European Banks Facing Funding Squeeze Devour Record ECB Emergency Funding
European banks borrowed enough cash from the European Central Bank at its first three-year offering to refinance almost two-thirds of the debt they have maturing next year amid concern that markets will remain frozen. The 523 euro-area lenders took a record 489 billion euros ($638 billion) from the Frankfurt-based central bank in 1,134- day loans today, more than economists’ median estimate of 293 billion euros in a Bloomberg News survey. That equals about 63 percent of the European bank debt maturing in 2012, according to Goldman Sachs Group Inc. analysts.
The Justice Department on Wednesday announced the largest residential fair-lending settlement in history, saying that Bank of America had agreed to pay $335 million to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers during the housing boom. A department investigation concluded that Countrywide loan officers and brokers charged higher fees and rates to more than 200,000 minority borrowers across the country than to white borrowers who posed the same credit risk.
Momentum is defined as the tendency for investments that have performed relatively well in the recent past to continue to do so and for relatively poorly performing investments to continue to fare poorly. It is a well-documented anomaly in modern finance. Numerous academic studies have confirmed that, when measured in periods of approximately three to 12 months, past investment winners tend to keep on outperforming while past losers tend to keep underperforming.
And so the year ends not with a bang but with an economic whimper, as the final Q3 GDP is revised lower from 2.0% to 1.8% on expectations of an unchanged print. The reason: Personal Consumption contributed only 1.24% instead of the 1.63% in the second revision and 1.72% in the advance forecast. Net net - very weak report and one which portends weakness from Q3 is spilling over in Q4.
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