A citizens’ group is enforcing a six-hour general strike in Bangladesh’s capital, partially disrupting businesses and transportation, to demand that the government cancel a gas exploration deal with U.S. energy giant ConocoPhillips.
Schools are also closed during Sunday’s strike in Dhaka.
Last month, the government signed a production-sharing contract with ConocoPhillips to explore for gas in deep waters of the Bay of Bengal business cards.
But the National Committee on Protection of Oil, Gas and Mineral Resources, Power and Ports says the agreement is compromising Bangladesh’s interests.
The country is facing up to 250 million cubic feet in gas shortages each day.
Bank of America’s $8.5 billion settlement with investors is the largest any bank has ever paid.
It might help assuage worries about how deep the bank’s mortgage problems might be and how long it might take to settle them. But for the nation’s largest bank and its CEO Brian Moynihan, the slate is far from clean.
The payout settles claims by just 22 investors who said Bank of America Corp. sold bonds based on substandard home mortgages. The bonds fell in value when the housing market collapsed and left the investors with losses on $424 billion worth of mortgages. The $8.5 billion settlement eclipses the last three years of earnings at the Charlotte, N.C. bank.
The uncertainty about just how bad Bank of America’s mortgage issues might be has scared investors and led to a 31 percent decline in Bank of America’s stock price since January of last year when Moynihan took over.
“This is a major step forward for our company,” Moynihan said in a conference call with investors on Wednesday.
Wall Street is cheering the move, sending the stock up 3 percent, to $11.14 Wednesday. It has been one of the worst performing stocks in the S&P 500 index in the past year.
But that rally could be short-lived. Analysts say the $8.5 billion is about double the amount they’d expected. The bank continues to fight other investor groups that are demanding similar settlements. Lawsuits from the Federal Home Loan Bank of Boston, bond insurers MBIA and Syncora Holdings linger. And Bank of America is likely to be ordered to pay a hefty portion of the estimated $20 billion multi-bank settlement over the mishandling hundreds of thousands of home foreclosures.
Paul Miller, a bank analyst at FBR Capital Markets, says he’s concerned about the bank’s ability to increase earnings at a pace that would make up for these higher costs. These worries are magnified by the fact that the economic recovery in the U.S. is slowing. That could reduce the number of loans the bank is able to make to consumers and businesses.
Bank of America is in worse shape than other major banks like JPMorgan Chase & Co. and Wells Fargo & Co. because of its purchase of Countrywide for $4 billion in 2008. What seemed like a bargain price for the country’s largest mortgage lender has cost the bank tens of billions more in mortgage losses, regulatory fines, repurchases of poorly-written loans and expensive litigation. At the same time, Bank of America itself had written a fair amount of bad mortgages. As it stands, the bank services one out of every five U.S. mortgages.
So even though most of the major banks sold the same kind of securities and have bad mortgages on their books, analysts say they are in better shape than Bank of America, which has $2.2 trillion in assets.
The other banks don’t have the same pressure to put the mortgage woes behind them. In March, the Federal Reserve didn’t allow Bank of America to increase its dividend, citing uncertainty about the depth of its mortgage problems. It was the only denial issued to any of the four largest U.S. banks. And it raised questions over whether the bank was strong enough to withstand another economic downturn.
The combined effect of the losses and the uncertainty prompted a reversal in the bank’s longtime strategy of fighting claims from investors, Moynihan admits. Since the beginning of the year, the bank has struck large settlements with multiple investors totaling $12.7 billion.
Most of the settlements are with investors that had purchased mortgages or mortgage backed securities. They want banks to buy back mortgages that had misinformation about qualifications of borrowers who received them. During the housing boom, lenders such as Countrywide routinely gave mortgages to people without documenting their income or ability to pay. This was a key driver of the financial crisis.
In January, the financial institution paid $2.6 billion to settle buyback claims on home loans sold to Fannie Mae and Freddie Mac. In April, the bank agreed to pay up to $1.6 billion to Assured Guaranty Ltd., an insurer that also pressed the bank to repurchase shoddy mortgages.
Some industry analysts say the string of settlements could open the door for similar agreements between investors and other large banks that sold mortgages, including JPMorgan, Wells Fargo and Citigroup.
“It’s like the tobacco lawsuits _ if Phillip Morris loses, it affects everyone else,” said Matt McCormick, a portfolio manager and banking analyst at Bahl & Gaynor Investment Counsel in Cincinnati, which manages about $4 billion in assets. He says banks face multiple issues, “”none of which are easy or inexpensive fixes.”
Even if other banks are pushed into settlements now, the amounts will likely be less eye-popping, because Bank of America has more exposure to bad mortgages.
Bank of America’s chief financial officer Bruce Thompson said in a conference call with analysts that by the end of the second quarter the bank would place $20 billion in reserves to cover costs related to future litigation and investor demands.
As a result of Wednesday’s settlement and other mortgage-related costs, Bank of America said it will take a $14 billion charge in the second quarter and will report a net loss of $8.6 billion to $9.1 billion in the second quarter of 2011. That’s up to 93 cents per share. The bank reports second quarter results on July 19.
On his third day in office, Greece’s new Finance Minister Evangelos Venizelos has to convince his eurozone counterparts to release a vital loan installment and consider billions of euros in new loans to save his struggling country.
The eurozone and the IMF have made a new round of budget cuts and economic reforms, which have sparked massive protests and forced a reshuffling of the Socialist government, a precondition for receiving more money.
At their meeting in Luxembourg Sunday evening, eurozone finance ministers have to decide on releasing a euro12 billion ($17 billion) loans installment without which Greece will default on its massive debts next month loan for people with bad credit.
They will also struggle over how banks and other private investors can contribute to a second bailout.
The line of job seekers began Monday inside the Hilton St. Louis at the Ballpark, then extended out a side door and down the block for 110 openings at the downtown hotel’s new rooftop lounge.
Hundreds of people are likely to apply by the time the job fair ends Wednesday. Erich Smith, the hotel’s general manager, said officials had been unsure how many would show up.
“We were either going to get a trickle or inundated,” he said. “We got inundated.”
The area’s unemployment rate remains high
There was an unmistakable echo of the dot-com boom Thursday on Wall Street.
LinkedIn, a trailblazer in the online networking craze, went public with a roaring stock offering. Within minutes, shares were trading at twice the value set by the company.
Buyers crowded the floor of the New York Stock Exchange, and by the closing bell, the company had a market value of $9 billion, the highest for any Internet company since Google had its initial public offering seven years ago. Millionaires and even one billionaire were made, at least on paper.
The stock, issued at $45, went as high as $122.70 just before noon and closed at $94.25 on a trading volume of 30 million shares. All this for a company that skeptics say amounts to an online Rolodex, a place on the Internet for professionals to post résumés and connect with one another and potential employers.
It was enough to remind some people on Wall Street of the heady late 1990s and the debuts of companies like Netscape Communications
Spyker Cars NV said Monday it has secured $88 million (euro59.1 million) in short-term funding for Saab and aims to restart production at the troubled automaker’s plant within a week.
The company, which bought Saab out of liquidation from General Motors Corp. in January 2010, says it signed a euro30 million convertible loan with investment fund Gemini and will also make a drawdown request to the European Investment Bank for euro29.1 million.
Saab has run out of cash to pay its suppliers and production has been at a standstill since April 6.
Spyker said it will also continue talks to secure midterm and long-term funding for the car brand.
“I would like to apologize to our dedicated employees, suppliers, dealers and customers for the disruptions of the past weeks,” Spyker CEO Victor Muller said. “We will do everything in our power to restore the confidence in our company as soon as practically possible.”
Shares in Spyker rose 2.9 percent to euro4.34 after the announcement.
The drawdown is part of Saab’s continued borrowing from the European bank, which has granted the company a euro400 million loan no fax cash advance. So far, Saab has used euro217 million of that, spokesman Eric Geers said.
Geers said the EIB needs to approve the drawdown, but said he sees no reason why it would reject it.
He said Muller is currently in China to seek funding partners among Chinese car manufacturers.
Spyker has previously also put forward plans to raise cash by selling its property to Russian businessman Vladimir Antonov and allow Antonov to become part-owner of Saab.
Last week, the Swedish Debt Office recommended the government allow Antonov to invest up to euro30 million for a 29.9 percent stake in Spyker, while GM said it had reached a “tentative agreement” with Saab to that effect.
The EIB, which also needs to approve the move, has not yet made a decision.
Despite scattered opposition from both ends of the political spectrum, House Republicans and the White House both predicted approval Tuesday for the hard-bargained $38 billion package of spending cuts that narrowly avoided a government shutdown.
House Democratic leaders remained non-committal on the legislation, sealed late last week in negotiations that excluded them.
House Speaker John Boehner, R-Ohio, touted the plan somewhat cautiously, saying it was “far from perfect and we need to do much more if we’re serious about creating new jobs.”
In a posting on his website, Boehner said the measure calls for the largest non-military spending cut in history and would set the stage for a companion vote later in the week on a Republican budget to reduce federal deficits by trillions of dollars over the next decade.
The spending bill covering the rest is fiscal year through Sept. 30 is ticketed for a vote in the House on Thursday, with the Senate to follow either later in the day or on Friday.
The product of days of brinksmanship, the compromise gave the White House, House Republicans and Senate Democrats enough to claim victory yet left critics every opportunity to find fault.
Overall the $38 billion in cuts are less than the $61 billion contained in legislation the House passed in February. Senate Democrats and the White House initially advocated no reduction from current levels.
The legislation includes cuts for the Environmental Protection Agency, the National Institutes of Health, community health centers and the Community Development Block Grant, favored by mayors and other local officials.
Yet the administration and Senate Democrats succeeded in blunting Republican demands for even deeper reductions in those programs and elimination of others. The deal protects some of President Barack Obama’s top priorities, leaving Head Start untouched, for example, while maintaining the maximum Pell education grant of $5,550.
Two prominent conservatives, Rep. Jim Jordan, R-Ohio, and Michele Bachmann, R-Minn., both said they would vote against the legislation.
“I believe voters are asking us to set our sights higher,” said Jordan, who chairs an organization of House conservatives. He said the group, the Republican Study Committee, had called earlier this year for $100 billion in cuts, a total that far exceeds the amount in the legislation.
Bachmann, a potential presidential candidate, said on a campaign-style trip to the first caucus state of the 2012 campaign that she was “very disappointed with the bill that came through payday advance online. And that’s an understatement.”
In an appearance at a high school in Pella, Iowa, she said, “Voters expected us to defund Obama-care,” a reference to the health care law that passed a year ago.
Republicans sought to include provisions that would have effectively voided the year-old health care law, but they were blocked during the negotiations by Obama and Senate Majority Leader Harry Reid, D-Nev.
In addition to the conservative criticism, Sen. Bernie Sanders, I-Vt., one of the most liberal members of the Senate, said the cuts in the measure amount to “Robin Hood in reverse. It takes from struggling working families and gives to multimillionaires. This is obscene.”
Sanders, who is seeking re-election next year, pointed to a reduction in the federal program that helps lower-income families pay their heating bills, and said Pell Grants for college students and the Women, Infant and Children nutrition program would be cut, as well.
Despite the criticism, House Majority Leader Eric Cantor, R-Va., predicted the legislation would pass and said “from every indication I have” support will be strong among the GOP rank and file.
At the White House, spokesman Jay Carney professed no concern about the bill’s prospects. “The deal as I understand it is moving through Congress and will be signed by the president,” he said.
Republicans hold a 241-192 majority in the House, with two vacancies. There are 87 first-term Republicans who will confront an early political test _ whether to support a deal that contains less than they sought and their most avid tea party supporters want.
Democrats have a 51-47 majority in the Senate, although Sanders and Independent Sen. Joseph Lieberman of Connecticut also are aligned with them.
Apart from the spending issues, the negotiators on the legislation also managed a trade-off on non-spending items that complicated the talks.
Included in the bill is a voucher program that lets poor children in the District of Columbia use government funds to attend private schools. Republicans also won agreement to ban the capital city from using its own funds to pay for abortions for poor women.
But they gave up their attempt to block EPA rules on greenhouse gases and other emissions, and were unsuccessful in seeking changes to a federal program that supports family planning.
A state appellate court on Friday denied a request by Missouri’s public counsel and three consumer groups to force utility regulators to roll back electric rates for 1.2 million Ameren customers business card.
Public Counsel Lewis Mills Jr. and the customer groups filed the lawsuit Thursday in the Western District of the Missouri Court of Appeals
OTTAWA
The Republican-controlled U.S. House voted to cut at least $61 billion in federal spending this year, setting up a battle with Democrats over the budget that threatens a government shutdown.
After more than 90 hours of debate, the House decided 235-189 early today to send the measure to the Senate.
Members adopted a number of changes that will make it harder to reach agreement with the Senate, including a ban on funds for President Barack Obama’s health-care overhaul or for Planned Parenthood, which provides abortions. The measure would block regulations on greenhouse-gas emissions, for-profit colleges and the Federal Communications Commission’s “net neutrality” Internet rules.
Senate Democrats already said they won’t accept the steep cuts in the $1.2 trillion spending bill, and Obama’s budget office has threatened a veto. With Congress out of session next week lawmakers have little time to work out their differences. Current spending authority ends March 4, and without a new plan the government will shut down.
House Speaker John Boehner, an Ohio Republican, said this week he won’t accept a short-term extension without some spending reductions. “Read my lips: We’re going to cut spending,” he told reporters.
Military Pay
Minority Leader Nancy Pelosi said a shutdown would halt military pay, veterans’ benefits, Social Security checks and government functions such as food-safety inspections, she said.
“The last thing the American people need is for congressional Republicans or Democrats to draw a line in the sand that hinders keeping the government open,” said Pelosi, a California Democrat.
The plan, designed to fulfill Republican campaign promises to slash federal spending, would kill more than 100 programs and cut funding for hundreds more.
It would make big reductions in programs affecting education, the environment, health care, energy, science and the arts. The Peace Corps budget would be cut by 20 percent and the maximum Pell college tuition grant would be slashed by 15 percent. The Social Security Administration said it would have to furlough employees.
500 Amendments
The House voted on more than 80 amendments among at least 500 offered under Boehner’s promise of an open debate.
An effort by a group of fiscally conservatives to force an additional $22 billion in cuts was defeated, 281- 147, amid warnings from Republicans and Democrats alike that it would force the Federal Bureau of Investigation and other agencies to furlough employees.
“It’s not pleasant to reduce spending — I get that,” said Ohio Republican Jim Jordan, who sponsored the amendment. “This is what the American people elected 87 freshman Republicans to do.” Ninety-two Republicans and 189 Democrats voted against the proposal.
A number of other Republican amendments were adopted, including one accepted 239-187 barring the administration from paying any employees to implement its health-care overhaul.
“Our efforts — and my amendment — will save billions of wasted funding while opening the door for true health-care reform,” said Representative Denny Rehberg, a Montana Republican.
Pre-Existing Conditions
The health-care law aims to expand health-insurance coverage to another 32 million Americans and bars insurers from refusing to cover pre-existing conditions. The law, which cleared Congress last year with no Republican support, also allows young adults to stay on their parents’ insurance plans up to age 26.
“Are you the ones who are going to go tell the American people that insurance companies can drop you when you get sick?” said Democrat Jan Schakowsky of Illinois.
The Education Department amendment, approved 289-136, would block the agency’s “gainful employment” rule that would tie for-profit colleges’ eligibility for federal student aid to their graduates’ income and loan-repayment rates. The administration contends for-profit schools often saddle students with big tuition debts they can’t pay back.
‘Job-Destroying Regulation’
Education and Labor Committee Chairman John Kline, a Minnesota Republican, said Education Secretary Arne Duncan should “put an end to this job-destroying regulation once and for all.”
“Students should be empowered to make an informed decision about their education, and we must ensure they have the information they need without targeting an entire sector of colleges and harming our economy,” Kline said.
The chamber voted 240-185 for Indiana Republican Mike Pence’s amendment to cut off federal funding to Planned Parenthood, which provides a variety of reproductive-health services.
“Congress has taken a stand for millions of Americans who believe their tax dollars should not be used to subsidize the largest abortion provider in America,” he said.
Senator Barbara Boxer, a California Democrat, called it an “extreme attack on women’s health that threatens the health and lives of millions of women.” She said, “We will continue to fight in the Senate against any effort to deprive women of access to lifesaving health care.”
Planned Parenthood receives $363 million in local, state and federal government funding, about 90 percent of it from the federal government or Medicaid, a joint federal-state program, according to spokesman Tait Sye.
Powered by WordPress -- XHTML 1.0