Japan unveils new $81 billion stimulus package
TOKYO — Japan’s government on Tuesday unveiled $81 billion of new stimulus spending to keep the world’s second-biggest economy from lurching back into recession.
Despite shrinking tax revenue, Prime Minister Yukio Hatoyama and his Cabinet agreed to 7.2 trillion yen ($80.6 billion) in new spending after days of negotiations with coalition partners. The announcement had been expected on Friday but was delayed by wrangling over the size of the plan.
In the U.S., meanwhile, President Barack Obama is looking at using some $200 billion leftover from the pot of money for bank bailouts to finance job creation schemes — spending that would come on top of the $787 billion stimulus approved earlier this year.
via Newsvine – Japan unveils new $81 billion stimulus package.
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Wow – That’s $987,000,000 Obama will have spent for US. I wonder where he gets that kind of money?
Goldman would be due $1 billion payment if CIT goes bankrupt
“Beyond the $1 billion payment from its rescue package, Goldman would also receive payment from credit insurance it holds if CIT were to go bankrupt.
The Goldman executive said the credit insurance was not a directional bet on CIT and was bought to protect against the possibility of a precipitous decline in the value of its collateral.”
via Goldman would be due $1 billion payment if CIT goes bankrupt – Oct. 5, 2009.
While this is not new news, I found it interesting because of the use of business credit insurance to hedge their bet. While they did not insure the full amount of the debt, they insured against their perceived risk involved in the credit exposure.
It just shows that business credit insurance can be structured to meet a variety of specific needs.
Business Leaders’ Predictions for Economic Recovery – Survey Results
“Gauges Timelines and Implications Based on 3,500 Executive Interviews from 20 countries
HUNT VALLEY, Maryland, December 4 /PRNewswire/ — This week, international trade credit insurer Atradius, based in Hunt Valley, MD, released its Global Economic Crisis Survey based on more than 3,500 interviews with executives and senior managers from companies in North America, Europe, Asia and Australia. The survey was designed to learn business leaders’ views on current economic indicators, including:
- Viability of their businesses, industries and financial institutions.
- Value of government interventions.
- Business practice modifications to maintain cash flow and prevent
payment defaults.
Impact on Business Practices-US respondents
- Thirty-four percent have suffered a decrease in their access to financing.
- The US remains one of the most pessimistic countries surveyed when it comes to expectations of failures of large banks and financial institutions, with nearly half reporting an anticipated increase in failures.
- Forty percent have changed their credit terms, 34 percent have increased their use of outsourced collection services, and 41 percent have increased the frequency of their buyers’ credit reviews.
- Finding new markets or sales channels for products and services (50 percent) and placing a heightened focus on customer service (58 percent) have proven essential elements for business continuity, as have gaining access to financing and conducting staff level reviews.
– Thirty-two percent are considering or have begun using credit insurance as a risk mitigation tool.”
Let’s see – they interviewed 3,500 executives and senior managers and 32% are considering or have begun using business credit insurance as a risk mitigation tool. That means about 1,120 of them are using or planning to use business credit insurance. Smart move!
If your business is one of these, Business Credit Insurance Brokers of Texas is very capable of assisting you in your search for the business credit insurance provider that will best meet your needs. BCIB of TX can also help you structure a business credit insurance policy to allow your business to:
* increase sales safely,
* improve your cash flow,
* get expert third-party credit guidance,
* Improve your borrowing power,
* add value to your financial statement,
* and/or guard your most valuable and volatile asset (accounts receivable).
If your business is not in Texas, you should contact Business Credit Insurance Brokers of the United States for excellent guidance.
While unsecured creditors usally don’t get much in bankruptcy settlements, This is sad.
Creditors to seek own bankruptcy plan for Freedom | Reuters
“The plan has enraged unsecured creditors by offering them only $5 million for their $300 million in claims. If they vote to reject the plan, they get nothing.”
Hmmm?, let’s see $5 for each $300 owed – that is less than 2 cents on the dollar. That is pretty bad. Read the rest of the story (click on link). The banks really tried to get all assets and cut the unsecured creditor out almost completely.
Euler Hermes offers insight on global insolvencies
Global corporate insolvencies: after a black year in 2009, Euler Hermes expects corporate insolvencies to stabilize at a high level in 2010
The world’s leading credit insurer Euler Hermes is forecasting a 33% rise in corporate insolvencies worldwide in 2009. In 2008, half the global increase in insolvencies resulted from financial restrictions whereas in 2009 the main factor has been the economic recession. (Paris, 17/11/2009)
The two major factors underpinning corporate insolvencies are businesses’ economic situations and profitability and their financing. It generally requires GDP growth of between 2% and 3% to halt the rise in insolvencies.
“Since mid-2008 the difficulties arising from traditional factors linked to the economic cycle (decline in business outlets) have been severely exacerbated by exceptional factors linked directly to the crisis (such as financing difficulties)”, notes Karine Berger, Head of Economic Research at Euler Hermes. “The economic downturn in 2008 accounted for only half the 26% rise in corporate insolvencies worldwide. The other half was probably linked to the financial restrictions faced by companies in the second half of the year. For 2009, we estimate that our global corporate insolvencies index, which summarises the trend in business failures worldwide, will rise by 33%. This increase can be wholly attributed to the slump in economic growth”.
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