North America

Twice in the last three decades, Mexico has demonstrated that one country’s profligacy and mismanagement can spell economic catastrophe beyond its borders. In 1982, the country defaulted on its foreign debt and set off a Latin American debt crisis that led to a decade of anemic growth across the region. In 1994, the peso collapsed and halted capital flows to emerging markets around the world, until the Clinton administration arranged a $50 billion Mexican bailout.
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Word that the federal and Ontario governments will provide the struggling auto sector with $4 billion in emergency loans was blasted by opposition critics and was lauded by industry and union spokesmen, the Canadian Press reported. The announcement Saturday by Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty in Toronto came a day after President George W. Bush offered US$17.4 billion in emergency loans to General Motors and Chrysler. Federal Finance Minister Jim Flaherty had promised Canada would offer 20 percent of the U.S.
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Ecuador’s default on $3.9 billion of international bonds means it’s only a matter of time before the country drops the U.S. dollar as its currency, Goldman Sachs Group has said, Bloomberg reported. Ecuador’s use of the dollar gives President Rafael Correa no outlet for providing credit to the economy as access to foreign financing dries up and revenue from sales of oil, the nation’s biggest export, tumbles.
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A collapse of the Detroit Three automakers would put nearly 600,000 Canadians out of work within five years, most of them in Ontario, as the impact ripples through the entire economy according to a report released Tuesday, the Calgary Herald reported. The study, commissioned by the Ontario Manufacturing Council, warned that a collapse of General Motors Corp., Ford Motor Co. and Chrysler LLC would spread across the country, hitting creditors, suppliers, parts manufacturers and dealerships. The report came as the Canadian and U. S.
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For years, the overseas operations of Ford and General Motors helped buoy Detroit when times were tough in the United States. But now, with the administration of President George W. Bush announcing Friday that it would step in to keep General Motors from falling into bankruptcy, and with Ford in serious trouble as well, fears are growing that the U.S. problems of the automakers will drag down their more successful units in Europe, Asia and Latin America, the International Herald Tribune reported.
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Centro Properties Group, one of Australia's highest profile casualties of the global credit crisis, was given a lifeline on Tuesday when lenders agreed to refinance $4.65 billion in overdue debt, Reuters reported. Without the refinancing, Centro could have been forced into administration by its creditors, potentially triggering a fire sale of retail properties in the United States, Australia and New Zealand. Centro has been struggling to sell shopping centres to help pay down debt after credit markets froze following its rapid expansion in the United States last year.
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Syscan International Inc., a provider of RFID-enabled supply chain solutions, has announced that it has filed under the Bankruptcy and Insolvency Act and that H.H. Davis & Assoc. Inc. of Montreal, Quebec, has been appointed by the court to handle matters with its creditors, FOXBusiness reported. The board decided to pursue this course of action after the expected private placement with Bluehill ID failed to materialize and after previous attempts to raise capital and effect a company merger and sale were unsuccessful.
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Over 100 companies globally have defaulted on their debt this year, affecting $302 billion worth of securities, but that figure could rise as nearly 900 issuers are poised for credit downgrades, Standard & Poor's said on Monday. Of the 108 defaults this year, 86 are from the United States, seven from Europe, five each from Asia and Canada, three from Latin America, and two from Russia. The figure contrasts with 22 defaults in 2007 and 30 in 2006.
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German reinsurer Global General and Reinsurance Co. Ltd., formerly the sixth largest reinsurance company in the world, has filed for Chapter 15 protection in the U.S., Bankruptcy Law360 reported. The filing indicated liabilities of more than $100 million and assets of more than $100 million. The company has estimated that it has between 50 and 99 creditors. Howard Seif, global chair of Chadbourne & Parke LLP’s bankruptcy and restructuring practice, is commandeering the U.S. proceedings. The U.K.
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Philippine Deposit Insurance Corp. took over the Rural Bank of Parañaque, Inc. after the central bank ordered its closure on Monday. The receivership order, which meant the responsibility of recouping as much of the bank’s unpaid loans has been transferred to the state deposit insurer, was stated in Monetary Board Resolution 1616 issued on Monday. Central bank records showed the bank, known for its double-your-money-time-deposit scheme, has a capital deficiency of P983.5 million as of July 2007. RBPI has 37,400 deposit accounts worth P5.4 billion, of which P5 billion is insured.
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