March 9, 2009
No need for nationalisation
Story link: No need for nationalisation
It seems that Lord Mandelson’s view on the recession and the nationalisation of banks is set in stone, but obviously his voice is not being heard. His comments were made just 48 hours after the Government increased its Lloyds Banking group stake by over 20%, the Government now own 65%.
Lord Mandelson has reiterated that the government has no plans to nationalise the banking sector.
His comments come two days after the government increased its stake in Lloyd Banking Group to 65% from 43%.
Will quantitative easing work?
Story link: Will quantitative easing work?
Quantitative easing has been proven as a good method to ease the pain of recession’s in the past, although that is not to say that the latest batch of cash will wave the wond and get rid of all the economic problems. A collection of important decisions are needed to combat the recession, not just one.
Will quantitative easing work?
So determined was the pro-Euro lobby to bury Emu-sceptics, it cast aspersions on the character of those who took an opposing view.
More recently, the same cowardly device has been used by deranged environmentalists. Anyone who dares to suggest “global warming” may not exist – that temperature changes could be driven by long-term climatic cycles rather than human activities – is dubbed a “denier”.
JP Morgan backs Ireland
Story link: JP Morgan backs Ireland
Ireland must be showing its signs of strength and weakness, of course one more than the other. Investors are now banking and in fact hoping, that Ireland defaults on its debts and that their investments pan out!
One of the biggest Wall Street banks has warned investors not to bet on Ireland defaulting on its debt, as its financial position remains “remarkably strong” despite the banking crisis and economic downturn.
JP Morgan bond analysts pointed out in a note to clients this week, that many other eurozone countries “have significantly worse public sector debt to gross domestic product (GDP) ratios”.
March 5, 2009
£21bn chase
Story link: £21bn chase
The fees are closing in on £700 million, which seems like over kill, and of course is the biggest flooding on rights issues in the last few years.
What this means is a massive £21bn of new money has been created in the last three months, an astonishing amount in such a short space of time!
Cazenove, has charged fees close to £700 million in return for holding the hands of 11 major companies which have raised £21 billion of new money in just the first two months of 2009, the busiest flood of rights issues in years.
While the deluge of financing fees will help the books of the investment banks and stockbrokers and their coterie of lawyer and accountant advisers, the price being charged for the work is causing alarm.
Gordon Ramsay’s kitchen nightmare!
Story link: Gordon Ramsay’s kitchen nightmare!
Gordon Ramsay has built a basic kitchen based concept into a multi million pound dream, a dream that has tripled in profits over the last few years, but has still found itself in major difficulty.
Gordon Ramsay’s kitchen business broke the terms and conditions set out by RBS on a multi million pound loan, which now needs to be renegotiated.
Gordon Ramsay’s kitchen nightmare!
Gordon Ramsay has been forced to promise to cover some of his restaurant group’s debts after it broke promises it made to its lenders.
Despite tripling profits to £3.05 million, the foul-mouthed chef’s restaurant group has been forced to renegotiate a multi-million pound loan with RBS after it breached its banking covenants.
Pump cash into the British Economy
Story link: Pump cash into the British Economy
As mentioned in a previous post, quantitative easing is one method of trying to stabilise an economy, but as history has proved, it is not a method that always has a positive outcome.
The combination of decisions from the Bank of England with the interest rate drops and now this could potentially stabilise the economy, or put it in further difficulty, only time will tell!
Pump cash into the British Economy
The financial crisis will enter a new phase today when the Bank of England announces that it will fight the economic downturn by pumping hundreds of billions of pounds into the economy.
The Bank is expected to confirm at lunchtime that it will embrace quantitative easing, the process of buying up government and corporate debt.
The future is bright for China
Story link: The future is bright for China
China has been showing signs of strength within its economy for the last few months, which is hopefully a signal for change. The Chinese economy has now strengthened for three months in a row, potentially a brighter future over there compared with most economies that are falling victim to the dreaded credit crunch.
The future is bright for China
China’s manufacturing Purchasing Managers’ Index (PMI) strengthened for a third consecutive month in February, climbing to 49.0% from 45.3% the previous month. Li & Fung Research Centre reports that there were some encouraging signs: all sub-indices were higher than their respective levels in the previous month though many were still lower than the critical level of 50% (i.e. still contracting).
In particular, both the Output Index and the New Orders Index rebounded to the expansionary zone of higher than 50% for the first time since September last year. In addition, the New Export Orders Index grew strongly by 9.7 percentage points to 43.4% in February, compared to the previous month.
March 3, 2009
What can Gordon Brown do?
Story link: What can Gordon Brown do?
Rows about the RBS chief’s pension are the least of our worries, with the UK economy on the brink of deflation and the Bank of England so worried, they are looking into the necessary procedure to introduce some kind of quantitative easing – we are in trouble, we know that, but what will Gordon Brown do about it?
Economic growth is plummeting around the world. The United States has just produced its worst figures for 26 years. The UN’s development arm, Unctad, says this could be the first year in a generation that the entire world economy shrinks. And the democracies of Eastern Europe, which emerged blinking and hopeful into the capitalist sunshine not yet 20 years ago, today look ready to fall over like dominoes.
These are undoubtedly the most difficult and dangerous economic times anyone alive has lived through. So how does Britain react? By getting into a lather about Sir Fred Goodwin’s pension. Yesterday Harriet Harman was just the latest minister to fulminate against the former RBS chief, warning that he should not “count on” keeping his money. But while she and others are responding in part to public anger, this row is rather too convenient for ministers.
Finacial markets will fall further
Story link: Finacial markets will fall further
So far it seems that nothing any Government does for the world wide financial system works. Banks are being bailed out left right and centre, interest rates have been dropped to record levels, but financial institutions are still reporting record losses, or applying for furher bail outs.
Finacial markets will fall further
Governments around the world may be starting to wonder if taking on the liabilities of the bust financial system was really such a good idea.
The markets took a real hammering yesterday as even the brightest star in the banking firmament – HSBC – turned out to have big problems, requiring the biggest non-government-backed rights issue in British history.
Alistar Darling admits mistakes
Story link: Alistar Darling admits mistakes
The UK economy was destined to fall into a recession, which ever decisions the Government made. The problem of course, is once the recession has its grip on the economy, it is down to the Government to get the Economy back out of that recession as quickly as possible, something that has not happened so far.
Alistar Darling admits mistakes
In an interview with The Daily Telegraph he concedes that there are a “lot of lessons” for the Government to learn from the events that led to the downturn and concludes that the regulation of banks has been a failure.
It is the first significant admission of responsibility from a senior government figure for the current economic crisis, partly blamed on ministers allowing the financial markets to run out of control for much of the past decade.