Irvine, CA, United States (4E) – The number of foreclosure filings nationwide dropped in April to its lowest level since July 2007, although foreclosure activity actually increased in some areas of the country.

RealtyTrac, the leading online marketplace for foreclosure properties, released its April report on foreclosure filings on Thursday. The report showed shows that foreclosure filings, consisting of default notices, scheduled auctions and bank repossessions, were reported on 188,780 properties.

Foreclosure activity decreased 5 percent in April, compared with March. It was down by 14 percent compared to April 2011.

In addition, repossessions by banks dropped significantly to 51,415 repossessions last month, down 26 percent compared to a year ago. That number was also about 50 percent of the 102,000 monthly repossessions at the peak of repossession in September 2010.

However, one in every 698 U.S. housing units had a foreclosure filing during the month, RealtyTrac said.

“Rising foreclosure activity in many state and local markets in April was masked at the national level by sizable decreases in hard-hit foreclosure states like California, Arizona and Nevada,” said Brandon Moore, CEO of RealtyTrac. “Those three states, and several other non-judicial foreclosure states like them, more efficiently processed foreclosures last year, resulting in fewer catch-up foreclosures this year.

“In addition, more distressed loans are being diverted into short sales rather than becoming completed foreclosures,” Moore continued. “Our preliminary first quarter sales data shows that pre-foreclosure sales — typically short sales — are on pace to outnumber sales of bank-owned properties during the quarter in California, Arizona and 10 other states.”

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Kabul, Afghanistan (IRIN) – Bonded labor in Afghanistan’s brick kilns is one of the most common forms of hazardous labor in the country. More than half of the brick kiln workers surveyed in a recent report by the International Labor Organization (ILO) were children, with most under 14. Few are getting any education to allow them to develop skills needed to break out of work in the kilns.

Most children began working at the age of seven or eight, and almost 80 percent are under 10. According to the ILO, the kilns rely on debt bondage: Workers and their families are tied to a kiln by the need to pay off loans taken out for basic necessities, medical expenses, weddings and funerals.

The ILO report found that basic subsistence needs force families to repeatedly take out loans, often paying for a winter’s food with a loan which they pay back over an entire season. Of the families surveyed, 64 percent had worked in the kilns for 11 years or more, and 35 percent had done so for more than 20 years.

The exact number of kilns in Afghanistan is unknown, but reports suggest that in Nangarhar Province’s Surkhroad District alone there are about 90, with 150-200 children working in each one. ILO estimates that Kabul Province’s Deh Sabz District has 800 kilns.

“It is out of necessity and extreme poverty that households enlist their children from an early age to work in the kilns,” said Sarah Cramer, lead author of the ILO report. “There are four cycles prevalent in the situation of bonded labor in Afghanistan – the cycle of debt, cycle of vulnerability, cycle of dependence and the cycle of poverty.”

bm/eo/cb

– Provided by Integrated Regional Information Networks.

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Midvale, Utah, United States (4E) – Ally Financial ResCap mortgage on Monday filed for prepackaged bankruptcy protection.

The bank, owned by taxpayers, said the filing will allow the bank to take another step to repay the U.S. treasury.

Ally’s ResCap unit operates under the GMAC Mortgage brand. At one time, it was the nation’s leading subprime lender. Problems with those home loans for risker borrowers, and the steep drop in the company’s core auto finance business, forced the Treasury to shell out some $15.8 billion in bailout funds in 2009 in an effort to rescue the ailing auto industry and bubble-bursting housing market.

ResCap began as the finance unit of automaker General Motors under the GMAC name. It changed its name to Ally after the bailout. In addition to its auto finance business, Ally also operates as an online commercial bank.

The struggling bank said it is seeking strategic alternatives for its international businesses, a euphemism that the overseas arm is up for sale.

Ally said it expects GMAC to continue to make and service mortgage loans during the bankruptcy process. Its portfolio of home loans, currently valued at less than half its original value, will be auctioned off as part of the bankruptcy process.

GMAC said it will make a so-called “stalking horse” bid of $1.6 billion for those loans, adding that it anticipates them to attract higher bids from investors.

In a statement, Ally CEO Michael A. Carpenter said, “The action by ResCap will enable Ally to achieve a permanent solution to its legacy mortgage risks and put these issues behind us. This action, along with pursuing alternatives for the international businesses, will allow Ally to focus 100 percent of its energies on further strengthening its already leading U.S. auto finance and direct bank franchises.”

At present, the U.S. Treasury owns about 74 percent of Ally’s outstanding stock. To date, Ally has repaid, through dividends and loan repayments, about $5.5 billion of the bailout funds it received.

The company also said Monday that upon successful completion of the bankruptcy auction and disposal of its international business, it should be able to pay back roughly two-thirds of the government bailout.

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Boston, MA, United States (KaiserHealth) – When Massachusetts passed sweeping health insurance reform in 2006, a crucial piece was missing from the landmark legislation: how to control rising medical costs.

Today, state lawmakers announced a new proposal to do just that, including new ways to pay doctors and hospitals, a specific cap on health-care spending tethered to economic growth and a tax on the state’s most expensive hospitals if they can’t justify their prices.

Different Takes: How Massachusetts Can Control Health Care Costs.

MIT economics professor Jonathan Gruber, an architect of the state’s 2006 health law and an advisor to President Barack Obama on the national Affordable Care Act calls the new House proposal “aggressive, broad and visionary.”

“This is an incredibly hard problem,” said Gruber, speaking on WBUR’s Radio Boston today. “What I like about this…is that it’s really taking the spaghetti approach to cost control; let’s throw a bunch of things against the wall and see what sticks. They’re doing a bunch of different things all of which might work.”

So, what does it mean for patients?

Mass. state Rep. Steve Walsh, the House chair of the joint Committee on Health Care Financing, said the plan would save $160 billion over 15 years. As far as savings for patients, Walsh said: “The first thing I’d tell [a patient] is five years from now, her family plan is going to be $2,000 cheaper than it is today.” Walsh said businesses would also find their health costs cut significantly.

House Speaker Robert DeLeo added: “With this bill, I think everyone’s gotten a little something they want and everyone’s gotten a little something they don’t want. So that’s what this legislation is all about, but at the end of the day, most importantly what it’s going to provide is some real health care cost containment. That’s what the bill is all about.”

One of the greatest challenges, he said, was to contain costs while not undermining a key industry in the state, with 1 in 7 jobs here linked to health care. Clearly some folks will be disappointed that the plan didn’t go far enough. Gov. Deval Patrick introduced legislation in February 2011 that would have allowed greater government oversight of contracts between insurers and health care providers and moved more medical groups into global payment systems that put doctors and medical groups on a budget.

But DeLeo also made the point that once again, the state is in the forefront of health reform. “I look at this as Massachusetts being a leader once again in terms of what’s going on in the health care field in the country.”

Here are some details of the House bill, officially the Health Care Quality Improvement and Cost Reduction Act of 2012, presented today by lawmakers. The state Senate is expected to introduce its own version of the plan next week.

1. A new, quasi-governmental agency called the Division of Health Care Cost and Quality would oversee the transition to the new payment and delivery system with a board including consumer, government and industry representatives.

2. The plan establishes a specific cap for health-care spending that would be linked to the Gross State Product minus .5 percent.

3. The state could impose a 10 percent tax on hospitals if they charged more than 20 percent of the state median price for a given service and couldn’t justify that higher price. (Two earlier reports by Attorney General Martha Coakley found that certain hospitals exploited their market clout to charge higher-than-justified prices). Hospitals would pay this penalty into a distressed hospital fund for institutions that serve a high proportion of poor and vulnerable patients.

4. Accountable care organizations would take on greater prominence, though the bill stresses that joining an ACO would be voluntary for patients and providers. The bill defines the size of an ACO as bigger than 15,000 people and no larger than 400,000. Patients would have the right to appeal decisions made by their ACO doctors, and have the right to a second opinion.

5. The state’s medical establishment would continue its shift toward global payments and away from fee-for-service systems. The measure would “transition the industry to adopt alternative payment methodologies such as global payments and bundled payments for acute and chronic conditions.”

6. Electronic health records would be required for all providers by 2017.

7. Greater transparency would be attained through detailed pricing available to consumers on the Web, as well as greater disclosure of out-of-pocket costs to patients up front.

8. The measure stresses greater coordination of care through primary care, and the establishment of “patient-centered medical homes” so that patients could have a single point of coordination for all types of care.

9. New rules on medical malpractice would create a 180-day cooling off period while both side try to negotiate a settlement. Also, the measure would allow providers to freely offer an apology to a patient.

10. Under a provision called “smart tiering” patients might pay more for more expensive services.

11. The bill would make several changes to Medicaid, including increasing MassHealth rates paid to providers.

12. Funding for workforce training and development are included in the measure, and a provision would forgive loans to primary care doctors who practice in rural or underserved areas.

– Provided by Kaiser Health News.

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Chiang Mai, Thailand (IRIN) – Ethnic minority groups in Myanmar are calling on the international community to set stronger benchmarks or steps in the incremental removal of international sanctions, following this week’s announcement by the European Union (EU) to suspend sanctions for a year, retaining only the embargo on arms sales.

“Now more than ever, it’s important that our voice is heard,” Zipporah Sein, general secretary of the Karen National Union told IRIN on 27 April. “If sanctions are to be lifted, it’s important that specific benchmarks be put in place.” Many argue there can be no real progress towards democracy until the country formerly known as Burma makes peace with all its ethnic groups.

Viewed as key to the development of Myanmar, the suspension of EU sanctions announced on 23 April is seen as another major endorsement of Burmese President U Thein Sein’s recent political reforms, which include the release of hundreds of political prisoners, new laws allowing labor unions and strikes, a gradual easing of media restrictions, and ceasefire agreements with various ethnic rebel groups.

Ethnic divide

The Burmese government has had contentious relationships with its ethnic minority groups, which account for about a third of the country’s more than 54 million inhabitants, and many have fought for greater autonomy or secession for their regions since the country gained independence from Great Britain in 1948.

At the weekend, leaders of the United Nationalities Federal Council (UNFC), an umbrella group comprised of 11 of Myanmar’s leading ethnic groups – including the Mon, Shan, Karenni, Chin, and Kachin people – released a statement announcing that they were prepared to meet with Myanmar’s chief negotiator, U Aung Min Aung Min, to present their version of a durable roadmap to peace.

At the end of 2011, the government launched peace initiatives with several of Myanmar’s ethnic armies.

“The UNFC has the same position as Daw Aung San Suu Kyi [leader of the National League for Democracy, Burma's main opposition party],” said KNU Vice President David Tharckabaw, during the meeting in northern Thailand near the Burmese border. “We support the rule of law, the amendment of the constitution, and building internal peace.”

Tharckabaw, along with other members of the UNFC, maintains that political dialogue, not resource development, must be the top priority after a nationwide cease-fire is reached.

Sanctions eased

The EU’s decision to ease sanctions follows an announcement by Washington a week earlier that the US will relax some financial restrictions on the country to support certain humanitarian and development projects.

“These [steps] were… in response to what we viewed as very positive parliamentary elections,” US State Department spokesman Mark Toner told a news briefing on 17 April.

Less than a week later, Japanese Prime Minister Yoshihiko Noda announced that his government would resume loans to Myanmar, and cancel US$3.7 billion of debt owed by the impoverished nation after by-elections that saw Aung San Suu Kyi’s party win 43 of the 44 contested seats earlier in April.

Some $61 million to assist ethnic minorities, improve medical care and other rural development programs, as well as disaster prevention efforts, were also pledged, the Japan Times reported. Canada suspended most of its sanctions on 24 April.

Benchmarks needed

Nevertheless, there are also calls for caution, particularly in Myanmar’s ethnic minority areas. “The suspension of EU sanctions keeps the pressure on the Burmese government to continue reforms, while also making a strong positive gesture that genuine reforms will be rewarded,” said Anna Roberts, executive director of Burma Campaign UK. “For the threat of re-imposition of sanctions to be credible, the EU must set clear timelines and benchmarks.”

Speaking before the US Senate Committee on Foreign Relations Subcommittee on East Asian and Pacific Affairs on 26 April, Joseph Yun, principle deputy assistant secretary, Bureau of East Asian and Pacific Affairs of the US State Department, noted: “In Rakhine State systematic discrimination and denial of human rights against ethnic Rohingya remains deplorable. Overall, the legacy of five decades of military rule – repressive laws, a pervasive security apparatus, a corrupt judiciary, and media censorship – is all too present.”

Fighting continues in Kachin State, in northern Myanmar, as thousands of displaced people in camps brace for the coming monsoon season.

“Right now, the IDP [internally displaced person] number is increasing” along the edge of the areas controlled by the Kachin Independent Organization (KIO), General Secretary La Ja reported.

“There are about 75,000 internally displaced people in Kachin State. Now that the rainy season is setting in, they will be needing shelter, food and medicine.”

Current UN planning figures put the number of displaced at between 50,000 and 55,000, while international access to areas controlled by the Kachin Independence Army (KIA), the military arm of the KIO, remains limited.

La Ja says the recent armed build-up of government troops, and the escalation in attacks, is out of step with the government’s words of peace.

“We want the first step to be that the government… withdraws, [and] re-positions their… troops. Their troops are very close to the KIA troops – that can spark many problems and a never-ending conflict.”

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– Provided by Integrated Regional Information Networks.

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United Arab Emirates David Rosenberg / The Med – Christopher Renehan, a 38-year-old Irish national and building contractor, is looking at at least five more years in Dubai’s Central Prison and he has had enough. Seven months into his jail term, he declared a hunger strike last week and has since been joined by others serving time of as much as 20 years, all for the same offense.

The crime that’s landed them in jail for such lengthy sentences isn’t murder or grand larceny – it’s for writing bounced checks, which in Dubai is a criminal offense that can get you as much as three years for each conviction.

Renehan was the managing partner of Sire Contracting before he was jailed for bouncing checks. He says the checks weren’t covered because a client was late in paying him. The hunger strike “was his final option as he was getting no joy through the courts,” his father, Michael Renehan, was quoted as telling media in Dublin.

When Dubai was booming and the money was easy, the draconian laws on check bouncing were largely brushed off. But when the property market hit a wall at the end of 2008, bringing the rest of the economy down with it, unpaid bills suddenly became a big issue for everyone from the state-owned Dubai World conglomerate to people keeping up with the rent on their apartment.

The problem has been exacerbated by the heavy use of post-dated checks, instead of credit cards, to cover future payments. That creates a situation where people are vulnerable to changing circumstances; a clerical error at the bank or even a check being rejected because of a poor signature match. It could end in a prison term or turn them into an international fugitive. Legal recourse is difficult.

“I worked in Dubai in 2009 and bought a car with finance from a bank of course I had to write and sign 36 post-dated checks. I lost my job three months into the loan, so I had no work visa, no apartment and no money to pay off the checks,” wrote someone who identified himself as David Hayes on a talkback on a law firm called Khairallah Legal Consultants.

“I had to leave the UAE and have since been subject to a court case in Dubai, which means there is an arrest warrant for me registered with Interpol. I cannot now enter the USA because of this!! And the bank will not negotiate repayment terms for the loan.”

Even though Dubai and some of the other mini-states gathered under United Arab Emirates (UAE) aspire to become global financial centers, in many respects they lack elementary transparency and appropriate laws. There is no clear bankruptcy law and laws regarding foreigners owning real estate are murky.

“You have incredibly rapid economic development without the regulatory infrastructure catching up,” said Christopher Davidson, an expert of the Gulf political and economic development at Britain’s Durham University. “In many ways this is an aspect of a bigger problem — a forward -thinking economy with a traditional monarchy underneath it.”

Expatriates, who make up the lion’s share of the UAE’s population, are in more danger of running afoul of financial laws.

“For financial crime, it’s far worse than to be an expatriate,” Davidson told The Media Line. “If you’re in prison for political reasons, they would prefer to deport you. If you owe money, they will want you to stay jailed.”

No one can agree how many prisoners are on strike. The Detained in Dubai website estimates as many as 70 are involved while The National daily put their number at 40. A Financial Times report said 20 were involved. Dubai prison officials insist that the protest was small to begin with, involving a single inmate, and was nipped in the bud.

“We sat with this guy yesterday and spoke to him and said, ‘If you go on strike, what will change?’ And I think he understood that,” Brig Omar Al-Attar told The National. “They don’t need to do such things. Once the court has decided, what more can you do?”

The British Embassy in Dubai has met with prisoners, according to Political/Media Officer Ruzina Hasan, although she stopped short of confirming a strike is on or how many have joined it.

“We are aware of the alleged planned hunger strike at Dubai Central Prison,” Hasan told The Media Line in an e-mail. “Consular officials in Dubai visited the jail to offer relevant advice to British detainees on the health implications of hunger strikes and will be in regular contact. The welfare of British nationals in detention remains a high priority. We will monitor the situation closely.”

The hunger strikers contend that under Article 88 of the penal code they should only serve one sentence for multiple check-bouncing offenses so long as they are closely related, for instance in the case of a single account that is in overdraft.

Lawyers argue, however, that multiple sentences can be appropriate even if more than one party was a victim of an offense. In any case, they argue convicted offenders are often pardoned and few people serve more than 10 years for financial crimes of any sort.

Most, but not all. Peter Margetts, 48, was initially sentenced to more than 40 years after investors in a huge project that stalled used post-dated checks he had written to them as collateral for loans. His sentence was reduced on appeal — to 23 years.

Police in Dubai and another emirate, Sharjah, have begun to arbitrate cases of bounced checks rather than make arrests. Last week Sharjah Police said a special “Compromise Initiative” led to a one-third decline in the number of bounced-check cases in the first quarter of 2012. Dubai Police Chief, Gen. Dahi Khalfan Tamim,last July urged a change in the law, saying jail time is “not the proper way of doing things.”

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New York City, NY, United States (AHN) – Short sales out paced foreclosures in 12 states in January, market research form Realty Trac reported Friday.

The increase highlights that more homeowners are finding an easier way out of a distressed home loans with short sales, and that more lenders are embracing them.

Short sales occur when a lender agrees to a home sale for less than what is owed. In January, the number surged 33 percent year-over-year, and preliminary data suggests February numbers will also come in robust.

Lenders have become increasingly acceptable to short sales, which tend to hurt neighboring homeowners less than foreclosures. In addition, homeowners may regain eligibility for a new mortgage quicker than those who go through a foreclosure.

Foreclosure sales occur after a bank has repossessed a property, and they still outnumber short sales, but the gap is narrowing.

Data from mortgage tracker Lender Processing Services, as reported this week from Bloomberg News, revealed that short sales exceeded foreclosures in January for the very first time.

States which led in short sales include those beaten up most in the housing downturn, and include California, Arizona and Florida, and nine others.

New rules have slowed foreclosures in many states, spurring short sales, industry analysts note.

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New York City, NY, United States (AHN) – U.S. stocks took a breather Wednesday from Tuesday’s big gains and once again focused on problems in Europe’s economy.

In mid-morning trading, the Dow Jones Industrial Average slipped 30 points, the Standard & Poor’s 500 Index slumped 2 points, and the NASDAQ gave back 3.

Weighing on stocks were mounting worries that the relative calm that has settled over Europe in the past several months may be short-lived, and the sovereign debt crisis that has been plaguing the region for quite some time will once again rear its ugly head.

Spain released data Wednesday that showed Spanish banks are holding more problem loans than expected. The news triggered new concerns that Madrid may be forced to seek a bailout.

U.S. stocks soared Tuesday as worries about Europe waned and investors applauded the latest round of corporate results. The Dow soared 194 points.

Also boosting stocks Tuesday was word from the International Monetary Fund that it raised its global growth outlook to 3.5 percent for 2012, up a hair from the previous prediction of 3.3 percent.

In world markets Wednesday, Asia ended higher and European stocks were lower in afternoon trading.

In currencies and commodities, the dollar fell against the British pound, but rose against the euro and the Japanese yen.

Oil for May delivery tacked on 40 cents to $103.80 a barrel and gold futures for April delivery slumped $8.50 to $1m642.60 a troy ounce.

 

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Washington, DC, United States (ProPublica) – by Cora Currier

Wells Fargo and U.S. Bank have let foreclosed homes in black and Latino neighborhoods lapse into disrepair, while bank-owned homes in mainly white neighborhoods are better cared-for, according to housing advocates.

The National Fair Housing Alliance, a non-profit group, brought a formal complaint to the Department of Housing and Urban Development last week alleging that Wells Fargo violated the Fair Housing Act by failing to keep up homes in minority neighborhoods. Today, the group announced they are also filing a second complaint, against U.S. Bank.

Earlier this month, the group released a survey, which was funded in part by HUD, of more than 1,000 unoccupied, foreclosed homes across the country owned by unspecified banks. When a house is foreclosed upon, the bank that takes it over is responsible for maintaining it. The report cites evidence — photos and interviews with neighbors — showing houses becoming dilapidated under banks’ watch.

The complaint against Wells Fargo claims that among more than 200 homes surveyed, those in black and Latino neighborhoods were much more likely to have yards filled with trash, broken doors, damaged windows, and other signs of neglect. Fewer homes in those neighborhoods had “for sale” signs visible. For example, 68 out of-9 homes in black and Latino neighborhoods had damaged roofs, compared to only nine out of 69 properties in white neighborhoods.

The study looked at homes owned by Wells Fargo in Washington D.C., Baltimore, Philadelphia, Dallas, Miami, Atlanta, Oakland, Calif., and Dayton, Ohio.

A spokeswoman for Wells Fargo said in an emailed statement that the bank “conducts all lending-related activities in a fair and consistent manner without regard to race: this includes maintenance and marketing standards for all foreclosed properties for which we are responsible.” She also said that the bank has a dedicated department that maintains and markets foreclosed properties from loans that are within its portfolio. Since the complaint did not identify specific properties, she said, Wells Fargo has not been able to investigate its claims.

U.S. Bank did not immediately respond to our request for comment, and a spokesman for HUD declined to comment on the complaint.

The report also pointed out that there were simply fewer bank-owned foreclosed properties in white neighborhoods than in minority neighborhoods, an indication, it says, of the fact that African-American and Latino communities were disproportionately affected by the subprime mortgage crisis.

Numerous studies have shown that lenders targeted minorities for the riskiest loans, and often charged them more than similarly qualified white borrowers. A report from the Center for Responsible Lending found that black and Latino homeowners were twice as likely to lose their homes to foreclosure than white homeowners. (The center was started with support from the Sandler Foundation, which is also the major funder of ProPublica.) In the biggest settlement to come out of the government post-bubble investigation of discriminatory lending practices, lender Countrywide (now owned by Bank of America) agreed to pay $335 million to settle a Department of Justice suit.

Nationally, banks or investors own roughly half a million foreclosed homes, and the Federal Reserve estimates this will increase to 1 million this year. Some banks and investors are looking to unload the properties en masse. Fannie Mae and Freddie Mac, who own about half the properties, are piloting a program for bulk sales of their foreclosed properties that requires they be offered as rentals. Other lenders are turning into landlords themselves.

– Provided by ProPublica.org

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Cairo, Egypt David Rosenberg / The Med – An International Monetary Fund loan critical to propping up Egypt’s teetering economy is being jeopardized by domestic political infighting that threatens to delay or even scuttle the program, economists say.

An IMF delegation left Cairo late on Tuesday after 17 days of talks apparently without reaching any agreement on the conditions for the $3.2 billion package. In a statement issued on its departure, the Washington-based financial institution said that Cairo needed to “mobilize the required political support for this program” before its board could approve the aid.

“Broad-based support for a national economic program is essential to bolster confidence and ensure its successful implementation in the period following the current political transition,” the IMF said, although it termed discussions with Egyptian officials and lawmakers “productive.”

Egypt is in critical need of the cash infusion. The economy is sputtering and foreign currency reserves are falling fast as tourism receipts and investment from overseas have plunged since President Hosni Mubarak was ousted from office more than a year ago. Egyptian reserves fell by $600 million in March to $15.12 billion, equivalent to less than the three months’ worth of imports widely seen as the minimum. On the eve of the revolution, reserves stood at $36 billion.

But negotiations with the IMF are taking place at an unusually sensitive time.

Politics are in high gear as Egyptians go to the polls to elect a president next month in a campaign season shadowed by even bigger political dilemmas. A new constitution has yet to be written so that the division of powers between the president and parliament remains up for grabs. Meanwhile, the emergent political establishment of Islamists and liberals is fighting with the interim military government over the timing and terms of the transition to civilian rule.

“It’s an ongoing saga. The problem is that the IMF money comes with conditions attached and countries don’t want to be dictated to,” Daniel Brody, chief investment officer at London-based Silk Investment, told The Media Line.

Two days before the IMF delegation departed, Khairat Al-Shater, the candidate for the Muslim Brotherhood’s Freedom and Justice Party, threw a wrench into the talks by asserting that it was irresponsible for Egypt’s interim government to negotiate terms and leave its successor with the responsibility of repaying the loan.

“We told them [the government], ‘You have two choices. Either postpone this issue of borrowing and come up with any other way of dealing with it without our approval, or speed up the formation of a government,’” he told the Reuters news agency in an interview.

In remarks that could be interpreted as a negotiating tactic aimed at pressing the interim government to hand over power more quickly, Al-Shater said that he might approve a plan whereby only a small amount of the aid package is disbursed before the new government takes power.

Inside the interim government, there has also been considerable policy confusion. The government has been saying it wants to tie up a deal with the IMF this month, but last week Planning Minister Faiza Abu Al-Naga said she expected the two sides to sign nothing more than a memorandum of understanding within a few weeks and only seal a final agreement by June.

The IMF itself said last week that there is no timeline to conclude the loan talks.

The waffling at the top may have to do with broad opposition among ordinary Egyptians from accepting aid of any kind, including from the IMF, according to a series of Gallup polls. Back in August, Egyptians supported IMF assistance by a margin of 57 percent to 32 percent, but by February, when the most recent survey was taken, the public had reversed opinion. Now, 57 percent oppose accepting IMF money versus 36 percent in favor.

“It’s due to a broad misconception in Egypt, which is that Egypt has a lot of misappropriated money in offshore bank accounts from the Mubarak days, so therefore we don’t need other people’s money,” said Silk Invest’s Broby. “The Brotherhood is using this as a political weapon.”

The reports of ill-gotten gains are so rife that in March, Assem Al-Gohary, the head of Egypt’s Illicit Gains Authority, called on the media to refrain from published unverified stories, citing a series of forged documents and unproven reports. The most widespread rumor is that the Mubarak’s family stashed away as much as $70 billion in foreign bank accounts during the three decades he was in power.

But Egypt ultimately may have little choice than to accept the IMF’s offer because the country’s foreign reserves position is more dire than the headline number suggests, according to a report by the London-based consulting firm Capital Economics.

Using figures from February, the latest available, liquid reserves such as convertible securities, currency and deposits, were less than $9 billion, or just two months of import cover, its Middle East economist, Said Hirsh, said in a comment. About $4 billion of the $15.2 billion total is gold bullion that the government would be reluctant to draw down.

The government itself is gradually reaching the limits of what it can borrow domestically to cover a yawning fiscal deficit. It has relied on loans from domestic banks to cover the gap, but economists say the banks are reaching the limits of their ability to lend. A fiscal crisis may well up as early as next month if the first of the IMF disbursements has not come through, economists warn.

With Egypt heading toward a financial crisis and the IMF loan’s fate still unresolved, a market rally that began at the start of the year has fizzled out in the past month over concerns about the economy and Egypt’s chronic political turmoil.

This week alone shares on the Egyptian Exchange were shaken by Al-Shater’s IMF remarks on Sunday and two days later by a court’s decision suspending the constitutional assembly. On Tuesday, the Egyptian Exchange’s benchmark EGX 30 index marked its sixth straight day of declines to finish at its lowest since Feb. 6.

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