Tag Archives: Spain

Euro Zone: Fizzling Growth Seen to Back Draghi Cut Case

According to Bloomberg,

Bank of Spain (Bloomberg)

Bank of Spain (Bloomberg)

Euro-area growth data this week may show the region’s nascent recovery slowing to a crawl, supporting Mario Draghi’s case for an interest-rate cut to help the economy get back to its feet.

Gross domestic product in the region rose just 0.1 percent in the third quarter, according to the median forecast of 41 economists in a Bloomberg News survey. In the 3 1/2 hours before that report on Nov. 14, economists predict a series of data releases to show growth slowing in Germany and stalling in France, with Italy remaining mired in an unprecedented slump.

Such an outcome would confirm that the recovery is grinding after a second-quarter growth spurt of 0.3 percent that ended the region’s record-long recession. The data are due one week after the European Central Bank president’s surprise rate cut to 0.25 percent. Draghi said at the time that the euro zone faces the danger of a “prolonged” period of low inflation.

“There are a few minor bright spots, for example Spain, (SPNAGDPQ) but Italy will continue to remain in contraction and growth in France will likely be flat at best,” said Nick Matthews, a London-based economist at Nomura International Plc. “That plays into the scenario the ECB is seeing, which is a very weak and fragile recovery.”

Read More…

Private-Equity Firm H.I.G. to Buy Spanish Real-Estate Assets

Private-Equity Firm H.I.G. to Buy Spanish Real-Estate Assets

MADRID—Spanish officials managing soured assets from the country’s real-estate collapse announced their first big property deal, choosing Miami-based private-equity firm H.I.G. Capital to buy a majority stake in a package of 939 homes known as Project Bull.

Officials said the property deal, one of the most closely watched in Europe this year, priced the portfolio at €100 million ($133 million).

The properties were transferred to a Bank Asset Fund, which provides a favorable tax regime to investors, officials said. H.I.G.’s Bayside Capital agreed to take a 51% stake in the fund. Spain’s “bad bank,” the government-run asset-management firm known as Sareb, will retain a 49% stake.

H.I.G. Capital beat rival bids from Lone Star Funds, Apollo Global Management LLC,APO -0.70% Colony Capital LLC and a joint offer by Centerbridge Capital Partners LP and Cerberus Capital Management LP, people familiar with the transaction said.

Read more

Euro-Area Unemployment Rate Reaches Record 11.2%: Economy

The jobless rate in the euro area reached the highest on record as the festering debt crisis and deepening economic slump prompted companies to cut jobs.

Unemployment in the economy of the 17 nations using the euro reached a revised 11.2 percent in May and held at that level in June, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995. In Germany, unemployment climbed for a fourth straight month in July, a separate report showed.

View More 

Fed Seen Forgoing Next Round Of Asset Purchases Until September

Federal Reserve Chairman Ben S. Bernanke will probably forgo announcing a third round of large- scale asset purchases this week, and is more likely to wait until September to unveil plans to buy $600 billion in housing and government debt, according to median estimates of economists in a Bloomberg News survey.

Eighty-eight percent of economists say the Federal Open Market Committee will refrain from starting new purchases at a two-day meeting beginning today in Washington. Forty-eight percent say the FOMC will announce the buying at its Sept. 12-13 meeting, according to the July 25-27 survey of 58 economists.

View More 

UK seeks urgent Libor reform

Policy ideas on Libor reform due Aug. 10

LONDON, July 30 (Reuters) – Britain is seeking urgent reform of the key interest rate rigged by a number of banks, including Barclays, in a transatlantic scandal that is threatening to seriously damage London’s reputation as a financial centre.

The government on Monday set the terms for a swift review of Libor, to be carried out by regulator Martin Wheatley in time for recommendations to be included in a draft law making its way through parliament.

View More 

Libor scandal: RBS facing huge fine, warns chief Stephen Hester

The chief executive said the taxpayer-backed bank will “have our day in the spotlight” over the rate-rigging that has cost its rival £290m in fines and three executives, and reignited the public’s anger towards bankers.

RBS is one of the banks tied up in Libor. We’ll have our day in that particular spotlight as well,” Mr Hester told the Guardian. He did not know the size of the fine but said that the investigation by the Financial Services Authority was “in process”.

The Telegraph understands that any possible fine is likely to be significant.

Mr Hester added that he believes the rate-rigging scandal was bad for the entire industry.

View More 

Timothy Geithner again under fire on Capitol Hill, this time over Libor scandal

Treasury Secretary Timothy F. Geithner was back in the hot seat Wednesday.

One of President Obama’s most polarizing Cabinet officials, Geithner returned to Capitol Hill for the 66th time since taking office, this time defending himself against charges from House Republicans that he had failed to stop big banks from rigging a critical global interest rate four years ago.

Geithner’s role in the unfolding scandalaround the London interbank offered rate, or Libor, centers on whether he responded aggressively enough in 2008 after he learned of potential rate-fixing while serving as head of the Federal Reserve Bank of New York. The Libor is a benchmark for hundreds of trillions of dollars worth of credit cards, mortgages, student loans and financial securities.

View More