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Business News
for 12/17/2008

(last updated 7:30am EST 12/17/2008)

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• Hong Kong shares close higher with prope... Hong Kong shares close higher with property firms rising
12/17/2008
Wall Street's jump overnight after the U.S. Federal Reserve slashed its interest rates effectively to zero pulled Hong Kong shares higher Wednesday, led by China-focused companies and local property developers. The blue-chip Hang Seng Index rose 330.31 points, or 2.2 percent, to 15,460.52 after trading between 15,179.38 and 15,557. 45. Turnover reached 56.41 billion Hong Kong dollars (7.27 billion U.S. dollars), up from 40.32 billion Hong Kong dollars (5.2 billion U.S. dollars) T ... (1 h ago)

• Obstacles blocking drug trade between Jo... Obstacles blocking drug trade between Jordan, Egypt removed
12/17/2008
Jordan and Egypt have removed "once and for all" obstacles hindering the entry of Jordan-made pharmaceuticals into the Egyptian market, local daily The Jordan Times reported on Wednesday. "We have agreed to solve all outstanding issues in order to encourage joint cooperation between the two countries' drug manufacturing companies," Minister of Industry and Trade Amer Hadidi said Tuesday at the end of the preparation meetings of Joint Jordanian-Egyptian Higher Committee. Jordanian ... (1 h ago)

• Japan hails U.S. rate cut, hints interve... Japan hails U.S. rate cut, hints intervention in yen's surge
12/17/2008
Japan hailed the drastic interest rate cut by the U.S. Federal Reserve, while hints at intervention in yen's surge against the dollar. Prime Minister Taro Aso told reporters Wednesday that Japan hopes the rate cut will bring about a positive effect. Also on the day, yen climbed to upper-88 yen zone against the dollar and Finance Minister Shoichi Nakagawa said Japan is ready to "take every necessary move to tackle the fluctuation in foreign exchange market." A rising yen caps Japa ... (1 h ago)

• Nissan to cut domestic production by fur... Nissan to cut domestic production by further 78,000 units
12/17/2008
Nissan Motor Co., Japan's third-largest automaker, will further cut its domestic auto production for fiscal 2008 by about 78,000 units from January 2009, marking the fourth reduction in domestic market this year, company sources said. "This further reduction is necessary to manage inventory levels and ensure a balanced production supply, in response to continued declines in global vehicle sales," the company said in a statement. The Japanese automaker said it would eventually lay ... (1 h ago)

• Tokyo stocks close higher on U.S. rate c... Tokyo stocks close higher on U.S. rate cut
12/17/2008
Tokyo stocks close higher Wednesday as investors were uplifted by the U.S. Federal Reserve's interest rate cut, however, a stronger yen weighed on Japanese exporters and capped gains of the key Nikkei index. The 225-issue Nikkei Stock Average gained 44.50 points, or 0.52 percent, from Tuesday to 8,612.52. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 9.84 points, or 1.19 percent, to 838.46. Major gainers included real estate, insur ... (1 h ago)

• Honda cuts profit forecast by 61.9% Honda cuts profit forecast by 61.9%
12/17/2008
Honda Motor Co. cut group net profit forecast by 61.9 percent from its previous estimate, the third time to revise downward the projection for fiscal 2008 through next March, according to local media on Wednesday. The second-largest automaker in Japan now estimates earnings of185 billion Japanese yen. It also made downward revisions in July and October, Kyodo News Agency reported. For the second half of the current fiscal year that began in October, Honda is likely to incur a gro ... (1 h ago)

• China property stimulus plan targets low... China property stimulus plan targets low-income housing, ownership
12/17/2008
The State Council, or Cabinet, on Wednesday announced a new real-estate stimulus package that emphasizes low-income housing and home ownership. The package was decided on at an executive meeting of the Council, presided over by Premier Wen Jiabao. The government said the package would address the difficulties of 7.5 million low-income urban families and 2.4 million households living in shantytowns in the next three years. Rural homes in dangerous condition will also be renovated. ... (1 h ago)

• China shares close almost flat on weak i... China shares close almost flat on weak investor confidence
12/17/2008
In contrast to gains on regional markets following an overnight strong rally on Wall Street, Chinese stocks closed merely 0.09 percent higher amid heavy trading on Wednesday. Earlier gains were wiped out in the afternoon by losses in heavyweights. The benchmark Shanghai Composite Index finished the day at 1,976.82 points, up 1.81 points, after hitting a high of 2,003.38 in the morning. The smaller Shenzhen Component Index closed 36.55 points, or 0.5 percent, higher at 7,2 ... (1 h ago)

• Hong Kong follows Fed to slash its base ... Hong Kong follows Fed to slash its base rate to 0.5%
12/17/2008
The Hong Kong Monetary Authority (HKMA) announced here Wednesday the adjustment downwards of the Base Rate to 0.5 percent with immediate effect following the U.S. Federal Reserve's surprising rate cut. Since the U.S. federal funds target rate is reduced to the range of zero to 0.25 percent and federal funds are effectively trading at zero, the HKMA, Hong Kong's de facto central bank, set the Base Rate at 50 basis points above the lower boundary of the target range at 0.5 percent. ... (1 h ago)

• Central Bank governor: Interest rate lik... Central Bank governor: Interest rate likely cut within next six months
12/17/2008
Zhou Xiaochuan, governor of the People's Bank of China, said on December 16 that as inflation falls faster than expected, the central bank still faces pressure to trim interest rates from the end of the year to the middle of next year; interest rates cut is likely to be announced again. He reiterated that since China has implemented a managed floating exchange rate system based on the market's supply and demand, the depreciation of the Renminbi (RMB)'s exchange rate does not necessarily have ... (1 h ago)

• China's GDP increases 14 fold in 30 year... China's GDP increases 14 fold in 30 years
12/17/2008
China's GDP in 2007 has increased 14 fold compared to the beginning of reform and opening-up back in 1978. Reporters learned this from the "30 years of reform and opening-up" international academic seminar held by the Chinese Academy of Social Sciences (CASS) on Tuesday. Liu Shucheng, a member of the Academic Divisions of CASS and deputy director of the Academic Division of Economics at CASS, said in the past 30 years since reform and opening-up, the most remarkable achievement of China is i ... (1 h ago)

• Spain to cut down on long-term labor con... Spain to cut down on long-term labor contracts for non-EU nationals
12/17/2008
Spain will take in no more than 1000 long-term contract workers from non-EU countries in 2009, a 94-percent cut compared to this year, Immigration Affairs Director Martha Rodriguez Tarduchy said Monday. In view of the global financial crisis and a difficult employment situation, the Spanish government has had to shut its doors to non-EU foreign workers to preserve jobs for its own people, local media reported. Figures from Eurostat, the European Union (EU)'s statistics bureau, sh ... (1 h ago)

• Mercosur expresses solidarity with U.S.-... Mercosur expresses solidarity with U.S.-spurned Bolivia
12/17/2008
The 36th Common Market of the South (Mercosur) Leaders Summit expressed solidarity with Bolivia on Tuesday in a communique, following U.S. President George W. Bush's suspension of Bolivia's trade preferences, which took effect Monday. Mercosur will import Bolivian products worth 30 million U.S. dollars in 2009 in response to the U.S. government's decision to cancel Bolivia's designation as a beneficiary country under the Andean Trade Promotion and Drug Eradication Act (ATPDEA), citing L ... (1 h ago)

• Mercosur to deepen cooperation amid glob... Mercosur to deepen cooperation amid global economic crisis
12/17/2008
The 36th Summit of the Common Market of the South (Mercosur) agreed Tuesday to deepen cooperation in dealing with the consequences of the global financial crisis. Brazilian President Luiz Inacio Lula da Silva denounced the "perversion" of the existing economic system and urged coordinated action from Mercosur members to tackle the crisis. "We face an international scenario marked by new threats. The crisis reveals the perversion of the current economic system, but the crisis also ... (1 h ago)

• Canada's October manufacturing sales hit... Canada's October manufacturing sales hit 7-year low
12/17/2008
Manufacturing sales in Canada decreased 1.8 percent in October to touch the lowest monthly level since December 2001, federal agency Statistics Canada reported Tuesday. Petroleum and coal prices, which dropped 13.5 percent in October, were the biggest contributors to bringing down the country's sales value, the report said. The sales value of petroleum and coal products declined 7.3 percent in the month, their fourth straight monthly drop. According to Statistics Canada, ... (1 h ago)

• ADB approves $300 mln loan to improve Ph... ADB approves $300 mln loan to improve Philippines justice system
12/17/2008
The Asian Development Bank (ADB) said on Wednesday that it is extending a 300 million-U.S. dollar loan to help the Philippines improve the country's justice system. The loan for the Governance in Justice Sector Reform Program will be used to increase budget resources, improve public expenditure management, and introduce new internal controls in the sector, the Manila-based lender said in a press release. By supporting more competitive salaries and higher budgets, the loan is exp ... (1 h ago)

• ADB approves $400 mln loan for Papua New... ADB approves $400 mln loan for Papua New Guinea
12/17/2008
The Asian Development Bank (ADB) said Wednesday it has approved a 400 million-U.S. dollar loan to help build and manage a sustainable road system in Papua New Guinea. The program will focus on around 1,400 kilometers of major national and provincial roads in the Highlands region, one of the most remote areas in the country, ADB said in a press release. The Highlands region is a major contributor to Papua New Guinea's economy through its mineral and agricultural exports. It is als ... (1 h ago)

• Vietnam's state-owned firms urged to joi... Vietnam's state-owned firms urged to join fight against economic slowdown
12/17/2008
Vietnamese Prime Minister has asked the country's state-owned companies to do their utmost in fighting against the national economic slowdown and achieving the economic growth of 6.5 percent in 2009, the local newspaper Youth reported Wednesday. At the meeting with heads of the country's corporations in Hanoi, Dung urged the state-owned companies to continue playing their key role in leading production and expanding domestic consumer and export markets. The government would conce ... (1 h ago)

• Honda to scale down business amid global... Honda to scale down business amid global economic woes
12/17/2008
Honda Motor Co. plans to delay the opening of a new factory in Yorii, Saitama Prefecture of Japan, and freeze the debut of the luxury Acura brand cars due to plummeting global auto sales, Kyodo News Agency reported Wednesday. Japan's second-largest automaker is considering delaying the start of operations at the Saitama factory from the initial opening in 2010 and will put off the timing of bringing the factory's output to its full capacity of 200,000 vehicles per year. The compa ... (1 h ago)

• Malaysian FM: AMF likely to become reali... Malaysian FM: AMF likely to become reality at ASEAN summit
12/17/2008
The Asian Monetary Fund (AMF) may become a reality at the next ASEAN summit in February next year, a local newspaper reported on Wednesday. A decision would be made when the Association of Southeast Asian Nations (ASEAN) meets at the end of February next year in Thailand, the News Straits Time quoted Malaysian Foreign Minister Rais Yatim as saying. Leaders representing 10-member countries of ASEAN had proposed a start-up placement of 120 billion U.S. dollars in the AMF, Rais said ... (1 h ago)

• C. Caracciolo, 83, a Publisher and La Re... C. Caracciolo, 83, a Publisher and La Repubblica Founder, Is Dead
12/17/2008
Mr. Caracciolo was a leading Italian publisher who was a co-founder of the influential newspaper La Repubblica and was known as “the editor prince.” (1 h ago)

• John W. Powell, 89, Dies; Writer in Sedi... John W. Powell, 89, Dies; Writer in Sedition Case
12/17/2008
Mr. Powell was tried for sedition in 1959 in a rare and highly public case after he asserted in print that the United States had used biological weapons in the Korean War. (1 h ago)

• News Corp.’s Stock Listing Shifts to a H... News Corp.’s Stock Listing Shifts to a Higher Bidder
12/17/2008
The News Corporation announced that it would move its stock listing from the New York Stock Exchange to the Nasdaq stock market, effective on Dec. 29. (1 h ago)

• Fewer Papers Will Hit the Porch in Detro... Fewer Papers Will Hit the Porch in Detroit
12/17/2008
The Detroit Free Press and The Detroit News will stop home delivery four days of the week, becoming the first major metropolitan dailies to take such a step. (1 h ago)

• Advertising: Churches Welcome Quirky App... Advertising: Churches Welcome Quirky Approaches to Spread Their Message
12/17/2008
Some churches are hoping that nontraditional advertising approaches may attract greater numbers of young people. (1 h ago)

• China Is Said to Restore Blocks on Web S... China Is Said to Restore Blocks on Web Sites
12/17/2008
The Chinese government has quietly begun preventing access again to Internet sites that it had stopped blocking during the Olympic Games. (1 h ago)

• Disney Plans a Channel for Russian TV Disney Plans a Channel for Russian TV
12/17/2008
The Russian market is one that Western entertainment companies have been trying to crack for a decade with little success. (1 h ago)

• Politico and Reuters Forge a News Distri... Politico and Reuters Forge a News Distribution Alliance
12/16/2008
Politico would gain the right to sell ads on newspapers’ Web pages containing Politico and Reuters articles and would share the revenue with the papers. (8 h ago)

• Pellicano Sentenced to 15 Years in Priso... Pellicano Sentenced to 15 Years in Prison
12/16/2008
Anthony Pellicano, a private investigator whose clients included Hollywood stars, was sentenced for wiretapping. (14 h ago)

• Justices Reject Appeal in Anthrax Libel ... Justices Reject Appeal in Anthrax Libel Suit
12/16/2008
Steven J. Hatfill, a former government scientist, contended that he was defamed by a series of New York Times columns about the anthrax mailings of 2001. (17 h ago)

• National Lampoon Chief Faces Charges National Lampoon Chief Faces Charges
12/16/2008
The chief executive of National Lampoon was charged with conspiracy and securities fraud in what prosecutors called an attempt to raise the company’s stock value artificially. (18 h ago)

• Advertising: ESPN Strives to Eject Clutt... Advertising: ESPN Strives to Eject Clutter From Its Site
12/16/2008
ESPN.com is counting on less clutter and more advertising options to bolster revenue at a time when its sister cable channels are battling rare weakness. (18 h ago)

• Actors Petition Their Guild to Cancel Vo... Actors Petition Their Guild to Cancel Vote Over Strike
12/16/2008
Leaders of the Screen Actors Guild came under pressure from a roster of A-list stars to call off plans for a vote to approve a possible strike against studios. (19 h ago)

• Campaign Spotlight: Campaign Seeks to An... Campaign Spotlight: Campaign Seeks to Answer ‘Now What?’
12/16/2008
The country’s largest nonprofit home health care provider has begun an ad campaign that asks people to imagine how they would respond to vexing medical situations. (20 h ago)

• MediaNews Sees Bad Timing on Newspapers,... MediaNews Sees Bad Timing on Newspapers, Not Bad Bets
12/15/2008
Dean Singleton gambled his company on California -- where the crash in housing has hit newspapers especially hard -- just as the bottom was about to fall out for newspapers. (1 d ago)

• Advertising: Banks Use Free Pizzas and H... Advertising: Banks Use Free Pizzas and Humor to Calm Fears
12/15/2008
Banks and financial institutions are buying ads and holding promotions to bolster consumer confidence. (1 d ago)

• David Shuster to Host MSNBC Political Pr... David Shuster to Host MSNBC Political Program
12/15/2008
MSNBC is replacing one David with another on its 6 p.m. program, “1600 Pennsylvania Avenue.” (1 d ago)

• News About News, in 140 Characters News About News, in 140 Characters
12/15/2008
A Twitter feed for public relations workers documents media hirings and firings in one-sentence bursts of text. (1 d ago)

• It’s Called The Economist, Not The Futur... It’s Called The Economist, Not The Futurist
12/15/2008
For 23 years, The Economist has issued bold predictions for the coming year. Last year, its crystal ball, in the issue called “The World in 2008,” was a little foggy. (1 d ago)

• A Parenting Magazine Run by a Rarity, a ... A Parenting Magazine Run by a Rarity, a Man
12/15/2008
Scholastic named Nick Friedman the first male editor of Parent & Child magazine last month, though 85 percent of the magazine’s readers are women. (1 d ago)

• European Markets Decline, and Dollar Sin... European Markets Decline, and Dollar Sinks
12/17/2008
Stocks opened lower in Europe after modest gains in Asia, and the dollar fell sharply against other major currencies. (1 h ago)

• Honda Cuts Profit Forecast by 64% Honda Cuts Profit Forecast by 64%
12/17/2008
Honda issued its third profit warning of the year in the latest sign of the dramatic drop in demand that has hammered the global car industry. (1 h ago)

• Belgium Fights Shareholder Vote on Forti... Belgium Fights Shareholder Vote on Fortis Sale
12/17/2008
The government has vowed to fight a court decision that would subject to a shareholder vote its plan to sell Fortis to BNP Paribas. (1 h ago)

• European Banks Tally Losses Linked to Fr... European Banks Tally Losses Linked to Fraud
12/17/2008
The size of the Bernard L. Madoff’s scheme calls into question why big banks in Spain, Britain and especially Switzerland failed to spot the risks of putting billions into Mr. Madoff’s hands. (1 h ago)

• Memo From Berlin: Allies See Germany Try... Memo From Berlin: Allies See Germany Trying Bailout With a Thimble
12/17/2008
The country’s neighbors and many of its politicians are criticizing the government for spending plans that seem tight-fisted compared to what European countries or the U.S. are preparing. (1 h ago)

• At Meeting in Brazil, Washington Is Scor... At Meeting in Brazil, Washington Is Scorned
12/17/2008
Latin American leaders, including Cuba’s Raúl Castro, assailed the U.S. for the credit crisis that has also roiled their economies. (1 h ago)

• British Bank Rescue Plan Is Under Fire British Bank Rescue Plan Is Under Fire
12/17/2008
The British prime minister’s initial success has faded and the credit markets still need fixing. (1 h ago)

• OPEC Plans Further Output Cut OPEC Plans Further Output Cut
12/17/2008
The cartel will slash its oil production by a further 2 million barrels a day, the Saudi oil minister said. (1 h ago)

• Siemens to Pay $1.34 Billion in Fines Siemens to Pay $1.34 Billion in Fines
12/16/2008
By agreeing to the record fines, the German engineering conglomerate closes the book on wide-ranging criminal investigations in the United States and Germany. (7 h ago)

• Japan’s Manufacturing Confidence Index D... Japan’s Manufacturing Confidence Index Drops Sharply
12/16/2008
A key measure of business sentiment released on Monday foreshadowed more bad news ahead for the Japanese economy. (17 h ago)

• Russia Devalues the Ruble for a 2nd Time... Russia Devalues the Ruble for a 2nd Time in a Week
12/16/2008
The currency may fall even further against the dollar and the euro unless oil prices rebound soon. (18 h ago)

• OPEC Looks to Halt Falling Oil Prices OPEC Looks to Halt Falling Oil Prices
12/16/2008
The oil cartel has been stunned by the stunning speed of the downturn, which has created a sudden nightmare for producers. (18 h ago)

• Global Car Industry Fearful for Detroit Global Car Industry Fearful for Detroit
12/16/2008
There are growing concerns that the automakers’ problems in the United States will weigh down their more successful units in Europe, Asia and Latin America. (18 h ago)

• Global Layoffs at Electrolux Global Layoffs at Electrolux
12/16/2008
The Swedish appliance maker Electrolux said that it would lay off more than 3,000 staff globally because of a slump in the market. (18 h ago)

• Toyota Delays U.S. Plant Opening Toyota Delays U.S. Plant Opening
12/16/2008
The assembly factory had been scheduled to open in 2010, but the downturn interfered. (19 h ago)

• Canada Agrees to Supplement Aid to Auto ... Canada Agrees to Supplement Aid to Auto Industry
12/16/2008
The head of the Canadian Auto Workers urged the Canadian government to offer an aid package to help force action in Washington. (19 h ago)

• Stocks headed lower after surging Tuesda... Stocks headed lower after surging Tuesday
12/17/2008
Wall Street headed for a lower open Wednesday as investors' enthusiasm over historically low interest rates gave way to concerns about the nation's weak economy. (1 h ago)

• Small cars making safety strides Small cars making safety strides
12/17/2008
Small cars, which have become more popular with the fluctuation in gas prices, are becoming better equipped to protect motorists in serious crashes, new tests show. (1 h ago)

• OPEC likely to make record output cut OPEC likely to make record output cut
12/17/2008
Saudi Arabia, OPEC's de-facto leader, said Wednesday the group will slash a record 2 million barrels from its daily production. (1 h ago)

• More Americans hurt by downturn More Americans hurt by downturn
12/17/2008
Nearly two-thirds of Americans say they have been harmed by the downturn and that the nation has entered a long-term economic decline, according to a new poll by The Washington Poll. (1 h ago)

• Paulson sees financial situation stabili... Paulson sees financial situation stabilizing
12/17/2008
Treasury Secretary Henry Paulson said Tuesday that he does not expect any more major financial institutions to fail during the current credit crisis. (1 h ago)

• Director of SEC says it failed in Madoff... Director of SEC says it failed in Madoff case
12/17/2008
Staff at the Securities and Exchange Commission failed many times over a decade to fully investigate credible allegations of wrongdoing by money manager Bernard Madoff. (1 h ago)

• White House will take its time on auto b... White House will take its time on auto bailout
12/17/2008
The Bush administration said it was still evaluating options and suggested any deal would require major concessions by all sides. (1 h ago)

• Fed cuts target for key rate to a record... Fed cuts target for key rate to a record low
12/17/2008
The Fed has cut its target for a key interest rate to the lowest level on record and pledged to use “all available tools” to combat a severe financial crisis and prolonged recession. (1 h ago)

• Downturn means decisions in holiday tipp... Downturn means decisions in holiday tipping
12/17/2008
In private, workers who depend on holiday tips might be willing to say they're getting hurt by the economic downturn. (1 h ago)

• The Fed’s new zero-tolerance policy The Fed’s new zero-tolerance policy
12/16/2008
The Federal Reserve now says it's targeting short-term interest rates as low as zero percent. So what, exactly, does it mean when rates go to zero.? Do we all get to borrow for free? (38 m ago)

• Americans sell burial plots, scale back ... Americans sell burial plots, scale back funerals
12/16/2008
After months of unemployment and weeks of soul searching, Helen Walker has decided she won't spend eternity alongside her parents at Fort Lincoln Cemetery in Brentwood, Md. (48 m ago)

• Readers split on taking pay cuts to save... Readers split on taking pay cuts to save jobs
12/16/2008
Msnbc.com readers across the country are split on whether they would take a 5 percent pay cut to save jobs in their company. (2 h ago)

• As OPEC meeting looms, oil prices sink As OPEC meeting looms, oil prices sink
12/16/2008
Oil prices fell Tuesday after OPEC powerhouse Saudi Arabia said oil production would be cut by 2 million barrels a per day to stem declining crude prices. (3 h ago)

• Fed presses on into uncharted territory Fed presses on into uncharted territory
12/16/2008
With the benchmark overnight interest rate virtually at zero, the Federal Reserve is scrambling to apply new tools to revive the economy by flooding it with cash. (3 h ago)

• Inflation falls, housing starts tumble Inflation falls, housing starts tumble
12/16/2008
Federal Reserve cuts target for key rate to record low. Vows to use 'all available tools' to promote economic growth. (4 h ago)

• Banks under the cosh again Banks under the cosh again
12/17/2008
Banks are under pressure at the moment, after more losses and analyst downgrades. France's biggest bank, BNP Paribas, unsettled the sector with news of an unexpected €710m loss at its CIB investment banking business. Part of this was due to its exposure to the alleged fraud perpetrated by Wall Street financier Bernard Madoff. The Paribas news follows yesterday's losses from Goldman Sachs. Meanwhile Deutsche Bank has just issued a sell note on Lloyds TSB , down 0.7p to 127.3p, ahead of the completion of its takeover of HBOS , down 2.5p at 69.4p. Deutsche said: "HBOS' recent trading update suggested a £2bn pre-tax loss in October and November, substantially driven by corporate loan losses. We are reducing earnings forecasts for higher bad debts, financial services compensation scheme costs and lost payment protection insurance revenues in particular and see the combined group as little better than break even in 2009 (though forecast risk is high at present, we believe) and that capital uncertainties will restrain share performance. Our 110p target price is reduced from 180p; [we move to] sell from hold." Ironically, an announcement that Deutsche will not redeem a 2014 subordinated bond at the first scheduled call also unsettled the market. Meanwhile HSBC is down 40.25p at 674.75p on continuing concern about a possible cash call, even though some analysts have dismissed the idea. Elsewhere housebuilder Taylor Wimpey added 0.7p to 10.5p - a 7% increase - after a report in Building magazine that the company's chief executive Peter Redfern had written a letter to staff in the course of which he suggested its debt renogiations could be concluded by February . UK banking sector HSBC Lloyds TSB HBOS Taylor Wimpey guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• David Gow in Europe: Christmas shoppers ... David Gow in Europe: Christmas shoppers ignore the economic gloom
12/17/2008
Snails floating in a light garlic sauce, waffles crowned with hillocks of artificial cream, paper pokes of frites topped by mayo and accompanied by warm Kriek (cherry beer) or, maybe, half a dozen oysters and a glass of white wine. It's a Saturday before Christmas in Brussels and Europe's recession is invisible. Locals and visitors from all over Europe can barely get past each other on the paths around the ice-skating rink and Ferris wheel on the Place Ste Catherine, home of the old fish market. The 240 wooden stalls from here to the baroque Grand Place via the Bourse are selling Russian matrushka dolls, Fairtrade models of 2CVs made in west Africa from recycled Coke cans, Peruvian woollen hats, Périgord truffles, Belgian lace and Saxon toys carved from wood. There's a huge queue of multilingual children for a reconstituted 19th-century carousel. You have to stand in line to enter the chocolate store in the nearby Galeries Royales. Across the border in Germany this weekend, hundreds of thousands of Germans and others will throng the country's 130 Christmas markets and make their own contribution to overcoming the worst recession there since 1949 and the founding of the federal republic. "It's a citizen's first duty to shop," says a German colleague heading for Cologne, with a big ironic smile. "We don't need VAT cuts to do our patriotic duty," he adds, with an even bigger smile. The economic ministry in Berlin now admits that Europe's biggest economy could contract by as much as 3% next year, but Germans are expected to spend €5.7bn (£5.2bn) on gifts this Christmas, more than last year. In the Anglo-Saxon economies – Britain and the US – the sales are long under way, with American stores offering discounts of 50%, 60% or even 70% since the "Black" Friday after Thanksgiving. In the UK, A preliminary pricing survey from Ernst & Young this week showed discounts in shops are running at 37.1% compared with 33.6% two years ago. So, who are the pessimists now? Germans, traditionally rated as among Europe's biggest, always seeing the glass half-empty rather than half-full, seem hardly affected by the recession, according to HDE, the German retail trade, which says that sentiment is better than the real situation. Relatively low unemployment, falling inflation and a boost to purchasing power via the strong euro and pay increases appear to be working even in a nation whose favourite word of 2008 was Finanzkrise . This is before the traditional Winterschlussverkauf (winter close-out sale) which doesn't officially begin until late January – although sales can, thanks to a reform four years ago – in effect take place throughout the year. Here in Belgium and neighbouring France the first of two official sales seasons of the year kicks off on 3 January and lasts for up to six weeks. Of course, by then, given the speed with which the recession is deepening, job cuts and lay-offs growing and business bankruptcies rising, the shops could be empty. But it's hard to avoid the impression that it's the consumers in the once-model economies of the UK and US who are mired in depression. Mainland Europe is hardly immune and plenty of people are cutting back but it feels a whole lot happier – so far. Bribery and corruption at Siemens They read like a German corporate version of Ocean's 14. Documents published online by the SEC and US Department of Justice on the settlement of their case against Siemens and its record $800m (£517m) bribery fine convey what the US authorities called a "corporate culture in which bribery was tolerated and even rewarded at the highest levels of the company". Bribery, they add, was "nothing less than standard operating procedure". Across the globe, between 2001 and 2007, the German engineering group paid "staggering" amounts of money – at least $1.4bn – to circumvent the rules and gain business, according to Christopher Cox, chairman of the SEC. There were at least 4,283 payments made to government officials to win lucrative contracts from Bangladesh to Venezuela. A further 1,185 separate payments of just shy of $400m were made to commercial employees for bribery and embezzlement. To win contracts under the UN oil-for-food program in Iraq, Siemens paid at least $1.7m in kickbacks to the government of Saddam Hussein, earning more than $38m in profits on 42 deals. It inflated UN contracts, adding at least 10% to their value and classifying kickbacks as "commission" fees for "room preparation" and the like. To win global profits of more than $1bn in total, employees obtained large amounts of cash from cash desks, the SEC said, and then sometimes transported the stacks of notes in suitcases across international borders for bribery. The authorisations were placed on Post-it notes so that they could be removed. Siemens, under its new CEO and board, is at least credited with taking extraordinary steps to "reveal its long-standing, systematic criminal conduct" – at a total cost in fines and fees of €2.5bn. The bulk of those fees were paid to US lawyers Debevoise & Plimpton who, in their investigation, conducted 1,750 interviews, evaluated 14m paper documents and examined 82m electronic files such as emails. Under an amnesty, 539 whistleblowing staff made allegations, of which 342 were substantiated, and 909 infringements of the code of ethical conduct brought disciplinary sanctions. The US authorities made plain that the executive board was not only ineffective in implementing compliance controls but that it condoned and even encouraged the culture of bribery. The Justice Department accused the former board, headed by Heinrich von Pierer, the once-lauded Mr Siemens, of failing to follow up huge indications of corruption and to act against suspected criminality. Von Pierer, one of 11 former executives from whom Siemens is seeking compensation, has again denied any knowledge when he was CEO or chairman. He has accused the US authorities of being one-sided, refusing him access to the process and elementary rights to be heard. The corporate case against Siemens in both America and Germany is now officially closed after two painful years. The individual cases, it seems, have only just begun. Europe Christmas Recession Global economy guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• BA and Virgin have cut their fuel surcha... BA and Virgin have cut their fuel surcharges
12/17/2008
Virgin Atlantic - per return flight Shorter flights Economy: £106 Premium economy: £126 Upper class: £156 Longer flights (London to Los Angeles, San Francisco, Las Vegas, Beijing, Tokyo, Shanghai, Sydney, Johannesburg, Cape Town, and Hong Kong) Economy: £132 Premium economy: £170 Upper class: £196 British Airways - per return flight Shorter flights (under nine hours) Economy: £106 Premium economy: £126 Business class: £156 Longer flights (more than nine hours) Economy: £132 Premium economy: £170 Business class: £196 British Airways Virgin Atlantic guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• 48-hour week: MEPs vote to scrap British... 48-hour week: MEPs vote to scrap British opt-out
12/17/2008
The European parliament voted today to scrap Britain's opt-out from the maximum 48-hour working week. A 421-273 vote of MEPs was hailed as a "triumph" as MEPs cheered the result – but months of negotiations with EU governments and the European commission now follow. Most British Labour MEPs backed the call to end the opt-out – clashing with the prime minister, Gordon Brown, who wants it to stay. At least 14 other EU countries now take advantage of an opt-out, once championed only by Britain as vital to business flexibility. With an economic downturn in full swing, more countries want the option of exceeding the 48-hour week – and earlier this week the commission admitted it had reversed its own opposition to keeping the opt-out because of pressure from so many member states. But today MEPs bucked the trend, voting by a bigger margin than expected in favour of a resolution that the opt-out should be gone by 2011. It would force employers across Europe to stick to a maximum 48-hour week, averaged over a year. The arrangement to average the maximum out provides sufficient short-term scope for bosses and workers to work longer hours if necessary, supporters of the ban argued. But opponents said it should not be up to the EU to determine the working patterns of very different employment cultures in the member states. Tory MEP Philip Bushill-Matthews said after the vote: "Socialist MEPs have won the battle today, but they must not be allowed to win the war. "The British government must dig in and defend the opt-out. Fifteen EU nations now take advantage of the flexibility provided by the opt-out and none of them should back down." He went on: "It should never be the place of the European parliament to tell people they cannot work – particularly during a downturn. Scrapping our working time opt-out is even more nonsensical in today's economic climate than ever before. "This is a double failure of Gordon Brown. Not only has he failed to control his MEPs, but he also naively signed up to a package deal that saw Britain give ground on the agency workers directive in exchange for our working time opt-out. "His folly was to assume the left in the European parliament would not sabotage the deal. British businesses have been given two damaging pieces of employment legislation for the price of one." Work & careers European Union guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• Unemployment: what the economists say Unemployment: what the economists say
12/17/2008
Jonathan Loynes, chief European economist at Capital Economics "With employment dropping by 134,000 in the third quarter, it is clear that, as in the US, conditions in the labour market are now deteriorating very quickly, threatening to feed back into yet further weakness in the housing market and economic activity in general." Howard Archer at IHS Global Insight "This is just a horrific set of data on the jobs front...There can be absolutely no doubt that unemployment is headed sharply higher in 2009 given that the economy looks set to contract by at least 2.0% next year. Reports of companies laying off workers are becoming more and more prevalent, while an increasing number of companies are folding. Unsurprisingly, latest labour hiring surveys are substantially softer, while the December survey of the Bank of England regional agents reported that 'demand for labour had contracted further' and that 'the majority of contacts were looking to reduce head count over the next few months'. "We suspect that claimant count unemployment will reach 2 million in the first half of 2010. Furthermore, unemployment on the ILO measure is poised to rise above 2 million imminently and it could very well reach 3 million in 2010." George Buckley, economist at Deutsche Bank in London "I think what's interesting is the scale of job losses this early in the cycle. [Unemployment] is normally a lagging indicator, so to see so many job losses this early in the cycle is extremely worrying." Amit Kara, UK economist at UBS "The [figures] look absolutely horrible. We are lookiing for a forecast of 3 million in 2010 or higher – rising every month next year and into 2010. We are in for a period of prolonged pain." Unemployment and employment data guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• MPC minutes: what the economists say MPC minutes: what the economists say
12/17/2008
Brian Hilliard, economist at Soci e te G e n e rale He said that the only debate from this month's meeting was how large the cut should be - which brought into question what size the cut will be next time. He said this could be in the range of 50 to 100 basis points. Jonathan Loynes, economist at Capital Economics Loynes said interest rates could head close to zero: "December's MPC minutes and the latest labour market data support the view that the monetary policy committee could soon be following the US Fed in cutting interest rates very close to zero." Nick Kounis, economist at Fortis Bank Kounis agreed that interest rates would go lower: "The minutes confirm that additional policy easing is very likely going forward." Philip Shaw at Investec He said the minutes highlighted that the MPC still feels the stance of policy is "out of kilter" with the economic outlook. "It mulled the idea of easing by more than 100 bps but didn't want to cause a surprise to the exchange rate or risk undermining confidence in the economy. We certainly think that another 50 basis points cut is due at the next meeting and our central case for interest rates remains they will dip below 1 pct in the second quarter of 2009. There is a risk that the MPC cuts by more but the committee may not want to use too much firepower immediately. Howard Archer, chief UK and European economist at IHS Global Insight Archer said the fact that the MPC considered a deeper interest rate cut in December, coupled with the ongoing evidence that the downturn is deepening and that inflationary pressures are retreating sharply, "reinforces our belief that the Bank of England will reduce interest rates by at least a further 75 basis points from 2.00% to 1.25% in January." He added: "We believe that the Bank of England may moderate the pace at which it is cutting interest rates as they near zero and the previous large cuts take time to feed through. "Even so, another 100 basis point reduction is certainly possible in January if the data show further serious deterioration. Further out, we expect interest rates to fall to a low of 0.50% in the second quarter of 2009 and then stay there for the rest of the year. "However, it is far from inconceivable that interest rates could come all the way down to zero." Interest rates Interest rates Economics guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• Dairy Crest unveils moves to improve deb... Dairy Crest unveils moves to improve debt position
12/17/2008
Dairy Crest , the maker of Cathedral City cheese and Yoplait yoghurts, has announced a couple of moves to improve its debt situation. First, its pension trustees have taken out a £150m annuity policy from Legal & General to insure part of its pension liabilities. The company has also made arrangements to reduce the effect of future currency movements on its net debt, by converting €200m back to sterling. Its shares - which slumped last month after it warned profits would miss City forecasts - edged up 2p to 195p on today's news. But analysts were lukewarm on the moves. On the pensions deal, Investec said: "Whilst there is no guarantee that the group will not be required to put more cash into the pension fund in future (its current extra payments cease after March 2009), this should help reduce the amount." As for the foreign exchange switch, the broker commented: "While not an ideal time to do it given rates, the group wanted to ensure that it was not overly exposed should sterling deteriorate further. The fall in sterling against the euro has already added to the group's debt which is now forecast to be £500m at year end versus our previous estimate of £475m. "Today's moves do not change our forecasts. The PE ratio might look low, but the group is still trading [at] a premium to the average for the food sector. We adjust our target price to 200p (from 220p) as we do not see this premium being extended from here given the market's current view of highly geared businesses. We retain a hold recommendation." Citigroup also has a hold rating, although today it has cut its price target from 330p to 190p. It said: "Prior to [today's foreign exchange] actions, we estimate recent movements in the pound/euro exchange rate increased overall debt by around £30m. "Covenants would only be breached if our estimated earnings for the second half of 2009 were to fall by another £11m (13%) and/or if sterling was to weaken (significantly) further against the euro. "Risks have somewhat heightened and further negative developments in the consumer environment and/or foreign exchange markets could pose an issue. That said, we view Dairy Crest's debt realignment as sensible and, on balance, believe consensus 2009 operational estimates will remain intact." Overall the market has been seeking direction so far, with the FTSE 100 moving within a 110 point range. At the moment the leading index is up just 4.26 points to 4313.34. Traders are uncertain whether the Federal Reserve's move to slash US interest rates to 0.25% was a good one, or could leave it with too few options if the cut fails to stimulate the US economy. Closer to home, the unemployment figures showed the claimant count jumped by 75,700 in November, while retail sales numbers were also - predictably - awful. The minutes of the Bank of England's rate setting meeting earlier this month revealed it had considered cutting rates by more than the eventual 100 basis point reduction. James Knightley at ING Bank said: "With unemployment now at 1.86m our forecast that unemployment will hit 3m in 2010 is looking on track. This will keep wage pressures benign and put further pressure on the Bank of England to follow the Federal Reserve's lead in adopting all possible measures to turn the UK economy around. Indeed, the minutes to the December rate decision which resulted in a 100 basis point cut showed that the MPC discussed cutting by more. However, they voted against a more aggressive move since it wasn't anticipated by the markets and could have negatively affected sterling and undermined confidence in the UK economy. This suggests that the Bank will continue cutting rates aggressively and we look for rates to hit 0.5% in March before more innovative stimulus options are potentially considered." Dairy Crest guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• Ministerial aide Jim McGovern quits gove... Ministerial aide Jim McGovern quits government over Royal Mail privatisation plans
12/17/2008
A ministerial aide quit the government today over Gordon Brown's plans to part-privatise the Royal Mail. The resignation of Jim McGovern was Brown's first over the proposals, announced by Lord Mandelson yesterday. McGovern stood down as parliamentary private secretary to Pat McFadden, the postal affairs minister, because he could not support proposals he said "beggared belief". Brown faces a large backbench revolt over the plans, which threaten tens of thousands of jobs and would end centuries of exclusive crown ownership. In a statement, McGovern, the MP for Dundee West and a former union activist, said that he could not support "what looks to me like partial privatisation of the Royal Mail" and that he was particularly unhappy about the revelation that Mandelson had welcomed an expression of interest from the Dutch firm TNT. "For me, it simply beggars belief that we would employ the services of a company from abroad to tell the Royal Mail where they are going wrong," McGovern said. McGovern's announcement followed protests from Labour MPs in the Commons yesterday as the plans were unveiled. The scale of the possible rebellion left Labour ministers facing the prospect of having to delay any legislation to sell off a 30% Royal Mail stake until after the election. Mandelson also faced a grilling at a private meeting of backbench MPs last night. The revolt was led by Peter Hain, the former cabinet minister, and seemed to include many MPs who had campaigned successfully to prevent a new wave of post office closures. The backbenchers' minimum demand is that there will be no major privatisation without fresh legislation. Mandelson insists that the majority of Labour MPs will support the measures, and, as he has the support of the Conservatives and the Liberal Democrats, privatisation will receive Commons backing. Yesterday's long-awaited report by Richard Hooper, the former deputy chairman of Ofcom, concluded that without radical action the future of the one-price-goes-anywhere universal service would be under "grave threat". It said Royal Mail was facing increasing competition from rival postal operators and from electronic alternatives such as email, texting and other digital technologies. Last year such alternatives cost the company £500m in profits, five times the impact of rival postal operators. The report also warned that Royal Mail's letters business was less efficient than many of its European peers, which used a greater degree of automation. It also faces severe financial difficulties, including a pension fund deficit that was expected to increase to around £8bn, even though Royal Mail has topped up its annual £500m contribution with a further £280m. Hooper said: "The company needs radical reform. It has a plan to achieve this. But in a declining market, we now face a stark choice: to modernise more quickly, or decline. The world of communications and the needs of consumers are changing fast. So too must postal services." The report said that, unless Royal Mail increased the pace of modernisation, a forced restructuring under European rules would be likely. "That would be a costly and poor outcome for the taxpayer, for consumers, and for Royal Mail and its employees." But it added that simply putting taxpayer money into Royal Mail to subsidise its operations was not a sustainable solution and would not bring about the changes needed to adapt to the structural changes in the market. Though the Hooper review argues in favour of Royal Mail forging a strategic alliance with another experienced operator it made it clear such an alliance should not involve the post office network, which, it said, should remain fully in public ownership. Announcing his backing for the Hooper analysis and recommendations, Mandelson said: "Hooper is absolutely clear that the main challenge to the Royal Mail is from the impact of changes in technology and consumer choices." He added: "Hooper's conclusions are crystal clear. The status quo is untenable. The universal service is under threat. The choice we face is either downgrading the universal service as we manage decline or acting now to turn things round and secure the Royal Mail's future." The Royal Mail's chief executive, Adam Crozier, said the company welcomed the Hooper proposals, "which we firmly believe will help secure the future of the one-price-goes-anywhere universal service which is a crucial part of the social and economic fabric of the country and underpins the entire postal industry in the UK". But the proposal to allow foreign investment drew a hostile response from the Communication Workers' Union. Billy Hayes, the union's general secretary, said: "It is incredible that the British government, which has led the world in overhauling banks, needs another European postal service to rescue the Royal Mail." In the Commons, McFadden said Royal Mail needed an outsider to bring in transformation, expertise and access to more flexible capital. He added that any strategic partner would have to accept the continuance of the universal service. The Dutch company TNT has already expressed an interest, but others will join the bidding, leading to a potential bidding war for a stake. Hain, in his first serious act of defiance of the Brown government since he was forced to resign as work and pensions secretary in January, asked: "Doesn't that open the door to full-scale privatisation against the wishes of our party and our government? Will you also confirm that taking the pension fund on to the government's balance sheet effectively lifts a burden of perhaps around £700m off the RM's balance sheet and therefore either fattens the calf for a future privatisation or leaves the RM without their liability in a much more effective position to compete as a fully owned public sector organisation?" Edward Leigh, a former Tory minister who had himself tried to privatise the Royal Mail in the 1980s, welcomed McFadden to the "Thatcherite wing of New Labour". Gordon Brown Postal service Labour guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• John Stevens: Larry Elliott is wrong on ... John Stevens: Larry Elliott is wrong on the euro
12/17/2008
John Stevens: The Guardian economics editor's belief that euro membership would 'make things worse' for the UK economy is nonsense (1 h ago)

• Bank of England considered a bigger cut ... Bank of England considered a bigger cut in interest rates
12/17/2008
Angela Balakrishnan The Bank of England unanimously agreed to slash interest rates to 2%, their lowest level in 57 years at its meeting earlier this month and considered an even bigger cut to help rescue the British economy from the depths of a long recession. Minutes from the meeting, released today, revealed that the nine members of the Bank of England's monetary policy committee did not even consider lowering rates by any less than 100 basis points, such was their concern over the state of the economy. The rate reduction earlier this month followed a run of awful data from all areas of the economy and was an attempt to bring some relief to businesses and households in the lead up to what is expected to be a grim Christmas . The statement today showed that a bigger reduction in borrowing costs was discussed, which would have taken rates below 2% for the first time since the Bank was set up more than 300 years ago. But policymakers felt that this might have shocked the markets. "There was a risk that going further could cause an excessive fall in the exchange rate. There was also a risk that an unexpectedly large cut could undermine confidence in the economy more widely," the minutes said. Lower interest rates in the UK have already sent sterling spiralling lower and today it hit a fresh record low against the euro, taking the currency closer to parity. The MPC appeared to welcome the sharp fall in sterling in recent weeks, saying it should support the economy by boosting export growth while the fall in the oil price would lift consumer spending power. The minutes suggest that the Bank rate will continue to head downwards and could soon be near zero, especially after the US Federal Reserve cut rates from 1% to 0.25% - lower than in the Great Depression. "It is consistent with a fall by another 100 basis points in January. It will probably trough at 0.5% or lower," said Amit Kara at UBS. Britain has seen interest rates fall steeply since the MPC began its cuts in earnest in October ,with co-ordinated action from central banks around the world to save the banking system from collapse. This month's reduction from 3% to 2% means rates are at their lowest level since 1951, and their joint lowest level ever. They had been at 2% for 19 years bar a blip upwards for a couple of months as war broke out in 1939. In today's minutes the MPC also noted the importance of getting banks lending again but added that interest rates alone would not be enough to tackle limited credit availability. "Further measures to underpin lending growth would be needed, building on the government's package announced in October to recapitalise and guarantee funding to the banks," they said. The rate reduction represented a victory for MPC member David Blanchflower who spent all this year urging his colleagues to cut rates sharply because of the danger of recession. His colleagues preferred to leave rates high, however, as they were focused on inflation. Interest rates Interest rates Bank of England guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• MEPs attack McCreevy over private equity MEPs attack McCreevy over private equity
12/17/2008
Charlie McCreevy, the European Union internal market commissioner, today comes under severe criticism from leading socialist MEPs for failing to regulate hedge funds and private equity firms. In a withering letter to José Manuel Barroso, the president of the European Commission, the MEPs say his actions "appear to be more appropriate for a paid lobbyist of the finance industry than a European commissioner". "We have lost trust and confidence in commissioner McCreevy," write Poul Nyrup Rasmussen, the president of the Party of European Socialists (PES), Martin Schulz, the socialist group leader, and Pervenche Berès, chair of the European Parliament's committee on economic and monetary affairs. Rasmussen is the architect of the European parliament's policy of demanding stricter regulation of all financial market players, including hedge funds and private equity firms, in the wake of the 17-month turmoil. The letter, seen by the Guardian, points out that McCreevy, a self-confessed market liberal, is ignoring not only the will of parliament but of Barroso and French president Nicolas Sarkozy, who chairs the EU until the end of this year. It also says his views are contrary to the conclusions of the G20 economic summit in Washington in mid-November. "This is too much," they write. McCreevy, who insists he recognises the value of "good appropriate regulation", has launched a new consultation paper on regulating hedge funds but is a strong believer in self-regulation for the industry and for private equity – provided they adopt greater transparency about their activities, investments and investors. The final straw for the socialist MEPs came last week when he told the British Venture Capital Association in London that private equity could avoid "trigger-happy regulators" if it implemented the Walker code on transparency, drafted by former banker and City regulator Sir David Walker last year, more fully. The letter accuses him of using "inflammatory language". McCreevy, a former Irish finance minister who is due to quit the commission towards the end of next year, believes hedge funds and private equity are not the cause of the financial crisis but, rather, key elements for restoring capital to markets frozen by the absence of bank lending. But the three socialist leaders urge Barroso to bypass him and come forward with proposals for regulation. "We don't need new consultations, we need concrete proposals and actions as the Parliament has requested," they write. The Irish commissioner, who is consulting on measures to control the credit derivatives market, has set out legislative proposals to regulate credit rating agencies and beef up cross-border supervision for Europe's 46 biggest banks as well as insurers. Private equity Europe guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• Unemployment heads over 1 million Unemployment heads over 1 million
12/17/2008
The total number of people claiming jobless benefits has risen over 1 million for the first time in seven years (1 h ago)

• Unemployment: These numbers are bad and ... Unemployment: These numbers are bad and getting worse
12/17/2008
Every month we think the unemployment numbers can't shock us again. But every month they do. Today's jump in both measures of unemployment are both horrible and bring to mind the warning from the Bank of England's labour market expert David Blanchflower that unemployment will head to 3 million next year. The broadest measure of unemployment, the Labour Force Survey, saw its biggest jump since the second quarter of 1999 as it surged to 1.86 million in the three months to October from 1.72 million in the previous three months. The TUC and Blanchflower have warned that this measure will rise to 2 million by December. And the narrower claimant count measure leapt spectacularly through the 1 million barrier to 1.07 million in November, a rise of 75,700 from October - the biggest jump since March 1991 when the economy was also heading into a deep recession. That pushed the jobless rate up to 3.3% on that measure, the worst since January 2001. Adding to the gloom was a big drop of 115,000 in the number of people employed in the economy which took the total down to 29.37 million. Oh, and the number of vacancies fell to its lowest since records began in 2001. Any which way you cut these numbers, they are bad. And they are going to get worse. Unemployment is traditionally a lagging indicator in the sense that it lags developments in the economy by anything up to a year. That means the figures were are seeing are a result of zero economic growth in the second quarter of the year and a drop of 0.5% in the third quarter. Never mind that the City expects the economy to contract by more than 1% in the current quarter just ending and by more than 2% next year. That means unemployment is going to get a lot worse next year and today's rises are merely a foretaste of things to come. Bear in mind that we are off the map here. We really don't know what is happening to this economy because the recession is not being caused by higher interest rates or an oil price shock but by the freezing up of credit. No one alive can remember that happening before. Luckily the Bank of England has now slashed interest rates to a 57-year low of 2%. But it is clear that it needs to, and will, cut them again, to zero if necessary. Remember that the US Federal Reserve cut its rates last night to 0.25% and said it will undertake "quantitative easing" as well which involves buying up bonds from the economy in exchange for cash. The Bank is almost certain to cut rates to 1% in early January and zero is possible in February. The experts at the Bank are putting their heads together with people at the Treasury to figure out how to do quantitative easing of our own. Let's hope they come up with something quickly. Unemployment and employment data Economics guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• Savills shares plunge as it issues secon... Savills shares plunge as it issues second profits warning in two months
12/17/2008
International property advisor Savills shocked investors with its second profit warning in two months today, reflecting the impact of tumbling house prices and the credit crunch on Britain's once red-hot property market. The company, which often relies on City bonuses to boost sales , warned today that profit for this year would be well below analysts' expectations. Its shares plunged almost 13% or 31.5p in early trading, to 218.25p, as the group also said it would "consider its dividend policy" in light of late 2008 and early 2009 trading. Just six weeks ago, the company reported that it was trading well in difficult markets. Today, however, Savills said it has seen a sharp decline in business in September and October, especially in Europe and the US, as the financial crisis has deterred many potential housebuyers. "In recent weeks investor confidence has been severely impacted by the recent turmoil in financial markets, which has led to a sharp reduction in transaction volumes," it said. December is traditionally an important trading month for estate agents but the expected seasonal pick-up in activity had not been seen, the company said. The trading update also revealed that the firm's property advisory arm has also been hit badly. The financial services arm, which predominately involves mortgage broking in the UK, fared poorly as the availability of credit on the market deteriorated further. "A return to higher levels of transactional activity will depend on how quickly confidence returns to financial markets," Savills said. The company is due to release its full year results next March. Savills Housing market House prices Credit crunch guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds (1 h ago)

• Unemployment heads over 1 million Unemployment heads over 1 million
12/17/2008
The total number of people claiming jobless benefits has risen over one million for the first time in seven years (1 h ago)

• MADOFF FAMILY TIES MADOFF FAMILY TIES
12/17/2008
An embarrassed Christopher Cox said his Securities and Exchange Commission is probing whether the agency's staff allowed confessed swindler Bernard Madoff to walk away from numerous fraud complaints filed against him over the years. Sources told... (1 h ago)

• DYKSTRA DROPS THE BALL DYKSTRA DROPS THE BALL
12/17/2008
FORMER New York Mets out fielder Lenny Dykstra appears to be striking out with his magazine, Players Club. Dykstra, who helped the 1986 Mets capture the World Series before landing with the Philadelphia Phillies, is leaving behind a string of... (1 h ago)

• ROCK SUITS CLOTHIER ROCK SUITS CLOTHIER
12/17/2008
AFTER 190 years, Brooks Brothers has finally chosen a spot for a store in Rockefeller Center. Brooks Brothers will take over the French Connection UK's duplex at 1270 Avenue of the Americas. The space has 2,936 feet on the ground and 1,031... (1 h ago)

• BEST BYE TO CHAIN'S WORKERS BEST BYE TO CHAIN'S WORKERS
12/17/2008
Best Buy said it will offer severance packages to nearly all its 4,000 corporate employees in a dramatic bid to slash costs as the recession continues to sap demand for electronic gadgets. The electronics giant said it also will scale back new... (1 h ago)

• ANALYSTS: FIRM SENT CLIENTS 'DATED' INFO ANALYSTS: FIRM SENT CLIENTS 'DATED' INFO
12/17/2008
The performance statements that fallen Wall Street big Bernard Madoff's firm sent to clients appear riddled with inaccuracies and other suspicious signs that should have raised red flags, according to experts who've reviewed the documents obtained... (1 h ago)

• SURPRISE NO-SHOW AT 'JOBS' FAIR SURPRISE NO-SHOW AT 'JOBS' FAIR
12/17/2008
Apple is dismissing concerns that Steve Jobs' health is behind the company's decision to pull out of Macworld - and end the gadget giant CEO's 11 consecutive keynote addresses at the event. Shares fell as much as 6 percent in after-market trading... (1 h ago)

• MIDWAY CUTS 25% OF STAFF MIDWAY CUTS 25% OF STAFF
12/17/2008
Midway Games Inc., the video-game maker sold this month by Sumner Redstone, will eliminate 25 percent of its work force and suspend development of some titles to scale back expenses as the company works to repay creditors. Midway, based in... (1 h ago)

• EPIC PREZ DECIDES TO TAKE A 'WALK' EPIC PREZ DECIDES TO TAKE A 'WALK'
12/17/2008
Epic Records President Charlie Walk will leave the label at the end of the year, The Post has learned. Several sources inside SonyBMG, Epic's parent company, said Walk's contract, which expires on Dec. 31, won't be renewed. Walk's ascendance to... (1 h ago)

• GOLDMAN POSTS FIRST LOSS: $2.12B GOLDMAN POSTS FIRST LOSS: $2.12B
12/17/2008
Wall Street's one-time king, Goldman Sachs, posted its first public loss ever - $2.12 billion in just three months - but pity was scarce. Goldman has already garnered $10 billion in federal aid and its tax rate is getting chopped to just 1... (1 h ago)

• DOLLAR TO DONUTS DOLLAR TO DONUTS
12/17/2008
Ben Bernanke's wild bet to flood the economy with even more cash than ever recorded could possibly drown the economy by springtime, some worried investors fear. The Federal Reserve chief's stunning strategy yesterday - virtually eliminating costs... (1 h ago)

• BUSINESS BRIEFS BUSINESS BRIEFS
12/17/2008
Deflation * Retail prices in the greater New York area fell the most since the Bureau of Labor Statis tics started publishing the monthly index in 1940. The 1.6 percent November decline was the third consecutive monthly decrease, due to a... (1 h ago)

• Fed Slashes Interest Rates To All-Time L... Fed Slashes Interest Rates To All-Time Low
12/17/2008
The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. (1 h ago)

• Madoff Kept Double Books To Hide Losses Madoff Kept Double Books To Hide Losses
12/17/2008
Investors poring over fraudulent money manager Bernard Madoff's books have discovered that he falsified documents to hide massive losses from investors. A judge has ordered Madoff's business to be liquidated. (1 h ago)

• Paulson: Big Financial Firms Are Stable Paulson: Big Financial Firms Are Stable
12/17/2008
Treasury Secretary Henry Paulson said that he does not expect any more major financial firms to fail during the current credit crisis. He added that he has no plans to ask Congress for the second half of the $700 billion bailout fund. (1 h ago)

• Tax Cheats Come Out Ahead During Meltdow... Tax Cheats Come Out Ahead During Meltdown
12/16/2008
Desperate to bring in revenue in the middle of a recession, states across the country are adopting tax amnesty programs, offering to let people pay their past-due tax bills with little or no penalties or interest. (7 h ago)

• Reports Paint Grim U.S. Economic Picture Reports Paint Grim U.S. Economic Picture
12/16/2008
The government says the construction of new homes plummeted in November by the largest amount in a quarter-century as builders slashed production in the face of a recessionary economy. (7 h ago)

• Madoff Once Bragged Of Profits To SEC Madoff Once Bragged Of Profits To SEC
12/16/2008
The money manager accused of duping investors in one of Wall Street's biggest Ponzi schemes once boasted to the Securities and Exchange Commission about how much money he earned. Now, all eyes are on the regulators, who may have dropped the ball. (11 h ago)

• Wall Street Investment Scam Victims Emer... Wall Street Investment Scam Victims Emerge
12/16/2008
From a Jewish youth charity in Boston to major banks as far afield as Zurich, the list of investors who say they were duped in one of Wall Street's biggest Ponzi schemes is growing. (21 h ago)

• Executive Pay Limits May Prove Toothless Executive Pay Limits May Prove Toothless
12/15/2008
At the last minute, the Bush administration insisted on a one-sentence change concerning executive pay in the law authorizing Treasury to give $700 billion on troubled banks. That small change now looks like a giant loophole. (1 d ago)

• Automakers Await Green Light On Loans Automakers Await Green Light On Loans
12/15/2008
Detroit automakers got public reassurance from President George W. Bush that short-term government help for the industry is in the works and could come soon. (1 d ago)

• Google Flip-Flopping On Net Neutrality? Google Flip-Flopping On Net Neutrality?
12/15/2008
According to the Wall Street Journal, Google's proposed arrangements with several major Internet service providers violates the company's long-held stance in favor of Net neutrality. The search giant disagrees. (1 d ago)

• SEC and Madoff: shutting the stable gate... SEC and Madoff: shutting the stable gate after the horse has bolted
12/17/2008
The Securities and Exchange has switched into damage control mode with SEC chairman Christopher Cox announcing an in-house investigation into why it did not detect the $50 billion fraud case sooner. "Cox has admitted has the SEC screwed up badly. "The Commission has learned that credible and specific allegations regarding Mr. Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of SEC staff, but were never recommended to the Commission for action. I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them. Moreover, a consequence of the failure to seek a formal order of investigation from the Commission is that subpoena power was not used to obtain information, but rather the staff relied upon information voluntarily produced by Mr. Madoff and his firm. In response, after consultation with the Commission, I have directed a full and immediate review of the past allegations regarding Mr. Madoff and his firm and the reasons they were not found credible, to be led by the SEC's Inspector General. The review will also cover the internal policies at the SEC governing when allegations such as those in this case should be raised to the Commission level, whether those policies were followed, and whether improvements to those policies are necessary. The investigation should also include all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm. The Commission believes strongly that it is vital that SEC investigators, examiners, and enforcement staff be above reproach while conducting their duties, in order to ensure the integrity and effectiveness of the SEC." You can't say that the growing list of Madoff's victims would regard the SEC as having much integrity or effectiveness. The SEC was getting warnings about Madoff as far back as 1999, so it's remarkable that the regulator avoided doing anything about it. As TPM Muckraker points out, there was a bunch of cozy family ties that allowed Madoff to get away with his scam, family ties that included his niece, Shana Madoff Swanson, who's married to the former SEC official, Eric Swanson. But then, the victims which include charities, Spain's largest bank, Santander, Japanese financial giant Nomura which says it could lose up to $303m and members of the Palm Beach country club, where many of Mr Madoff's wealthy clients were recruited, have no-one to blame but themselves. As the BBC's Kevin Connolly says, Madoff relied on "irrational euphoria" and creating the illusion around the oldest trick in the book: that there is an inside track to investment. If it was that easy, everyone would be rich. "What made Mr Madoff unusual was the manner in which he recruited his investors. For that he relied on a powerful but elementary piece of human psychology: the more someone tells you that you cannot have something, the more you want it. Membership of the Madoff fund was very strictly by invitation only - merely being rich was not enough in itself." See full article . Related Entries: Madoff and SEC neglect - 13 December 2008 The Madoff debacle: how did people get sucked in? - 14 December 2008 How Madoff played the SEC for suckers - 15 December 2008 Fair Food Organization Is Latest Victim Of Bernard Madoff’s Ponzi Scheme - 17 December 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (1 h ago)

• Bernanke the banker Bernanke the banker
12/17/2008
There are two remarkable things about the Fed's decision today to cut interest rates to virtually zero. The first point is that it is bringing the US to Japan's zero interest rate policies. The second is that the Fed has now become the most important commercial bank in the US. In effect, it is taking over the US banking system. Read the Fed's statement and you see that it amounts to nationalization. "The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant." All this needs to be seen in the context of some of the worst fundamentals for any economy. Consider this: jobless claims have reached their highest level since the 1980s and some commentators believe US employment might reach as high as 10% in 2010, the destruction of wealth continues with US prices forecast to fall further until end-2010 or mid-2011, the US federal deficit could top $1 trillion if the US government used the same accounting methods as private companies and worries about inflation have been replaced by concerns about deflation. The problem is that when things start recovering, the Fed will have created too much money. "Right now, the crisis is created by the huge demand by banks for hoarding cash. The Fed is providing cash, and the banks want to hoard it. When things start returning to normal, the banks will want to start lending it out. If that much money is left in the monetary base, it would be extremely inflationary," Princeton economics professor Alan Blinder told the New York Times . See full article . Related Entries: The Upside of Rising Interest Rates - 19 June 2006 Bernanke backs Sarbanes-Oxley - 16 February 2007 Helikopter-Ben Bernanke dreht mächtig an den Börsenrädchen - 20 August 2007 Condo stress - 20 March 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (1 h ago)

• The Queen's credit crunch The Queen's credit crunch
12/17/2008
No-one is immune from the credit crunch. Not even Queen Elizabeth. Richard Kay at the Daily Mail reports that she has cut back on the traditional Christmas presents for staff at Buck House. This year, they'll just get a pair of coasters. As Royal Watch News reports , the Queen has now taken to growing fruit on her estate at Balmoral in order to save money. It quotes a source saying: ""The queen wants to make savings like everyone else. She spends hundreds of pounds buying exotic fruits for the kitchen and a lot more on cut flowers. She's decided enough is enough and wants to be self-sufficient. A small fruit crop is expected this year from the new indoor fruits, apricots and grapes, and the rest will be picked next year." Times are tough. Her dressmaker Hardy Amies and favorite porcelain maker Royal Worcester and Spode have both filed for administration, reports AFP . See full article . Related Entries: Subprime explained - crunch time glossary - 14 February 2008 The credit crunch - worst still ahead - 12 July 2008 Credit crisis: views from the inside - 18 September 2008 Indian Outsourcing During the Credit Crunch - 28 September 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (1 h ago)

• Will there be more Madoffs? Will there be more Madoffs?
12/16/2008
Is Bernard Madoff a sign of things to come? Will there be more like him? Is Madoff's $50 billion fraud a sign of things to come? These are valid questions because Madoff was the product of a dysfunctional system, one that had the regulator doing nothing to protect investors because it was all too hard, and one that allowed him to get away with complicit auditors. And the other point too is that Madoff would never have been able to get away with it for so long if investors weren't clamoring to join his club. Greed and the desire for an easy buck are powerful drivers. As Tim Reid in The Times notes, the wealthy were fighting to get on his books. "In the wealthy enclaves of Long Island and Palm Beach, people spent years trying to get on to Bernie Madoff's client list. Some even joined the blue-blooded golf clubs where he was a member - and where he recruited many of his investors - just for the chance of meeting him. Inside this world of predominately older, less flashy investors, there is not just shock and panic over the huge losses inflicted by Mr Madoff's colossal swindle. There is a profound sense of betrayal. To many he was not just a philanthropic pillar of the community: many considered him a friend. Mr Madoff's modus operandi was based on his membership of exclusive clubs in New York and Florida, and on his image as an unimpeachable old-school banker ...If you gave your money to Bernie, he would see you right. Nothing flashy, sure, but he was safe and would always get you a steady return. Yet he often turned investors down." Dick Cheney, bless him, has told the media that the Madoff scandal was simply an example of "bad apples". What crap!!! Madoff's crime highlighted the two big problems with the financial services sector that got us into this mess: the growth of under-regulated investment vehicles, and bullish investors who trusted those institutions and bought without thinking, or even knowing what those investments were worth. Commentator Douglas A McIntyre warns that Madoff will be followed by many more like him. " None may be responsible for his colossal $50 billion disaster, but the circumstances of the times and the character of people like Madoff are in the DNA of the money system. They are the by-product of rapidly rising wealth, narcissism, vanity, and the naïve assumption that the very smart and very rich never make bad judgments ... The first reaction to the Madoff matter is that he was remarkably clever, so clever that what he did could not be replicated. To the extent of its size, that may be true. But, Madoff revealed how very deeply flawed the system has been and that means that he has many others just like him in the financial community." See full article . Related Entries: Some Constructive Criticism for Luc Bernard - 25 March 2008 Madoff and SEC neglect - 13 December 2008 The Madoff debacle: how did people get sucked in? - 14 December 2008 How Madoff played the SEC for suckers - 15 December 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (12 h ago)

• More law suits for big tobacco More law suits for big tobacco
12/16/2008
In a 5 to 4 decision, the US Supreme Court has opened the door to a flood of lawsuits against tobacco companies with a ruling that smokers can sue over the way they promote light and low tar brands. Basically, the court has allowed smokers to sue for fraud. It is, as the New York Times points out, a fraught issue because fraud claims are not suited to class action and in any case, the question before the court was not whether use of the term "light" amounted to fraud but whether plaintiffs should be allowed to sue at all given US law requires tobacco companies to place rotating warnings on their packaging and advertising. Basically, the argument goes that smokers were misled into buying cigarettes they believed were safer than regular ones. Still, this was inevitable. As The Times points out: Packs sold in Britain have to include health warnings covering 30 per cent of the front surface and 40 per cent of the back European law sets an upper limit of tar, nicotine and carbon monoxide in cigarettes. Words such as "light" or "mild" are banned as part of a brand name, unless authorised by member states A study by the American Journal of Public Health found that people who smoke light cigarettes are half as likely to quit as other smokers. A third of respondents said that they smoked lights because of health concerns". See full article . Related Entries: Monoclonal Antibodies Against Cancer From Genetically Engineered Tobacco - 17 July 2006 All Tobacco Forms, Bad for your Heart - 22 August 2006 Smokeless Tobacco Is Dangerous To Your Health Too - 03 September 2006 Compound In Broccoli May Inhibit Tobacco Smoke-Related Lung Cancer - 08 December 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (15 h ago)

• US drivers off the road US drivers off the road
12/15/2008
The Big Three might be sweating blood over whether the Bush administration bails them out or not, but there is a story that's fart broader than the managerial incompetence of US automakers. The bottom line is that Americans are buying fewer cars and driving less. According to American International Automobile Dealers , car sales fell 37% in November, further confirmation that the US is deep in recession. It's the worst sales data in 26 years. And in a statement from the US Department of Transportation , Americans drove more than 100 billion fewer miles between November 2007 and October 2008. And that's despite falling fuel prices. For automakers everywhere, that spells trouble. It means they will have to rethink their business model. See full article . Related Entries: High Loft Drivers - 15 January 2007 Could Teaching Driver's Ed Online Be Life-Threatening? - 26 March 2007 NY to allow Drivers' Licenses to Undocumented Aliens - 24 September 2007 Alpha V5 Driver is a Hit - 12 February 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (1 d ago)

• How Madoff played the SEC for suckers How Madoff played the SEC for suckers
12/15/2008
Over the weekend, I did a blog entry condemning the Securities and Exchange Commission for ignoring the warnings it was receiving about swindler Bernard Madoff. Now Bloomberg reports that the SEC never even bothered to inspect his investment advisory business. This was despite the fact that Madoff registered the unit in 2006. A new business that needed to be checked out first. The regulator failed badly and that is seriously scary. Henry Blodget at Clusterstock provides us with a document from advisory firm Aksia pointing out there were so many red flags with Madoff's business. Read it carefully, and weep. "The Madoff feeder funds marketed a purported 'Split-strike Conversion' strategy that is remarkably simple; however its returns could not be nearly replicated by our quant analyst. The feeder funds had recognized administrators and auditors but substantially all of the assets were custodied with Madoff Securities. This necessitated Aksia checking the auditor of Madoff Securities, Friehling & Horowitz (not a fictitious audit firm). After some investigating we concluded that Friehling & Horowitz had three employees, of which one was 78 years old and living in Florida, one was a secretary and one was an active 47 year old accountant (and the office in Rockland Country, NY was only 13ft x 18ft large). This operation appeared small given the scale and scope of Madoff's activities." Why didn't the SEC pick this up. But an equally important question is why so many hedge funds and supposedly brilliant investors didn't pick it up. See full article . Related Entries: Some Constructive Criticism for Luc Bernard - 25 March 2008 Luc Bernard, Eternity's Child Creator, Decides to Leave Video Game Industry - 11 August 2008 Madoff and SEC neglect - 13 December 2008 The Madoff debacle: how did people get sucked in? - 14 December 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (1 d ago)

• Close to 1 million bankruptcies in the U... Close to 1 million bankruptcies in the US, and climbing
12/15/2008
More signs of the US economy on the skids with the latest data showing that bankruptcy filings are climbing and are likely to reach one million by the end of December. According to the figures, more than 5000 businesses went bust each day in November. The November daily filing rate of 5,075 is up 36.9% over the same time period the year before and we are now only a few hundred bankruptcies short of one million. No relief is in sight, with Bain & Co warning that bankruptcies will continue into 2010. But what makes it worse now is the prospect of General Motors or Chrysler going bust. That would set off a cascade of failures further down the food chain with many suppliers going out of business. Which is why the US Government is now considering using money from the $700 billion bank bail-out. See full article . Related Entries: More bankruptcies on the way - 10 November 2006 Doctor Climbing Toward Goal - 26 November 2006 Climbing Hawaii's Mauna Kea - 25 December 2007 Climbing Kilimanjaro - 22 January 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (1 d ago)

• The Madoff debacle: how did people get s... The Madoff debacle: how did people get sucked in?
12/14/2008
The tales of woe and the list of Bernard Madoff's victims continue to grow. Associated Press reports that the list includes former Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services, the Robert I. Lappin Charitable Foundation in Massachusetts which supports Jewish programs, the North Shore-Long Island Jewish Health System and the Texas-based Julian J. Levitt Foundation and the town of Fairfield, Connecticut, which is said to have placed nearly 15% of its retiree pension fund with Madoff. Add to that those hedge funds and other investment group. For a handy list, you can check out the names provided by Reuters . But how did they get sucked in? It's easy to see why. First, Madoff was a former chairman of Nasdaq and he had portrayed himself as a champion of transparency. As Monica Gagnier in BusinessWeek notes, there is a profound irony here. Secondly, he generated steady returns with an average annual rate of 11%-13%, year in and year out, with little volatility. As Walter Hamilton at the Los Angeles Times notes, that in itself raised red flags. But then, hindsight is a wonderful thing. It's easy to write that when you see things through the "retrospect-oscope". And finally, there is the image Madoff himself presented to the public. The claims he makes on his website are cases in point. Madoff made sure he presented an image of impeccable integrity. As his website says: "In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner's name is on the door. Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark." And as the New York Times notes, he was regarded as a great philanthropist, pillar of the community and totally trustworthy. As one investor told the NYT: "The pain is just unbelievable. He was part of the family for so many people. There was this quiet culture of people, slightly older-money, who maybe weren't that interested in the market, who kept saying to each other, 'Just give Bernie your money, you'll be fine.' " See full article . Related Entries: People may 'Trust' traditional media more than emerging media - 03 October 2006 GE and integrity land mines - 17 April 2007 Some Constructive Criticism for Luc Bernard - 25 March 2008 Madoff and SEC neglect - 13 December 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (2 d ago)

• Sports Biz: NASCAR on the skids Sports Biz: NASCAR on the skids
12/17/2008
At least near-term, NASCAR future looks bleak. (1 h ago)

• Madoff boasted to regulators about profi... Madoff boasted to regulators about profits
12/16/2008
The money manager accused of duping investors in one of Wall Street’s biggest Ponzi schemes once boasted to regulators about how much money he earned. (7 h ago)

• Poll: Most Americans oppose auto bailout Poll: Most Americans oppose auto bailout
12/16/2008
Most Americans continue to oppose a government-backed rescue plan for Detroit's Big Three automakers as majorities blame the industry for its own problems, according to a new poll. (7 h ago)

• Goldman posts first loss since going pub... Goldman posts first loss since going public
12/16/2008
Goldman Sachs says it had its first quarterly loss since it went public in 1999, losing $2.29 billion during its fiscal fourth quarter. (8 h ago)

• Not just super rich caught up in Madoff ... Not just super rich caught up in Madoff case
12/15/2008
The list of investors who say they were duped in one of Wall Street’s biggest Ponzi schemes is growing, snaring banks, the super rich and the famous, pensioners and charities. (1 d ago)

• Falling prices hurt some small gas stati... Falling prices hurt some small gas stations
12/15/2008
With gas prices tumbling to levels last seen in 2004, small independent service station owners say they have struggled to keep pace with plunging gas prices. (1 d ago)

• Court allows lawsuits over ‘light’ cigar... Court allows lawsuits over ‘light’ cigarettes
12/15/2008
The Supreme Court ruled Monday that lawsuits may proceed against tobacco companies for allegedly deceptive marketing of “light” cigarettes. (1 d ago)

• Bush will see big payday, but not anytim... Bush will see big payday, but not anytime soon
12/14/2008
In January, President George W. Bush will join the growing ranks of the nation's unemployed. (2 d ago)

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• Cost of Living: Coaches for a Game of Mo... Cost of Living: Coaches for a Game of Money
12/16/2008
As the economy sputters, there is a growing impetus to give millions of Americans something they badly need: financial advice. (4 h ago)

• Your Money: Be Smart, but Don’t Think Th... Your Money: Be Smart, but Don’t Think That You’re Special
12/16/2008
Strategies to avoid being an investor caught with one’s life savings in the mess surrounding Bernard L. Madoff. (4 h ago)

• Mortgages: A Possible Drag on Bank Lendi... Mortgages: A Possible Drag on Bank Lending
12/16/2008
A proposal from the Federal Deposit Insurance Corporation could make it harder to get a mortgage from small community banks. (4 h ago)

• Measuring the Shock Waves in Bond Funds Measuring the Shock Waves in Bond Funds
12/16/2008
Many middle-of-the-road bond mutual funds that seemed to promise stable returns in a difficult market have recently taken gut-wrenching plunges. (4 h ago)

• It’s the New Economic Reality. Work With... It’s the New Economic Reality. Work With It.
12/16/2008
An adviser to the rich recommends four strategies that the wealthy (and even the less than wealthy) can use to better manage their financial and emotional lives. (4 h ago)

• Governor to Unveil a Low-Cost Student Lo... Governor to Unveil a Low-Cost Student Loan Program
12/16/2008
Gov. David A. Paterson plans to announce a low-cost student loan program to help 45,000 students in New York secure credit and cope with tuition increases at both public and private colleges. (8 h ago)

• Rise of Bankruptcy Rate in Region Outpac... Rise of Bankruptcy Rate in Region Outpaces Rest of Nation
12/16/2008
Filings for bankruptcy protection, by individuals and businesses, were pouring in at the rate of about 175 per day last quarter, and filings in the city and surrounding area increased by more than 36 percent. (9 h ago)

• As the Rich Get Poorer, Teenagers Feel t... As the Rich Get Poorer, Teenagers Feel the Crunch
12/16/2008
Youngsters from well-to-do families seem to have found a new work ethic as their parents’ finances are squeezed. (19 h ago)

• A green gift in carbon offsets A green gift in carbon offsets
12/16/2008
Giving away carbon offsets for the holidays isn't exactly glamorous, but it does help the environment. Joellen Easton reports on how the market for offsetting greenhouse gas emissions is doing this holiday season. (5 h ago)

• Madoff scam is part of "the bezzle&... Madoff scam is part of "the bezzle"
12/16/2008
With the dust settling from the Madoff scandal, Harvard professor Richard Parker tells Tess Vigeland that more scams may yet be uncovered during this downturn. It's part of what economist John Kenneth Galbraith called "the bezzle." (5 h ago)

• Country club circuit key to Madoff's ris... Country club circuit key to Madoff's rise
12/16/2008
Bernard Madoff built the foundation for his Ponzi scheme by word of mouth at charity balls and country clubs from New York to Florida. And he's not the only one. Amy Scott reports. (5 h ago)

• Sign of success: Slovakia to adopt euro Sign of success: Slovakia to adopt euro
12/16/2008
Slovakia has rebuilt itself since the end of communism, succeeding where many thought it would fail. In three weeks it will become a member of the eurozone. Stephen Beard reports. (5 h ago)

• Layoffs quiet construction business Layoffs quiet construction business
12/16/2008
In the face of a worsening economy, a small construction company in Oregon has laid off nearly all of its employees. Tess Vigeland speaks with Keith Knowles from Robert Knowles Construction about where his business goes from here. (5 h ago)

• Employees take hit as pay raises dip Employees take hit as pay raises dip
12/16/2008
A new survey says companies are scaling back on pay raises. Employee benefits may also take a hit in the near future as out-of-pocket expenses like co-pays are expected to rise. Mitchell Hartman reports. (6 h ago)

• Fed drops rate to record low Fed drops rate to record low
12/16/2008
In a bold move to revive the economy, the Federal Reserve dropped the federal funds rate to 0.25%. Tess Vigeland talks with Bob Moon about the impact of the rate cut. (6 h ago)

• Small stores face big holiday test Small stores face big holiday test
12/17/2008
With the economy in recession and consumers in cost-cutting mode, this year is expected to be especially tough for smaller shops. Here is a look at how three owners are coping. (1 h ago)

• Do Detroit’s automakers deserve a bailou... Do Detroit’s automakers deserve a bailout?
12/15/2008
A Big Three collapse could cripple many small businesses with ties to the automotive industry. Inc.com asked several major CEOs for their opinions about a possible bailout. (1 d ago)

• Your Biz blog: Recession-busting ideas Your Biz blog: Recession-busting ideas
12/15/2008
One entrepreneur's way to find the best parking has him leading the cottage industry pack. (1 d ago)

• Asia markets climb after U.S. rate cut Asia markets climb after U.S. rate cut
12/17/2008
Asian stocks markets climbed Wednesday after the U.S. Federal Reserve slashed its key interest rate to historic lows in an effort to pull the world's largest economy out of recession. (1 h ago)

• A gloomy Christmas from Paris to Hong Ko... A gloomy Christmas from Paris to Hong Kong
12/16/2008
Families around the world are cutting back on Christmas expenses as they try to keep the fires of festive cheer burning in tough economic times. (7 h ago)

• Mattel settles with 39 states over taint... Mattel settles with 39 states over tainted toys
12/15/2008
Toy maker Mattel Inc. will pay $12 million to 39 states to settle an investigation over Chinese-made lead-tainted toys shipped to the U.S. in 2007, state officials said Monday. (1 d ago)

• Wal-Mart CEO sees changes in consumers Wal-Mart CEO sees changes in consumers
12/15/2008
Wal-Mart's chief executive said on Sunday he sees changes in the habits of the chain's customers as they contend with the recession. (1 d ago)

• Your Career: Talking to a jobless friend Your Career: Talking to a jobless friend
12/15/2008
With unemployment across the nation at a 15-year high and so many people losing their jobs, one of the most difficult challenges is figuring out what to say to out-of-work friends and family. (1 d ago)

• How pay varies widely for the same job How pay varies widely for the same job
12/14/2008
Dentists in Charlotte lead their group, lawyers in San Jose are paid best, bizjournals study finds (2 d ago)

• Madoff Scandal Rocks Hedge Funds Globall... Madoff Scandal Rocks Hedge Funds Globally
12/15/2008
Julie Scuderi writes about the Madoff scandal and the investors that were burned are coming forward in droves, including Spanish bank Santander, French bank BNP Paribas, Fairfield Greenwich Group, Tremont Capital Management and Maxam Capital Management. More on those hedge funds here at HedgeCo. Also at a loss are the Royal Bank of Scotland and hedge fund Man Group, there are also reports coming in from Asia . However , Vienna based hedge fund manager Salus Alpha Group Services GmbH. said that any exposure to Madoff funds were systematically prevented by the proprietary investment approach of their funds at all times. "I am not shocked that Madoff did blow up but I am shocked that so many obviously unqualified naive fund of hedge fund managers who are obviously doing no due diligence nor do they understand hedge fund strategies do manage so much amounts of money and wonder why this happened to them" said Oliver Prock, CIO of Salus Alpha. More at Salus Alpha Hedge Funds Not Exposed To Madoff Strategy See full article . Related Entries: Hedge funds Go West. - 10 February 2006 Hedge fund facts from the morning Paper - 20 May 2005 NY Hedge Fund Manger Joins With Canadian Giant - 21 July 2008 Lehman, Recruitment in Hedge Funds, Nigeria, and Hedge Fund Calculators - 15 September 2008 Contents of this feed are a property of Creative Weblogging Limited and are protected by copyright laws. Violations will be prosecuted. Please email us if you'd like to use this feed for non-commercial activities at feeds - at - creative-weblogging.com. (1 d ago)

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