February 2009 World economic and property articles

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Asian Currencies Fall, Led by Rupiah, Ringgit, as Export Outlook Worsens
Asian currencies fell, led by the Indonesian rupiah, on concern a deepening global recession will hurt regional exports and curb demand for riskier assets.
http://www.bloomberg.com/apps/news?pid=20601080&sid=av9yn70ageTk&refer=asia

U.K. Economy to Shrink 3.3% in Worst Slump Since 1980, CBI Says
Feb. 16 (Bloomberg) -- The U.K. economy will shrink at almost twice the pace previously forecast this year as the credit famine plunges the nation deeper into the worst recession in almost 30 years, the Confederation of British Industry said.
http://www.bloomberg.com/apps/news?pid=20601102&sid=aSyW70WSh4NU&refer=uk

News of the World: Anthea Turner and Grant Bovey owe £1.78million
TELLY presenter Anthea Turner and hubby Grant Bovey actually owe £1.5 million MORE than they claimed when their business went bust last year. We can reveal that the couple’s true debts are £1.78 million — NOT the £200,000 they admitted when Imagine Furnishings went under. Official figures prove 48-year-old Anthea’s design firm went bust with enormous debts owed to the bank and more than 70 companies.
http://www.newsoftheworld.co.uk/showbiz/176786/Turn-er-for-the-worse-Anthea-Turner-and-hubby-Grant-Bovey-owe-pound178-million-after-Imagine-Furnishings-went-bust-last-year.html]

News of the World: Anthea Turner and Grant Bovey owe £1.78million
TELLY presenter Anthea Turner and hubby Grant Bovey actually owe £1.5 million MORE than they claimed when their business went bust last year. We can reveal that the couple’s true debts are £1.78 million — NOT the £200,000 they admitted when Imagine Furnishings went under. Official figures prove 48-year-old Anthea’s design firm went bust with enormous debts owed to the bank and more than 70 companies.
http://www.newsoftheworld.co.uk/showbiz/176786/Turn-er-for-the-worse-Anthea-Turner-and-hubby-Grant-Bovey-owe-pound178-million-after-Imagine-Furnishings-went-bust-last-year.html

Firstrung: London house prices crash by 3.7% in January
Prime London residential prices fell 3.7% in January 2009, the second highest monthly decline on record, according to the Knight Frank Prime Central London Index. Overall prime London prices have fallen 21.4% since the March 2008 peak. Knight Frank Research has pushed its forecast for the peak to trough fall in prime central London from 30% to 35%. It still expects the bottom of the market to hit in mid 2009. Liam Bailey, head of residential research, Knight Frank, commented: "In early 2008 it was generally held that London's unique situation, with very strong demand set against weak supply, would help it escape the worst of the housing market downturn. As we reached late summer last year, it became apparent that no part of the market was immune. Every area and type of property was hit."
http://firstrung.co.uk/articles.asp?pageid=NEWS&articlekey=10939&cat=44-0-0

UK Bubble: Just how big are the UK banks
Nice chart illustrating the frightening fact that the UK's four largest banks are approximately the same size as the UK economy. And how exactly are we going to bail them out? It puts me into a cold sweat just thinking about it.
http://ukhousebubble.blogspot.com/2009/02/just-how-big-are-uk-banks.html

The Guardian: Climbing off the property ladder
A few people seem to be tempted back in the market as their savings are not gaining interest. Not a ramping article, as further falls are mentioned and the people buying seemed to make a choice on factors other than money.
http://www.guardian.co.uk/money/2009/feb/15/property-house-prices-renting

Contract journal: Desperate builders want to work in Antarctic
This reminds me of the 1000 applicants for 35 firemans jobs in USA.......
http://www.contractjournal.com/Articles/2009/02/13/64871/desperate-builders-want-to-work-in-antarctic.html

Independent: Brown's nemesis: Will Paul Moore prove to be PM's downfall?'
'[Paul Moore] wants Gordon Brown to take the rap for his part in creating the credit boom, allowing people to borrow too much, and for letting us go bust. There is more to come. Moore is about to lob his next missile. This week he will be sending some of the more than 30 new documents he has compiled in his time at HBOS to the clerk of the select committee as new evidence, which he says will support his allegations of reckless lending at the bank.''
http://www.independent.co.uk/news/uk/politics/browns-nemesis-will-paul-moore-prove-to-be-pms-downfall-1622475.html

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FT: Lloyds has top credit rating removed
Lloyds Banking Group suffered another blow on Monday when it lost its long-held Aaa credit rating from Moody’s amid continued worries about accelerating losses from HBOS. Gordon Brown on Monday sought to damp speculation that Lloyds was set to come under majority public ownership. The prime minister’s spokesman stated: “While nothing is ruled out, no active consideration is being given to the nationalisation of Lloyds.” Peter Mandelson, business secretary, will on Tuesday argue in a speech in New York that the government is caught in the “politically difficult but economically necessary” position of having to take time to get its handling of the banking crisis right, while facing demands for instant results.
http://www.ft.com/cms/s/0/e6e8ef78-fc05-11dd-aed8-000077b07658.html

Telegraph: Zimbabwe introduces $100 trillion banknote
Hyperinflation has forced the central bank to continue to release new banknotes which quickly become almost worthless. There is an official exchange rate, but most Zimbabweans resort to the informal market for currency transactions.
http://www.telegraph.co.uk/news/worldnews/africaandindianocean/zimbabwe/4269695/Zimbabwe-introduces-100-trillion-banknote.html

MoneyWeek: The banks could now make Britain go bust
The pound has been plunging as international investors have got the jitters about British banks' $4.4trn of external liabilities. Add a large chunk of these to our other national borrowings, and we could reach a point where we can't raise the money to pay the bills. What's more, we have form. Don't forget in 1976, we had to call the IMF for help.
http://www.moneyweek.com/news-and-charts/economics/why-the-banks-could-bust-britain-14622.aspx

Telegraph: Tax rises will be needed to pay off extra £100billion debt, CBI warns
In fact the debt will be 1000,000,000,000 pounds. The 100 billion mentioned is just an installment but clarified in the article. Taxes will have to rise, and spending cut until 2030. The suggestion is to place the burden on NI but Ken Clarke offers the olive branch of slashing services instead. National Insurance in the UK must be the only insurance scheme in the world where if your claim is approved then you get a small fraction of your yearly premium in return. The car insurers must be jealous. Also the idea that any recovery will be damaged by immediate tax hikes, I don't necessarily see that generational wealth transfers restrict spending myself. Anyway, I am sure everybody will stay loyal and nobody will move away to low tax regimes in resource rich abundant land nations.
http://www.telegraph.co.uk/finance/financetopics/recession/4632088/Tax-rises-will-be-needed-to-pay-off-extra-100billion-debt-CBI-warns.html

The Scotsman: What an Appalling Mess
A LENDING bonanza, a credit bubble, a house price boom and now a slump: who was watching the bigger picture that allowed this catastrophe to unfold? We now have an answer: no-one.
http://thescotsman.scotsman.com/latestnews/Analysis-What-an-appalling-mess.4982662.jp

Yahoo: UK recession to be 'worse than expected
'Business leaders are warning the recession will be deeper and longer than expected with many more jobs lost. The CBI said the Government will also have to borrow around a £100 billion on top of their expectations.Spokeswoman Lai Co said ministers had spent heavily to bail out the banks and cut VAT but there was now less money coming in. In its latest dire warning on the economy, the CBI said the economy will shrink by 3.3 per in 2009, compared with its November forecast of a 1.7 per cent contraction.
http://uk.news.yahoo.com/4/20090216/tuk-uk-recession-to-be-worse-than-expect-dba1618.html

Canada.com: The Complexity Theory
Complexity Theory argues that societies become progressively more unstable and vulnerable as the network of interconnections within them increases -- not particularly good news for a globalizing system in which increasing complexity is precisely the thrust of economics, finance, manufacturing, technology and almost everything else we do. The sobering implications may explain why many proponents of Complexity Theory preface their comments with an apology. "We don't want to tell you this," goes the essence of their message, "but we think you should know."
http://www.canada.com/Complexity+Theory/1286263/story.html

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hi,

Times really are grim. RBS has cut bonuses by 90%, and the Japanese Finance Minister drank himself into resignation at the G7. The German Finance Minister has been trying to quit for a couple of weeks. Maybe he should also take the schnapps (or sake) way out.

regards, Scott

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Telegraph: Ukraine must be rescued
It would be tempting to leave this misgoverned country to its fate. That would be an error. If Ukraine defaults on its foreign debt – or lets its private companies default on their dollar and euro loans – it will lead to near instant contagion through much of Eastern Europe. This cannot be allowed to run its course. The European Central Bank is going to have to put a clothes peg over its nose and use its printing powers to rescue the region.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4691850/Ukraine-must-be-rescued-from-tragi-comedy-for-Europes-sake.html

Telegraph: Economy could recover in April claims Brown
Mr Brown said that the world could then "move towards recovery in the next few months" if agreement was reached The Prime Minister said: "If we can get that action in place and rebuild trust and confidence in the world economy then recovery will be quicker. That is why we are putting a lot of emphasis on the meeting on 2 April. If we can get agreement then that is a major step forwards
http://www.telegraph.co.uk/news/newstopics/politics/labour/4691479/Economy-could-begin-to-recover-in-April-claims-Gordon-Brown.html

MoneyWeek: Inflation could be back sooner than you think
Why inflation may not drop as far as many people think - and could soon be on the rise again.
http://www.moneyweek.com/news-and-charts/economics/inflation-could-be-back-sooner-than-you-think-14629.aspx

Press Association: Bank to start 'printing money'
"The co-operation that's needed around the world is not something that has been achieved before - but I believe it can be achieved to meet the needs of our times." Gordon Brown "urged world leaders to strike a "grand bargain" ( very Faustian !). GB seems to hope that he can single-handedly talk all of the other countries into following his QE lead. Probably not such a difficult sell to your average politco. Free money. I'd do it. But.... you never can tell with pesky Johnny Foreigner. Wearing his heart on his sleeve as always, GB honestly declares "needed" cooperation and also this achievement resting on his "belief".
http://www.google.com/hostednews/ukpress/article/ALeqM5jB_2ib3ytgymdkXNSzi-qxluq3Gw

CNBC: Goldman Sachs Partners Borrow to Cover Margin Calls
Tough times on Wall Street are reaching all the way to the highest levels of the most storied former investment bank—Goldman Sachs—as partners there are being forced to borrow money to cover margin calls, according to sources within the firm. Several Goldman Sachs partners have leveraged their Goldman Sachs stock to buy alternative investments such as hedge funds & private equity, and they have done so through their Goldman Sachs brokerage accounts. But Goldman stock has declined in value by more than 50 percent since last spring, meaning that Goldman Sachs is in the awkward position of making margin calls on its own partners, who can't meet those calls because their alternative investments are underwater and they don't have enough cash on hand.
http://www.cnbc.com/id/29260008

Telegraph: Britain's AAA credit rating threatened by scale of bank bail-out
"Britain could be stripped of its prized AAA credit rating as a result of the Government's latest bank bail-out" Oh those ever-reliable ratings agencies.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4681167/Britains-credit-rating-threatened-by-scale-of-bank-bail-out-warns-SandP.html

Daily Mail: Mandelson's foul-mouthed tirade at Starbucks boss over the state of Britain's economy
Yes Britain is screwed, it is failing the fastest and hardest of all (excluding iceland of course)
http://www.dailymail.co.uk/news/article-1148518/Mandelsons-letter-rant-Starbucks-boss-state-Britains-economy.html

Irish Times: Irish Economy and Financial System Hangs on a thread.
This is a refreshingly precise and clearly written article by an Irish economics Professor. Morgan Kelly has been very vocal over the years warning us how the Irish economy was built on little more than a house-price bubble. In this article he details how the rushed state guarantees of Irish banks leave the whole state vulnerable to economic meltdown. This depends on the true extent of the banks' bad debts which nobody seems to know. The clarity and simplicity of this article shines through the smog of verbage from politicians and vested interests, it makes it for particularly grim reading.
http://www.irishtimes.com/newspaper/opinion/2009/0217/1224241278003.html

Reuters: Recession will be worst since 1930s
He reiterated, however, that a housing recovery is a necessary condition for the end of the financial crisis, and said that "the prospect of stable home prices remains many months in the future."
http://www.reuters.com/article/newsOne/idUSTRE51H0OX20090218

MoneyWeek: Gold: why it could be time to take profits
Gold is hitting fresh record highs in almost every currency. And in the long-term it can only go higher. But Dominic Frisby thinks the mainstream is getting too excited about gold, and now could be a good time to take some short-term profits.
http://www.moneyweek.com/investments/precious-metals-and-gems/gold-why-it-could-be-time-to-take-profits-14628.aspx

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Telegraph: EU mulls action as Ukraine crumble triggers contagion fears for Europe
Europe's institutions are scrambling for ways to prevent financial contagion from Ukraine and the rest of Eastern Europe from setting off a full-blown banking crisis in Austria, with risks of systemic contagion across the eurozone. West European banks have lent roughly $1.6 trillion (£1.13 trillion) to the region, led by Austrian, Swedish, Italian, Greek, Belgian, and Swiss banks. Almost $400bn must be rolled over this year in hostile markets.
http://www.telegraph.co.uk/finance/4691108/EU-mulls-action-as-Ukraine-crumble-triggers-contagion-fears-for-Europe.html

TS: Eastern Europe is about to Blow
The UK Telegraph's economics correspondent Ambrose Evans-Pritchard has written a series of articles about Eastern Europe. In "Failure to save East Europe will lead to Worldwide meltdown" he says: "Austria's finance minister Josef Pröll made frantic efforts last week to put together a €150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent €230bn to the region, equal to 70pc of Austria's GDP. "A failure rate of 10pc would lead to the collapse of the Austrian financial sector," reported Der Standard in Vienna. Unfortunately, that is about to happen. UK Telegraph's economics correspondent Ambrose Evans-Pritchard: "Global banks have so far written down half the $2,200bn losses estimated by the IMF.
http://www.thetruthseeker.co.uk/article.asp?ID=10205

Moneymarketing: ONS classifies Lloyds and RBS as public sector bodies
The Office of National Statistics has classified both RBS and Lloyds TSB as public sector entities. The ONS says it has decided to classify the banks as public entities from October 13, meaning their liabilities are included in public finances.It could not confirm how much the banks will add to national debt, but the ONS estimates it is likely to add £1 trillion to £1.5 trillion to public-sector net debt. The ONS says: "As a percentage of the gross domestic product, this range is roughly equivalent to between 70 per cent and 100 per cent of GDP.”
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=181262&d=340&h=341&f=342

Guardian: Brown targets Switzerland in global tax haven crackdown
Not before time, but some weaseling at the bottom of the article about competitiveness.
http://www.guardian.co.uk/business/2009/feb/19/gordon-brown-tax-avoidance-switzerland

Market Oracle: US, UK, Eurozone Banks Face Collapse: Global Banking System Insolvent
For those who look, a strong case can be made that European banks are as bad off if not much worse off than their US counterparts.
http://www.marketoracle.co.uk/Article8923.html

Yahoo: Bank bail-outs may add £1.5trn to national debt
LONDON (ShareCast) - The bail out of some of Britain's biggest high street banks could add as much as £1.5 trillion to the country's debt pile, equivalent to 100% of GDP, says the Office for National Statistics.
http://uk.biz.yahoo.com/090219/214/igpr7.html

MoneyWeek: Life assurers are in trouble
As the economic picture worsens, more and more weak links are revealed. Banks are going bust, new scams are being uncovered every other day – even whole countries are tottering on the brink of insolvency. And it seems the life insurance sector is next in line to feel the pain. Potential carnage in corporate bonds is forcing these companies to make big loss provisions. Not only is that very bad news for these firms’ shareholders, but the overall fallout could be quite shattering.
http://www.moneyweek.com/news-and-charts/economics/dont-be-tempted-by-life-assurers-14631.aspx

FTimes: UK to miss annual borrowing target
''The public finances took a sharp turn for the worse in the crucial month of January as the recession and credit crisis hit corporate and personal tax revenues, making it almost impossible for the government to meet its borrowing target made in late November. In his autumn pre-Budget report, Alistair Darling forecast government borrowing of £77.6bn in the 2008-09 financial year, a sharp deterioration on the £35bn outturn for 2007-08.''
http://www.ft.com/cms/s/35788e96-fe6d-11dd-b19a-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F35788e96-fe6d-11dd-b19a-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fuk

Guardian: 'Distress funds' buy Countrywide
Three "distressed debt investors" - hedge fund Polygon, restructuring specialist Oaktree and private equity firm Alchemy - have taken control of Countrywide, Britain's biggest residential estate agent, which was bought by US private equity firm Apollo less than two years ago for about £1bn, mostly financed by debt. Together, they have taken a majority stake for one-third of the price paid by Apollo.
http://www.guardian.co.uk/business/2009/feb/19/distress-debt-investors

Recession reduces total tax paid 
The government has collected less tax from businesses due to the recession
The recession led to a £7bn fall in the amount of tax paid by individuals and businesses in January, data shows.
http://news.bbc.co.uk/2/hi/business/7898871.stm

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Telegraph: UK national debt set to surpass £2 trillion
The ONS expects to have to add between £1 trillion and £1.5 trillion to the UK's public sector net debt, taking the total national debt to an unprecedented £2.2 trillion – just under 150pc of gross domestic product. This would be the worst debt total since the 1950s, when Britain was in the process of paying back its war debts. The figures were the latest in a blizzard of bad news on the public finances, which have been badly hit by the financial and economic crisis. The ONS confirmed its decision to add the debts of Lloyds and RBS to the public balance sheet, but warned that their complexity meant it was still working out exactly how much this would impact the national debt.
http://www.telegraph.co.uk/finance/financetopics/recession/4700055/UK-national-debt-set-to-surpass-2-trillion.html

NY Times: Bankruptcy Could Be More Costly
Businesses filing for bankruptcy need loans to work out their troubles, or face liquidation. But General Motors and its smaller rival, Chrysler, have threatened that they will need $125 billion, in what would be the largest bankruptcy financing packages ever, if they do not receive the additional federal aid they are requesting. G.M. alone has said that it needs $100 billion to finance its bankruptcy. To many, that figure seems far too high, and may be a negotiating tactic to keep the companies out of bankruptcy. Several bankruptcy experts doubted that G.M. would need to draw upon anywhere near that amount to get court protection from creditors.
http://www.nytimes.com/2009/02/19/business/19dip.html

Bankrupt: One out of every 290 mortgage holders see homes repossessed in 2008
Interesting that despite all the efforts being made by the Government and apparently lenders, and despite the growth in sell to rent schemes, even the CML is saying repossessions during 2009 will be the worst ever. It was only a year ago that talking heads on TV were telling us that it was never going to be as bad as 1991 because it was different this time!!! Almost as way off the mark as the property experts urging people to buy before they were priced out of the market altogether.
http://www.bankrupt.co.uk/Repossession-Figures-2008.htm

BBC: PM 'raised false mortgage hopes'
Gordon Brown has been accused by the Tories of raising false hopes over a promised scheme to help people struggling with mortgage payments. When the PM announced the Home Owner Support Scheme in December he said it would be available from early 2009. The scheme will now be launched in April due to protracted negotiations with lenders over how it will work. The Tories said it was "completely wrong for the government to announce a scheme where the details haven't been worked out and where months later people's expectations will have been dashed because actually they are still losing their homes rather than the scheme being in place."
http://news.bbc.co.uk/1/hi/uk_politics/7901582.stm

ShareCast: London close: Footsie closes below 3,900
Footsie closed below 3,900 points for the first time since November after a weak start in the US sent the leading index even lower following its poor start.
http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=2620804

Times Online: Goldfinger Brown’s £2 billion blunder in the bullion market
''GATHERED around a table in one of the Bank of England’s grand meeting rooms, the select group of Britain’s top gold traders could not believe what they were being told. Gordon Brown had decided to sell off more than half of the country’s centuries-old gold reserves and the chancellor was intending to announce his plan later that day.''
http://www.timesonline.co.uk/tol/news/politics/article1655001.ece

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BBC: Last' pic'n'mix fetches £14,500
Somebody thought ahead about the possible fate of sterling
http://news.bbc.co.uk/2/hi/uk_news/england/london/7903509.stm

BBC: Economy protest gathers in Dublin
An estimated 100,000 people have gathered in Dublin city centre to protest at the Irish government's handling of the recession. The trade union Impact said workers did not cause the economic collapse but they were being forced to pay for it.
http://news.bbc.co.uk/2/hi/uk_news/northern_ireland/7903518.stm

Reuters: Soros sees no bottom for world financial "collapse"
Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis. Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.
http://uk.reuters.com/article/businessNews/idUKTRE51K0AV20090221

Daily Mail: Desperado to come Home - A very good read!
Cest la vie mes amis, but the grass aint greener only the benefit system.
http://www.dailymail.co.uk/news/article-1151294/Au-revoir-le-dream--British-expats-Dordogneshire-desperate-come-home.html

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Guardian: Owners must be weaned off the house-price drug
House prices are still far too high - they are only back to about 2006 levels, still crazy money. Prices need to fall further to regain any reasonable multiple of people's incomes. But every time prices fall, another round of bad debts hurt the banks' balance sheets and the taxpayer has to pump in more. The nation is still deeply dependent on house prices rising for ever. We still live in a bubble economy, with no way to live except by reinflating it. The state itself has been mainlining on the house-price drug, as addicted as the happy home-owners. Please can we have our bubble back, clamours just about everyone. The 70% who own homes and those who dashed into buy-to-let property yearn for the magical unearned wealth that came from nowhere.
http://www.guardian.co.uk/commentisfree/2009/feb/24/house-prices-taxes

SKY: American Shares Plunge To 12-Year Low
US shares have plunged to a 12-year low after President Obama announced plans to prop up America's crippled banking system. Shares savaged in New YorkThe Dow Jones Industrial Average sank 250.73 points (3.40%) to 7,114.94 at the closing bell, breaking its November bear market low and hitting the lowest level since May 1997.
http://news.sky.com/skynews/Home/Business/Dow-Jones-US-Shares-Plunge-To-Lowest-Level-Since-1997/Article/200902415228314?lpos=Business_Carousel_Region_1&lid=ARTICLE_15228314_Dow_Jones%3A_US_Shares_Plunge_To_Lowest_Level_Since_1997

Bloomberg: Virgin's Branson Sees Expansion Into Mortgages, Banking
Video interview with Branson on his Virgin Money plans.
http://www.bloomberg.com/avp/avp.htm?N=ceo&T=Virgin%27s%20Branson%20Sees%20Expansion%20Into%20Mortgages%2C%20Banking&clipSRC=mms://media2.bloomberg.com/cache/v.2oBnZmGIs4.asf

Mortgagestrategy: Lack of overseas tenants pushes down London rents
London landlords are being hit by a fall in rental income as the numbers of applicants from overseas declines, figures from Hamptons International reveal. The company has reported that the number of overseas applicants looking for a property to rent in London has fallen by 20% in the last six months. Prime areas of London including Tower Bridge, Kensington and Knightsbridge have been hardest hit by the fall-off in overseas tenants, with rental prices over the last six months down by up to 16%.
http://www.mortgagestrategy.co.uk/cgi-bin/item.cgi?id=181427&d=403&h=401&f=402

The Star: Mystique of global crisis unravelled
From the article: The entire derivatives market is very large. Latest estimates point to US$668 trillion (gross) or about 15 times the size of the world economy. Their underlying worth is about US$15 trillion, slightly larger than the US gross domestic product (GDP). Now if deleveraging is taking place, why is this figure growing?
http://biz.thestar.com.my/news/story.asp?file=/2009/2/14/business/3264668&sec=business

FT Alphaville: The gold tooth indicator
Gartman, meanwhile, seems convinced of further downside to come. His reasoning? The rush of “cash for gold” type commercials on TV. As he explains: "Perhaps from an anecdotal perspective, one thing has our interest above all else: the commercials on television recently by the companies asking the public to bring their gold rings, jewellery, necklaces, heirlooms to them and get paid for the gold content are commercials beckoning the public to sell gold, not to buy it…" Funny video I will post the link.
http://ftalphaville.ft.com/blog/2009/02/23/52776/the-gold-tooth-indicator/

MoneyWeek: Why the dollar will stay strong for now
"...although the Chinese could cause serious problems for the US by refusing to lend it any more money, that’s unlikely to happen right now. The Chinese don’t want to spark a run on the dollar, as that would wreck the value of their own dollar holdings. But at the same time, there’s always the risk that by printing lots more money, the US will simply try to inflate its way out of its debts. That wouldn’t be good for China either. So it’s understandable that Beijing is looking for reassurances that if it keeps buying US debt, it’ll eventually be repaid in money that’s actually worth something."
http://www.moneyweek.com/investments/why-the-dollar-will-stay-strong-for-now-14635.aspx

ITN: UK Police braced for 'summer of rage
'Police fear there may be a "summer of rage", with a wave of protests against the economic crisis. David Hartshorn, who heads the Metropolitan Police's public order branch, said he feared there could be "mass protest" at rising unemployment, failing financial institutions and the downturn in the economy. He said that "known activists" were planning returns to the streets, and intelligence revealed that they may be able to call on more protesters than normal due to the unprecedented conditions. He said: "Those people would be good at motivating people, but they haven't had the 'footsoldiers' to actually carry out (protests). "Obviously the downturn in the economy, unemployment, repossessions, changes that. Suddenly there is the opportunity for people to mass protest."
http://uk.news.yahoo.com/4/20090223/tuk-police-braced-for-summer-of-rage-dba1618.html

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Bank Negara cuts OPR by half percentage point
By JAGDEV SINGH SIDHU
KUALA LUMPUR: Worried about a growing risk of an economic contraction this year, Bank Negara has cut the overnight policy rate (OPR) by 50 basis points, or half a percentage point, to 2% as the global economy continues to deteriorate.
In a statement yesterday, the central bank announced the statutory reserve requirement (SRR) would also be cut from 2% to 1% from March 1 to reduce the cost to banks.

On Jan 21, Bank Negara cut the OPR by 75 basis points to 2.5% and slashed the SRR from 3.5% to 2%
http://biz.thestar.com.my/news/story.asp?file=/2009/2/25/business/20090225070643&sec=business

With reference to the Malaysian property market - especially Kuala Lumpur - I suppose that this will help increase 'holding power' for those that have properties due to the lower borrowing costs and may make things more attractive to potential buyers. Just my thoughts...

Report on business: There will be blood
Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm. The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020. Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same. “There will be blood.”
http://www.theglobeandmail.com/servlet/story/RTGAM.20090223.wferguson0223/BNStory/crashandrecovery/home/?pageRequested=all

Telegraph: Bank of England gives clearest indication of zero interest rates
The Bank of England has given its clearest indication yet that interest rates will have to be slashed further towards zero as the recession intensifies. Andrew Sentance, a member of the Bank's Money Policy Committee, said that "more stimulus" would be needed to avert the risk of Britain sliding into deflation - with prices falling as they did in 1930s America. The warning comes with interest rates at only 1 per cent, and will be taken as a sign that the Bank is preparing to cut them even further in the coming months.
http://www.telegraph.co.uk/finance/economics/interestrates/4799618/Bank-of-England-gives-clearest-indication-of-zero-interest-rates.html

Telegraph: UK Property freeze is worst since 1950s
A record low of 43,000 homes worth £40,000 or more were sold in January, according to figures published by HM Revenue & Customs. At barely a quarter of the total activity when the housing market was booming, this was the lowest number of transactions since monthly records began in 2005.
http://www.telegraph.co.uk/finance/economics/4800418/Property-freeze-is-worst-since-1950s.html

Telegraph: German CDS debt spreads hit record as economy crumbles
“The entire Landesbanken system is rotten,” said Hans Redeker, currency chief at BNP Paribas.”Credit will collapse if they are allowed to fail so they have to be recapitalized. But it is not just the banks in trouble: Germany’s entire export structure has been hit drastically.” “German CDS spreads are going massively higher. German bank exposure to Eastern Europe, although less than Austria, is still very high. The markets have started to price in a de facto bail-out of Eastern Europe and they think that Germany that will have to pay the bill,” he said.
http://www.telegraph.co.uk/finance/economics/4800828/German-CDS-debt-spreads-hit-record-as-economy-crumbles.html

Yahoo: Fraud Squad Raids Anglo Irish Bank HQ
The raid followed remarks by Transport Minister Noel Dempsey yesterday in which he accused those involved in wrongdoing at the bank of engaging in "economic treason".
http://uk.biz.yahoo.com/24022009/140/fraud-squad-raids-anglo-irish-bank-hq.html

Guardian: N Ireland house prices down 28%
Northern Ireland – which until recently had the fastest growing prices in the UK – is experiencing a sharp drop in the value of property. House prices fell 28% over 2008, according to a University of Ulster/Bank of Ireland survey released today – one of the worst drops in property values since the early 1980s. The survey showed house prices down across the board, with traditional family homes taking the biggest hit. Properties which saw their values slashed included detached houses (down 27.3%), semi-detached houses (down 26.4%) and detached bungalows (down 34.9%).
http://www.guardian.co.uk/business/2009/feb/24/northern-ireland-house-prices

The following guide may help those that find whats happening around the globe confusing, its a simple guide to help explain all the jargon:
http://news.bbc.co.uk/2/hi/uk_news/magazine/7642138.stm

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Singapore Economy Shrinks Most in at Least 33 Years
Singapore’s economy shrank the most in at least 33 years last quarter as a slump in exports and a weakening financial-services industry pushed the island deeper into recession.
http://www.bloomberg.com/apps/news?pid=20601087&sid=abtjsq6bz6AE&refer=home

Scotland faces 'severe' recession
Scotland can expect to lose 159,000 jobs over the three-year course of the recession, according to economists at Strathclyde University.
http://news.bbc.co.uk/2/hi/uk_news/scotland/7909802.stm

Reuters: Petrol prices rise more than inflation
I find it hard to accept that in this time of collapsed global demand that fuel, of all things, is rising more than the stated inflation figures. I worry about a sudden and unpleasant end to deflation, and a discovery that actually inflation was worse. I looked to see if the UK basket of goods has been moderated recently and I can't find anything, however, if car manufacturers are running down their production facilities, then people are -not- buying cars and so the price of cars for example, should receive a lower weighting than previously. Zimbabwe didn't include flat screen hd tvs in their basket of goods because nobody was buying them. Similarly now, most expensive goods are being studiously avoided by the consumer (..cont..)
http://uk.reuters.com/article/personalFinanceNews/idUKLNE51I01T20090219

Japantimes: Land prices in big cities crumbling
The figure suggests the global economic downturn rooted in the collapse of the U.S. housing market and the collapse of U.S. securities house Lehman Brothers Holdings Inc. sent land prices diving, observers said.
http://search.japantimes.co.jp/cgi-bin/nb20090225b1.html

Blanchflower Says Britain's Recession Will Probably Deepen `Significantly' 
Bank of England policy maker David Blanchflower said the U.K.’s recession will probably deepen “significantly,” underscoring the need for the government and the central bank to step up aid to the economy.
http://www.bloomberg.com/apps/news?pid=20601102&sid=aV.0Acqr0H18&refer=uk

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 From today's New York Times talking about how New York condomium developers are trying the public auction method in a despearate attempt to get their stock moving.

    Real estate auctions, rarely used in New York, have the potential to both move property and indicate to reluctant buyers what the true market prices are. Given the current sales drought, even a handful of auctions could reset prices for new condominiums citywide, said Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company. He said he expects the auctioned properties to sell for 40 to 45 percent below the asking prices of the first quarter of 2008, when the market peaked.

Today, almost every signpost is bleak for new developments. Buyers who signed contracts long before condo projects were completed are expected to walk away in droves this coming quarter. In many cases, these buyers will be abandoning deposits of $100,000 or more that pale in comparison to the slide in market values. Many buyers may have lost jobs, or may be worried about their jobs, while others will be unable to get financing.

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http://www.moneyam.com/action/news/showArticle?id=3559332
Royal Bank of Scotland has this morning announced the biggest ever annual net losses in UK corporate history at £24.1bn. Loss before tax was £40.7bn with impairment losses were £8.1bn. The loss per ordinary share came in at 61.0p.

Please help me understand where the H3ll all that money went, and why the directors should get a single cent of bonus?

http://www.moneyam.com/action/news/showArticle?id=3559330
British American Tobacco this morning reported that group revenue increased by 21% to £12.122bn in the year ended December 31st. Profit from operations was 23% higher at £3.572bn, or 24% higher if adjusting items are excluded.......
....
BAT is recommending a final dividend of 61.6p, which will be paid on 6th May 2009.
This, together with the interim dividend, will take dividends in respect of 2008 as a whole to 83.7p, an increase of 26%.

I am going to take up smoking...or at worst, ignore my conscience and buy the shares!!!

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The reward for being an incompetent buffoon

http://news.bbc.co.uk/2/hi/uk_news/politics/7912651.stm

Goodwin pension stance condemned

The Treasury has said that banker Sir Fred Goodwin's refusal to give up his £693,000-a-year pension is "unfortunate and unacceptable".

Chancellor Alistair Darling had asked him to hand back his £16m pension pot amid anger about rewards for failure.

But the ex-RBS boss rejected this in a letter to the Treasury in which he says ministers agreed to the pension deal.

This is just unbelievable!! What an arrogant thieving idiot!

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While I agree that he should be condemned for his foolish purchase of ANB I think it is very harsh to want to claim back his pension - a lot of which was purchased before he went to RBOS. Politicians ( at least in my view) are the lowest species on the planet. If you read what was agreed with Goodwin for him to go in October you can see that the pension was the only "benefit" he accrued - he could have taken shares and severence pay which he did not. They then back track when the public start making a noise and leak the info about the pension to find a scapegoat. Brown lost the UK billions when he sold off the UK gold reserve, Major lost trillions on the currency market etc etc. Can't see any politicians giving up their pensions - can you? Those buggers would sell their own mothers for a bit of political leverage - I hate them all.............................ah ah ah  what a rant!!

Cheers

Brian

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Independent.ie: Suddenly, those overseas 'dream' properties are back to haunt us
Anyone who bought and kept property in Bulgaria was a complete mug and I have been saying that on these pages since before our current collapse.
http://www.independent.ie/business/irish/suddenly-those-overseas-dream-properties-are--back-to-haunt-us-1653715.html

MoneyWeek: Shares aren't cheap - they have much further to fall
As stock markets tumble, most people assume shares are getting cheaper. But in fact they're getting more expensive...
http://www.moneyweek.com/investments/stock-markets/shares-arent-cheap-they-have-much-further-to-fall-14642.aspx

Telegraph: Nearly 4 million UK home owners are already in negative equity
The calculation is the most gloomy yet, and shows how the property crash has caused serious financial problems for an increasing number of people. Previous estimates suggested that, at most, two million home owners were suffering from the predicament.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/4840800/Nearly-4-million-home-owners-are-already-in-negative-equity-researchers-say.html

BBC: Ryanair mulls charge for toilets
Ryanair has said it is considering charging passengers for using the toilet while flying.
http://news.bbc.co.uk/1/hi/business/7914542.stm

Spiegel Online: The Steep Decline of the British Economy
As the global economic crisis takes hold, hardly any other country has seen its fortunes wane as brutally as the United Kingdom. Once a model economy, the country has been overcome by a deep sense of uncertainty.
http://www.spiegel.de/international/europe/0,1518,609391,00.html

Guardian: Executive pensions: how Sir Fred Goodwin's gold-plated package fits in
If you thought public service schemes were good take a look at what the execs get, led of course by Fred Don't Shred My Pension. Corruption is with us now.
http://www.guardian.co.uk/business/2009/feb/27/executive-pensions-final-salary-schemes

CNN: Will the banks survive?
Now the storm is entering an entirely new phase that's potentially even more dangerous: a historic meltdown in the bread-and-butter businesses of credit card, home-equity, and mortgage lending.
http://money.cnn.com/2009/02/27/news/economy/tully_banks.fortune/index.htm?postversion=2009022707

Bloomberg: Euro Area Risks Breakup on Bank Woes, Subprime Bear Hayman Says
Feb. 27 (Bloomberg) -- Hayman Advisors LP, the firm that earned $500 million betting on the U.S. subprime mortgage-market collapse, says Europe’s monetary union is about to fall apart. Richard Howard, a managing director for global markets at Dallas-based Hayman, said Germany may opt to shore up its own economy, Europe’s biggest, rather than bail out fellow euro nations such as Austria, Italy and Spain as their banks sag under the weight of bad debts. That might lead to defaults and compel Germany to renounce the euro, he said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2JbfmRZSr7A&refer=home

CNBC.COM: Half of Bankers Would Quit UK If Bonuses Capped
Half of British bankers would consider leaving the country if a cap were put on their cash bonuses, a survey showed on Friday. The poll by jobs website eFinancialCareers.com found that 49 percent of British-based bankers would consider voting with their feet such a limit to their income were introduced. That figure rose to 71 percent among financiers with six to ten years experience.
http://www.cnbc.com/id/29423109