Default

Americans are borrowing huge amounts of money from their 401(k) retirement plans -- and then having big trouble paying off their debt, according to a new study. Defaults on 401(k) loans have totaled as much as $37 billion a year in recent years, far higher than previously estimated, according to the analysis Monday by two researchers. The default rate was estimated to be 17.4% in the 12 months through May. That's down slightly from the 19.8% peak in mid-2010, but up dramatically from 9.7% in mid-2008 prior to the global financial crisis.

The declining number of U.S. smokers is proving hazardous to the health of municipal bonds backed by payments from cigarette companies under a 1998 settlement with 46 U.S. states, Moody's Investors Service said. The rating company projected that almost three-quarters of the $20.4 billion in tobacco bonds it grades will default if cigarette consumption declines 3% to 4% annually. Tobacco bonds that have a high ratio of outstanding debt to annual payments from the companies, long maturities and low cash reserves are vulnerable to lower smoking rates, Moody's said today in a report.

The 17 nations of the Eurozone agreed Friday to increase their bailout resources in an attempt to keep a lid on the debt crisis that has hobbled the region's economy and raised doubt about the future of the euro. But the new total of about $1 trillion in rescue funds still falls short of what many analysts and investors have suggested is necessary to insure major economies such as Spain and Italy against a possible default. Also, more than a third of the money is already committed to rescue packages for Greece, Ireland and Portugal, meaning that the actual amount available is considerably less.

Greece has successfully pushed through a deal to lower its debt burden and avoid defaulting on its outstanding bonds in the near future. Holders of Greek bonds had until Thursday to agree to trade in their old Greek bonds for new ones with a lower face value. After tabulating all the responses, Greece said overnight that over two thirds of its bondholders agreed to the exchange -- the threshold necessary for the deal to go forward. If Greece was unable to secure agreement from enough of its creditors it was expected to default on bond payments due later this month, which would likely have set off some amount of economic panic.

Decision day for the Greek debt crisis is drawing near, and insiders are predicting that if things go awry it could cost the world economy $1.3 trillion. Holders of Greek bonds have to decide by this Thursday whether they will trade in their old Greek bonds for new bonds that are worth less. Bond holders have an interest in agreeing to the swap because if it doesn't work, Greece is likely to default on its debt when it has scheduled payments on March 20. In a confidential memo that has just surfaced, the industry group representing bond holders has said that the consequences of such a default could be $1 trillion in losses.

The financial world has spent the morning intently watching and debating about an obscure and secretive committee that voted on how to categorizeGreece'sbailout plan. The question facing the committee was whether to define the current plan to exchange bonds as an act of default by Greece on its bonds. But the committee, run by the International Swaps and Derivatives Assn., voted 15 to 0 Thursday morning that the plan was not a default. The answer is significant because if Greece does default on its bonds, it will trigger the complex financial instruments known as credit default swaps, which are designed to allow investors to bet on Greek defaulting on its bonds.

Among new Internet-based real estate ventures to pop up in recent months is one that enables house hunters to simultaneously search for just about every lifestyle criteria imaginable. Another protects would-be tenants from unwittingly renting from a struggling owner in the midst of a foreclosure. SpatialMatch.com, an overlay technology that can be embedded on an agent's website or perhaps on an entire multiple listing service, enables buyers to pursue properties using any number of lifestyle criteria.

Walkaways. Jingle mail. Strategic defaults. Those of you already experiencing nostalgia for the cliffhanger days of the housing crisis will remember those terms. They were applied to homeowners who were supposedly so distressed at the collapse of the homes' values that they were abandoning the properties to foreclosure, even though they still had the wherewithal to keep up their mortgage payments. These borrowers were just "walking away" from their homes; "jingle mail" was a fanciful way of describing the sound made when they mailed their keys back to the bank; "strategic default" was the sober, nonjudgmental way of describing the phenomenon in financial journals.

Europe's ailing currency union approved its second bailout for Greece in less than two years, signing off on a $170-billion rescue package early Tuesday after weeks of bickering and rising ill feeling between Athens and other regional capitals. The deal should help ward off the specter of an imminent Greek default, which threatened to occur as early as next month and to throw global markets into turmoil. But the price for Greece is a fresh round of punishing austerity cuts that its parliament approved last week, despite an economy already gutted by previous belt-tightening measures.

One of the country's largest office landlords has completed a $355-million recapitalization of its Universal City office building and said it intends to buy more property in Southern California. Normandy Real Estate Partners owns 10 Universal City Plaza, the tallest building in the San Fernando Valley at 36 stories, in which NBCUniversal is the largest tenant. Morristown, N.J.-based Normandy became the owner of the tower in mid-2009 when the previous owner defaulted on debt owed to Normandy.