Financial 411: IMF Chief Jailed, U.S. Reaches Debt Limit
Monday, May 16, 2011
IMF Head Jailed, Denied Bail
The head of the International Monetary Fund, Dominique Strauss-Kahn, remains in police custody, after a criminal court judge in Manhattan denied him bail Monday, citing concerns that he'd flee the country.
Strauss-Kahn is accused of sexually assaulting a hotel maid at the Sofitel in Midtown Manhattan. He faces seven counts of sexual assault and unlawful imprisonment. Some charges carry maximum sentences of 25 years.
Whether he's guilty or innocent, the news comes at a difficult time for Europe. On Monday, Portugal received about $110 billion, in part from IMF — so instability at top of that organization could have economic implications, and prompt questions over future leadership of the fund.
Irene Finel Honigman teaches international banking and finance at Columbia's School of International and Public Affairs. She said the news is already having a negative effect in Greece. "All of this, of course, may be premature, but right now there's a sort of sense of initial panic," she said. "The last thing anyone needed was fragility and volatility at a major institution."
Federal Government Hits $14.3 Triillion Debt Limit
On Monday, the government hit its $14.3 trillion borrowing limit. Treasury Secretary Timothy Geithner said he will immediately stop investing in two government pension plans, so that the federal government doesn't default.
Lawmakers on both sides of the aisle, in Congress and the White House, have been meeting and talking. But WNYC's Business and Economics Editor, Charlie Herman, said it doesn't appear that they're any closer to a deal. He explains that what we're seeing now is a broader debate on debt in general, taxes and spending, especially on entitlement programs like Medicare and Social Security. Herman also talks about what could happen if there's still no deal by later this summer.
New Series: New York Works
The Financial 411 is introducing a new series called "New York Works." The series looks at jobs that aren't necessarily unique to New York City, but are made more special or significant precisely because they're here.
For the first story, reporter Tracey Samuelson goes behind the red velvet curtain, to meet with a dancer at the American Ballet Theatre.