Monthly Archives: December 2011

Iceland’s New Finance Minister

Oddny Hardardottir was named Iceland’s new Finance minster and will be taking all the duties and responsibilities in regards to maintaining policies and aimed at gradually cutting the budge deceit.  Many analyst says that the government will benefit as a whole from the reshuffle. It was also stated from the article, that Iceland is looking to enter into the European Union, this was very much supported by Iceland’s Prime Minister.

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New laws implementing on hedge fund trades

According to the Federal Reserve Survey, wall street traders are making it harder than every for hedge funds to finance securities and derivatives in the last three months. There was a tighten in securities for many hedge fund investors that wants a share in the market. Wall street has made new implements to trading by adding a strict credit term that is applicable to counterparties such as hedge fund clients, trading in real estate investments trust, and non financial corporations.

The tightening in the hedge funds will make it worse because the general function and liquidity of the market will be reduced. To reduce extent, the market will have to adopt to a more stringent market convention. As reported a lot of the creditors lowered their credit limit financial institutional companies. As a result there was a decrease in financial leverage for hedge funds.

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Italy economic problems lead to new reforms

The Italian Prime Minister Mario Monti has urged a response against the debt crisis that has pushed the Europe market to the brink this year after Italy’s auction week. The auction was to stimulate the market and the treasury was able to raise 7.0 billion euros. Although it was below the 8.5 bullion euros the long-term rates holding was 7 per cent which has caused quit a stir around the world. Monti believes that the problem is within Italy economy, that the market is suffering because European markets are not united. He believes that with discipline and a strong European economic policy it will boost growth in the economy. His plans for the new year is to start implementing liberal reforms to make Italy’s economy more competitive and would look at economic policies of Nordic countries for some pointers.

The euro has hit its lowest level against the American dollar and a ten year low against the Chinese yen. What can be done is bailouts and bonds but analysts says that they are cautious with the implications of bond sale.

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France banks ready to finance Petroplus

According to Landauro, on Wednesday the French banks made it clear that they were ready to finance Petroplus Holdings AG, a swiss based oil refiner company with enough finance they need to operate. Petroplus stated on Tuesday that the group of international lenders had frozen the credit facility and this shocked the market. The company which owns five refineries in Europe states that the company is currently negotiating with the creditors with this problem and the French government is supporting the negotiations. The three French banks are willing to extend financing to Petroplus as long as the other banks agree to this also.

The company has experienced a shortage in their market of more than 80% since early August after several quarters of net losses. The company made a cut on its refined products because of their financial problems. But now the French banks are willing to help and to revive this company and help European markets.

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Japan is to invest a $4.5 billion in DMIC project

Japan expresses its intentions of investing $4.5 billion on Delhi-Mumbai Industrial Corridor for the next five years. India’s ambitious $90 billion project is aimed at creating industrial infrastructure along the Delhi-Mumbai Rail Freight Corridor. This is a company that is aimed at developing an Industrial Zone spanning across six states in India. The project will include industrial clusters of rail roads, port, and air connectivity amongst the six states.

Japan is supporting India’s project by aiding them in financial and technical support. Japan’s private and public finance will total a $4.5 billlion for the next five years. To do so Japan will have to acquire money from banks and obtaining a loan from the official development assistance. Although this might be difficult for Japan, the two prime ministers one from Japan and another from India are very pleased with this project. What can be said is that  this project will lead to economic growth for India, while Japan can obtain part ownership of it.

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Europe Financial Economy and Key dates to watch for the next year

Financial markets are looking at many challenges as 2012 approaches. One of the major financial economies that is being effected is Europe. Europe, one of the financial markets that are being targeted is witnessing a recession as of now and it doesn’t look like it is getting any better as 2012 approaches. The financial markets are talking about Greek bailouts and more credit ratings are downgrading as heavy schedule of bonds are being issued by European governments and banks to cover the debt.

Many analysts are saying that there are little hopes that the liquidity aid will help prop up euro-zone bond markets and keep down sovereign borrowing costs. The European Central Bank has already allotted nearly $7 billion to cover the cost of the debts but that is not enough to put Europe out of a recession.

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DE-banks MetLife

General Electric Co.’s finance agreed to buy MetLife, an insurance company in a deal that matches the life insurer’s desire to get out from under federal regulation with GE’s pursuit of a more liable funding source. This deal will influence GE Capital of $7.5 billion in efforts to acquiring MetLife and its online banking platform. GE will benefit from this by being able to attract more individual buyers and rely less on financial markets for funds. At 4 p.m. today, the New York Stock exchange reported a 22% fall for GE and a 0.3% increase for MetLife. GE paid less than $100 million for the MetLife operation, and from the deal it boost GE Capital a base of $23 billion by about a third and help support its commercial lending business.

What is the next step for GE? GE is trying to expand MetLife by creating an online banking system similar to Discover Financial Service’s Inc. and American Express Co. They want to expand their internet efforts in respond to increasing more accounts. GE Capital is also looking to rebrand the site with its name after the deal closes and take over marketing and customer support functions from MetLife.

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