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The crowd listens as President Barack Obama speaks at the AFL-CIO Labor Day Picnic in Cincinnati, OH on
Labor Day. September 7, 2009.
Labour Party Spokesperson on Finance Joan Burton, said today that there are several fundamental problems with the proposed legislation on the "bank bank," the National Assets Management Agency (NAMA). One is valuation, in Section 58, and the second is the awesome powers given to the Minister for Finance in the Bill.
The Labour Party has proposed that the Government should demand a 50% discount on distressed loans NAMA buys from the banks.
Joan Burton said there would have to be what she called "chapter and verse" were the discount to be any less than 50%.
There is an estimated €90 billion in property loans on the books of the financial institutions.
She said citizens need a clear statement from the Minister of the loans and the assets to be taken over.
"We need a consolidated statement of the position of each of the top 100 developers whose loans are proposed for transfer to NAMA. While the identities of the individuals need not be revealed, we need a clear picture of the State’s potential exposure. This statement should set out the nature of collateral, level of cross-collateralisation between developers, the extent of the use of derivative instruments and personal guarantees,"she said.
Earlier Tuesday, Cork developer Michael Flynn, who heads Flynn Construction one of the country's biggest developers, said proposals by the Government to establish NAMA, may not work unless property developers are included in efforts to find a solution.
He said while developers had to accept some responsibility for the serious mistakes that led to the property crash, they should not be excluded from the recovery of the industry.
Fitch places 4 Irish banks' short-term IDRs on watch negative
Fitch Ratings on Tuesday said it could cut the short-term ratings of four Irish banks in anticipation that the Irish government will reduce the scope of its guarantee for their liabilities, when the current State guarantee expires in 2010.
Ireland's guarantee for about €400 billion in bank liabilities expires next September and Fitch said the new guarantee to replace it is expected to be less comprehensive.
"Irish banks continue to need guaranteed funding," Fitch said.
"Fitch expects Ireland to amend its guarantee scheme so that it conforms more closely with those in other European Union countries, which means it is likely to be less all-embracing," it added.
Portugal's GDP rises; Finland's sinks
Portugal's gross domestic product (GDP) expanded 0.3% in the second quarter of 2009 compared to the first three months of 2009. The economy had contracted three straight quarters, the National Statistics Institute (INE) said on Tuesday.
In its final estimate, the institute said GDP contracted 3.7% year-on-year in Q2 2009, compared with a contraction of 4% in the first quarter.
In the second quarter of 2008, the economy grew 0.1% and 0.7% year-on-year. There was a decline in GDP in the first quarter this year of 1.8%.
In Finland, Statistics Finland reported that GDP fell 9.4% year-on-year in the second quarter, after falling 7.6% in the first quarter.
Sequentially, the GDP was down 2.6% in the second quarter, compared to the 3% fall in the first quarter, revised from a 2.7% dip reported initially.
In the second quarter, the volume of private consumption dropped 3.4% on an annual basis, while investments plunged 11.7%.
The GDP indicator dropped a working day adjusted 11.1% year-over-year in June, compared with a 11.4% fall in the previous month.
Investors move out of the dollar into commodities is reflected in the Dow, which rose 21 points to 9463 led by Aluminum giant Alcoa gained 3%, while oil giants Chevron and Exxon Mobil rose more than 2% each.
The Nasdaqis up 0.45%；the S&P 500 has gained 0.58%。
For live currency updates, check the right-hand column of the Finfacts home page.The dollar traded at a record low $1.6038 per euro on July 15, 2008.
The gold price today broke through the `symbolic` $1000.00/oz mark reaching $1004.50 on the 11 a.m. London price fix, and topped $1007 during morning trading. Before early September, the highest 2009 price was on February 20 when gold fixed (in the afternoon) at $989, and it has traded in the range $870 to $993 ever since, with an average price over that period of $879.
Gold peaked at $850 per ounce in January 1980, which has an inflation adjusted value of about $2,300.
The rise translates to an annual increase of more than 21 percent on the average price in September 2008, which was $829.93/oz.
Aram Shishmanian, CEO of World Gold Council, commented: "Reaching the $1000 mark once again shows that this price level is no longer the watershed for gold that it once was. The sustained demand we are seeing from investors is, however, not wholly about returns. Investors are turning to gold as they seek assets that preserve their wealth, whatever the financial weather.
In 2009, we have seen record inflows into exchange traded funds and significant increases in retail demand for bars and coins as investors around the world took steps to diversify risk in a systematic way and improve their portfolios` long-term prospects.
"The stability in the gold price over the long term is testament to the diversity of gold`s demand base, which insulates the price from movements in any single category or country. This is a luxury many other assets, more closely linked to industrial output or consumer spending, do not enjoy. This diverse demand base has helped support the price despite a pressure on jewelry demand driven by ongoing economic uncertainty and high local gold prices."
Today`s $1000/oz record follows a sustained rise in price over the past seven years.