Mar 11

Wall St bonuses rise to $28.5 billion; jobs up for first time since 2011

“However, the industry is still smaller by 11 percent, or more than 20,000 jobs, than it was before the 2008 financial crisis, DiNapoli said. The comptroller cautioned job growth would not necessarily continue in 2015.” — The bonus pool increase is probably not significant compared to inflation, especially in NYC…

Mar 11

Ukraine wins IMF approval for $17.5 billion to rescue economy

“The financing offers a lifeline to an economy that the government expects to shrink as much as 11.9 percent this year, as the conflict in the eastern part of the country hobbles its industrial capacity. The funding, which replaces a two-year package from last April, also marks a deepening of the IMF’s involvement in the worst standoff in Europe since the end of the Cold War.” — It will be interesting to see whether the rump-Ukraine survives the backlash to the austerity of this IMF intervention…

Mar 11

Treasury Urged to Scrutinize Foreign Real Estate Buyers for Money-Laundering Risk

In a broad show of support for increased scrutiny of foreign real estate buyers in the United States, 17 nonprofit organizations on Tuesday urged the Treasury Department to require that the real estate industry verify the identities of buyers and screen them for potential money-laundering risk.

a 2010 report by the United States Senate Permanent Subcommittee on Investigations which showed how corrupt foreign officials and their associates had undermined anti-money-laundering controls, using ill-gotten money to purchase real estate in the United States.

The real estate industry has said it adheres to its own voluntary guidelines in performing background checks on purchasers. In the series, which focused on condominium purchases overlooking Central Park at the Time Warner Center, The Times quoted several people involved in luxury real estate transactions who acknowledged performing few background checks on buyers beyond determining their financial wherewithal to purchase luxury condos worth tens of millions of dollars.

More than half the time, the condos are purchased under the names of limited liability companies that mask the identities of the true owners. Current law in a number of states, as well as offshore jurisdictions, does not require disclosure of the identities of the beneficial owners of these entities.

Mar 11

The End of the Debt Cycle

Wall Street is as bubbly as ever. But Main Street is still struggling. Real wages and real business investment, for example — things that mark and measure genuine prosperity — are as limp as a Tokyo noodle.

Prosperity depends on savings and capital formation. You have to devote real resources to new output capacity. You have to hire people and find new and better ways of doing things.

But business investment has gone down since 2007. Based on fourth-quarter figures from 2007 and 2014 and annualized, $400 billion was invested in business development in 2007 against only $300 billion in 2014.

Meanwhile, businesses borrowed about $3 trillion more.

Where did all this money go?

It appears to have gone into share buybacks, mergers and acquisitions, bonuses, fees and other speculator payoffs.

Mar 11

Once one of Africa’s richest countries, oil-dependent Libya spirals towards bankruptcy

“In an interview with this newspaper, Mashala Zwai, the oil minister for one of Libya’s two rival governments, warned that the country was becoming “a second Somalia”. “This is a critical time in a critical situation,” said Mr Zwai, speaking from the Tripoli offices of the National Oil Corporation, which manages Libya’s energy sector. “By next year the state will not be able to pay Libyans’ salaries.””