My Connroy Finance Blog

Euro Zone Recovery Unlikely Before Mid-2010

http://uk.reuters.com/article/marketsNewsUS/idUKBRU00739720090504?pageNumber=2

In its deepest recession since the World War II, the European economy is unlikely to recover before mid-2010, the European Commission has said. In its latest economic assessment for the region, the EC has said the euro zone economy is expected to shrink by 4% this year and 0.1% next year. The remedial, stimulus and other measures announced by the governments and the central banks in the region are expected to help enable a recovery next year. The unemployment levels are likely to continue rising and reach 11.5% in 2010. An important action that is essential to pave the way for the recovery is the cleansing of the balance sheets of the region’s banksand getting rid of the toxic assets that they are saddled with.

Lenders In Chrysler Offer To Cut Debt

http://uk.reuters.com/article/motoringAutoNews/idUKIndia-39175420090422?pageNumber=2&virtualBrandChannel=0

First Lien lenders of automobile major Chrysler LLC have offered to reduce 35% of their debt and instead take equity in the company’s restructured format. This format involves a tie up with Italy’s Fiat SpA. As per the proposal, the lenders have offered to retain debt worth $4.5 billion and take over one third stake in the new Chrysler. Officials in the Obama Administration, however, criticized the offer saying, it included unjustified returns for the creditors at a time when the company is negotiating with other stakeholders in a bid to avoid bankruptcy. The government task force for auto industry had earlier proposed that the creditors write off loans worth $6 billion. Chrysler needs to restructure its debt and enter into an alliance with Fiat to avail further government aid to continue its operations.

Unity In Adversity

http://www.nytimes.com/2009/03/28/business/economy/28bank.html?ref=business

The meeting of the heads of 13 top notch financial institutions with president Obama in white house could emerge as a much needed rescue operation to save the ailing economy and strategizing more aptly to cope with the current scenario.

The meeting should also be praised for rightly assessing the anger of the citizens. In a condition like the current one, exorbitant salaries and bonuses were sure to find place in the discussion.

The subject to watch, however, is how the financial institutions penalize themselves for running the financial markets with unprecedented faith despite having a lax attitude and an inappropriate strategy for so long. If they had accepted the fact that the lending procedure was orbiting around only profitability, they could have averted the need of unity in adversity.

http://news.yahoo.com/s/ap/20090314/ap_on_bi_ge/sc_mortgage_help;_ylt=AqSU.3Ex_xhrwz3JHmyG.HCyBhIF

A Sigh Of Relief

The Neighborhood Assistance Corporation of America’s “Save the Dream” tour has enabled many to heave a sigh of relief in today’s economically tight circumstances. It has facilitated the restructuring of mortgages at several places. It would also be covering places deeply affected by foreclosure. It asserts that it has helped bring down the mortgage payments of most of the people who had approached them for assistance.

The best thing is that even some of the lenders have started to realize how problematic foreclosure can be. They have also begun to help these nonprofit organizations in their work. This is like a boon to a lot of people who have lost their jobs lately and who are suffering the blow of recession. Three cheers to NACA and its efforts to genuinely help them.

Good Ol’ UBS

http://www.nytimes.com/2009/03/02/business/worldbusiness/02ubs.html?ref=worldbusiness

For those linked with UBS, there is more good news. UBS might have cut its bonuses, but it is all set to raise the salaries of its staff. Even in these times of recession? Yes, even now!

UBS, the Swiss bank is at set to hike the base salary of its senior investment bankers so as to compensate for other financial services jobs, like consulting.

This is a new trend considering that the base salaries were always kept flat and the bonuses resulted in a hike in the take-home pay. There are going to be more changes in the banking sector. Hopefully they should be good for both the banks as well as their employees considering that the government is giving away a lot of tax payer’s money to bailout private banks!

http://uk.reuters.com/article/marketsNewsUS/idUKN2340702620090224

The Federal Reserve has said that it is ready to do everything in its power to combat the current financial crisis and recession. Buying long-term treasury bonds may be helpful in clearing the mess in the financial system and achieving sustainable economic growth and price stability, according to a Fed official. The regulatory authority has already lowered interest rates and pumped billions of dollars into the market to restrict the economic slump. Richard Fisher, president of the Federal Reserve Bank of Dallas, believes that the fed can expand its holdings of mortgage-backed paper or buy large amounts of asset-backed paper as part of its efforts to cleanse the whole financial system.

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