Tag Archives: Bloomberg

Greece Considering Legal Action Against U.S. Banks for Crisis

16 May

By Timothy R. Homan

May 16 (Bloomberg) — Greece is considering taking legal action against U.S. investment banks that might have contributed to the country’s debt crisis, Prime Minister George Papandreou said.

“I wouldn’t rule out that this may be a recourse,” Papandreou said, in response to questions about the role of U.S. banks in the crisis, in an interview on CNN’s “Fareed Zakaria GPS.” The program, scheduled for broadcast today, was taped on May 13. Neither Papandreou nor Zakaria mentioned any banks by name.

U.S. stocks fell and the euro slumped on concern that Europe wouldn’t be able to contain the debt crisis stemming from Greece. The Standard & Poor’s 500 Index declined 1.9 percent May 14, while the euro fell below $1.24 for the first time since November 2008.

Papandreou said the decision on whether to go after U.S. banks will be made after a Greek parliamentary investigation into the cause of the crisis.

“Greece will look into the past and see how things went,” Papandreou said. “There are similar investigations going on in other countries and in the United States. This is where I think, yes, the financial sector, I hear the words fraud and lack of transparency. So yes, yes, there is great responsibility here.”

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KBR to Get No-Bid Army Work as U.S. Alleges Kickbacks (Update1)

9 May

(Updates with General Casey’s comment in 10th and 11th paragraphs, McCaskill comment in third paragraph from end.)

By Tony Capaccio

May 6 (Bloomberg) — KBR Inc. was selected for a no-bid contract worth as much as $568 million through 2011 for military support services in Iraq, the Army said.

The Army announced its decision yesterday only hours after the Justice Department said it will pursue a lawsuit accusing the Houston-based company of taking kickbacks from two subcontractors on Iraq-related work. The Army also awarded the work to KBR over objections from members of Congress, who have pushed the Pentagon to seek bids for further logistics contracts.

The Justice Department said the government will join a suit filed by whistleblowers alleging that two freight-forwarding firms gave KBR transportation department employees kickbacks in the form of meals, drinks, sports tickets and golf outings.

“Defense contractors cannot take advantage of the ongoing war effort by accepting unlawful kickbacks,” Assistant Attorney General Tony West said in a statement.

KBR, the Army’s largest contractor in Iraq, will review the litigation when it is received and “will continue to cooperate with the government,” company spokeswoman Heather Browne said in an e-mail. “Gifts of dinners, baseball tickets and similar items would violate KBR policies and KBR was not aware of these violations.”

KBR will continue to provide services in Iraq such as housing, meals, laundry, showers, water purification and bathroom cleaning under the new order, which was placed under a military contract KBR won in late 2001, shortly after the U.S. invaded Afghanistan.

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Jobless Suffer With Corporate Cash Climbing to $1.19 Trillion

11 Feb

Very typical pirate behavior, hoarding the stash so that they can ride out the storm.

By Thomas Black and Will Daley

Feb. 11 (Bloomberg) — A majority of companies in the Standard & Poor’s 500 stock index increased cash to a combined $1.19 trillion while simultaneously reducing spending, keeping a jobs recovery on hold.

Caterpillar Inc., Eaton Corp., Walgreen Co. and General Electric Co. are among 260 companies that ended last quarter with $522 billion more than a year earlier after cutting capital spending by 42 percent. Economists say the dearth of investment is keeping the jobless rate at about 10 percent as the U.S. emerges from its worst recession since the 1930s.

“It’s not clear we are going to see the type of growth following this recession that we’ve seen in previous recessions,” Sandy Cutler, Eaton’s chief executive officer, said in an interview yesterday. That view “is leading people to be cautious as to their rate of reinvestment, and right in parallel with that, in terms of hiring additional employees.”

Investment and hiring may remain low as companies bring unused capacity back on line and rely on productivity gains to fill demand, said Edward Lazear, former economic adviser to President George W. Bush and a professor at Stanford University in Stanford, California. Employers have eliminated 8.4 million jobs since the U.S. slipped into recession in December 2007.

“About three years into the recovery, you start getting significant wage growth,” Lazear said in an interview. “It’s unfortunate because it means workers suffer for a pretty long time after the recovery takes off.”

Congressional leaders of both parties share a “common commitment” with President Barack Obama to promote employment and help small businesses, Lawrence Summers, director of the White House’s National Economic Council, said in a Feb. 9 interview with Bloomberg Television.

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