Investors dismiss Mexican austerity
Investors repudiated Mexico's economic austerity program yesterday, pushing short-term interest rates above 90 percent and deserting the peso in a response that threatened further economic collapse.
The government had to offer the astronomical interest rates in bond auctions to get investors -- chiefly foreign -- to buy its bellwether bonds at auction. And even at those rates, many investors chose to take their money out of the country.
The latest rates are expected to drive interest charges on home mortgages, business loans and consumer credit above 100 percent.
But despite the high interest rates on Mexican securities, pesos were sold off, forcing the currency as low as 7.33 to the dollar before it closed at 6.93, down 32 centavos.
Banks post $44.7 billion profit
The nation's commercial banks posted a $44.7 billion profit last year, setting a record for the third straight year as they earned higher interest income with fewer bad loans.
According to the Federal Deposit Insurance Corp., interest income for banks rose $7.3 billion as the institutions continued to increase their loan portfolios. At the same time, banks had to set aside $5.9 billion less for loan losses. Loan losses totaled $11.2 billion, the smallest since $10.8 billion in 1984.
Court stalls FCC minorities plan
A federal appeals court in Washington yesterday derailed the government's plan to reserve a valuable swath of the nation's airwaves for small businesses, minorities and women.
In a tersely worded decision, the U.S. Court of Appeals barred the Federal Communications Commission from proceeding with its plan to auction nearly 500 licenses this summer for new wireless telephone and data services.
The commission had set aside the licenses for small companies and decided to give companies owned by women or minorities a series of financial preferences that would have sharply lowered their cost of entering the business.
The appeals court ruled that objections raised in a lawsuit by a rural telephone company must be resolved before the commission could proceed. The court scheduled a trial for September.
Falkenberg president of GSE
GSE Systems Inc., a Columbia-based provider of simulation technology, has named Rolf M. G. Falkenberg, chief executive officer of a Swedish firm, as its president and chief operating officer. He will join a management group headed by GSE Chief Executive William E. Kuhlmann.
Mr. Falkenberg is president and CEO of Vattenfall Engineering AB, which owns 10 percent of GSE, a company made up of Columbia-based S3 Technologies, a former Texas Instruments process control unit in Hunt Valley, Columbia-based GP International and Sweden's EuroSim AB.