, angry about the compensation issues, particularly in the context of what people perceive as bailouts of each and every one of the folks that participated.”

Goldman Sachs is currently discussing the details of credit swaps undertaken with Greece during 2001 with the
European Union following allegations that it helped the country hide the full extent of its debt from regulators.

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Tags: Allegations, Anger, Banks, Bloomberg, Business Profits, Ceo, Chief Executive Officer, Compensation Issues, Compensation Schemes, Envy, Financial Crisis, Financial Institutions, Full Extent, Goldman Sachs, Greece, Investment Bank, Jon Corzine, Period Of Time, Regulators, Swaps

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JPMorgan Chase CEO – Economy could still “double dip”

March 2nd, 2010

Before You Invest

JPMorgan Chase will not raise its dividend until the threat of a “double dip” in the economy has subsided, the company’s chief executive officer has said.

Jamie Dimon made the comments at the financial institution’s annual investor meeting, Reuters reported.

Representatives from the bank stated that ideally the dividend would be increased from 75 cents to $1.

However, further confirmation that the financial crisis had ended, such as rising employment figures, would be needed before the bank would increase the figure.

Mr Dimon said: “We don’t mind holding extra capital right now because we don’t know what’s going to happen. There are huge
potential negatives out there.”

He added that the company is “cautious” due to uncertainty over the amounts of money needed to be maintained in reserve for future potential credit losses.

Although the economic turmoil in Greece was not an issue for the bank, the CEO did express concern over the ability of states such as California to manage debt.

Earlier in the month, JPMorgan announced the acquisition of the commodities arm of RBS Sempra for $1.7 billion.

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Tags: Acquisition, Ceo Express, Chief Executive Officer, Commodities, Confirmation, Credit Losses, Dividend, Economic Turmoil, Economy, Employment Figures, Financial Crisis, Financial Institution, Greece, Investor, Jamie Dimon, Jpmorgan Chase, Money, Rbs Sempra, Reuters, Uncertainty

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Goldman Sachs criticized by financial crisis panel chief

February 27th, 2010

Before You Invest

Goldman Sachs has been singled out for criticism from Phil Angelides, the chairman of the Financial Crisis Inquiry Commission (FCIC).

In an interview with the Financial Times, Mr Angelides said that he was concerned at revelations uncovered by the public hearing that suggest Goldman Sachs had been “creating and selling securities and then fully betting against them”.

He added that recent allegations about Goldman Sachs’ behavior in relation to debt swaps carried out on behalf of the Greek government were also a worry for him.

“I find the practice troubling and it raises questions about fair dealing and trust and transparency in the marketplace,” he said.

The FCIC is set to begin hearing from further witnesses again today (February 26th 2010) after previously taking testimony from leading figures in the US banking sector.

Mr Angelides said that the commission may decide to recall witnesses such as Lloyd Blankfein from Goldman Sachs and Jamie Dimon of JPMorgan Chase as its enquiries continue.

Last month, Mr Blankfein told the inquiry that he believed the lessons of the financial crisis had been learned and such events would not occur again in his lifetime.

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Tags: Allegations, Banking Sector, Fair Dealing, Fcic, Financial Crisis, Financial Times, Goldman Sachs, Greek Government, Inquiry Commission, Jamie Dimon, Jpmorgan Chase, Lifetime, Lloyd Blankfein, Panel Chief, Phil Angelides, Public Hearing, Revelations, Selling Securities, Swaps, Transparency

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Wall Street Bonuses Rise 17%

February 23rd, 2010

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(Bloomberg) — Wall Street bonuses rose 17 percent in 2009 from a year earlier as the securities industry rebounded from the financial crisis, New York State Comptroller Thomas DiNapoli said.

Financial firms disbursed $20.3 billion compared with $18.4 billion in 2008, DiNapoli’s office calculated, basing its estimate on personal income-tax collections.

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Tags: Bloomberg Television, Bonus Pool, Budget Deficit, Budget Problems, Capital Gains, Cash Bonuses, Corporate Earnings, David Paterson, Deferred Compensation, Financial Crisis, Growth And Profitability, Income Tax Collections, New York State Comptroller, Personal Income Tax, Predictable Growth, Securities Industry, Stock Options, Thomas Dinapoli, Wall Street Bonuses, York State Comptroller

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Wall St. Helped to Mask Debt Fueling Europe’s Crisis

February 14th, 2010

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Gary D. Cohn, president of Goldman Sachs, went to Athens to pitch complex products to defer debt. Such deals let Greece continue deficit spending, like a consumer with a second mortgage.

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits.

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Tags: Billions, Complex Products, Credit Cards, Day Of Reckoning, Debt Limits, Deficit Spending, Early November, Epicenter, European Governments, Financial Crisis, Flashpoint, Goldman Sachs, Health Care System, President Gary, Second Mortgage, Second Mortgages, Street Tactics, Subprime Mortgages, World Markets, Worries

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This Day in Wall Street History 1895: U.S. gold supply running dry

February 9th, 2010

Before You Invest

The early 1890s were not kind to America’s gold reserves. The nation’s supplies of the precious metal swooned under the strain of the recently passed Sherman Silver Act as European investors, fearful that America was chucking gold for silver, increasingly sold their gold supplies overseas.

Coupled with declining revenues triggered by various protective tariffs, the reserves plummeted, taking a severe toll on the economy.

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