Germany and France send two key government officials to fill positions at the European Central Bank today, setting off a struggle for the job of chief economist.
Joerg Asmussen and Benoit Coeure join the ECB
Taiwan President Ma Ying-jeou said his rapprochement with China will encourage other nations to strengthen trade with the island and make it less dependent on the mainland, rebutting opposition criticism that he
Bank holding company Washington Mutual Inc. has agreed to a settlement with some creditors involved in its Chapter 11 bankruptcy case and has filed a new reorganization plan.
Washington Mutual said in a statement late Monday that the settlement will allow it to distribute more than $7 billion to its creditors. The settlement must still be approved by the U.S. Bankruptcy Court for the District of Delaware.
“The comprehensive settlement announced today represents a fair and reasonable recovery for the thousands of equity holders of the company who have been following this case closely for three years,” Michael Willingham, chairman of the committee of equity security holders appointed in the company’s Chapter 11 proceedings.
Washington Mutual’s bankruptcy case is three years old and its reorganization plans have twice been rejected by Bankruptcy Court Judge Mary Walrath. The company is hoping to exit bankruptcy protection by the end of February. It has a hearing scheduled for Jan. 11, 2012 in which the bankruptcy court will consider approval of the reorganization plan’s disclosure statement. The company also plans to ask the bankruptcy court for a mid-February hearing to confirm its reorganization plan fast cash online.
The Federal Deposit Insurance Corp. seized WaMu’s Seattle-based flagship bank in 2008 and sold its assets to JPMorgan for $1.9 billion in the largest bank failure in U.S. history.
Under terms of the settlement, the reorganized assets of Washington Mutual will include equity interests in WMI Investment Corp. and WM Mortgage Reinsurance Co.
A reorganized Washington Mutual will receive $75 million in funding from certain creditors. Exit financing provided by settlement noteholders will include a $125 million senior secured credit facility that will be used to fund working capital as well as for general corporate purposes and eligible originations and acquisitions.
The majority of the reorganized company’s common equity will be distributed to its current preferred and common equity holders. Its board will initially be made up of four members chosen by the equity committee and one member selected by lenders under the credit agreement.
Peruvian Cabinet chief Salomon Lerner resigned Saturday after less than five months in the post and was replaced by the interior minister, who inherits an unresolved dispute over the country’s biggest mining investment.
The reason for Lerner’s resignation was not explained, but he was recently involved in failed attempts to negotiate an end to protests that stalled the $4.8 billion Conga gold mining project, which has been plagued by increasingly violent protests.
His resignation letter, posted online by the newspaper La Republica, does not make direct reference to the conflict but hints Lerner was unhappy with the government’s handling of it.
As Cabinet chief, Lerner wrote in the 1 1/2-page resignation letter, “our direct mandate has been dialogue and the seeking of consensus to avoid confrontation between Peruvians.”
After just one day of talks that Lerner led with local officials who fear the Conga project could taint and diminish water supplies affecting thousands, President Ollanta Humala on Dec. 5 called a state of emergency in four affected northern provinces for 60 days.
Lerner’s replacement, Interior Minister Oscar Valdes, is a 62-year-old former army officer who quit the military as a lieutenant in 1991 and became a successful executive at various businesses in the southern coastal city of Tacna, most recently a trucking company and pasta producer.
Humala, 49, was a student of Valdes in the 1980s at Peru’s military academy.
Humala, who canceled a trip to Argentina for the Saturday inauguration of President Cristina Fernandez, had no immediate comment on the change.
A successful businessman of Jewish descent, Lerner was twice campaign manager for the center-left Humala, a former army officer who lost the 2006 race and then won election last June.
The fate of the Conga project, whose principal owner is U.S.-based Newmont Mining Corp., is considered key to prospects for other mining investments in Peru, which gets 61 percent of export income from the sector.
A windfall tax that the industry agreed to, and that Lerner played a key role in brokering, is helping to underwrite social welfare programs that Humala promised during the election campaign.
China’s chronically high inflation rate fell to a lower than expected 4.2 percent in November, paving the way for authorities to further ease credit to support growth.
The National Bureau of Statistics said Friday that falling food prices and a high base from a year earlier helped to bring inflation down from 5.5 percent in October.
The decline gives China’s leaders the leeway to ease policies that were imposed to cool an overheated economy but recently have fanned fears growth might be stifled at a time when hopes are pinned on a robust China to help offset the malaise in Europe and the U.S.
“Inflation is marching south at an aggressive pace,” Alistair Thornton, an economist with IHS Global Insight, said in a research note.
Data for November “highlighted strong downward pressure amid an increasingly gloomy global outlook,” it said.
China has already begun relaxing reserve requirements on banks to help ease a cash crunch and reopen a flow of liquidity needed to keep growth on track.
Beijing is treading a thin line as it strives to support job-creating growth while avoiding re-igniting inflation that can undermine public support for the ruling communist party because it erodes the economic gains that underpin their claim to power saving account payday loan.
“The challenge for policymakers is to enact measures that boost domestic demand and to loosen credit controls somewhat without stoking inflation and property price bubbles,” said Jing Ulrich, JP Morgan’s chairwoman for global markets.
Incomes are rising but gains are increasingly unevenly distributed.
Food costs, a major component of the consumer price index and especially sensitive in a society where poor families spend up to half their incomes on food, rose 8.8 percent, the National Bureau of Statistics said.
China’s latest bout of perilously high inflation, fueled by a binge in bank lending unleashed by stimulus meant to fend off the global crisis, peaked at 6.5 percent in July.
O’FALLON, MO.
Premier Mario Monti urged lawmakers Tuesday to accept his financial rescue package, including new and higher taxes, saying Italy had risked running out of money to pay state salaries and pensions.
Lawmakers on the right and left have been grumbling over his 2-day-old rescue plan, including pension reforms to make Italians work far longer and a revived home property tax.
Monti’s rescue plan, approved by his Cabinet on Sunday aims to pull Italy back from the brink of default on its staggering sovereign debt, a scenario that could doom the eurozone and worsen economic crises across the globe.
“Parliament is sovereign, time is short, the room to maneuver is very little,” Monti said on a state TV talk show when asked about political leaders’ insistence in Italy that the austerity plan be softened.
He said it is “premature” to decide if his 3-week-old government would resort to a confidence vote in a bid to get his rescue recipe approved by Parliament quickly and intact.
With no political base in Parliament _ Monti and his ministers are all technocrats asked to save Italy’s finances _ the government would topple if it loses a confidence vote, a prospect that could trigger catastrophe in global markets.
Monti, an economist and former EU commissioner, announced emergency measures on Sunday that seek to save euro30 billion through austerity measures and reinvest euro10 billion of savings from those measures to enhance growth, which has been stuck at zero for a decade.
Much of the austerity strategy hinges on new or higher taxes, such as the higher excise tax on gasoline and diesel fuel, which already took effect Tuesday. News reports said it would mean it would cost consumers an extra euro5 or euro6 (nearly $7-8) every time they fill up their car.
Monti called the hike in fuel taxes “indispensable” and needed to help keep local public transport functioning.
“We didn’t have to look far. Greece represented what could have happened to Italy,” Monti said, evoking the drastic situation of its fellow eurozone member across the Adriatic.
“We lived well, consuming the wealth produced by past generations instead of producing more,” he said. Under existing pension system reforms over the last decade or so, many Italians could retire at as much as 80 percent of pay in their mid-50s. With Italians enjoying exceptional longevity, the pension payments are becoming nearly unsustainable.
Italy’s public debt is amounting to a staggering euro1.9 trillion, or 120 percent of its GDP.
Asked if Italy had risked being unable to pay its public servants, Monti replied, grimly: “It was certainly possible” that salaries as well as pensions ran that risk.
On Tuesday, the government approved the release of euro4.8 billion ($6.4 billion) from state coffers to fund strategic infrastructure projects aimed at stimulating economic growth. The funds will pay for highway projects, high-speed railways and retractable underwater barriers to help protect Venice from flooding.
Economists have mixed views on how effective infrastructure programs are for spurring economic growth, with most favoring privately funded projects for better stimulus. Still, longer-term projects such as railways usually require state funding because the investment period is too long for many investors.
Sunday’s Cabinet emergency decree allows the funds to be released immediately, but Parliament must still convert the measures into law.
The new funding includes euro2 billion to upgrade the Treviglio-Brescia and Milan-Genoa railway lines, both in the north, to high-speed, euro598 million for highways, and euro600 million for the Venetian lagoon mobile barriers, a project already more than two years behind schedule due to financial problems and designed to protect Venice from periodic high tides. The projects are expected to stimulate growth by putting unemployed people to work and to keep construction contracts flowing.
Unicredit economic analyst Chiara Corsa said the measures appear “sufficiently bold” to allow Italy to balance its budget by 2013,” even with recession looming.
Hundreds of police officers in riot gear raided the Occupy Wall Street encampment in New York City in the pre-dawn darkness Tuesday, evicted hundreds of demonstrators and demolished the tent city that was the epicenter of a movement protesting what participants call corporate greed and economic inequality.
The police action began around 1 a.m. and lasted several hours as officers with plastic shields and batons pushed the protesters from their base at Zuccotti Park. Police Commissioner Ray Kelly said around 200 people were arrested, including dozens who tried to resist the eviction by linking arms in a tight circle at the center of the park. A member of the City Council was among those arrested during the sweep.
Tents, sleeping bags and equipment were carted away, and by 4:30 a.m., the park was empty. It wasn’t clear what would happen next to the demonstration, though the new enforcement of rules banning tents, sleeping bags or tarps would effectively end an encampment that started in mid-September.
“At the end of the day, if this movement is only tied to Liberty Plaza, we are going to lose. We’re going to lose,” said Sandra Nurse, one of the organizers, referring to the park by the nickname the demonstrators have given it. “Right now the most important thing is coming together as a body and just reaffirm why we’re here in the first place.”
Hundreds of protesters marched through lower Manhattan as the workday began, chanting and looking for a new space to gather. A state court judge called an 11:30 a.m. hearing on the legality of the eviction, following an emergency appeal by the National Lawyers Guild, and issued a temporary restraining order barring the city from preventing protesters from re-entering the park.
As of midmorning, though, the park remained surrounded by police barricades and officers keeping everyone out. A few dozen demonstrators sat on the sidewalk just outside the police line, waiting. In the meantime, workers used power washers to blast the plaza clean.
The surprise action came two days short of the two-month anniversary of the encampment. Mayor Michael Bloomberg said he ordered the sweep because health and safety conditions and become “intolerable” in the crowded plaza.
“From the beginning, I have said that the city has two principal goals: guaranteeing public health and safety, and guaranteeing the protesters’ First Amendment rights,” he said. “But when those two goals clash, the health and safety of the public and our first responders must be the priority.”
He said that people would be allowed to return as soon as this morning, but that the city would begin enforcing the rules set up by the park’s private owners banning camping equipment.
That left demonstrators wondering what to do next. There was talk among some Tuesday of trying to occupy another park or plaza, but there are no immediate plans to do so, Nurse said.
The eviction began in the dead of night, as police officers arrived by the hundreds and set up powerful klieg lights to illuminate the block.
Officers handed out notices from Brookfield Office Properties, the park’s owner, and the city saying that the plaza had to be cleared because it had become unsanitary and hazardous. A commander announced over a bullhorn that everyone had to leave. Many did, carrying their belongings with them. Others tried to make a stand, even chaining themselves together with bicycle locks.
In contrast to the scene weeks ago in Oakland, where a similar eviction turned chaotic and violent, the police action was comparatively orderly. But it wasn’t entirely bloodless.
“The cops hit my legs with a baton,” said demonstrator Max Luisdaniel Santos, 31, an unemployed construction worker, pulling up his pants to show some swollen scars on his calf. “Then they shoved my face into the ground.”
He pulled open his cheek to show where his teeth had cut into the flesh as he hit the stone paving payday advance lenders.
“I was bleeding profusely. They shoved a lot of people’s faces into the ground,” Santos said as he stood near the park Tuesday morning, looking shaken. He said he lost his shoes in the scuffle, but wasn’t arrested.
One person was taken to a hospital for evaluation because of breathing problems.
City Councilman Ydanis Rodriguez, who has been supportive of the Occupy movement, was among those arrested outside of the park. Kelly, the police commissioner, said he was trying to get through police lines to reach the protesters.
Protesters were able to grab about $2,500 in cash that was at the plaza before police kicked them out, said Pete Dutro, who is in charge of the New York City movement’s finances.
“We got all the dough,” Dutro said. “It’s on my person.”
Bloomberg said the evacuation was conducted in the middle of the night “to reduce the risk of confrontation in the park, and to minimize disruption to the surrounding neighborhood.”
“The law that created Zuccotti Park required that it be open for the public to enjoy for passive recreation 24 hours a day,” Bloomberg said. “Ever since the occupation began, that law has not been complied with, as the park has been taken over by protesters, making it unavailable to anyone else.”
He said the city would contest the motion filed by the National Lawyers Guild, a civil rights organization that has been representing arrested protesters.
Concerns about health and safety issues at Occupy Wall Street camps around the country have intensified, and protesters in several cities have been ordered to take down their shelters, adhere to curfews and relocate so that parks can be cleaned.
The surprise ouster at Zuccotti Park came as the movement was at its most vulnerable. A rift had been growing in recent weeks between the park’s full-time residents and the movement’s power players, most of whom no longer lived in the park.
The protesters who actually made things happen _ the ones who planned marches and rallies and set plans into motion _ held meetings in donated office space high above the park, in skyscrapers just like the ones housing the bankers they were protesting.
Some residents of Zuccotti Park have been grumbling about the recent formation of a “spokescouncil,” an upper echelon of organizers who held meetings at a high school near police headquarters. Some protesters felt that the selection of any leaders whatsoever wasn’t true to Occupy Wall Street’s original anti-government spirit: That no single person is more important or more powerful than another person.
But other protesters felt that Occupy Wall Street needed to be bigger than Zuccotti Park _ that they had, in a sense, outgrown it.
Occupy encampments have come under fire around the country and even overseas as local officials and residents have complained about possible health hazards and ongoing inhabitation of parks and other public spaces.
Anti-Wall Street activists intend to converge at the University of California, Berkeley, on Tuesday for a day of protests and another attempt to set up an Occupy Cal camp, less than a week after police arrested dozens of protesters who tried to pitch tents on campus.
The Berkeley protesters will be joined by Occupy Oakland activists who said they would march to the UC campus in the afternoon. Police cleared the tent city in front of Oakland City Hall before dawn Monday and arrested more than 50 people amid complaints about safety, sanitation and drug use.
In London, authorities said they were resuming legal action to evict a protest camp outside St. Paul’s Cathedral after talks with the demonstrators stalled.
A judge on Monday blocked a federal requirement that would have begun forcing tobacco companies next year to put graphic images on their cigarette packages to show the dangers of smoking.
U.S. District Judge Richard Leon ruled that it’s likely the cigarette makers will succeed in a lawsuit claiming the images violate the free speech amendment to the Constitution. He stopped the requirement until the lawsuit is resolved, which could take years.
Leon held a hearing on the case in September and questioned the Justice Department about whether the nine graphic images approved by the Food and Drug Administration in June convey just the facts about the health risks of smoking or go beyond that into advocacy _ a critical distinction in a case over free speech.
The images include a cloud of cigarette smoke within inches of a baby’s face; a pair of healthy lungs next to the diseased lungs of a smoker and a warning that smoking causes fatal lung disease; a smoker’s stained teeth and a lip diseased by cigarettes; and a dead smoker on an autopsy table with surgical stitches in his chest and the words “Smoking can kill you.”
The FDA requirement said the labels were to cover the entire top half of cigarette packs, front and back and include a number for a stop-smoking hotline. The labels were to constitute 20 percent of cigarette advertising, and marketers were to rotate use of the images.
The Justice Department argued the images coupled with written warnings were designed to communicate the dangers to youngsters and adults. The FDA declined to comment on the judge’s ruling.
Tobacco companies are increasingly relying on their packaging to build brand loyalty and grab consumers. It’s one of few advertising levers left to them after the government curbed their presence in magazines, billboards and TV, and the graphic labels could cost them millions in lost sales and increased packaging costs.
The cigarette makers that sued the FDA are R.J. Reynolds Tobacco Co. of Winston-Salem, N.C., Lorillard Tobacco Co. of Greensboro, N.C., Commonwealth Brands Inc. of Bowling Green, Ky., Liggett Group of Mebane, N.C., and Santa Fe Natural Tobacco Co. of Santa Fe, N.M.
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