Economy

Last edited Mon May 20, 2013, 07:44 AM - Edit history (1)

Barclays wins dismissal of U.S. shareholder lawsuit over Libor

http://www.reuters.com/article/2013/05/13/us-barclays-libor-lawsuit-idUSBRE94C10920130513

Barclays Plc, the first bank to settle with authorities over alleged manipulation of the Libor interest rate, on Monday LAST won the dismissal of a U.S. lawsuit by shareholders who claimed they lost money because of the British bank's activity. U.S. District Judge Shira Scheindlin in Manhattan said investors who owned Barclays' American depositary shares did not show that Barclays and other defendants, including former Chief Executives John Varley and Bob Diamond, misled them about Libor or took too long to reveal potential liabilities. She also said the investors failed to show that alleged Libor manipulation between August 2007 and January 2009 caused them to lose money through June 2012, when Barclays reached a $453 million settlement with U.S. and European regulators.

"The notion that the market would fail to digest three years of non-fraudulent submission rates and other more detailed financial information, and would instead leave intact artificial inflation as a result of fraudulent submission rates during the financial crisis is implausible," Scheindlin wrote.

The lawsuit had sought class-action status, and been brought on behalf of ADS purchasers between July 2007 and June 2012. It was led by the Carpenters Pension Trust Fund of St. Louis in Missouri, and the St. Clair Shores Police & Fire Retirement System in Michigan. Scheindlin said the plaintiffs will not get a chance to amend their lawsuit, having failed to address previously identified deficiencies in their second amended complaint...

IT'S TOUGH TO PROVE A CASE OF CONCEALMENT...WHEN YOU DON'T HAVE THE FACTS BECAUSE THEY'VE BEEN CAREFULLY HIDDEN!

Fitch upgrades Greece by one notch citing fiscal progress

http://in.reuters.com/article/2013/05/14/greece-fitch-idINL6N0DV4XT20130514

Ratings agency Fitch upgraded its sovereign credit rating for Greece by one notch on Tuesday, citing the country's progress in cutting its budget deficit and the receding risk of its euro zone exit. After nearly crashing out of the euro last year and coming under attack for stalled reforms, Greece has won praise in recent months from its international lenders for getting back on track and pushing through unpopular austerity measures.

"The price has been high in terms of lost output and rising unemployment and the capacity for recovery is still in doubt," Fitch said. "Nonetheless, sovereign debt relief and an easing of fiscal targets have lifted central bank measures of economic sentiment to a three-year high and the risk of eurozone exit has receded."

The rating outlook is stable, Fitch said in a statement raising its rating to B-minus from CCC. It comes afterStandard & Poor's also raised Greece's rating to B-minus with a stable outlook from selective default in December. Moody's Investors Service has a C rating on the credit. All three are still deep in junk territory. Some analysts remain skeptical that things have turned a corner in Greece.

"Things are getting better but from a very low base," said Ben May, an analyst at Capital Economics in London. "Greece is less on a knife's edge than it was months ago but I'm not sure the worst is over because the fundamental economic problems are still there."

MORE DEPRESSING REAL DATA AT LINK

Greece not tough enough on rich tax evaders, IMF says

http://www.guardian.co.uk/world/2013/may/06/greece-not-tough-tax-evaders-imf


...The International Monetary Fund, one of the contributors to the Greek bailout, also said – at the conclusion of its mission to the debt-laden, recession-hit country – that a "taboo against dismissals" in the overstaffed public sector had led to a surge in unemployment in the private sector. Greece has pledged to cut about 20% of the public sector – or 150,000 jobs – between 2010 and 2015 to help reduce spending, but progress has been slow, while unemployment has topped 27%. A bill has been passed recently to allow 15,000 public-sector posts to be axed. However, the IMF said Greece had made progress in a socially painful recession. It had made "exceptional" improvements on its fiscal position, its competitiveness and preserving stability in the financial sector. "The achievements to date are evidence of a very strong and persistent determination on the part of Greece and its European partners to do whatever it takes to restore Greece to a sustainable situation inside the euro area," the IMF said.

The debt-to-GDP ratio for Greece is around 160%, but the IMF has called for this to be cut to 120% by 2020, resulting in the imposition of tough conditions.

But restoring growth to the country is "the overarching precondition of whether Greece succeeds", according to the IMF. In the face of criticism that some of the problems were caused by austerity measures, the Washington-based fund said that the deeper-than-expected recession was caused by a loss of confidence, concerns about a euro exit and political uncertainty.

The IMF is concerned about the lack of structural reforms, which has left the rich relatively untouched in an economy where 70% of the income is declared by wage earners and pensioners. "Very little progress has been made in tackling Greece's notorious tax evasion. The rich and self-employed are simply not paying their fair share, which has forced an excessive reliance on across-the-board expenditure cuts and higher taxes on those earning a salary or a pension," the IMF said...

EU releases first two billion euros in bailout aid CYPRUS

IT GETS EASIER WITH PRACTICE...AND THEY ARE GOING TO HAVE LOTS OF PRACTICE...

http://www.cyprus-mail.com/bailout/eu-releases-first-two-billion-euros-bailout-aid/20130514

THE EUROGROUP gave its blessings to the disbursement of €3 billion to Cyprus yesterday, with the first €2 billion already sent to the island as part of the first tranche of a €10 billion bailout expected to “buy time” for its ailing economy...During the first hour of the Eurogroup meeting, the European Stability Mechanism (ESM) board announced its approval of the Financial Assistance Facility Agreement with Cyprus and the disbursement of the first tranche of ‘rescue’ money worth €3 billion. The first tranche will be transferred in two separate disbursements: the first €2 billion was transferred yesterday, while the remaining €1 billion will be transferred before June 30. Both disbursements will be made in cash, and will be used for the general financing needs of the public sector, including the considerable sum of maturing debt the government is expected to pay next month, and the country’s fiscal needs.

“The loans granted by the ESM help to maintain financial stability in the euro area and buy time for Cyprus,” Klaus Regling, Managing Director of the ESM said. “This time enables Cyprus to undertake the reforms necessary to rebuild its economy on a sustainable basis.”

In accordance with the Eurogroup decision on March 25, Cyprus will receive assistance of up to €10 billion during the next three years... €3.4 billion of the funds will be used to cover Cyprus’ fiscal needs, €4.1 billion to redeem its medium and long-term debt, and €2.5 billion for the recapitalisation of Cyprus’ other banks.(NOT THE TWO LARGEST)

Cyprus is not only the first fully fledged macro-economic bailout financed by the ESM, it is also the first country forced to contribute to its rescue package with a “bail-in” of over €10 billion by uninsured depositors of the island’s two biggest banks. A further estimated €3 billion will come from privatisations, state gold sale and fiscal adjustments...AT THE USUAL HORRIBLE COST TO PEOPLE