The Federal Reserve is expected to leave its influential interest rate unchanged after the central bank’s top officials wrap up their meeting in Washington today, following a rocky start to the year in the financial markets that is forcing them to reevaluate their plans.
The Fed raised its benchmark interest rate in December from near zero to a range of 0.25 to 0.50 percent — the first increase in nearly a decade. The move amounted to a vote of confidence in the nation’s economic recovery, and officials at the time indicated they anticipated hiking four more times this year.
Latrobe city officials Monday defended the use of public money for certain improvements to and projects for the community.
During council’s voting meeting, Irving Avenue resident James Bolton questioned borrowing and spending, from street equipment to recreation.
“We can’t keep borrowing money. You get money and you save it. You don’t go out and spend it,” Bolton said.
Earlier in the meeting, council agreed to purchase a street sweeper from Golden Equipment Co. of Mars. The $211,524 cost will be financed through the low bidder, 911Leasing.com, at an interest rate of 2.7 percent over five years.
The purchase is dependent on the state Local Government Unit Debt Act’s approval.
New York (CNN Money) — It’s no secret that China is the largest holder of U.S. debt.
So should Americans be concerned that China has started dumping some of its Treasury holdings?
After all, it raises serious questions about whether China will keep lending Washington money to help finance the federal deficit in the future.
But right now, China is selling because it’s in dire need of cash. Recently, it unleashed multiple moves to support its markets and prevent its currency from a freefall, while at the same time trying to stimulate the economy.
China yanks record sum from war chest
China owned $1.3 trillion of U.S. Treasuries as of June, making it the biggest holder of U.S. debt.
But China’s foreign-exchange reserves plunged by a record $94 billion in August, according to the country’s central bank, leaving it with a war chest of $3.6 trillion. Analysts say it’s very safe to believe a big chunk of that decline occurred due to a reduction in U.S. Treasury holdings.
The selling and the potential that China will not be buying U.S. debt in the near future raises questions on its potential to increase America’s borrowing costs.
Some of this might already be happening, at least at a small scale. When stock markets are turbulent, investors usually rush to the safety of U.S. Treasurys and yields fall. However, despite August’s extreme stock volatility, rates on Treasurys actually rose slightly in late August.
Part of that move is likely due to Wall Street betting the Federal Reserve may raise interest rates next week. But market participants also suspect the unusual action in the bond market was driven by China dumping Treasuries.
China is raising lots of cash
This time, Beijing is cutting its Treasury holdings out of a weakened position as it tries to stave off more declines in its currency. China is also propping up its stock market, which lost half its value in the span of just a few months this summer.
“Capital outflows have skyrocketed in China and the yuan is under intense selling pressure. The only thing they could do is sell Treasuries to buy their own currency,” said Walter Zimmerman, chief technical analyst at United-ICAP.
China isn’t trying to sink the U.S. economy
There have long been concerns that China could sink the American economy by unloading its gigantic holdings of Treasuries, sending borrowing costs skyrocketing.
Thankfully, those doomsday fears don’t appear to be at play here yet.
“If China’s U.S. Treasury stock is a nuclear bomb, moderate sales to offset selling pressure on the yuan are unlikely to set off an explosion,” Michael McDonough, chief economist at Bloomberg Intelligence, wrote in a recent report.
But moves could raise borrowing costs here
Still, China’s sales could make Treasury yields higher than they would normally be. That’s of concern because Treasury rates are used as a benchmark that set the cost of borrowing for items like credit cards and mortgages.
While it’s “not the end of the world,” SkyBridge Capital senior portfolio manager Troy Gayeski said higher yields could lead to a “slowdown in the housing recovery.”
What’s key is how much cash China ultimately needs to raise to defend its currency and stock market. No one, not even China, knows that figure.
China may go on a U.S. debt diet
So far, the American bond market seems to be taking the China move in stride.
The yield on the 10-year Treasury note is currently sitting at 2.22%, about unchanged from a month ago.
Demand for U.S. debt is healthy now especially when compared to the ultra-low, or even negative rates in other economic powerhouses like Germany and Japan.
Policymakers in Washington should hope that trend continues. Now that China’s economy is in disarray, America might not be able to count on its No. 1 lender to gobble up U.S. debt like in the past.
“China’s surplus is slowing. That gives them less firepower to accumulate Treasuries,” said Thomas Urano, managing director at Sage Advisory.
Riot police have clashed with anarchist groups in Athens tonight, as Greece’s PM Tsipras faces rebellion over the country’s bailout plan
Read More: Greek crisis: Protests in Athens turn violent as Tsipras urges MPs to back him – live updates | Business | The Guardian
A column of anti-austerity protesters are currently marching in a loop through central Thessaloniki, Greece’s second city, and its seafront.
The mood is calm, and not everyone is in the streets – the marchers just passed a pirate-themed ship full of revellers.
“Maybe there’s about a thousand here – with VAT,” jokes one protester, in a reference to the huge VAT hikes that the new bail-out will precipitate, inflating the cost of daily living.
There is a sense of anger, but also of disorientation – and uncertainty about what to do, and who to blame.
“I feel very confused about the situation,” says Giorgos, a middle-aged pharmacist who lost his job two weeks ago.
“I feel very angry about the memorandum, but also I have no problem for the moment with Tsipras. He was under a lot of pressure, and this is a coup.”
Giorgos is resentful of the EU, whose leaders have shown no compassion to a family like his – a family whose two breadwinners have lost their jobs. But equally he doesn’t want to leave the euro, not yet anyway.The feeling shared by other marchers.
“It’s more complicated than that,” says Varvara Kyrillidou, an Italian teacher and Syriza member protesting against her party leader’s decision.
“To leave Europe behind, we need a plan – without a plan it’s very risky for our people. And at the moment we haven’t got one.”
Greece ideally needs to sit down and have a rethink, says Kyrillidou – but she knows there isn’t time.
“We’re between two walls that are closing in on us.”
Bank of America Corp Chief Executive Brian Moynihan has been hiring more sales staff, in areas ranging from commercial lending to wealth management, in his latest effort to boost revenue that has barely budged for years.
The hiring push is part of a shift in how the bank is trying to sell more products to existing customers. Previously, Bank of America tried training individual employees to sell multiple products, but now it is focusing more on hiring specialized sales staff that can refer business to one another.
So instead of a bank teller trying to sell a branch customer a credit card and a mortgage, the teller might refer the client to a home loan specialist.
The bank has added some 1,000 financial advisors since the second quarter of 2014, and increased the number of sales specialists for products like mortgages and credit cards by 3.5 percent to 6,963.
On a call with analysts, Moynihan said that while the bank is still encouraging individual employees to sell different products, having enough sales staff is important as well.
“It is really just having more of them,” he said.
The bank’s chief financial officer, Bruce Thompson told reporters on a conference call, “Ultimately revenues are driven by the number of client-facing personnel that you have and how well they do relative to their peers.”
So far, these new hires have had a limited impact on results. The bank posted a tepid 1.7 percent increase in revenue in the second quarter from the same period a year ago. Quarterly revenue at the bank has hovered around $22 billion since 2011.
With weak revenue growth, the bank has been trying to boost profit by cutting costs. Overall, the bank is laying off staff. It had fewer than 66,000 full time employees at the end of the second quarter, nearly 10 percent less than the same quarter last year. Bank of America has a regular cost-cutting program in place it calls “Simplify and Improve.”
Spokesman Jerry Dubrowski said Bank of America has been steadily increasing its sales force for some time.
But that growth has not been uniform across all products. While the number of consumer sales specialists for products such as credit cards and auto loans has steadily increased, the number of financial advisors dipped from 2013 to 2014, then rose over the past year. Bank of America doesn’t disclose the size of its sales force for loans to businesses. (Reporting by Dan Freed; Editing by Dan Wilchins and Nick Zieminski)
By JAMES KANTER and ANDREW HIGGINS
BRUSSELS — European leaders said Monday morning that they had reached a deal meant to resolve Greece’s debt crisis and avert a historic fracture in the Continent’s common currency project.
“EuroSummit has unanimously reached agreement,” Donald Tusk, the president of the European Council, wrote on his Twitter account shortly before 9 a.m. on Monday. The new bailout for Greece would involve “serious reforms” and “financial support,” he wrote.
The deal announced early Monday allows only the start of detailed negotiations on a new assistance package for Greece. But the prospect of a new bailout program was expected to give the European Central Bank the leeway to continue channeling sorely needed emergency funding to Greek banks hollowed out by a long economic slump and the withdrawal of billions of euros in recent months by panicky account holders as the country’s financial crisis worsened.
Riot police stood guard in front of the Greek Parliament, during an anti-austerity demonstration in Athens on Sunday.Greeks’ Anticipation Turns to Anxiety, Then Frustration in Weekend on EdgeJULY 12, 2015
Diners bowed their heads in prayer before eating at the Galini charity’s soup kitchen in Athens. Greece’s fiscal crisis has made many destitute and desperate, and is stretching the resources of charities and government agencies that help the poor.Greece Financial Crisis Hits Poorest and Hungriest the HardestJULY 11, 2015
At a bank in Athens, graffiti made clear the resentment some Greeks have against the Germans’ hard-line economic positions.Greek Debt Crisis Pits Greeks Against GermansJULY 11, 2015
A statue of the goddess Athena in Athens. Greece is struggling to avert bankruptcy.With Greeks Now Ready to Make a Deal, What Can We Expect?JULY 11, 2015
Christina Economou, 59, owns a restaurant named after herself in Hydra.Portraits From Greece as It Endures a CrisisJUNE 23, 2015
The agreement aims to provide Greece with its third bailout package in five years. Tough terms, demanded by Germany and others, are meant to balance Greece’s demands for a loan repayment system that will not keep it mired in recession and austerity budgets, against creditors’ insistence that loans worth tens of billions of euros not be money wasted. Months of testy negotiations, and the inability of Greece to live up to the promises made in its previous bailouts had put a cloud of distrust over the weekend’s discussions.
An accord would end five months of bitter negotiations that raised concerns that Greece would be the first country to be forced out of the euro currency union — a development that proponents of European unity had sought desperately to avoid.
“The advantages far outweigh the disadvantages,” Chancellor Angela Merkel of Germany told a news conference, explaining her decision to accept the deal and recommend that the German Parliament also grant its approval.
“The country which we help has shown a willingness and readiness to carry out reforms,” said Ms. Merkel, referring to Greece.
As part of Greece’s commitments, Ms. Merkel said, a fund will be created to use the proceeds from selling off assets owned by the Greek government to help pay down the country’s debt. That fund would be “to the tune of” €50 billion, she said.
Greece will be required to also seek assistance from the International Monetary Fund and agree to let the organization continue to monitor the country’s adherence to its bailout commitments. The Greek government had resisted a continued role for the I.M.F., seeing the fund’s involvement as unwanted meddling.
The Greek Parliament will also be required to approve the terms of the agreement “without delay,” according to the draft document that was circulating Monday morning. One of the sticking points in the weekend negotiations had been a demand that the Parliament sign off on any deal by Wednesday, but that requirement appears to have been relaxed.
He added that eurozone finance ministers would “as a matter of urgency discuss how to help” Greece meet its short-term financing needs. That appeared to be a reference to ensuring that Greece, which is nearly bankrupt, can make large payments to lenders including the European Central Bank that are due in the coming weeks.
During the marathon negotiation session, Alexis Tsipras, the Greek prime minister, struggled with economic overhauls that were demanded by the creditors but that his left-wing government will find difficult to sell at home — just a week after Greek voters overwhelmingly rejected softer terms in a referendum.
European stocks rose and the bond market calmed on Monday morning just moments after European leaders said they had reached a deal. There was no euphoria, however, as investors waited to see how the tough agreement would be put in place.
Niki Kitsantonis contributed reporting from Athens, and Alison Smale from Berlin.
Florida cops have captured two robbers who were on their attempt to flee after seizing an ATM from the local bank with the help of a stolen backhoe. The robbers were identified as Francisco Hernandez, 53 and Jesus Antonio Sanchez, 50 both residents of Clewiston. They are currently being held at the Polk County Jail on grand theft auto charges as reported by the Orlando Sentinel.
Hernandez and Sanchez are believed to have stolen the backhoe from a local construction site, before heading to Winter Haven and capturing an ATM from the wall of the CentreState Bank. The entire incident has been recorded by a surveillance camera near the ATM. The footage has confirmed the robbery being taken place on Friday midnight.
The suspects however claim that they were innocent as they had been collecting scrap metal and were unable to recall where items pulled by the investigating deputy had been located. Hernandez was previously known to officials due to an outstanding Hendry Country arrest warrant for violating his probation. Sanchez was also on probation for a previous grand theft offence.
According to a bank representative, the suspects did manage to take the ATM from the wall but they were in no attempt to open it.
Backhoes are generally used to excavate or dig and is usually mounted on tractors and front loaders. The suspects have been referred to as “brazen” for their shameless assault on the ATM. The motivation of the two men remains unclear and the two men remain in holding at Polk County Jail.
Recent reports suggest that ATM theft is on the rise as criminals turn to stealing ATM’s rather than swiping credit cards. In 2010 in Texas, 100 ATM machines were stolen. Bank robberies appear to be down.
Greece’s parliament has backed a government package of economic reforms aimed at ending the country’s debt crisis and securing a new bailout.
In a late-night debate, Prime Minister Alexis Tsipras admitted many proposals fell short of his party’s anti-austerity promises.
But he said there was a “national duty to keep our people alive and in the eurozone”.
The proposals are to be studied by eurozone finance ministers later.
EU sources says Greece’s creditors – the European Commission, the European Central Bank and the International Monetary Fund – believe the plan is positive.
Eurozone officials are also expected to discuss Greek requests for some of the debt to be rescheduled.
While a majority of the 300-member parliament backed the plans in the early hours of Saturday, several government MPs voted against or abstained.
Mr Tsipras is asking for €53.5bn ($59.47bn) to cover Greece’s debts until 2018.
In return, he has given in to demands for a pension overhaul, tax rises and privatisations – measures rejected in a referendum last Sunday.
Greek banks are days away from running out of money and unless a deal is struck the country faces exiting the euro.
The BBC’s Mark Lowen in Athens says the Greek reform package is a major climbdown for the prime minister, whose radical left-wing Syriza party was elected on a strong anti-austerity platform.