Tags
accounting principles, bailouts, banking, bankruptcy, banks, bondholders, bonds, budget deficits, Bush economics, Business, collateralized debt obligations, Creating Solutions for America, credit crunch crisis, credit default swaps, credit derivatives, Cricket D, cricket diane, Cricket Diane C Phillips, Cricket Diane C Sparky Phillips, Cricket Diane Designs, Cricket House Studios, cricketdiane, CricketHouseStudios, currencies, currency values, Current Economic Info Sources, Democracy, depression, diane c phillips, Economic depression, economic statistics and analysis, Economics, Economy, Federal government, financial derivatives, foreclosures, global economic crisis, government corruption, Inventing Solutions For America, invest in America, investing, investment banking, investments, macro-economic future forecasting, macro-economics, Macro-economics future forecasting, macroeconomics, mark to market, Money, Principles of Economics, Reality-based Analysis, recession, Senate, shareholders, Solutions, solvency, statistics, stimulus bill, stimulus package, structured investment vehicles, US currency, US dollar, US economic bailout, US economic crisis, US Government, US government policy
***
Sir Fred May Be Ready To Shred His Pension
Breaking News
8:54am UK, Friday April 03, 2009
Ex-RBS chief executive Sir Fred Goodwin is considering accepting a cut in his controversial pension payment.
Bank to hold annual meeting in Edinburgh
RBS chairman Sir Philip Hampton told Sky News that Sir Fred may voluntarily accept a lower payout.
The revelation comes ahead of what is expected to be a stormy annual general meeting later, with shareholders likely to vent their anger at the situation.
UK Financial Investments (UKFI), the body which manages the public stake in the bank, says it will register a protest vote against the controversial £703,000-a-year deal at the bank’s AGM in Edinburgh.
However, the vote is a symbolic gesture which is not legally binding on the company and will not lead to the pensions being taken away.
UKFI has already taken the major decisions which will be discussed at the meeting in Edinburgh, making the agenda almost irrelevant to normal investors.
But they will be able to express their anger and question the current management team on the progress made in repairing the damage caused by the disastrous acquisition of Dutch bank ABN Amro in 2007.
[ . . . ]
RBS has posted the biggest loss in British corporate history – £24.1bn – and is now majority-owned by the taxpayer after a £20bn bail-out last October.
The Government’s 70% share will be formally confirmed at a separate meeting.
This could rise to as high as 95% after a deal to dump more than £300bn in “toxic” assets into a taxpayer-backed insurance scheme.
***
Money is a necessary element for democracies and parties to run smoothly but only as long as financing is transparent, properly accounted for, with full public disclosure and subjected to effective governmental and social oversight mechanisms. This guarantees citizens’ basic right to know the financial interests supporting candidates and the chance to consider them when casting their votes. Transparency and accountability also serve to monitor irregularities such as vote-buying and the flow of ill-gotten funds.
Crinis presents measures to help governments and citizens increase transparency and accountability levels. In addition to a comparative analysis of the data collected in eight countries, the study includes a narrative report on each country with findings and detailed recommendations.
“Citizens have no way of knowing who finances candidates and political representatives. The lack of transparency in political financing poses alarming risks of corruption since private donations easily become a channel for buying favours,” said Silke Pfeiffer, Regional Director for the Americas at Transparency International during the launch of the study in Panama City.
http://www.transparency.org/regional_pages/americas/crinis
***
My Note –
Although the above tool from the Transparency International organization is predominantly focused on the Latin American countries, it is very apropos to the current situation in the United States, in her business communities and political influence arenas of power.
– cricketdiane, 04-03-09
***
http://www.g20.org/Documents/g20_wg1_010409.pdf
G20 Working Group 1
Enhancing Sound Regulation and
Strengthening Transparency
4.3.2 Liquidity
Recent events have highlighted a number of limitations in the lines of defence of financial institutions during a period of severe liquidity strain. Many of the actions by which financial institutions can address liquidity pressures, for example by selling illiquid assets for cash or by competing more aggressively for retail deposits, suffer when liquidity pressures are widespread and many institutions attempt to use the same funding strategies.
The increasing complexity of financial instruments also creates challenges for managing liquidity. The inclusion of options in financial instruments (e.g., credit rating downgrade clauses) and the fact that some instruments have short track records or do not trade actively, increases the difficulty in assessing the behaviour of these instruments during periods of stress and consequently, for managing liquidity.
Another weakness revealed by the crisis is that liquidity, which some large global financial institutions are increasingly managing in a centralised manner across borders, may not be fully transferable across borders in times of stress, as national supervisors and domestic crisis management policies may require that sufficient liquidity be held for local operations.
**
Action Item: Regulators should develop and implement procedures to ensure that financial firms implement policies to better manage liquidity risk, including by creating strong liquidity cushions. (For immediate action by March 31, 2009)
Action Item: Supervisors and central banks should develop robust and internationally consistent approaches for liquidity supervision of, and central bank liquidity operations for, cross-border banks. (For action in the medium term)
http://www.g20.org/Documents/g20_wg1_010409.pdf
***
Working groups
- G-20 Working group 1: Enhancing sound regulation and strengthening transparency (PDF file, 698KB)
- G-20 Working group 2: Reinforcing international cooperation and promoting integrity in financial markets (PDF file, 548KB)
- G-20 Working group 3: Reform of the IMF (PDF file, 311KB)
- G-20 Working Group 4: The World Bank and other multilateral development banks (PDF file, 194KB)
**
Communiqués
- Communiqué UK, 2 April 2009 (PDF 169KB)
- Communiqué Annex – Declaration on strengthening the financial system – London, 2 April 2009 (PDF 141 KB)
- Communiqué Annex – Declaration on delivering resources through the international financial institutions – London, 2 April 2009 (PDF 92 KB)
- Communiqué UK, 14 March 2009 (PDF 30KB)
- Communiqué Annex – Restoring lending: a framework for financial repair and recovery, 14 March 2009 (PDF 25KB)
- Progress Report on the Immediate Actions of the Washington Action Plan prepared by the UK Chair of the G20, 14 March 2009 (PDF 24KB)
**
- Declaration Washington, USA, 15 November 2008 (PDF 72KB)
- Communiqué São Paulo, Brazil, 8 – 9 November 2008 (PDF 1118KB)
- Communiqué Kleinmond, Cape Town, South Africa, 17 – 18 November 2007 (PDF 47KB)
- Communiqué Melbourne, Australia, 18 – 19 November 2006 (PDF / 32KB)
- Communiqué Xianghe, Hebei, China, 15 – 16 October 2005 (PDF 68KB)
- Communiqué Berlin, Germany, 20 – 21 November 2004 (PDF 321KB)
http://www.g20.org/pub_communiques.aspx
****
*****
From Reuters’ Business News Today –
Bailed-out banks eye toxic asset buys
Purchases would test public opinion
- • Lex Buying bad assets
- • In depth US banks
- • Interactive feature Bank Street
- • Senate calls for greater scrutiny of Fed lending
- • Video What caused the financial crisis
- • The decade for global banks
Tra i fermati, 105 sono ancora trattenuti dalle forze dell’ordine. Nel summit
del sessantesimo anniversario presente per la prima volta Barack Obama
Strasburgo blindata per il vertice Nato
Trecento arresti per gli scontri di ieri
STRASBURGO – Massiccia operazione di polizia dopo gli scontri di piazza di ieri a Strasburgo, e alla vigilia delle manifestazioni previste per oggi e domani in occasione del vertice della Nato. La polizia francese ha effettuato 300 arresti, e 105 persone sono ancora in stato di fermo. Possono restare in detenzione 48 ore prima di essere formalmente incriminati.
I leader della Nato, tra i quali per la prima volta ci sarà Barack Obama, si ritrovano per una due giorni a Baden Baden e Kehl in Germania e a Strasburgo in Francia per celebrare il sessantesimo compleanno dell’Alleanza atlantica, il ritorno della Francia nella struttura militare integrata, e l’ingresso di Croazia e Albania. Ma al di là dei festeggiamenti il vertice deve occuparsi del rilancio della strategia in Afghanistan e della ripresa dei rapporti con la Russia, favoriti dal disgelo celebrato a londra tra Obama e il capo del Cremlino Dmitri Medvedev.
I documenti conclusivi attesi sono tre: una dichiarazione sull’Afghanistan, un corposo comunicato stampa finale in una cinquantina di paragrafi e una dichiarazione sulla sicurezza atlantica, “Das”, che sarà il documento politicamente più interessante. Negli ultimi giorni si è lavorato ad un testo agile “una pagina e mezza, una decina di paragrafi” spiega la fonte diplomatica, che illustrerà le priorità dell’alleanza.
Parlerà di allargamento, di Russia, dell’articolo 5 (quello sull’obbligo di difesa degli alleati), del disarmo, della deterrenza, dei rapporti con l’Onu e la Ue, delle minacce esterne, dell’Afghanistan.
Ci sarà poi un ultimo paragrafo dedicato alla riforma strategica della Nato, che dovrebbe affidarne il disegno ad un gruppo di “esperti” esterni, un progetto che richiederà almeno 18 o 24 mesi.
http://www.repubblica.it/2009/04/sezioni/esteri/nato-strasburgo/nato-strasburgo/nato-strasburgo.html
Nato Summit: 300 Protesters Arrested
Breaking News
9:17am UK, Friday April 03, 2009
French police have detained 300 people after protests in Strasbourg, where Gordon Brown and Barack Obama are due to attend a Nato summit.
Anti-Nato protesters in Strasbourg ahead of the summit
The summit has already provoked clashes between police and protesters in the French city.
Demonstrators have vowed to disrupt the two-day meeting and police fear violence earlier in the week in London may have encouraged them even more.
Police in Strasbourg used tear gas and rubber bullets to beat back several hundred protesters who threw rocks and bottles at officers yesterday.
Strasbourg Riots - NATO meeting - April 03-09 - from SkyNews, UK
The meeting – which marks the 60th anniversary of Nato – is not expected to include specific pledges of troops from the 28 members, but lay the groundwork for future announcements.
Leaders will also discuss ways to rebuild ties with Russia and welcome new members Albania and Croatia.
[Etc.]
Also video
Tra i fermati, 105 sono ancora trattenuti dalle forze dell’ordine. Nel summit
del sessantesimo anniversario presente per la prima volta Barack Obama
http://www.repubblica.it/2009/04/sezioni/esteri/nato-strasburgo/nato-strasburgo/nato-strasburgo.html
Nato, i Grandi a Strasburgo
città blindata, già 300 arresti
Ieri fino a sera i primi, violenti scontri. Tra i fermati, 105 sono ancora trattenuti dalle forze dell’ordine. Nel summit del sessantesimo anniversario dell’Alleanza Atlantica presente per la prima volta Barack Obama
FOTO Gli scontri alla vigilia del vertice Nato
***
Commentary on the CMBS market
By: PAUL JACKSON
March 31, 2009 1:19 PM CST
From an analyst at one of the five large U.S. banks still standing, passed to me via Mark Hanson this afternoon:
In a foreclosure auction today, the John Hancock Tower – a marquee building in Boston – traded at $660MM to Normandy Real Estate Partners. That same property was appraised for $1.3BN in 2006 and traded for $935MM in 2003. This is VERY negative for commercial real estate. At face, it looks like even top quality assets are down 50% from their peak, but that forgets the value of the financing that Normandy now gets to assume. There will still be a $640.5MM mortgage on the property at a rate of 5.6%. What is the value of being able to get a 97% LTV loan at 5.6% these days? Let’s say you can get a 60% LTV mortgage ($400MM) at 8%, and the other $240MM in mezz financing (which has no chance of getting done in this market) could hypothetically get done at 15.
That combination produces a weighted average financing cost of almost 11%. A 5.6% mortgage at 11% yield is about a 70 $px, which means the value of assuming the existing financing on the Hancock Tower is close to $190MM. The real clearing level for the top commercial property in Boston was only $470MM – down 65% from 2006 levels and down 50% from 2003 levels. If we assume 2008 NOI numbers are still accurate, this would be a 9.5% cap rate adjusted for the financing. Without adjusting for the value of financing, the purchase price of $660MM looks like a 6.7% cap rate and $383/sqft – rich, relative to 1540 Broadway (NY office vs Boston office) recently clearing at ~$400/sqft.
**The main takeaway: property values are down A LOT more than people think, especially when considering the implied value of financing.
Caveat Emptor.** On the brightside for holders of GG9, the #1 loan now has a better sponsor with a lighter debt load. Unfortunately, not every CMBS loan had a 50% LTV to 2006/2007 levels like John Hancock Tower…Severities will be much higher for the majority of 75+% LTV CMBS loans.
http://www.housingwire.com/2009/03/31/commentary-on-the-cmbs-market/
****
My Note –
The division of wealth has been manufactured to exclude 90% of those who must live and make a living in every country on this earth. The sadness is that this fact includes the United States of America with increasing numbers and by increasing measures over each day of the last thirty years.
What did those who sought to do this, think would be accomplished by it? Or did they not believe there would be any accountability in it?
– cricketdiane, 04-03-09
Cricketdiane's Weblog 
thanks for helpful post ;)