THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.
Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.
Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies.
Speculation that the chairman of the US Federal Reserve, Dr Ben Bernanke, would make an appearance could not be confirmed last night.
The event will be dominated by Asian delegations and is expected to include governors of the Peoples Bank of China, the Bank of Japan and the Reserve Bank of India.
The arrival of the high-powered gathering coincided with a fresh meltdown on world sharemarkets, sparked by renewed concerns about global growth and sovereign debt.
Fears countries including Greece, Portugal, Spain and Dubai could default on debt repayments combined with disappointing US jobs data to spook investors.
Australia's ASX 200 slumped 2.4 per cent, to a its lowest close since November 5, echoing a sharp fall on Wall Street.
Asian share markets were also pummelled, with Japan's Nikkei 225 down almost 3 per cent and Hong Kong's Hang Seng slumping 3.3 per cent.
The damage was also being felt by European markets last night with London's FTSE 100 down sagging 1 per cent in early trade.
Sovereign debt fears rippled through to the Australian dollar which was hammered to a four-month low of US86.43 and was trading at US86.77 cents last night.
"This does feel like '08 and '07 all over again whereby we had these sort of little fires pop up and they are supposedly contained but in reality they are not quite contained,'' said H3 Global Advisors chief executive Andrew Kaleel.
"Dubai should have been an isolated incident and now we are seeing issues with Greece, Portugal and Spain.''
It wasn't all bad news with the RBA yesterday upping its Australian growth forecasts and flagging more interest rate rises this year.
The central bank estimates the economy grew 2 per cent in 2009, and will expand by 3.25 per cent in 2010, and by 3.5 per cent in 2011.
The outlook for global growth is likely to be a key theme of the high level central bank talks.
The gathering also comes at an important time for the BIS as it initiates an overhaul of the global banking system which will include new capital rules applying to banks and more stringent standards regulating executive pay.
A key part of the two-day talkfest will be a special meeting of Asian central bankers chaired by the governor of the Central Bank of Malaysia, Dr Zeti Akhtar Aziz.
Influential BIS general manager Jaime Caruana is also expected to take a prominent role in the talks.
Federal Treasurer Wayne Swan will address the central bank officials at a dinner on Monday night.
Secret summit of top bankers | News.com.au
Showing posts with label Dow Jones. Show all posts
Showing posts with label Dow Jones. Show all posts
Friday, February 5, 2010
Thursday, February 4, 2010
Ex-BofA chief Lewis charged with fraud - Feb. 4, 2010
NEW YORK (CNNMoney.com) -- New York Attorney General Andrew Cuomo said Thursday it was bringing civil charges against senior Bank of America executives, including former company CEO Ken Lewis, for their role in the company's controversial purchase of Merrill Lynch.
Separately, the Securities and Exchange Commission said it had struck a $150 million settlement agreement with BofA over its decision to pay billions of dollars in bonuses to former Merrill employees.
Bank of America's last-minute decision to purchase the ailing Merrill in September 2008 has remained a central issue in the wake of the financial crisis, prompting both federal and state probes into the matter.
Cuomo's office, which has been aggressively pursuing an investigation into the merger and subsequent bonuses paid to former Merrill employees, said it was charging Lewis and Bank of America's former chief financial officer Joe Price with fraud.
The lawsuit contends that the bank's management team understated the losses at Merrill in order to get shareholders to approve the deal, then subsequently overstated the firm's willingness to terminate the merger to regulators weeks later in order to get $20 billion of additional aid from the federal government.
"Bank of America and its officials defrauded the government and the taxpayers at a very difficult and sensitive time," Cuomo said at a press conference Thursday, joined by federal bailout cop Neil Barofsky, whose office aided in the investigation. "I believe that Bank of America officials exploited this fear."
A spokesperson for Bank of America called the charges "regrettable" and "totally without merit," adding that both Lewis and Price acted in good faith at all times and were "consistent with their legal and fiduciary obligations."
Mary Jo White, an attorney with law firm Debevoise & Plimpton, who is representing Lewis, echoed those remarks, saying her client had been "unfairly vilified" in a search for the culprits of the financial crisis.
"This suit is not fair, it is without factual or legal basis, and we look forward to prevailing in a court where the facts and law do matter," White said in a statement.
Lewis retired from the company at the end of last year amid intense scrutiny about his role in the merger. Price continues to serve at the bank as the head of the firm's consumer banking and credit card business.
Cuomo's office would not say whether the investigation prompted what many believed was an early retirement by Lewis.
New York's top lawmaker also said newly-appointed Bank of America CEO Brian Moynihan had no responsibility in the firm's failure to disclose losses before a special shareholder vote in December 2008.
"Mr. Moynihan did not have a role in that," said David Markowitz, special deputy attorney general for investor protection, who helped lead the investigation.
Despite the charges against Lewis and Price, Bank of America may be one step closer to putting the Merrill bonus controversy behind them as a result of Thursday's proposed settlement with the SEC.
The terms of the agreement would require the Charlotte, N.C.-based lender to pay the $150 million penalty to its shareholders who were affected by the disclosure violations.
It would also require the company to implement a number of corporate governance changes for the next three years including giving its shareholders an advisory vote, or "say on pay" of its executives.
Bank of America would also pay $1 million to the Office of the Attorney General for the State of North Carolina to resolve an investigation it had raised over the merger. The company said the payment is not a penalty or a fine.
Bank of America and the SEC were set to square off in court in March over charges that it allegedly lied in its proxy statement, telling shareholders it would not pay out bonuses paid to Merrill employees in fiscal year 2008.
The agency brought another nearly identical legal action against BofA in January, alleging that the firm failed to alert investors about the potential losses at Merrill Lynch before the deal closed.
The latest settlement would resolve both those charges, but it would still be subject to the approval of U.S. District Court Judge Jed Rakoff.
Rakoff scuttled a previous agreement between the two parties last fall, arguing that the original $33 million settlement was not only paltry, but would only impact those who were hurt by the bonus scandal: the company's shareholders.
Bank of America (BAC, Fortune 500) shares fell nearly 4% in afternoon trading Thursday.
Ex-BofA chief Lewis charged with fraud - Feb. 4, 2010
Separately, the Securities and Exchange Commission said it had struck a $150 million settlement agreement with BofA over its decision to pay billions of dollars in bonuses to former Merrill employees.
Bank of America's last-minute decision to purchase the ailing Merrill in September 2008 has remained a central issue in the wake of the financial crisis, prompting both federal and state probes into the matter.
Cuomo's office, which has been aggressively pursuing an investigation into the merger and subsequent bonuses paid to former Merrill employees, said it was charging Lewis and Bank of America's former chief financial officer Joe Price with fraud.
The lawsuit contends that the bank's management team understated the losses at Merrill in order to get shareholders to approve the deal, then subsequently overstated the firm's willingness to terminate the merger to regulators weeks later in order to get $20 billion of additional aid from the federal government.
"Bank of America and its officials defrauded the government and the taxpayers at a very difficult and sensitive time," Cuomo said at a press conference Thursday, joined by federal bailout cop Neil Barofsky, whose office aided in the investigation. "I believe that Bank of America officials exploited this fear."
A spokesperson for Bank of America called the charges "regrettable" and "totally without merit," adding that both Lewis and Price acted in good faith at all times and were "consistent with their legal and fiduciary obligations."
Mary Jo White, an attorney with law firm Debevoise & Plimpton, who is representing Lewis, echoed those remarks, saying her client had been "unfairly vilified" in a search for the culprits of the financial crisis.
"This suit is not fair, it is without factual or legal basis, and we look forward to prevailing in a court where the facts and law do matter," White said in a statement.
Lewis retired from the company at the end of last year amid intense scrutiny about his role in the merger. Price continues to serve at the bank as the head of the firm's consumer banking and credit card business.
Cuomo's office would not say whether the investigation prompted what many believed was an early retirement by Lewis.
New York's top lawmaker also said newly-appointed Bank of America CEO Brian Moynihan had no responsibility in the firm's failure to disclose losses before a special shareholder vote in December 2008.
"Mr. Moynihan did not have a role in that," said David Markowitz, special deputy attorney general for investor protection, who helped lead the investigation.
Despite the charges against Lewis and Price, Bank of America may be one step closer to putting the Merrill bonus controversy behind them as a result of Thursday's proposed settlement with the SEC.
The terms of the agreement would require the Charlotte, N.C.-based lender to pay the $150 million penalty to its shareholders who were affected by the disclosure violations.
It would also require the company to implement a number of corporate governance changes for the next three years including giving its shareholders an advisory vote, or "say on pay" of its executives.
Bank of America would also pay $1 million to the Office of the Attorney General for the State of North Carolina to resolve an investigation it had raised over the merger. The company said the payment is not a penalty or a fine.
Bank of America and the SEC were set to square off in court in March over charges that it allegedly lied in its proxy statement, telling shareholders it would not pay out bonuses paid to Merrill employees in fiscal year 2008.
The agency brought another nearly identical legal action against BofA in January, alleging that the firm failed to alert investors about the potential losses at Merrill Lynch before the deal closed.
The latest settlement would resolve both those charges, but it would still be subject to the approval of U.S. District Court Judge Jed Rakoff.
Rakoff scuttled a previous agreement between the two parties last fall, arguing that the original $33 million settlement was not only paltry, but would only impact those who were hurt by the bonus scandal: the company's shareholders.
Bank of America (BAC, Fortune 500) shares fell nearly 4% in afternoon trading Thursday.
Ex-BofA chief Lewis charged with fraud - Feb. 4, 2010
Thursday, October 1, 2009
Stocks Take a Beating
NEW YORK (TheStreet) -- Stocks sold off at the start of the new quarter as disappointing jobless claims data left Wall Street bracing for Friday's unemployment report. After locking in 15% gains for the third quarter, the Dow Jones Industrial Average started off the new three-month period by taking a 204.89-point plunge, dropping 2.1%, to 9507.39, while the S&P 500 slid 27.4 points, or 2.6%, to 1029.68. The Nasdaq Composite edged down 64.94 points, or 3.1%, to 2057.48.
Losses were broadbased with financials, commodities, technology and home stocks hard hit. The Philadelphia Stock Exchange Gold and Silver Index, the Philadelphia Semiconductor Index, and the KBW Bank Index all sank more than 4%.
Stocks fell early after the Department of Labor said there were 551,000 new jobless claims last week, up from an upwardly revised 534,000 the week prior and topping expectations for 535,000.
Those data, paired with a worse than expected report on private sector job losses earlier in the week, have traders cautious ahead of the most-anticipated data of the week, Friday's unemployment report, says Doug Roberts, chief investment strategist at ChannelCapitalResearch.com.
"You've seen chinks in the armor, so people are hesitant -- especially with it coming on a Friday," says Roberts. "There's uncertainty, and until there's some sort of resolution, people are going to be nervous."
Adding pressure to the market, Goldman Sachs changed its forecast for September nonfarm payrolls from a loss of 200,000 to a loss of 250,000, wrote James DePorre, founder and CEO of Shark Asset Management, on RealMoney.com.
In other data Thursday, Institute for Supply Management's manufacturing index edged down 0.3 points to 53.6, vs. expectations for a rise to 54. The Chicago PMI spurred selling earlier in the week, when it indicated a contraction in manufacturing.
"Tentative signs in housing, automobile, Chicago PMI and several other economic indicators continue to remind us that the month of September was weaker than generally expected," writes Seabreeze Partners' Doug Kass. He later adds that, "at the risk of being the boy who cried wolf, I believe that market participants have a false sense of security in rising equity share prices."
"Plenty of stocks were pumped up by mark-up buying. The pump-up and subsequent support underneath is now gone," writes Jim Cramer on RealMoney.com."We know that jobless claims aren't improving. That's a real negative, especially for retail and banks. But, and this is a big but, we are not seeing the right stocks go up if we are signaling another dip down."
Not all of the recent data have been negative. Among the day's surprises, construction spending unexpectedly increased by 0.8% in August, and pending home sales rose by 6.4% vs. expectations for a much smaller, 1% gain.
At the same time, the Department of Commerce said personal income increased 0.2% in August, in line with the prior month's increase, and spending ticked up 1.3%, respectively, vs. 0.3% in July. Both readings were slightly better than expected.
In other news Thursday, Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee on regulatory reform. Bernanke told members of Congress that a council of regulators should monitor systemic risk, while all systemically important financial firms should be subject to a consolidated regulator.
Losses were broadbased with financials, commodities, technology and home stocks hard hit. The Philadelphia Stock Exchange Gold and Silver Index, the Philadelphia Semiconductor Index, and the KBW Bank Index all sank more than 4%.
Stocks fell early after the Department of Labor said there were 551,000 new jobless claims last week, up from an upwardly revised 534,000 the week prior and topping expectations for 535,000.
Those data, paired with a worse than expected report on private sector job losses earlier in the week, have traders cautious ahead of the most-anticipated data of the week, Friday's unemployment report, says Doug Roberts, chief investment strategist at ChannelCapitalResearch.com.
"You've seen chinks in the armor, so people are hesitant -- especially with it coming on a Friday," says Roberts. "There's uncertainty, and until there's some sort of resolution, people are going to be nervous."
Adding pressure to the market, Goldman Sachs changed its forecast for September nonfarm payrolls from a loss of 200,000 to a loss of 250,000, wrote James DePorre, founder and CEO of Shark Asset Management, on RealMoney.com.
In other data Thursday, Institute for Supply Management's manufacturing index edged down 0.3 points to 53.6, vs. expectations for a rise to 54. The Chicago PMI spurred selling earlier in the week, when it indicated a contraction in manufacturing.
"Tentative signs in housing, automobile, Chicago PMI and several other economic indicators continue to remind us that the month of September was weaker than generally expected," writes Seabreeze Partners' Doug Kass. He later adds that, "at the risk of being the boy who cried wolf, I believe that market participants have a false sense of security in rising equity share prices."
"Plenty of stocks were pumped up by mark-up buying. The pump-up and subsequent support underneath is now gone," writes Jim Cramer on RealMoney.com."We know that jobless claims aren't improving. That's a real negative, especially for retail and banks. But, and this is a big but, we are not seeing the right stocks go up if we are signaling another dip down."
Not all of the recent data have been negative. Among the day's surprises, construction spending unexpectedly increased by 0.8% in August, and pending home sales rose by 6.4% vs. expectations for a much smaller, 1% gain.
At the same time, the Department of Commerce said personal income increased 0.2% in August, in line with the prior month's increase, and spending ticked up 1.3%, respectively, vs. 0.3% in July. Both readings were slightly better than expected.
In other news Thursday, Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee on regulatory reform. Bernanke told members of Congress that a council of regulators should monitor systemic risk, while all systemically important financial firms should be subject to a consolidated regulator.
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