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Ireland seizes struggling Allied Irish Banks

Sales of new homes hit a seasonally adjusted annual rate of 290,000.
Sales of new homes hit a seasonally adjusted annual rate of 290,000. (Seth Perlman)

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Friday, December 24, 2010

Ireland's High Court said Thursday that Allied Irish Banks can be taken over by the government without shareholder approval as the lender became the fourth bank to fall under state control since 2008.

Finance Minister Brian Lenihan secured approval from the Dublin-based court to inject $4.8 billion into the lender by Dec. 31 and raise its stake to 92 percent from 19 percent, the Finance Ministry said in a statement. Allied Irish recorded its biggest share price drop in 22 months in Dublin trading. Valued at almost $28 billion at its peak, the bank's market capitalization Thursday was $455 million.

"We wouldn't have had Allied Irish Banks on the 1st of January if this investment wasn't made," Lenihan said in an interview with Dublin-based broadcaster RTE Radio after the ruling.

Irish banks are grappling with loan losses after the collapse of a decade-long real estate boom.

- Bloomberg News

ECONOMY

New home sales up 5.5 percent in November

More people purchased new homes in November, though not enough to signal better times are ahead for the housing industry.

Sales of new homes rose 5.5 percent last month, to a seasonally adjusted annual rate of 290,000 units, the Commerce Department reported Thursday. That's less than half the rate that economists consider healthy. And the increase follows a dismal October sales pace that nearly matched the lowest level in 47 years.

Economists think it could take three years to get back to a more typical rate of 600,000 sales per year, given a continued glut of unsold homes and falling prices.

The median price for a house sold in November fell to $213,000, 2.7 percent lower than a year ago.

- Associated Press

Orders for most durable goods rose

Orders for long-lasting manufactured goods, excluding the volatile transportation category, rose in November by the most in eight months, the Commerce Department said. Factories saw demand increase for computers, appliances and heavy machinery.

Total orders for durable goods dropped 1.3 percent, the Commerce Department reported Thursday. That decline reflected sagging demand for aircraft and autos.

Excluding transportation, orders rose 2.4 percent, the best showing since March.

- Associated Press


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