Money world

It’s been three months since MF Global became the eighth-largest bankruptcy in U.S. history. Did anyone see this coming?

Well, a few people had some idea, and a congressional subcommittee heard from them on Capitol Hill Thursday.

Michael Roseman, MF Global’s former chief risk officer, warned early of the dangers in the firm’s massive bets on troubled European debt. He clashed with ex-CEO Jon Corzine over the strategy before being replaced early last year by Michael Stockman, who also appeared at the hearing.

"I discussed my concerns about the positions and the risk scenarios with Mr. Corzine and others," Roseman told the subcommittee. "However, the risk scenarios I presented were challenged as being implausible."

Under questioning, Roseman said he believed his views on risk "certainly played a factor" in the firm’s decision to dismiss him.

MF Global () filed for bankruptcy on Halloween following a frantic week in which executives including Corzine, the former CEO and an ex-governor and senator from New Jersey, attempted to offload assets and sell the business.

The firm had come under intense pressure in the previous days after its $6.3 billion investment in European debt came to public notice. Trading partners called for increased margin payments and clients took their business elsewhere, leaving the firm scrambling for cash to meet its obligations.

"It almost looks like that they took Mr. Roseman out and replaced Mr. Roseman with a ‘yes man,’" Rep. Stephen Fincher said.

Stockman responded that he had initially signed off on the European bets, but later raised concerns and recommended bringing the firm’s risk down in July of last year.

Corzine, for his part, has acknowledged pushing the aggressive European strategy after arriving at MF Global in 2010, anxious to take it to the ranks of Wall Street’s elite.

The investments themselves didn’t actually lose money, as Corzine noted in Congressional testimony in December. None of the bonds MF Global held came from countries that have defaulted and all were set to mature before 2013. But Europe’s precarious finances and the massive leverage MF Global took on spooked investors and ultimately helped doom the firm need a personal loan with bad credit.

While an examination of MF Global’s risk management may have been the main focus of Thursday’s hearing, for the firm’s former customers, the bigger question is what happened to their money.

Customer funds at futures brokers like MF Global are supposed to be protected even in the event of a bankruptcy. In MF Global’s case, however, staffers were unable to account for roughly $1.2 billion in customer money that is now suspected to have been unlawfully appropriated for the firm’s own purposes.

Ratings agencies under fire: Others facing scrutiny Thursday were rating agencies Moody’s and Standard & Poor’s, which waited until just days before MF Global’s bankruptcy to flag its European exposure even though the firm had disclosed it back in May.

By the time the rating agencies acted, the bets were already sparking concern among MF Global’s trading partners. The downgrades then sharply acclerated the firm’s downward spiral.

"[T]he abruptness of the downgrades and the suddenness of MF Global’s collapse raise questions about why the credit rating agencies did not consider MF Global’s exposure to European sovereign debt until late October," the House committee said in a memo last week.

Also appearing Thursday was James Gellert, head of the smaller ratings agency Rapid Ratings International, which maintained a grim outlook on MF Global long before its larger counterparts did. Gellert noted in his testimony that MF Global’s business model had been deteriorating for several years prior to its failure, and that the new risks in the European strategy only made its situation more precarious.

"Had MF Global offered a lower risk foundation, MF Global might have been able to withstand the failure of the new business strategy," Gellert said. "As it was, Mr. Corzine inherited an unhealthy company and made it worse by some high-stakes gambles." 

Source

No faxing fast cash advance gets you cash fast and easily.

The Greek government resumed stalled talks with its private creditors in Athens on Wednesday in the hope of sealing a euro100 billion ($128 billion) debt relief deal needed to avoid a disastrous default this spring.

Charles Dallara, a top official at the Institute of International Finance, a global banking association, returned to Greece after negotiations stalled last week, and held a nearly three-hour meeting with Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos.

“A very crucial meeting, that lasted several hours, has just finished at the prime minister’s office,” Venizelos told Parliament shortly afterward. “The meetings between the Greek government and the IIF have resumed and they will continue (Thursday).”

Earlier, he said the talks “are without a doubt at a very sensitive stage.”

The so-called private sector involvement, or PSI, deal is meant to write off half of the debt Greece owes private bondholders. Creditors would get most of the remaining debt in new bonds with extended repayment periods, as well as a cash payment.

“We want this (deal) to happen in a way that is safe for Greece _ with Greece in the eurozone _ and safe for the real economy and the financial system,” Venizelos said.

Since May 2010, Greece has kept solvent with rescue loans from its European partners and the International Monetary Fund. In the event of bankruptcy, Greece would likely have to abandon the euro and revert to a devalued currency. Since the country imports more than it exports, the costs of fuel and basic consumer goods would skyrocket, further frustrating a population angered by two years of harsh austerity.

The PSI talks have mainly been held up by a disagreement on interest rates for the new bonds.

“The interest rate on the new loans is a key issue here,” Dallara told CNN before Wednesday’s meeting. “Some seem to have a view that we should actually extend the loans at interest rates even lower than what the IMF and (the Europeans) extend their loans at, and there’s not much logic in that in our viewpoint.”

Dallara urged the EU to make clear that a similar deal would not apply to other troubled eurozone countries. “Greece really is a unique situation,” he said.

A Greek government official said Athens is still considering whether to impose so-called collective action clauses on its bonds. Such clauses could force private debt holders resisting a settlement to fall in line with the majority if an agreement is reached. The official asked not to be identified, citing the sensitive nature of the talks Payday advance.

A second government official, who also spoke on condition of anonymity, said Athens estimates there could be an agreement by the end of the week.

Greece needs to clinch the deal quickly to qualify for more bailout loans before it faces a euro14.5 billion ($18.6 billion) bond repayment on March 20. The bond swap is a key part a new euro130 billion ($166 billion) bailout package in loans and bank support from international rescue creditors.

Recession-bound Greece needs to write off some of its borrowings, if it is to have a fighting chance of emerging from its debt hole.

It has so far relied on austerity measures, which were a condition for it to receive the emergency loans. The Greek government has cut pensions and salaries, raised taxes and sold some state property.

Yanis Varoufakis, a professor of economics at the University of Athens, argued that even with a debt deal Greece could do little to eventually avoid default.

“Let the truth be revealed. Let’s have a default because Greece is insolvent and insolvent entities have to default. It’s a law of nature and of society and of reason, and we should simply succumb to that,” Varoufakis told AP Television.

“If European leaders are worried about the effect this will have on banks, they might as well recapitalize them, not continue to drip-feed the Greek state,” he said.

Dallara, the Institute of International Finance official, said that if Greece is forced to default, it will be messy. “I personally believe that there is no such thing as an orderly default for Greece,” he told CNN. “If there is a default, it is likely to be very disorderly.”

As austerity measures have cut deeply into incomes and unemployment has risen, unions have held frequent strikes and protests over the past two years.

Unions and employers were to start talks on Wednesday on reducing labors costs, but the negotiations were disrupted when protesters from a Communist-backed labor union occupied the central building where the meetings were to take place.

EU-IMF debt inspectors are back in Athens this week to monitor progress of those reforms aimed at slashing the country’s high budget deficits.

__

Derek Gatopoulos and Theodora Tongas in Athens contributed to this report.

Source

If you are interested in getting free instant credit score, here is a reliable site that you can go to for the same.

British and Hong Kong leaders said Monday they will team up to develop London into an international trading center for China’s currency.

British Treasury chief George Osborne said in Hong Kong that his trip to Asia this week, which also includes stops in Beijing and Tokyo, furthers dialogue with Chinese authorities and Chinese and British banks “on establishing London as a new hub for the renminbi market as a complement to Hong Kong.”

Hong Kong’s leader, Chief Executive Donald Tsang said a new private sector-led group will be set up to look at strengthening ties between Hong Kong and London in terms of settlement systems, market liquidity and the development of renminbi financial products.

Beijing is promoting the international use of the renminbi, also known as the yuan. It’s also promoting Hong Kong, a semiautonomous Chinese territory with its own financial system and currency, as an offshore trading center for the yuan.

Last year, yuan-denominated bank deposits in Hong Kong doubled to 630 billion renminbi ($100 billion) as savers sought higher returns from the yuan, which has been strengthening 4-5 percent a year.

Beijing would like to see the currency become an alternative to the dollar, although tight capital controls limit its circulation overseas.

“It’s clear that there’s scope for substantial expansion of the renminbi market in coming years,” said Osborne, who was speaking at a financial conference.

He said that in June 2011, China’s share of world trade was 11 percent but the yuan’s share of global foreign exchange trading last year was only 0.9 percent.

Source

Spain’s Parliament approved the new conservative government’s first austerity measures Wednesday, which aim to rein in the country’s swollen deficit with euro8.9 billion ($11.5 billion) in spending cuts.

The measures, which also include income and property tax hikes, were approved by 197 deputies in the 350-seat lower house, where the ruling Popular Party has an absolute majority of 185 seats after a landslide election win in November.

Finance Minister Cristobal Montoro said the measures were severe but necessary, owing to what he called the mismanagement of the economy by the former Socialist government.

“The economy is stopped, we’re on the verge of a recession and the accounts are unbalanced as a consequence, among other things, of the deplorable decisions taken by the former government, which only made the situation worse,” Montoro told lawmakers.

Spain is battling to avert being dragged further into a debt crisis that has already forced Greece, Ireland and Portugal to seek financial bailouts.

In 2010, Spain began to emerge from a near two-year recession triggered by the collapse of a property and construction bubble that had fueled growth for nearly a decade. The country now has a 21.5 percent unemployment rate _ the highest in the eurozone _ and Economy Minister Luis de Guindos said recently the economy would slide back into recession early this year with the last quarter of 2011 and the first of 2012 both registering negative growth.

Montoro accused the former Socialist government of deliberately hiding figures that showed that Spain’s deficit for 2011 would be 8 percent of national income, and not 6 percent as the Socialists had claimed easy to get unsecured personal loans. He said the deviation represented an estimated euro20 billion ($25.4 billion) “black hole.”

However, Prime Minister Mariano Rajoy has acknowledged that the deficit of regional governments, most of which are run by his own conservative party, was responsible for 75 percent of the deviation.

Other measures in the austerity package include a freeze on civil servants’ salaries and on practically all government hiring. Pensions, however, are to be increased by 1 percent, the only area of spending to rise. Taxes on income and property will also be raised but only for two years.

Treasury Minister Cristobal Montoro said the tax increases will be progressive, with the wealthiest paying more and that the impact on lower-income earners will be minimal.

The government projects that the tax increases will bring in euro6.2 billion ($7.9 billion) on top of the euro8.9 billion saved on the spending cuts.

The package was part of an extension of the 2011 budget because the last government did not pass one for 2012. More austerity measures are expected when the government presents its 2012 budget by the end of March.

Source

TORONTO

FRANKLIN COUNTY • The wound left when Chrysler shuttered its plants in 2008 and 2009 hasn’t healed in nearby Franklin County, where residents for years relied on those paychecks.

The county has seen the sharpest rise in poverty in the metro region since the recession, according to recently released census figures. In 2006, a year before the recession officially began, 10.3 percent of residents lived below the poverty level. That figure hit 17 percent in 2010, the most recent statistics available.

When asked why the county was hit so hard, those who work with the poor unanimously cite the Chrysler closure in Fenton and its lingering effects on jobs.

“I think disproportionately we were hit harder than other areas, and that showed in our unemployment rate,” said Presiding County Commissioner John Griesheimer.

Many in the county haven’t found a way to replace good-paying jobs, and the county is about to be dealt another blow with ties to the auto industry.

Harman-Becker Automotive Systems plans to start shutting its plant in Washington, Mo., as soon as this month, leaving nearly 300 people without jobs, said Sandy Lucy, the city’s mayor.

Most of those jobs are in manufacturing. Many workers earn $40,000 to $60,000 a year assembling auto accessories such as car radios and navigation systems. The company supplied parts to the Chrysler plant.

Harman-Becker’s closure was announced more than a year ago but wasn’t supposed to begin until summer. The plant is now expected to be shuttered by spring.

The plant is an example of efforts to create county jobs. The state and city bent over backward to lure Harman-Becker to Washington in 2005, with incentives worth nearly $3 million.

The company has repaid the state almost $540,000 under a “clawback provision,” which allows the state to recover tax money from businesses that fail to meet economic commitments, according to the Missouri Department of Economic Development.

The company did not have to repay nearly $40,000 it received through the Missouri Quality Jobs program because it created and maintained jobs for three years. Harman-Becker did not respond to an email request for comment.

The pending closure worries Sandy Crider, executive director of Loving Hearts Outreach food pantry in Washington. She sees people coming to the pantry who lost jobs in the auto industry that paid $25 or $30 an hour with health benefits and retirement plans, and who have continued to struggle after those jobs disappeared.

“Now they’re working two part-time jobs for minimum wage and no health insurance,” Crider said. “They’re embarrassed because they can’t find jobs to bring them back to the point where they were in the past.”

A 58-year-old freelance Web developer standing in line recently at the Agape House food pantry in St. Clair said the loss of the plants has crippled the county and sent ripples beyond the auto industry. His own workload is down 40 percent from before the recession, said the man, who asked to be identified only by his first name, Bill, so his customers wouldn’t know his financial situation.

“I could see if you’re a bad person, you’re not going to hold a job,” he said. “But I see a lot of good, hardworking people who want a job and there’s nothing for them.”

Crider said more families are becoming homeless and must move in with other family members, also on fixed incomes.

“That’s what the homelessness looks like in Franklin County,” she said.

Ellen Dietrich, director of community relations of the Jefferson Franklin Community Action Corp., has seen the uptick in poverty, too.

Not long ago, a woman who used to donate came into the social service agency’s office. Instead of writing a check, she asked for help.

“People come in and give us résumés and say if we know of anyone hiring, please pass it along,” said Tammy Stowe, executive director of the Union Chamber of Commerce.

Franklin County government relies heavily on sales tax, but collections hit a low of $4.9 million in 2009. Since then, sales tax revenue has been on a slight upswing, said county Auditor Tammy Vemmer.

To help balance the budget the last couple of years, county employees have been required to clean their own offices to save on janitorial services. This year, unelected, full-time county employees will get a $700 boost in pay. They have not seen raises since 2008, Vemmer said.

Griesheimer, the presiding county commissioner, said the county had been able to avoid layoffs, unlike the private sector.

From January 2009 through March 2011, unemployment in Franklin County topped 10 percent for all but two months, and peaked at 13.4 percent in February 2010. The rate dipped to 8.8 percent in November, the most recent data available.

Christie Bean, of Gerald, has searched for a full-time job for more than five years. “I call the temp service every day,” she said.

Bean lost her assembly-line position when the Daisy BB bullet factory shut down in Salem, Mo. She’d like a permanent factory job but knows she can’t be picky.

“People who are getting jobs are holding onto them,” said Bean, 42.

Her husband sells scrap metal and fixes cars, but work has dried up. He has resorted to selling firewood door to door.

“He’s working hard and he’s not getting anywhere,” said Bean. He once had a good factory job, too, she said, but he lost it because of back problems.

Last month, Bean and her sister stopped at the Loving Hearts Outreach food pantry in Washington. Bean packed a basket of pasta, tuna, tomato soup, applesauce and red beans and rice into the back seat of her car and was grateful for it.

Other county residents are slowly digging their way out. Cody Sansom, 27, once made $20 an hour working construction jobs. When the demand for new houses dried up, so did work. He became homeless three years ago and moved to the Agape House shelter three months ago.

He recently landed a job as a cashier and pizza cook at a convenience store, where he earns minimum wage.

“It’s the lowest I’ve ever made,” said Sansom, who will start classes at East Central College in Union next month. “But it’s a job.”

Source

President Barack Obama, saying he

Russia unexpectedly reduced its benchmark rate, suggesting policy makers see a global economic slump posing greater risks than inflation to the world

+%3Cp%3E+More+monetary+stimulus+from+the+U.S.+Federal+Reserve+would+be+the+%22wrong+path%2C%22+despite+the+threat+the+simmering+European+debt+crisis+is+posing+for+the+U.S.+economy%2C+a+top+Fed+official+known+for+his+hawkish+views+on+inflation+said+on+Friday.%3C%2Fp%3E+%3Cp%3EIt+is+up+to+Congress+and+the+President+–+not+the+U.S.+central+bank+–+to+clean+up+the+%22yucky+mess%22+that+is+the+country%27s+debt+and+fiscal+problems%2C+Dallas+Fed+President+Richard+Fisher+said%2C+reprising+what+is+for+him+a+frequent+theme+in+public+speeches.%3C%2Fp%3E+%3Cp%3E%22The+Federal+Reserve+has+done+everything+it+can%2C+and+more%2C+to+reduce+unemployment+without+forsaking+our+sacred+commitment+to+maintaining+price+stability%2C+or+crossing+over+the+monetary+river+Styx+into+full-blown+debt+monetization%2C%22+Fisher+told+the+Austin+Chamber+of+Commerce.+%22From+my+standpoint%2C+resorting+to+further+monetary+accommodation+to+clean+out+the+sink%2C+clogged+by+the+flotsam+and+jetsam+of+a+jolly%2C+drunken+fiscal+and+financial+party+that+has+gone+on+far+too+long%2C+is+the+wrong+path+to+follow.%22%3C%2Fp%3E+%3Cp%3EThe+U.S.+central+bank+stood+pat+on+policy+at+its+meeting+Tuesday%2C+leaving+interest+rates+near+zero%2C+and+continuing+to+signal+that+it+will+keep+them+there+through+at+least+mid-2013.+One+policymaker%2C+Chicago+Fed+President+Charles+Evans%2C+dissented%2C+calling+for+further+easing.%3C%2Fp%3E+%3Cp%3ESpeaking+in+Florence%2C+Italy+on+Friday%2C+Evans+reiterated+his+call+for+the+Fed+to+keep+rates+low+until+unemployment%2C+now+at+8.6+percent%2C+falls+below+7+percent%2C+as+long+as+inflation+does+not+threaten+to+top+3+percent.%3C%2Fp%3E+%3Cp%3EHe+also+said+that+while+the+United+States+needs+better+fiscal+discipline+in+the+medium+and+long+term%2C+some+%22smart+stimulus%22+would+help+a+lot+in+the+short+term.%3C%2Fp%3E+%3Cp%3EDISSENTERS%3C%2Fp%3E+%3Cp%3EFisher+and+fellow+hawks+Minneapolis+Fed+President+Narayana+Kocherlakota+and+Philadelphia+Fed+President+Charles+Plosser+were+the+dissenters+earlier+this+year+as+the+Fed+eased+policy+to+jumpstart+a+slowing+recovery.%3C%2Fp%3E+%3Cp%3EFisher+on+Friday+said+his+votes+were+driven+not+by+a+fear+that+easing+would+stoke+inflation+but+on+concern+it+would+not+help+on+employment.%3C%2Fp%3E+%3Cp%3EInflation%2C+he+said%2C+is+headed+back+down+toward+the+Fed%27s+2+percent+target%2C+and+recent+economic+indicators+suggest+domestic+demand+is+strengthening.%3C%2Fp%3E+%3Cp%3EStill%2C+souring+conditions+in+Europe+and+slowing+growth+in+emerging+economies+like+China+and+Brazil+threaten+to+knock+the+U.S.+recovery+off+course+again%2C+Fisher+said.%3C%2Fp%3E+%3Cp%3EFinancial+markets+remain+on+edge+about+Europe%27s+ability+to+put+a+floor+under+a+bond+market+selloff+that+is+pushing+borrowing+costs+for+countries+such+as+Italy+and+Spain+toward+unsustainable+levels.%3C%2Fp%3E+%3Cp%3EBut+there+is+little+U.S.+policymakers+can+do+but+%22pray+that+fiscal+and+monetary+authorities+abroad+get+it+right%2C%22+Fisher+said.+To+reporters+after+the+speech%2C+Fisher+said+he+does+not+envision+the+need+for+a+monetary+policy+response+to+Europe%27s+crisis%2C+unless+there+were+to+be+a+panic+of+some+sort.%3C%2Fp%3E+%3Cp%3EIn+testimony+at+the+U.S.+House+of+Representatives+Friday%2C+the+New+York+Fed%27s+powerful+chief%2C+William+Dudley%2C+made+a+similar+point.%3C%2Fp%3E+%3Cp%3E%22I+don%27t+anticipate%2C+even+if+the+crisis+in+Europe+were+to+worsen%2C+further+steps+on+the+part+of+the+Federal+Reserve+at+this+time%2C%22+Dudley+told+the+panel+of+lawmakers.%3C%2Fp%3E+%3Cp%3ESpeaking+in+the+Texas+capital+about+1%2C000+miles+away%2C+Fisher+warned+against+the+Fed+opening+the+spigots+of+liquidity+further+to+get+the+economy+moving+again%2C+when+the+biggest+culprit+in+his+view+was+uncertainty+over+tax+policy%2C+given+the+huge+national+debt.%3C%2Fp%3E+%3Cp%3E%22It+may+provide+immediate+relief+but+risks+destroying+the+plumbing+of+the+entire+house%2C%22+said+Fisher%2C+who+often+uses+colorful+metaphors+and+literary+references+to+enliven+his+speeches.+%22Better+that+the+Congress+and+the+president+–+the+makers+of+fiscal+policy+and+regulation+–+roll+up+their+sleeves+and+get+on+with+the+yucky+task+of+cleaning+out+the+clogged+drain.%22%3C%2Fp%3E+%3Cp%3EFisher+and+his+fellow+hawkish+dissenters+rotate+off+the+Fed%27s+policy-setting+panel+next+year%2C+and+only+one+policy+hawk+–+Richmond+Fed+President+Jeffrey+Lacker+–+will+rotate+in.%3C%2Fp%3E+%3Cp%3EThe+change+in+voting+line-up+means+the+panel+will+lean+more+dovish+than+it+did+last+year%2C+suggesting+Fed+Chairman+Ben+Bernanke+may+have+more+support+for+further+easing+in+the+New+Year.%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fwww.reuters.com%2Fassets%2Fprint%3Faid%3DUSTRE7BC0CW20111217%27+rel%3D%27nofollow%27%3ERead+more%3C%2Fa%3E%3C%2Fp%3E+

The Sappington Farmers Market, which filed for bankruptcy Friday, will remain open despite its troubles.

“The reorganization of Sappington Farmers Market will allow the store to remain open and viable,” said Nancy Smith, the market’s manager, in a written statement. “We feel this will position us to be successful in the future.”

Smith didn’t provide an interview.

The store, on Watson Road in Marlborough, has roots going back to the early 1980s, and has been at its present location since 1995 where it has gained a loyal following of bargain hunters and proponents of local farming.

The store’s mission has long been to support area farmers by featuring their products.

In her statement released Saturday, Smith said the store would continue to feature local farmers, and would continue distributing their products not only through the store, but through schools, restaurants and a “mobile market instant payday loans.”

The store’s founder, Tessa Greenspan, sold it in 2008 to a cooperative of small-scale farmers known as the Missouri Farmers Union, which formed a company called Farm to Family Naturally LLC to buy the business.

Farm to Family Naturally, which does business as Sappington Farmers Market, was the organization that filed forChapter 11 bankruptcy on Friday.

Members of the original cooperative who purchased the store have since left, according to employees.

Source