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Business News
for 01/25/2009

(last updated 7:30am EST 01/25/2009)

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• News Analysis: China Jittery About Obama... News Analysis: China Jittery About Obama Amid Signs of Harder Line
01/24/2009
Timothy F. Geithner’s assertion that China manipulates its currency isn’t the only sign that an Obama administration may take a harder line toward Beijing. (9 h ago)

• Brazil Expands Investment in Offshore Dr... Brazil Expands Investment in Offshore Drilling Projects
01/24/2009
Brazil’s state-controlled oil company announced a plan to spend more than $174 billion for deep-water oil and gas exploration. (10 h ago)

• College-Educated Chinese Feel Job Pinch College-Educated Chinese Feel Job Pinch
01/24/2009
Anxiety is rippling through a generation of Chinese who had grown up thinking that prosperity was guaranteed. (10 h ago)

• China Rejects Currency Manipulation Char... China Rejects Currency Manipulation Charge
01/24/2009
The central bank of China rejected an accusation by President Obama’s nominee for Treasury secretary that China was trying to gain an unfair advantage on exports. (11 h ago)

• Once a Boon, Euro Now Burdens Some Natio... Once a Boon, Euro Now Burdens Some Nations
01/24/2009
Euro membership allowed some countries to gloss over economic problems that have now roared to the fore. (1 d ago)

• Europe Wants U.S. to Join Carbon Trading... Europe Wants U.S. to Join Carbon Trading Market
01/24/2009
The European Commission will call on the U. S. to help limit greenhouse gas emissions and to press for the establishment of similar markets in developed countries. (1 d ago)

• Shares Mixed, Closing a See-Saw Week Shares Mixed, Closing a See-Saw Week
01/23/2009
The major indexes finished about 2 percent lower for the week, their third week of losses. (1 d ago)

• France Expands Its Financial Support for... France Expands Its Financial Support for Newspapers
01/23/2009
In an effort to help newspapers through the recession, President Nicolas Sarkozy said the government would double the amount of advertising it did in print and online newspapers. (1 d ago)

• Britain and Spain Show More Signs of a S... Britain and Spain Show More Signs of a Slowdown
01/23/2009
As Britain officially falls into recession, unemployment in Spain hits an eight-year high. (1 d ago)

• Sweden’s Fix for Banks: Nationalize Them... Sweden’s Fix for Banks: Nationalize Them
01/23/2009
Sweden’s experience with reviving a failed banking system might provide a model for the United States. (1 d ago)

• Death Sentences in Chinese Milk Case Death Sentences in Chinese Milk Case
01/23/2009
A Chinese court sentenced two men to death and a top dairy company executive to life in prison for selling tainted milk products. (1 d ago)

• Geithner Hints at Harder Line on China T... Geithner Hints at Harder Line on China Trade
01/23/2009
Timothy F. Geithner stated that the president believed that China was “manipulating” its currency. (1 d ago)

• Profit Decline at Nokia Comes With a War... Profit Decline at Nokia Comes With a Warning
01/23/2009
The cellphone maker posted a worse-than-expected drop in quarterly profit, reduced its dividend and warned that market volumes would shrink 10 percent this year. (2 d ago)

• Europe to Buy 30,000 Tons of Surplus But... Europe to Buy 30,000 Tons of Surplus Butter
01/23/2009
Faced with a drastic drop in the price of dairy goods, the European Union hopes to revive one of the abiding symbols of Europe’s generous farm subsidy system. (2 d ago)

• Satyam Chief Is Accused of Falsifying Si... Satyam Chief Is Accused of Falsifying Size of Work Force, Then Stealing Payroll
01/22/2009
The head of the software company confessed to making up more than 10,000 employees to siphon money from the company and to using his mother’s name to buy land with the cash. (2 d ago)

• Sony Expects to Report $3 Billion Annual... Sony Expects to Report $3 Billion Annual Loss
01/22/2009
Sony said it would post a record annual operating loss because of the rapid deterioration of the economy. (2 d ago)

• Crisis in Europe and U.S. Hurts Asian Ec... Crisis in Europe and U.S. Hurts Asian Economies
01/22/2009
Economic data from leading Asian economies highlighted the accelerating decline of growth in the region, mainly because of sagging demand in the recession-struck West. (2 d ago)

• Jobs Vanish as Exports Fall in Asia Jobs Vanish as Exports Fall in Asia
01/22/2009
The global economic slump is spreading across Asia, where countries depend on manufacturing for a far greater share of economic output than Western countries do. (2 d ago)

• Falling Pound Raises Fears of Stagnation Falling Pound Raises Fears of Stagnation
01/22/2009
From housing prices to banks, perspectives for the British economy seem bleaker than those of the U.S. or Europe. (3 d ago)

• BHP Closing Nickel Mine as Commodity Pri... BHP Closing Nickel Mine as Commodity Prices Fall
01/22/2009
The mining company will cut 6,000 jobs and close its giant Ravensthorpe mine in Australia, writing off $1.6 billion, as it battles a collapse in commodity prices. (3 d ago)

• Obama: Stimulus plan will cut power bill... Obama: Stimulus plan will cut power bills
01/24/2009
President Barack Obama on Saturday laid out more pieces of an economic plan he says would add 3,000 miles of electrical lines and double the United States' renewable energy capacity within three years. (15 h ago)

• Finding college aid could prove tough te... Finding college aid could prove tough test
01/24/2009
Finding financial aid for college this year promises to be tougher than any final exam. (16 h ago)

• Downturn accelerates as it circles the g... Downturn accelerates as it circles the globe
01/24/2009
The world economy is deteriorating more quickly than leading economists predicted only weeks ago, with Britain becoming the latest nation to surprise analysts with the depth of its economic pain. (19 h ago)

• Governors seek sacrifices from public wo... Governors seek sacrifices from public workers
01/24/2009
Governors across the nation are seeking significant concessions from public employee unions in hopes of helping to balance their teetering budgets during the economic downturn. (20 h ago)

• Regulators close 1st Centennial Bank Regulators close 1st Centennial Bank
01/23/2009
Regulators have shut down 1st Centennial Bank in California, the third U.S. bank to fail this year. (1 d ago)

• Obama sees stimulus package by mid-Feb. Obama sees stimulus package by mid-Feb.
01/23/2009
President Obama said Friday he expects an $825 billion economic recovery plan to be approved by mid-February and urged congressional leaders to work swiftly to pass it. (1 d ago)

• Wall Street closes seesaw session mixed Wall Street closes seesaw session mixed
01/23/2009
Wall Street closed Friday with modest losses, as investors adopted a “glass is half full” approach to a handful of weak corporate earnings reports. (1 d ago)

• Newsweek: Can Richard Parsons turn Citi ... Newsweek: Can Richard Parsons turn Citi around?
01/23/2009
If you let his track record speak for itself, and the answer is a resounding yes. Fortunately for Citi, Parsons spent much of his early career bridging the gap between Corporate America and the government. (1 d ago)

• Wall Street's entitlement culture Wall Street's entitlement culture
01/23/2009
There's still a deeply ingrained culture of entitlement at financial companies. It's a mindset banks will have to work harder at changing as they come to grips with their failures. (1 d ago)

• Why you'll work through retirement Why you'll work through retirement
01/23/2009
There is a major social and cultural message in the current economic collapse for the future retirees of America: Forget retirement. (1 d ago)

• Senate panel proposes $300 bonus for sen... Senate panel proposes $300 bonus for seniors
01/23/2009
Senior citizens receiving Social Security would get a bonus payment of $300 under the Senate version of President Barack Obama’s economic recovery plan. (1 d ago)

• Oil prices jump in volatile market Oil prices jump in volatile market
01/23/2009
Oil prices rose in another day of volatile trading Friday as investors parked money in commodities even as questions arose over how much OPEC will cut production. (1 d ago)

• General Electric’s profit down 46 percen... General Electric’s profit down 46 percent
01/23/2009
General Electric posted a 46 percent drop in fourth-quarter earnings on Friday and warned of a “tough environment” this year as it struggles with its ailing finance business. (1 d ago)

• Harley’s profit skids, will cut 1,100 jo... Harley’s profit skids, will cut 1,100 jobs
01/23/2009
Harley-Davidson Inc. said Friday it will cut 1,100 jobs over two years, close some facilities and consolidate others as it grapples with a slowdown in motorcycle sales. (1 d ago)

• Pfizer in talks to buy Wyeth for $60 bil... Pfizer in talks to buy Wyeth for $60 billion
01/23/2009
Pfizer Inc., the world’s largest drugmaker, may be seeking to buy rival Wyeth in a deal that could be valued at more than $60 billion, the biggest in recent memory. (1 d ago)

• Newsweek: The value of an Oscar nod Newsweek: The value of an Oscar nod
01/23/2009
Oscar campaigns aren't cheap. Estimates put the cost at tens of millions of dollars. Yet nobody seems to question whether it's worth all the trouble in the first place. How much money, exactly, is a best picture nomination worth at the box office, anyway? (1 d ago)

• Honda’s Insight hybrid marks the sweet s... Honda’s Insight hybrid marks the sweet spot
01/23/2009
Honda’s goal in designing the 2010 Insight was to find the value sweet spot, and it looks like they’ve hit it. The Insight marks the best intersection yet of the plots for price, efficiency and practicality. (2 d ago)

• The world’s most valuable pro sports tea... The world’s most valuable pro sports teams
01/23/2009
This may be hard to believe: In 2003, no pro sports team in the world was worth a billion dollars. By the end of 2008, there were 24. (2 d ago)

• Marijuana growers thrive in California Marijuana growers thrive in California
01/22/2009
The marijuana trade is an exploding industry in Northern California's 'Emerald Triangle' thanks to a state law legalizing the harvest of limited quantities of pot. CNBC's Trish Regan reports. (2 d ago)

• Is this another Great Depression? Is this another Great Depression?
01/22/2009
Economists think things will get better this year. But no one really knows. So what are the odds that we’re the early stages of what will eventually become another Great Depression? (2 d ago)

• Q&A: How much does Britain actually owe? Q&A: How much does Britain actually owe?
01/24/2009
How much does Britain actually owe? Official figures from last week showed that the government had run up total debts of £697.5bn, or 47.5% of GDP, by the end of 2008. That includes just over £100bn for the nationalisation of Northern Rock and the recapitalisation of Royal Bank of Scotland. How does that compare with other countries? Ranked by our debt-to-GDP ratio, we came 18th of 28 members of the Organisation of Economic Co-operation and Development in 2007, clocking in at 30.4% on the OECD's measure. A number of other major economies had higher levels of borrowing: Japan's debt was worth 85.9% of its GDP, for example, and Italy's well over 100%. Debt levels in many countries are likely to explode in the years ahead, too, as governments spend billions of dollars on recapitalising their financial sectors, and boosting public spending to kick-start the economy. Is the debt mountain about to get much bigger? Yes: the Office for National Statistics has said that the liabilities of RBS, thought to be around £1.7tn, will soon have to appear on the government's balance sheet, because its shareholding, of almost 70%, gives it enough managerial control over the battered bank to make it a public institution. However, the minutiae of the statisticians' rules mean that although RBS's liabilities will turn up on the books, many of its assets - such as the homes on which mortgages are secured - will not. So the eye-watering debt figures we are likely to see over the next year are a bit misleading. Even without the banking rescues, though, public debt has already hit 40.4% of GDP, bursting through the 40% limit the prime minister laid down as one of his fiscal rules when Labour came to power. And as recession eats away at tax revenues, and the government spends billions of pounds on Keynesian fiscal stimulus, the chancellor's forecasts show debt peaking at more than £1tn, or 57.4% of GDP by 2012-13. What about Alistair Darling's latest bank rescue package? The government announced last Monday that it would introduce a taxpayer-backed insurance scheme, allowing the banks to cap their losses on so-called "toxic" assets, if the loans go sour. That could potentially expose the public to vast losses and the unknown size of the black hole helped to send sterling into a tailspin last week. But the Treasury insists that many of the loans will eventually come good - and the banks are paying the government a fee for its trouble. Is Britain at risk of "going bankrupt"? It is highly unlikely. The government currently borrows about 35% of its total debts from foreign investors and there is as yet little evidence of them heading for the door: the German and Greek governments have had more problems borrowing money in the capital markets in the past few weeks than the UK. However, if foreign investors do go off gilts, then yields will be driven up - so, in effect, taxpayers will end up paying higher interest rates to borrow money. Much of the cash the government needs can continue to be borrowed from taxpayers at home - pension funds such as government bonds, or gilts, because they can match the fixed returns against their liabilities, and cash is pouring into National Savings, which are invested in gilts as nervous savers shun risky looking banks. If overseas investors lose confidence in the UK, we will have to fund the debts ourselves, in effect, borrowing from our own future income. That could prolong the downturn and force the Bank of England to keep interest rates lower, and for longer, than it otherwise might have done, to compensate for the tightening of fiscal policy, but it doesn't mean we are "bust". Will we have to "call in the IMF", as David Cameron claimed last week? Again, it's not impossible, but highly unlikely: it would only happen if the government was unable either to meet a debt repayment, or to roll over, or "refinance" the debt with investors, in the capital markets. Ireland, Turkey and Greece all look much closer to that extreme than the UK. The verdict of credit ratings agency Moody's last week was that increasing borrowing in the short-term, in order to limit the length and severity of the recession, is a "calculated risk," which it doesn't think endangers the UK's creditworthiness. Spain and Greece have had their ratings downgraded, however, and Ireland has been warned that it could face the same fate. If the problem in the first place was too much borrowing, isn't it dangerous to try to fix it by borrowing even more? Yes, but the government believes the risk of allowing the credit markets to seize up, potentially driving the economy into full-blown depression, is even greater. As Mervyn King, governor of the Bank of England, put it last week: "This is the paradox of policy at present - almost any policy measure that is desirable now appears diametrically opposite to the direction in which we need to go in the long term." Credit crunch Recession guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (15 h ago)

• Across Britain people ask: is this count... Across Britain people ask: is this country going bust?
01/24/2009
Andy Clarke, chief operating officer of Asda, is taking the decision to swap the mince and steak in the meat aisles. Payday at the end of the month is looming and he says that's the time when consumers are prepared to splash a bit of cash. The recession, he says, has changed the way people shop across the month. "When they have just been paid, they buy steak. By the middle of the month, when money gets a bit short, they switch to mince." Clarke says Asda started to sense that the economic winds were growing chillier last summer. "Ready meals are down 50%, but raw ingredients are up by a matching amount. There is a move away from premium brands to private labels, a decline in sales of still bottled water, but hair colourants are up 60% because women are having their hair done less often. Childrenswear is performing well because the last thing consumers will give up is new clothes for their kids." The view from Asda fleshed out the story told by the official figures released last week. Britain is now officially in recession - and judging by three days spent travelling the length of the M62, the decline has been swift and brutal. Two years ago the government was boasting that Britain was the fastest-growing economy in the G7; last week the talk was of whether the country was going bust. Bank shares were pummelled despite a second emergency package from the government in three months; the number of people out of work and claiming benefit rose by 75,000; one of the world's most famous speculators advised fellow investors to dump the pound. "Sell any sterling you have. It's finished," said Jim Rogers. London won itself a new and unenviable nickname: Reykjavik-on-Thames. If the M62 - a 107-mile transport link that runs from Liverpool in the west until it peters out 15 miles short of Hull in the east - is anything to go by, Britain is not yet going bust, although plenty of individual companies are going to the wall, not just in the five big cities connected by the motorway, but also in the smaller towns that straddle the transport hub. As official figures showed inflation falling to 3.1%, the north-west region of the manufacturers group EEF gathered in Warrington to discuss the state of business. David Ost, the chief executive, said one word summed up the mood: grim. His members agree. Richard Green is the pensions and benefits director of Federal Mogul, an automotive parts company with plants along the M62 corridor in Manchester, Chapel-en-le-Frith and Bradford. He said: "In October and November it seemed as if the shutters came down almost overnight. I can't see any signs of recovery before the back end of 2009 or early 2010." John Young has been the Bank of England's agent in the north-west for five-and-a-half years and acts as the eyes and ears of Threadneedle Street in the region. "If you had come in mid-2008, you might have found hope that the north-west might be relatively better off than the rest of the country," he said. "Since November that hope that we might be protected has largely evaporated. The reason is the sharp synchronised downturn in the global economy. It is not unusual to find firms' turnover down between a third and a half. Order books have halved or more." The north-west has a number of car plants - GM at Ellesmere Port, Jaguar Land Rover at Halewood on Merseyside and Bentley at Crewe - and all are suffering from falling demand in the developed world. In contrast to 25 or 30 years ago, the plants are modern and highly productive, but there are fears that they nonetheless remain vulnerable to the recession. Tony Woodley, joint general-secretary of the Unite trade union, wants the government to provide the same sort of support for the UK car industry as is on offer in the rest of Europe, where the state tops up the wages of those put on short-time working. "Never mind a plan for bankers, we need a plan for people," he said. Woodley said ministers need to end the uncertainty for "strategically important" sectors of industry such as aerospace and cars. Otherwise it risks losing a pool of skilled labour, which would leave Britain badly placed to benefit from an upturn in global demand. Like other Liverpudlians, he was enthusiastic about the success of the city's year as Europe's cultural capital, but added: "If you are really interested in having a good cross-section of economic growth, you have to make bits and bobs." Liverpool city centre is certainly on the up. Tate Liverpool has had a record year, attracting 1.1m visitors; Liverpool One, a £950m shopping centre, has just opened; and there are plenty of tourists attracted by the cheap pound eager to follow the Beatles trail from the Cavern club in Matthew Street to Penny Lane. On a cold Tuesday afternoon in mid-January, the handful of visitors to Albert Dock had plenty of space to admire the eight Warhol prints of Chairman Mao and consider whether western banks had done more to bring down capitalism in 18 months than the Chinese communist leader had achieved in a lifetime. Andrea Nixon, the Tate's director, is upbeat about the economic benefits of the city's cultural strength: "I think it is the start of something new. It is very critical for the city's economy. We need to recognise culture as a core part of a changing economy and ally it to what universities are doing with the knowledge economy." Yet, as in other cities in the north, regeneration is still in its infancy and goes only skin deep. Within half a mile of Albert Dock there is urban decay on a massive scale: empty warehouses in the old docks, row upon row of boarded-up houses in Kensington. Manchester, the north-west's regional capital, is several years further down the regeneration road. The city centre has been transformed since the IRA bomb of 1996 and its growing professional middle class will be swelled when the BBC moves large numbers of staff from London to the new media city just across the city border in Salford. Sandy Lindsay is project director of Manchester Masters, a new scheme designed to stop the graduate brain-drain from the north west. Ten graduates will be offered four work placements each during the course of a year, together with a personal mentor and a free city-centre apartment. "We want to show that there are opportunities here and you don't have to go elsewhere to work. There is no need to go to London to get experience," she said. In Manchester, as in Liverpool, there is unfinished business from the hollowing-out of manufacturing in the early 1980s. But there is also heightened concern for the smaller towns on both sides of the Pennines that still rely heavily on low-wage manufacturing jobs, are relatively remote from the conurbations and have not reaped the benefits of large amounts of regeneration cash. "In Manchester there has been a dramatic fall in commercial property. There are fewer cranes around," says Young. "In the old mill towns it is even grimmer. Housing regeneration has ground to a halt. These towns have not shared in the expansion of business and professional services." Until recently, Halifax was not seen as a Pennine town under threat, but the financial crisis has left the community anxious about the future. In 1997, the Halifax building society - Britain's biggest mortgage lender - turned itself into a bank. It grew, took over the Bank of Scotland and, when it could not finance all its mortgages from savers, raised money from the world's money markets. That source of funding dried up 18 months ago, and when the crisis entered a new and virulent phase last September, HBOS came under speculative attack. A deal was hastily brokered for it to be taken over by Lloyds TSB, leaving a combined workforce of 140,000 and plenty of scope for savings. An early sign of trouble can be seen from the road snaking down to the town from the M62. A factory that once made the Gannex raincoats favoured by Harold Wilson has a banner across its frontage advertising unsold luxury apartments. At the HBOS head office, the atmosphere is sepulchral. "HBOS has 6,000 employees in Halifax over two sites," said its chief economist, Martin Ellis. "It accounts for 13% of employment in the town and is by far the biggest private sector employer. The financial sector is important to the town and its prosperity. There is great uncertainty. It is making people cautious about going out and spending money." Responding to the unemployment figures announced that morning, Ellis said: "We are set for a very difficult 2009. The financial problems have got a lot worse. We still have relatively low levels of unemployment but it is climbing and that can't be good news for the housing market. It is not good for confidence." Yet this was a recession that economists said would never happen. It was assumed the boom would go on for ever, and when it didn't it was assumed that the problems would be confined to the housing market. Then the talk was of the economy having a "soft landing" - a slowdown in growth but not a recession. Then, the hope was that the recession would be short and sharp. Now people are talking about a return to the 1930s and Britain going bust. Asked why few spotted it coming, Ellis sighs before replying: "The economics profession doesn't seem to come out of this terribly well. The Bank of England clearly didn't spot it coming." Nor, as he admitted last Friday when the official figures showed the economy contracting by 1.5% in the final three months of 2008, did Gordon Brown. In two months it will be the 25th anniversary of the start of the year-long miners' strike. Back then anyone driving east from Leeds on the M62 would have passed the Glass Houghton colliery at the Castleford turn-off. Today a huge structure still looms into view, but it is Xscape, an indoor ski slope and leisure complex surrounded by an American-style retail park. "They said that it would provide jobs for former miners," says Joan Dixon, principal policy officer of the Alliance, a group that campaigns on behalf of Britain's old industrial centres. "It did: one former miner got a job there, or so the story goes." The government has spent money on the old Yorkshire coalfields. John Prescott chose Allerton Bywater as the country's second millennium village and its new houses are being built to top environmental standards. The state of the housing market means, though, that whereas the first tranche of properties was snapped up, the next wave mostly lies empty. The show house shuts in the middle of the week. State spending is also helping in other ways. Thursday dawns grey and wet, but at Airea in Osset Mills there is a belief that the company will get through the recession. Given that the company makes carpets and floor coverings, that might seem an heroic assumption, but while the market for carpets has shrunk by up to 15% and necessitated a four-day working week, heavy government investment in schools and universities has kept Airea's other business arm buoyant. Nigel Brook, group sales director, says the company has cash in the bank. "That is money that might be spent on acquisitions or investment in new machinery, but at the moment it just feels nice having it." In Hull, the lack of ready cash has caused severe problems. The area specialises in the manufacture of caravans, but the administrators moved into Atlas, where 350 jobs have been lost, and to Cosalt Holiday Homes, where 200 posts have gone. Peter Sykes runs the Acorn Fund in Hull, set up by the council after it sold its stake in Kingston Communications, the telephone company. "It was a £5m fund and the remit was to provide seed money to create jobs. For the past six months it has been used to safeguard jobs. The average loan used to be £10,000; it is now six figures." Atlas had five months of orders when the bank pulled the plug. Like Liverpool, Hull has an Albert Dock. Unlike Liverpool, it is still a working dock, although that was hard to believe as the sun set on Thursday afternoon on a Humber estuary empty of shipping. David Johnson, finance director of shipping services firm RMS Group holdings, is spearheading a fight against the government over the backdating of a new business rate to 2005. Bills, Johnson says, have increased tenfold at a time when companies operating in the port are already struggling. "The whole industry could collapse in the next two years," he warns. Two years is now seen by business as the duration of the recession. There is no belief that the economy will start to pick up in the second half of this year. Along the length of the M62, there was no whingeing, just a grim determination to survive the recession that was never supposed to happen, but looks like being every bit as bad as any downturn suffered since the second world war. Credit crunch Recession guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (15 h ago)

• Is it too late for Britain's banks to ma... Is it too late for Britain's banks to make an honest living?
01/24/2009
What will the United Kingdom's banking sector look like in a year's time? "Post offices," quips one banking executive. "They will be all that is left." It is not such an absurd prediction. Despite the government announcing a second rescue package, designed to insulate the leading banks from losses on their bad lending - which some estimate could cost as much as £500bn - and a further cash injection into Royal Bank of Scotland, bank shares continued to plunge. In just a week, more than £20bn was wiped off the value of RBS, Barclays and Lloyds Banking Group, leaving the trio valued at just £17bn put together - or less than the £20.5bn the three raised between them last summer. For a while, calls to go the whole hog and nationalise the banks intensified - a point of view summed up by John Greenwood, chief economist at fund manager Invesco Perpetual: "By not removing all the toxic assets of the banks in one fell swoop, for example by injecting them into a 'bad bank', the government is leaving itself open to the risk that the economy and the banks' operating results will deteriorate further, requiring open-ended intervention in the future. "This means that if the other components of the government's plan for economic recovery - such as its fiscal spending plans, or any quantitative easing by the Bank of England - do not work, then the authorities will gradually be drawn into larger and larger commitments to the banking system. Full-scale nationalisation of several large banks would probably be the ultimate outcome. If this is the case, why not do it immediately?" For the moment, the government seems set against such a move, insisting that banks are better run by commercial, private-sector managers - although anyone looking at the scale of losses incurred so far, never mind what is still to come, might question that confidence. The trouble is that, nationalised or not, investors across the globe are uncertain of Britain's ability to rescue its banks - a worry that is sending sterling falling almost as rapidly as bank shares. The government is refusing to estimate how much its insurance package - under which it will underwrite future credit losses in exchange for a premium, probably paid in bank shares - will cost, but the numbers could be frightening. Simon Ward, chief economist at New Star, points out that in October, the Bank of England estimated that British banks could lose £130bn over the next five years, and that was before the economy really started to turn nasty. Last week's trading update from RBS warned that the worsening economic climate meant bad debts of between £6.5bn and £7bn, with another £8bn in write-offs against the value of toxic assets - far worse than the City had been expecting. And, in a bleak statement, chief executive Stephen Hester warned: "More asset deterioration and significant credit losses seem certain." Barclays chief executive John Varley insists it is not in such a parlous position - indeed, it says it made a profit of £5.3bn last year. Yet no one is willing to bet that it will be one of the survivors. Its shares more than halved last week alone, and now change hands at less than a tenth of their value last month. That is despite the fact the bank has been stressing the differences between RBS's investment banking business and its own, Barclays Capital. RBS's capital-markets loan book, at £600bn, is twice as big as that of BarCap's, while its commercial property loan book is also much larger. The panic selling of Barclays shares also overlooks the fact that the temporary relaxation of capital requirements by the Financial Services Authority, announced at the start of last week in a bid to help the banks weather the financial storm, is equivalent to an extra £25bn of retained profits, or £20bn in new capital - and possibly as much as £100bn across the banking sector as a whole. Lord Turner, in his first significant speech since he took over as chairman of the FSA, gave a clear indication that, when this mess is finally cleared up, the banking industry that emerges from the rubble will look very different. "Not all innovation is equally useful," he said. "If by some terrible accident the world lost the knowledge required to manufacture one of our major drugs or vaccines, human welfare would be seriously harmed. If the instructions for creating a 'CDO-squared' [a credit derivative manufactured out of other derivatives] have now been mislaid, we will, I think, get along quite well without. "And in the years running up to 2007, too much of the developed world's intellectual talent was devoted to ever more complex financial innovations, whose maximum possible benefit was at best marginal, and which in their complexity and opacity created large financial stability risks." That is a pretty damning obituary for a securitisation market which, according to the Bank of England, was worth more than $600 trillion at the end of 2007. The FSA will produce its blueprint for the future of regulation in April, but Turner's speech gave plenty of hints about what it might contain. Regulators were too focused on the risks of individual banks and not enough on how their inter-relationships were increasing financial instability. In future, they will need to make more judgments about the risks inherent in banks' business models. Far more capital needs to be held in support of banks' activities - and they need to put aside larger amounts in the boom years to cushion against the bad. The banks themselves are already working as fast as economic conditions will permit to shape themselves for the future. Hester will give an outline of his bank's strategic review when it announces its 2008 results on 26 February. But already it is clear that riskier activities - such as lending £1.5bn to Russian oligarchs, trading in complex financial instruments and bankrolling large property projects - will be ditched in favour of increasing mortgage lending, offering pricing pledges to small businesses and - most likely - retaining the Direct Line and Churchill insurance businesses that Hester's predecessor Sir Fred Goodwin was planning to sell. RBS points out that it has a comparatively small share of the mortgage market and has been able to increase that, even during the downturn. It is unlikely to be alone in its intentions: virtually every other international bank is pulling back to old-fashioned core lending and savings business - assuming, of course, that they have managed to survive the costs of pursuing the alternative, high-risk and highly toxic, securitised lending. HSBC is aggressively expanding its mortgage loan book in the UK while working out how to rid itself of Household, its sub-prime lending business in the United States. Lloyds Banking Group's chief executive Eric Daniels has made it clear that he plans to ditch the high-risk property and private equity lending book acquired with his acquisition of the HBOS banking group as quickly as is possible in such a dismal climate, in favour of back-to-basics banking. Only Barclays continues to insist that its investment banking arm can grow and prosper, although it, too, is scaling back on the higher-risk areas. In the US, Citigroup has all but ended its quest to be a global universal bank, while Goldman Sachs - the purest of investment banks - has opted for deposit-taking status. And Bank of America is growing increasingly agitated by the losses and bonus culture it is uncovering at Merrill Lynch, the investment bank it rescued earlier this year. The retail banking sector became even more crowded last week when the mutually-owned Co-operative bank merged with the Britannia building society to create what it describes as "a unique ethical alternative to shareholder- and government-owned banks". While it will still be a relatively small player, it should find it easier to attract depositors who have been horrified by the excesses of the publicly quoted institutions. Hester thinks there should still be enough banking business to go round, even when lending volumes get back to normal. Foreign banks - such as those from Iceland and Ireland - and non-banking groups like America's GE Capital, were responsible for as much as 40% of British lending; and, bank bosses insist, it is their departure, rather than British banks' shutting up shop, that has caused the slump in the availability of loan finance here. "I think there should still be good business growth," he says. "Obviously, the world is huge and complex and will still have the need for complex financial products, albeit less than there were before, and there will be greater capital scarcity. So even if volumes are lower, the number of players will be fewer and smaller in size, so banks should be able to make a good living. Not as racy a living as for the last decade, but that is no bad thing." Simply getting to a position where banks can make a living is presenting a big challenge to regulators, bosses and the government. Gavin Oldham, chief executive of the Share Centre, thinks one solution would be to temporarily suspend the shares of the leading banks to allow them to work through their problems. He has written to financial services minister Paul Myners to point out that, as the FSA acknowledges, "a very substantial part of bank over-indebtedness lies in the complex web of claims between financial institutions: in other words, not in lending to business or for mortgages. If these claims could be netted off, there would be a massive reduction in the scale of bank losses." He believes that suspending trading would give them breathing space to unravel these problems. At their current levels, he adds, bank shares are "little more than an option against nationalisation, and do not provide the basis for any further injection of private sector capital to resolve future needs". The Share Centre's own customers, however, continue to snap up bank shares as they tumble, betting that even a small improvement in sentiment could lead to a big profit should the prices rise sharply. The stock market is taking a very gloomy stance: Bruno Paulson, banking analyst at Bernstein Research, calculates that, based on their capital position, the market price of RBS shares suggests investors consider it has just a 19% chance of survival: at Barclays and Lloyds, the probabilities are 43% and 38% respectively, he says; but that was before the most savage falls of last week. Six months ago, few investors would have bet that Royal Bank of Scotland would be announcing a loss of close to £30bn - stealing the record for biggest loss by a British company from Vodafone - or that it would end up being 70% owned by the government. That just shows that anything is possible. Rescue remedies: the bail-outs September 2007: The Treasury agrees an emergency loan to tide over Northern Rock - but queues form outside branches, with savers well aware that only the first £35,000 of their deposits are guaranteed by the government. 17 February 2008: After months of wrangling about Northern Rock's future, Alistair Darling announces that it will be nationalised as a "temporary" measure. 21 April 2008: The Bank of England announces a "special liquidity scheme", which will allow banks to swap hard-to-sell loans for more liquid government bonds. Initially worth "at least" £50bn, it is later extended to more than £100bn. 29 September 2008: The government announces that it will nationalise Bradford and Bingley, taking on liability for £50bn of loans, and selling the deposits to Spanish bank Santander. 13 October 2008: Realising that piecemeal efforts to help particular banks are not enough, Gordon Brown announces a £37bn "recapitalisation" plan, plus a scheme worth up to £250bn to underwrite interbank lending for participating institutions. 19 January 2009: Darling announces another bail-out scheme, including an uncosted "insurance" scheme to protect banks from losses on toxic loans, and £50bn for the Bank to buy up corporate loans. Barclays Lloyds Banking Group Royal Bank of Scotland Banks and building societies guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (15 h ago)

• Heather Connon: New boss earns credit as... Heather Connon: New boss earns credit as he sets out on his mission to save RBS
01/24/2009
Stephen Hester, chief executive of Royal Bank of Scotland, is promising a "significant restructuring". Some would say that, despite a mere three months in the post, he has achieved that already. The bank has a new chairman-designate in Sir Philip Hampton and its balance sheet has been lightened by as much as £30bn in goodwill and bad debt write-offs. It has made the biggest ever loss by a British company and the bosses of its various businesses have been put on notice that they have to prove their worth if they want to stay. To top it all, the government's stake has been increased from 58 to 70%. But, dramatic though these announcements have been, they are outweighed by the cultural shift at the bank since Hester arrived. Sir Fred Goodwin - his predecessor and the mastermind of the disastrous deals that have left RBS in its current predicament - ruled by diktat and felt no need to explain his actions, internally or externally. Hester has made himself as available as is possible for someone struggling to wrest a bank from the brink of collapse. In just three months, according to insiders, there have been more conference calls and briefings with the senior executive team than there were in the previous six years, while he has made numerous radio and TV appearances to explain last year's disastrous results and hint at his plans for the future. One former RBS employee who knows Hester well says: "Fred was revered within the bank as some kind of founding father, and we all wasted a lot of time and energy discussing how to manage him and trying to second-guess how he would react to things. That will not be needed with Hester: he is transparent in his management style and leaves people in no doubt what is expected of them." Insiders agree: "There is a feeling that he wants to free people up, devolve responsibility and empower them," says one executive. That is a big contrast to the "force of nature" that was the old chief executive. But Hester is as bright and ambitious as his predecessor. He had earned a good reputation in the City for his stewardship of British Land, and many executives would have been content to serve out a few more years there before taking up the inevitable portfolio of chairmanships and public appointments that would see them into retirement. Instead, he is grappling with restructuring an over-ambitious bank during the worst financial crisis since the Great Depression. But Hester was keen to rise to the challenge. "If you are a footballer you want to play in the Champions League final. It's the same in business... you want to test yourself against the biggest and most complicated challenges," he said shortly after his appointment. But he was also clear about the risks: "Jobs like this are unbelievably stressful, leaving you open to unpleasant scrutiny, and there is a 50% chance it ends in tears, because that is the way the world works. But, as they say, if you can't stand the heat, get out of the kitchen." Hester is accustomed to taking on demanding roles. At British Land, he succeeded Sir John Ritblat, the charismatic but dictatorial chairman who created the property empire and ran it rather like a family fiefdom, to the consternation of some of its investors. Hester introduced a more transparent culture, ditched its palatial offices for a more utilitarian building and made a number of astute acquisitions. He was even more revolutionary at Abbey National, the former building society, where he was brought in as finance director to help rescue it from the brink of collapse with disposals and rationalisation, before selling it to Spanish bank Santander. A colleague from that time describes him as "dynamic and sharp-witted, a brilliant strategic thinker". He adds that, while Santander's ethos could be described as shareholder-friendly, Hester's was more customer-focused: in the insurance business, for example, he decided against actions that, while legitimate, would have left policyholders in a poorer position than they might have expected. Hester is taking a £1.2m salary from RBS but will be hoping that the real reward will come from the 10.4m shares he was granted on arrival. He may be disappointed. They were priced at 65p, the price at which the government subscribed for shares in October; last week they were changing hands for less than a fifth of that and, with the calls for full nationalisation growing, may end up worthless. Not that Hester needs the money. His first job after Oxford - where he gained a first in politics and economics - was as assistant to the chairman of Credit Suisse First Boston. He went on to become its youngest-ever managing director, at 35. Then he became chief financial officer and finally head of fixed income before being culled when John Mack, "the Knife", took over. But the bonuses earned during that period were generous enough to help him buy a Swiss ski chalet, a house in London and a 350-acre estate, complete with landscaped gardens, in Oxfordshire. His passion for gardening in general, and trees in particular, is reflected in his trusteeship of the Kew Foundation of the Royal Botanic Gardens. He also enjoys riding - his wife is a master of foxhounds - tennis and shooting. That may explain the jacket he wore to last weekend's meetings with chancellor Alistair Darling - an outfit which, apparently got just two out of 10 on his daughter's measure of sartorial elegance. Having turned 48 in December, Hester has plenty of time to prove he can succeed in his latest and most difficult corporate challenge. But there is a significant risk it will outfox even him. Royal Bank of Scotland Shares guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (15 h ago)

• Cheap loans for drivers in car industry ... Cheap loans for drivers in car industry bail-out plan
01/24/2009
Cheap car loans to encourage nervous motorists back into the showrooms could be unveiled this week under plans being drawn up by the government to rescue the stricken motor industry. Gordon Brown has privately signalled backing for extending some of the same support for lending now being offered to banks to car finance houses - often offshoots of the manufacturers - allowing 0% finance deals and other incentives to flow more readily to buyers. Ministers have also looked at introducing so-called "scrappage" schemes, under which motorists willing to trade in older, polluting cars for greener new models would get a one-off payment. Germany has proposed a similar payment worth almost £2,000 for its citizens, while Spain and France have backed similar measures. The business minister Lord Carter told peers last week that "we are considering [scrappage schemes] carefully". Industry chiefs say such a scheme could cut carbon emissions as well as help manufacturers. However, ministers are concerned that while such incentives would be a lifeline for struggling UK car dealerships, they would not help manufacturers much, since most cars bought in Britain are foreign-made. Peter Mandelson, the Business Secretary, is to meet industry chiefs this Wednesday for new talks, amid warnings from the unions that some supplier companies are now only weeks from collapse, putting tens of thousands of jobs at risk. Car production in the UK almost halved in December as factories shut down amid collapsing demand. Tony Woodley of Unite, the car workers' union, said hard-won deals for new models to be built in Britain - such as the Vauxhall Astra, due to start production in autumn - could be at risk if British plants were forced into redundancies while subsidised European plants stayed open. "I'm looking at a catastrophe waiting to happen on the supply line," he said. "Action has got to happen yesterday. We have to ask ourselves whether they really understand what's happening out there." MPs are also pushing for a "buy British" public sector initiative under which government agencies and public services such as police forces could bring forward plans to replace ageing fleets, ensuring they buy UK-made cars. The government has largely ruled out an old-fashioned state aid package, with some manufacturers such as Nissan - which recently laid off 1,200 workers at its Sunderland plant - arguing that the problem is not restructuring but buyers' reluctance to make expensive purchases because of the economic uncertainty. Richard Burden, the Labour MP and chair of the all-party motor group, met Brown last week to discuss options, and said the key was to stimulate demand. "We talked about using the facilities that are available to banks to underwrite consumer credit. Most domestic customers will buy a car on credit and the people offering 0% finance deals, a lot of those will be run by offshoots of the manufacturers. He was receptive to that." He said a scrappage scheme could also provide a "silver lining" to the crisis by getting older, polluting cars off the road. "We do need to tackle the issue of not just ending up subsidising imports, but I think there are ways of doing that." Automotive industry Economic policy Recession guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (15 h ago)

• Official: £40,000 loss for every taxpaye... Official: £40,000 loss for every taxpayer
01/24/2009
Every taxpayer in the country has lost almost £40,000 since the onset of the credit crunch, as plunging house prices and the savage sell-off in stock markets have obliterated £1.2 trillion of Britain's national wealth. The combined impact of the property downturn and the slide in share prices has wiped out the equivalent of a full year's economic output, according to research by analyst Dharval Joshi at City bank RAB Capital, £38,700 for every one of Britain's 31 million taxpayers. "We're only halfway through; there's more destruction to come before we stabilise," said Joshi, predicting that as much as £2 trillion could be knocked off the value of assets. Even by the end of 2008, just six months into what many analysts believe will be a prolonged recession, he calculates that £700bn has been lost in the housing market since the downturn began, plus £500bn from Britons' pension pots and share portfolios. With public anger at senior bankers, regulators and politicians growing as the scale of the damage becomes clear, Gordon Brown will use a speech tomorrow to demand tighter international regulation of banks. He will argue that the crisis was exacerbated because no regulators, no ministers and startlingly few banking executives knew what assets had been sold to whom. The prime minister will try to build a consensus around curbs on irresponsible banking practices later this week at the World Economic Forum in Davos, the annual gathering of tycoons and politicians. The Commons Treasury select committee will also seek to hold the industry to account over short-selling bank shares when it cross-examines five leading hedge fund managers on Tuesday. The Conservatives seized on Joshi's research yesterday to accuse the government of failing to protect consumers. Philip Hammond, shadow chief secretary, said: "Gordon Brown said he'd ended boom and bust, but he's presided over the biggest asset bubble in living memory and now we are all paying the price. Confidence in Brown's economic management has evaporated at home and the relentless decline of the pound shows that the rest of the world thinks the same." Sterling declined sharply on the foreign exchanges last week, amid fears that the government's insurance scheme to protect banks against losses on 'toxic' assets - details of which are still being finalised this weekend - could expose the taxpayer to billions of pounds of additional liabilities. Official figures revealed on Friday that the economy contracted by 1.5% in the final three months of 2008, underlining the severity of the downturn. Lord Myners, the City minister, said the economy was undergoing a "correction". "We know that there were elements of a bubble, not just in credit markets and share prices, but also in things like art and jewellery. There's a correction back towards an equilibrium. That's why we're taking the action that we are to support those who are most exposed." But Liberal Democrat treasury spokesman Vince Cable said the government should have warned the public earlier that the housing market in particular was in the grip of an out-of-control boom. "They failed in their responsibility by failing to recognise the seriousness of the problem. We were rushing towards the edge of the cliff." Rapid declines in wealth alarm economists, because consumers tend to respond by cutting spending, exacerbating recession. Danny Gabay of City consultancy Fathom said consumers had previously boosted their spending power by borrowing against their houses, but by the last quarter of 2008 mortgage borrowers were actually paying down equity, with a potentially devastating impact on spending. "If you bought your house for £100,000 and some bloke in a pinstripe suit tells you it's worth £200,000, then you feel like you're being conservative if you only borrow an extra £25,000," said Gabay, who is concerned that the knock-on impact of the housing crash on families' spending habits has only just begun. Joshi said Britain's housing boom and resulting bust meant the economy was likely to take longer to recover than America's, where consumers have more of their savings tied up in shares, which tend to see recovery faster. Credit crunch House prices Property Shares Market turmoil Tax Economics Consumer affairs guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (15 h ago)

• Lights go out across Britain as recessio... Lights go out across Britain as recession hits home
01/23/2009
Britain's days as the fastest growing economy in Europe were officially declared over yesterday as the deepest recession in a generation saw consumers turning off the lights and Poles returning home. While official figures showed the economy contracting at its fastest since 1980, National Grid said demand for electricity had fallen over Christmas at homes and factories across the land, and Poland confirmed that thousands of its citizens were coming home from Britain and Ireland. National Grid said it was cutting its forecast for electricity consumption this year because of the recession. The thousands of people being laid off each week and the hundreds of firms cutting production are reducing demand. Industry has suffered most in this recession and made the biggest contribution to the slump in national output, which fell by a worse-than-expected 1.5% in the fourth quarter of last year compared to the third - or around 6% on an annualised basis. As the economy had contracted by 0.6% in the July to September period, Britain now meets the most common definition of a recession - two consecutive quarters of shrinkage. But some analysts say the country fell into recession last April. Financial markets took fright at the sheer speed of the economy's contraction, which outpaced anything seen in the recession of the early 1990s. The pound slumped to a fresh, 23-year low against the dollar of just $1.35 - a far cry from the peak of $2.11 seen last summer - and to an all-time low against the yen. The FTSE 100 share index fell below the key 4,000 level after the news, although it later recovered to end little changed. "These figures are the final nail in the coffin for Gordon Brown's claim to have 'ended boom and bust'. The UK economy is most definitely bust at the moment," said Charles Davis at the Centre for Economics and Business Research. "It is not just that the UK has entered recession; it is the size of the contraction ... The economy is set for the steepest contraction in the post-war era in 2009." Brown admitted the government had not seen what was coming: "What we did not see, nobody saw, was the possibility of markets' failure. "We are fighting this global recession with every weapon at our disposal. We need other countries to work with us and we are asking them to agree with us a common set of measures." He criticised David Cameron for having suggested Britain might need to go to the IMF for help in financing its bail-out of the creaking banking system. But Cameron insisted he was right to warn that the country faced the prospect of an IMF loan for the first time since 1976. "I think it's right to warn about that, I think it's a responsible thing to do," Cameron said. He and the shadow chancellor, George Osborne, mocked Brown's claims last summer that the economy was better placed than in the past to withstand recession and would grow in spite of the credit crunch. But TUC chief Brendan Barber blamed bankers and previous Tory governments for the economic mess: "This recession is not bad luck or an inevitable swing of the pendulum. Its cause is irresponsible behaviour by banks and financial institutions taking advantage of the deregulation started by Mrs Thatcher and president Reagan, and continued to a greater or lesser extent ever since." Unemployment was this week reported to have jumped to nearly two million, and analysts say it would be much higher were it not for workers from countries such as Poland returning home. Poland's treasury minister Aleksander Grad told the Guardian that the economy there, unlike Britain's, would avoid recession. Poland's banks had been regulated tightly and had not got into the toxic derivative products that have brought down banks around the world, said Grad. National Grid said weekly peak electricity demand would fall by 600-1,000 megawatts, the equivalent of a large power plant, over the next year. The drop will ease the strain on power stations, some of which are facing closure because of age or environmental rules. It will also reduce CO² emissions. Recession Energy Energy bills guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (1 d ago)

• Pfizer in talks to buy American rival Wy... Pfizer in talks to buy American rival Wyeth
01/23/2009
The American drugs company Pfizer is in talks to buy rival Wyeth in a deal worth as much as $60bn (£44bn), as the pharmaceuticals industry scrambles to overcome the expiry of lucrative patents on blockbuster medicines. Negotiations between the two companies have been under way for months but a deal is not thought to be imminent. Turmoil on the global financial markets has made it challenging for companies to complete multibillion-pound transactions. Pfizer, the world's biggest drugs company in revenue terms, is looking for ways to plug a potential gap in its earnings as its anti-cholesterol pill Lipitor loses patent protection in 2011 – a change that will allow competitors into the market with cheaper, copycat drugs. Shares in Wyeth jumped by 8% to $42.03 during early trading on the New York Stock Exchange today as news of the potential deal surfaced in the US media. Both companies declined to comment. If it goes ahead, the tie-up will be the first drugs merger on a global scale since Sanofi-Synthelabo's takeover of Aventis in 2004. "Pfizer, more than anyone else in the pharmaceutical industry, is under pressure because of Lipitor coming off patent," said Chris Sterling, head of European pharmaceuticals research at KPMG in London. Based in New Jersey, Wyeth was formerly known as American Home Products, which held unsuccessful merger talks with Britain's SmithKline Beecham a decade ago. The group has 48,000 staff worldwide including 1,500 people at four sites in England. Among Wyeth's top-selling drugs are an antidepressant treatment, Effexor, and a paediatric vaccine called Prevnar, which protects against infections such as pneumonia and meningitis. The company's consumer healthcare business owns brands including the lip balm ChapStick and the cough medicine Robitussin. Pfizer's chief executive, Jeffrey Kindler, has cut costs by eliminating more than 15,000 jobs. But he is under pressure to find deals to bolster Pfizer's pipeline. The success of Lipitor is considered a hard act to follow – the drug has been the best selling prescription medicine in the world, bringing in $12bn in 2007. A Deutsche Bank analyst, Barbara Ryan, estimated that by purchasing Wyeth, Pfizer could limit the drop in its profits to a 10% fall rather than a 23% decline in 2011. Tim Anderson, an analyst at Sanford Bernstein, said: "Wyeth represents perhaps the best take-out play if one assumes there will be at least some big pharma consolidation over the next one to three years." Pfizer United States Drugs guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (1 d ago)

• Barclays shares fall for ninth day Barclays shares fall for ninth day
01/23/2009
John Varley, the chief executive of Barclays, was under mounting pressure after the bank endured its ninth day of heavy stockmarket falls as investors turned against bank stocks. More than £10bn has been wiped off Barclays' stockmarket value in the past fortnight. Its fall to 51.2p a share today gave it a value of just £4.2bn. The fall has taken place even though Varley has mounted a strong defence of the bank's financial position and the bank is thought to be working hard with its auditors to try to finalise its 2008 accounts, as quickly as possible. The accounts were due to be released on 17 February. Last Friday, after the bank's shares suffered a tumultuous 25% drop, Barclays released figures showing it expected profits for 2008 of more than £5.3bn. But this failed to stem the fall and prompted Varley to insist that the bank was being unfairly caught up in the negative sentiment sweeping through the banking sector. The admission by Royal Bank of Scotland that it could make a loss of up to £28bn for 2008 knocked investor confidence, as did the release of a package of measures by the government to try to stimulate lending. Varley said: "Sentiment in the banking sector at the moment, whether it's in the United Kingdom or the United States or Europe, is at a low point in the cycle." Shares in the new Lloyds Banking Group, formed on Monday when Lloyds TSB completed its takeover of HBOS, have more than halved to 49.3p, while RBS is now trading at 12.1p, well below the 65p at which the taxpayer injected £15bn into the Edinburgh-based bank. He tried to reassure investors that if Barclays took part in a government-backed scheme to insure banks for losses on toxic assets that the bank would be able to pay in cash. This would allow Barclays to avoid issuing preference shares, which is the other method of payment the government will accept to pay for the insurance. Issuing shares may also be difficult for Barclays because of a clause in the contract with its Middle East investors allowing them to increase their shareholding. But City sources noted the Financial Services Authority had reassured the stockmarket on Monday that it was not expecting banks to need to raise more capital – despite the downturn in the economy and the continued fall in price of a variety of assets. There was also discussion about whether the lifting of the ban on short-selling on Friday had contributed to the fall. Lansdowne Partners is the only hedge fund to have admitted to the strategy of selling shares with a view to buying them back more cheaply. It has made a profit of about £12m in just four days from this strategy. Other hedge funds have not disclosed any other short positions to the market, as would be required by the FSA if they held positions worth more than 0.25% of the company's value. One of the lingering concerns about Barclays is the way it values the investments that have caused major losses at other banking groups. But Varley continues to insist that there are no hidden problems. "Risk isn't generic and risk management isn't generic," he said. Barclays Banking Credit crunch London Stock Exchange Shares Royal Bank of Scotland Lloyds Banking Group guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (1 d ago)

• Wall Street boss Thain ousted for extrav... Wall Street boss Thain ousted for extravagance
01/23/2009
Antique furniture, a $15bn (£11bn) loss and an unacceptably lavish trip to a Swiss ski resort. The 30-year Wall Street career of former Merrill Lynch boss John Thain came crashing to an end this week as his new employer, Bank of America, ran out of patience. Nicknamed "superThain" for his bespectacled Clark Kent looks, Thain was once known as a turnaround expert with a deft hand for fixing troubled financial institutions. But he lost his job in a meeting which lasted barely 15 minutes on Thursday morning with Bank of America's chief executive, Kenneth Lewis. "Ken went to see him, they had a short meeting and they mutually decided things weren't working out," a Bank of America spokesman said. Ostensibly, the reason for Thain's departure was that Merrill Lynch has being losing money hand over fist since Bank of America agreed to buy the business in September. In the final quarter of the year, Merrill lost an eye-watering $15.3bn on exposure to toxic derivatives and bad mortgages. Bank of America bosses privately complain that Thain left them in the dark about the scale of the outflow – as the situation deteriorated in December, he went on holiday to the mountain resort of Vail. The banking group might have pulled out of its purchase of Merrill had it not been urged to press on by the US treasury which, fearing another Wall Street bankruptcy, hurriedly stumped up $20bn of aid. But Thain's personal style engendered particular irritation. In a carefully timed leak, it emerged this week that Thain spent $1.22m of Merrill's money renovating his office in New York a year ago. The 58-year-old signed off on purchases including an $87,784 rug, a $35,115 commode and a pair of curtains costing $28,091. Even the waste paper bin cost $1,405. In any other year, such expenses would barely have prompted a raised eyebrow among Wall Street banks where wood panelling, tropical fish tanks and oil paintings are commonplace. But Thain misjudged the climate. "Redecorating your office at this expense while letting go of employees is not a good thing," said Stuart Plesser, a banking analyst at Standard & Poor's equity research. Office furnishings were not the only example of Thain's reluctance to tighten his belt. He was planning to lead a Merrill delegation to the World Economic Forum's annual summit in Davos at the end of this month – and his plans irritated Bank of America chiefs. While Bank of America plans a single cocktail reception for opinion leaders in Davos, the Merrill team intended to show off in style. A banking industry source said: "Signals were sent to John that what he was planning was not appropriate. They were going to take over a hotel. They were going to do a lot of press with multiple parties and dining events." With Wall Street banks struggling to stay afloat, Thain even had the audacity to lobby for a bonus. He let it be known to Merrill's board late last year that he felt he deserved $10m for successfully selling the business, thus protecting it from the fate of Lehman Brothers and Bear Stearns. When his peers at rivals such as Goldman Sachs and Citigroup declared that they were renouncing personal payouts, Thain backed down. "The collective weight of things coming out – the office, the trips, the bonus – borders on indefensible," said Nancy Bush, an analyst at NAB Research. It is a shattering end for a man who spent 24 years at Goldman Sachs before moving to run the New York stock exchange – where he won plaudits for trimming costs and smoothing the process towards electronic trading. For many on Wall Street, the lingering question is what might happen to Bank of America next. While Merrill's brand and brokerage network are valuable assets, the firm's investment banking arm is proving a huge liability. Bank of America's own boss will face his board next week with doubts mounting over his handling of the takeover. Critics suggest Lewis failed to negotiate sufficiently hard when he agreed to buy Merrill in an all-stock deal which was worth nearly $50bn before share prices sank. Others, such as JP Morgan's Jamie Dimon, have proved more ruthless in snapping up troubled firms. "It is possible to do good deals in this environment," said Robert Bruner, dean of the University of Virginia's Darden school of business. "It looks like JP Morgan, which has acquired Bear Stearns and Washington Mutual, will stay on its feet and remain healthy." Many wonder whether Lewis will meet the same fate as Thain. Shares in Bank of America have collapsed by 78% since September. "If he doesn't go, he's going to be kept on a very, very short leash by the board in future," said Bush. "As the stock continues to sink, it's going to get harder and harder for the board to defend him." US economy Global recession Merrill Lynch United States guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (1 d ago)

• Scardino admits using shares to back loa... Scardino admits using shares to back loan
01/23/2009
Dame Marjorie Scardino today became the latest leading business figure to admit using shares in their employer to underwrite a personal loan. Scardino, the chief executive of Pearson and one of the most powerful women in British business, has pledged 216,668 shares in the publishing house to HSBC, along with other assets. The arrangement dates back to March 2006, and at today's price the shares are worth almost £1.37m. The arrangement was disclosed by Pearson to the stockmarket this morning. "This is not Pearson-related," a spokesman explained. "It is a personal financial situation, a personal family matter." today is the deadline set by the Financial Services Authority for company directors to reveal whether they have pledged their shares in this way. The regulator set up the disclosure amnesty after David Ross, the co-founder of Carphone Warehouse, was forced to resign from several company boards after admitting secretly using £162m worth of shares as collateral personal loans. Pearson said that Scardino had informed the company the day after Ross's actions came to light. Ross's fall has prompted a rush of disclosures across the City, including the billionaire businessman Michael Spencer ; Lord Rothermere , Daily Mail & General Trust chairman; JD Wetherspoon's chairman, Tim Martin , and Fritz Seegers, Barclays chief executive of retail and commercial banking. About 60 listed companies have updated the market to date. However, it seems unlikely that other directors will share Ross's fate, as there is a widespread feeling that the FSA's rules were not clear enough, hence the amnesty. Stockmarket rules say a company director must disclose any dealings in its shares, but it appears that there has been confusion over whether pledging shares against a loan counts as dealing. Scardino owns a total of 632,755 shares in Pearson, equivalent to 0.078% of its issued share capital. Her disclosure did not appear to affect Pearson's share price, which was down 1.7% today at 632p. Financial Times Regulators Pearson Marjorie Scardino Carphone Warehouse Corporate governance guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (2 d ago)

• Santander applauded 'impeccable' Madoff ... Santander applauded 'impeccable' Madoff weeks before scandal
01/23/2009
Spanish banking giant Santander reportedly praised Bernard Madoff for his "impeccable" timing just weeks before the disgraced financier was accused of the biggest fraud in corporate history. According to the Financial Times, Optimal, Santander's fund-management arm, told its institutional investors in a report last autumn that Madoff had an ability "to find great entry and exit points to benefit investors". US regulators now believe, though, that Madoff may never have made a single trade . He is accused of running a massive pyramid scheme, using cash from new investors to fund payments to earlier clients. Clients of Santander are thought to be some of the biggest victims of Madoff's alleged $50bn (£37bn) fraud. With lawyers on both sides of the Atlantic already considering legal action, the bank faces the prospect of being sued by investors who have lost money. A Santander spokesman declined to comment this morning, other than to state that the bank is not involved in any legal action over Madoff. While Santander faces losses of just €17m (£16m), its clients face total losses of €2.3bn. Spain's top anti-corruption investigator has already launched an investigation into how such a large exposure could have been built up without triggering Santander's risk controls, and Spanish legal firm Cremades & Calvo-Sotelo has teamed up with America's Labaton Sucharow to represent victims. Labaton Sucharow has cited Optimal as one of the "feeder funds" who channelled funds into Madoff Securities in return for what it calls "lucrative commissions". "Labaton Sucharow is investigating whether these feeder funds conducted adequate due diligence before investing in Madoff in light of the multiple red flags that are now know to have been evident, including the absence of a serious or reputable auditor, the absence of an outside clearing agent, and the overly consistent returns," it said last month. Many other financial institutions have also reported being exposed to Madoff Securities, including Man Group – which is considering legal action of its own . Reports from Spain have shown that many small investors were also encouraged to put their savings into Madoff Securities via Optimal, including a retired school teacher who put half her savings in the fund, and a street vendor who invested more than $400,000 in lottery winnings in the fund. And in Philadelphia, a widow who thought she had more than $7m invested with Madoff has now taken up cleaning work . Bernard Madoff himself is still on bail in New York, and wore a bullet-proof vest on his last court appearance . Banco Santander Bernard Madoff Banking US economy United States guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (2 d ago)

• Marston's reports weak beer sales but ou... Marston's reports weak beer sales but outperforms rivals Punch Taverns and Enterprise Inns
01/23/2009
Pubs and brewing group Marston's, which owns the Pitcher and Piano chain, has suffered a slump in trading – but has outperformed rivals. The shares jumped by 10% in early trading and later traded up 2.5p at 99.75p, a rise of 2.6%. Marston's, which owns more than 2,250 pubs, said today that like-for-like profits fell by 6% at its tenanted pubs in the 15 weeks to 17 January. "Trading in the Christmas and New Year weeks showed a slight improvement compared to recent trends, but as expected, trading in January to date has been more subdued," the company said. It has tried to support its tenants through rent concessions and price discounts on beer. Rivals Punch Taverns and Enterprise Inns have posted sales declines of 12% and 8% respectively in their leased pub estates. Marston's posted a 2.9% fall in sales at its managed pubs. "Whilst the environment is difficult, Marston's continues to trade in line with its board's expectations. Its managed houses are taking share and its tenanted performance is better than that of Punch or Enterprise," said Mark Brumby at Blue Oar Securities. Paul Hickman at KBC Peel Hunt said the figures were "better than might have been feared". He downgraded his annual profit forecast by 3% to £67m. Earlier this month, the company refinanced £295m of a £400m bank loan, extending the facility by three years to 2013. Marston's is worried that there could be further increases in beer duty this year following last year's rises. It is backing the Axe the Beer Tax campaign run by industry bodies including the British Beer & Pub Association. Marstons Punch Taverns Enterprise Inns Food & drink industry guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (2 d ago)

• The last recession in 1990/1991 The last recession in 1990/1991
01/23/2009
Britain has officially plunged into recession for the first time since 1991. While there are many differences today, some things haven't changed much at all (2 d ago)

• Obama team accuses China of manipulating... Obama team accuses China of manipulating its currency
01/23/2009
Barack Obama's choice as the next treasury secretary has fired the first shot in what could be a new protectionist battle between America and China. Tim Geithner told US senators that Obama believes that China has been manipulating its currency, the yuan - an accusation that is likely to hurt relations between the two countries. In written testimony at a confirmation hearing, Geithner said that "President Obama - backed by the conclusions of a broad range of economists - believes that China is manipulating its currency." The former head of the Federal Bank of New York went on to tell the Senate finance committee that Obama will use "all the diplomatic avenues open to him" to push for changes in China's currency practices. Geithner is expected to be officially confirmed in his post by the full Senate within days. While it is an open secret that Beijing does take steps to manage the value of its currency, analysts warned that Geitner's comments risk disrupting the delicate balance between the two countries. The yuan has strengthened against the dollar since 2005, when China stopped pegging the currency. From around eight yuan to the dollar in 2005, it was trading at 6.84 earlier today. This rise has pushed up the cost of Chinese exports overseas. There was no official response from the Chinese government to Geithner's comments. America is a hugely important market for China's factories, which have already suffered from the US economic slump. The flow of goods from east to west has meant China built up huge reserves of dollars and holds more US government debt, in the form of Treasury notes, than any other country. The prospect that China might respond by selling some these assets off triggered a drop in the value of long-term US treasuries yesterday. The term "manipulates" is politically sensitive, as under America's trade laws the US treasury must identify any country that manipulates its exchange rate to gain an advantage in international trade. But Geithner's remarks may find favour with the American manufacturers, unions and politicians who have claimed that Chinese firms have an unfair edge over foreign competitors. The Senate committee approved Geithner's nomination, however he must wait another week for final confirmation while Republicans continue to dig into his tax affairs . The former top US banker has admitted failing to pay self-employment taxes over a four-year period - an omission he says he has now addressed. US economy China Currencies Barack Obama Obama White House United States guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (2 d ago)

• UK car production nearly halves in Decem... UK car production nearly halves in December
01/22/2009
Pressure on the government to unveil measures to help Britain's hard-pressed automotive industry intensified this morning after it emerged car production slumped by almost half last month. With many manufacturers on extended Christmas shutdown, the number of cars rolling off production lines in December fell 47.5% to just 53,823. Overall production for the year was down 5.7% to 1.45m, according to figures from the Society of Motor Manufacturers and Traders. Commercial vehicle production was even worse affected by the fall-out from the credit crunch which has slashed demand. December production fell 56.7% to 6,209 vehicles, while the total for the year was down 5.9% to just over 200,000. Further falls are inevitable. Nissan is laying off 1,200 staff at its Sunderland plant, Honda is halting production at Swindon for four months and Jaguar Land Rover has said it is looking at ways to cut costs which would avoid making workers redundant. Cuts by the manufacturers affect companies in the industry's supply chain, many of which are already struggling financially because of the credit crunch. Carmakers around the world are cutting production as inventories build up to unprecedented levels. Storage areas and docksides are now packed with vast expanses of unsold cars as demand slumps. Next week leaders of the automotive industry will meet business secretary Lord Mandelson to discuss the government's response to their calls for help to boost the availability of credit to boost demand. This morning Paul Everitt, chief executive of the SMMT, said: "The automotive industry is of strategic economic and social importance, reflected in the measures to support the industry being discussed by governments across Europe and around the world. "SMMT has been in close discussion with UK government on the urgent need to improve access to credit and kick start demand in the market, in order to sustain valuable industrial capability during theis exceptionally difficult period. "SMMT is looking forward to meeting with Lord Mandelson before the end of January to receive the government's response to the proposals we submitted at our November meeting." Automotive industry Honda Jaguar Land Rover Credit crunch guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds (3 d ago)

• States Hobbled By Unemployment Bills States Hobbled By Unemployment Bills
01/24/2009
More than 4.6 million Americans are now receiving jobless benefits, and that's putting a serious squeeze on state budget, reports CBS News correspondent Michelle Miller. (13 h ago)

• Calif. Bank Is Third To Fail This Year Calif. Bank Is Third To Fail This Year
01/23/2009
Regulators on Friday shut down 1st Centennial Bank in California, the third U.S. bank to fail this year. California regulators closed the Redlands-based bank and appointed the Federal Deposit Insurance Corp. as receiver. (1 d ago)

• Google Reprices Employee Stock Options Google Reprices Employee Stock Options
01/23/2009
Google Inc. is showing its love for its employees by giving them a second chance to profit from their wilting stock options. But the move irked shareholders still stuck with agonizing losses on their investments. (1 d ago)

• Jobless Execs Face Tough Lifestyle Chang... Jobless Execs Face Tough Lifestyle Changes
01/23/2009
With unemployment rising, white collar workers are trading in briefcases and careers for brown bag lunches and dim job prospects. Seth Doane looks at painful lifestyle changes. (1 d ago)

• Year Of The Ox Looking Very Un-Bullish Year Of The Ox Looking Very Un-Bullish
01/23/2009
Chinese fortunetellers say fire is essential to financial well-being. And fire is nowhere to be found in the mythology of this coming Year of the Ox, the Chinese lunar year that begins Monday. (1 d ago)

• Report: Pfizer Looking To Buy Rival Wyet... Report: Pfizer Looking To Buy Rival Wyeth
01/23/2009
Pfizer Inc., the world's largest drugmaker, may be seeking to buy rival Wyeth in a deal that could be valued at more than $60 billion, the biggest in recent memory. (1 d ago)

• GE's 4Q Earnings Drop 46 Percent GE's 4Q Earnings Drop 46 Percent
01/23/2009
General Electric Co.' fourth-quarter net income fell 46 percent, weighed down by its ailing financial business and capping a difficult year for the industrial giant. (1 d ago)

• Mac Turns 25 With Uncertain Future Ahead Mac Turns 25 With Uncertain Future Ahead
01/23/2009
Twenty-five years after the debut of the Macintosh, the product that is the soul of Apple is not necessarily its vehicle to the future. (2 d ago)

• Former Merrill CEO Out At Bank America Former Merrill CEO Out At Bank America
01/22/2009
John Thain resigned under pressure from Bank of America after reports he rushed out billions of dollars in bonuses to Merrill Lynch while the brokerage was suffering huge losses and just before Bank of America took it over. (2 d ago)

• Meltdown Spurs Fugitives & "Econocides" Meltdown Spurs Fugitives & "Econocides"
01/22/2009
It's becoming a trend: So-called fugitive financiers attempting to skip town after losing big for investors. Bob Orr examines the disturbing recent spate of big-money power brokers fleeing financial meltdown - and taking their own lives. (2 d ago)

• To Refinance Or Not To Refinance? To Refinance Or Not To Refinance?
01/22/2009
That's not even a question for Ray Martin who says waiting could mean missing a historic window of opportunity. (2 d ago)

• Google Earnings Top Expectations Google Earnings Top Expectations
01/22/2009
For the last quarter of 2008, Google followed the example of Apple and IBM, reporting financial results that beat analyst estimates in grim economic environment. (2 d ago)

• Merrill Lynch CEO John Thain Resigns Merrill Lynch CEO John Thain Resigns
01/22/2009
Bank of America Corp. gave no reason for John Thain's departure, but it follows news that Merrill Lynch had moved up its year-end bonuses, doling out cash just days before it was officially acquired by Bank of America on Jan. 1. (2 d ago)

• Jobless Numbers Continue Bleak Rise Jobless Numbers Continue Bleak Rise
01/22/2009
Microsoft announced plans Thursday to cut up to 5,000 jobs, underscoring the latest disappointing news regarding the nation's growing unemployment rate. (2 d ago)

• Microsoft Shows It Isn't Recession-Proof Microsoft Shows It Isn't Recession-Proof
01/22/2009
Microsoft Corp. said it is cutting 5,000 jobs over the next 18 months, a sign of how badly even the biggest and richest companies are being stung by the recession. (2 d ago)

• New Home Constructions Hits 49-Year Low New Home Constructions Hits 49-Year Low
01/22/2009
New home construction plunged to an all-time low in December, capping the worst year for builders on records dating back to 1959. (3 d ago)

• Pork imported from Ireland contaminated ... Pork imported from Ireland contaminated with dioxin
01/24/2009
More than 23 tonnes of frozen pork shipped from Ireland to Nanjing was found to contain toxic dioxin and ordered to be shipped back on Friday, a local inspection and quarantine authority said Sunday. The 937 cases of pork, imported by a food company in Suzhou City, was found to contain the chemical dioxin, according to the Suzhou Municipal Entry-exit Inspection and Quarantine Bureau. Dioxin is carcinogen specifically linked to breast cancer. Inspectors sealed the pork and ordered ... (8 h ago)

• CNPC expands oil and gas business to 29 ... CNPC expands oil and gas business to 29 countries
01/24/2009
The China National Petroleum Corporation (CNPC) had expanded its oil and gas businesses to 29 countries by the end of 2008, according to sources with the CNPC. Currently 75 cooperative projects are underway in these countries, with five oil and gas cooperative zones being built in Central Asia, Africa, South America, the Middle East and the Asia-Pacific region, the sources said. In addition, CNPC has largely improved its international competitiveness in engineering and technologi ... (8 h ago)

• Falling demand causes damaging losses to... Falling demand causes damaging losses to British manufacturing
01/24/2009
Together with a tight credit market, falling market demand has given a damaging blow to British manufacturing, pushing the country's economy further to the edge of collapse. The Confederation of British Industry (CBI) has warned that prospects for the next few months will become even more gloomy, as business orders continue to fall. This worrying situation was revealed by a recent CBI industrial trends survey, which was concluded in earlier January and had responses from 527 manu ... (8 h ago)

• Chilean private mining companies critici... Chilean private mining companies criticized for firing 14,000 workers
01/24/2009
Chilean private mining companies were criticized by the country's labor union for having laid off more than 14,000 workers since 2008, local media reported Friday. President of the Central Union of Workers in Chile Arturo Martinez said that such move "is a company policy to make the employees pay for the financial crisis." "The businessmen think of themselves more than their workers, though they have earned a lot of money at the good prices of the copper," Martinez said. ... (8 h ago)

• Brazil's Petrobras to invest $174.4 bln ... Brazil's Petrobras to invest $174.4 bln by 2013
01/24/2009
Brazil's state owned oil and gas giant Petrobras on Friday announced its 2009-2013 business plan which foresees a total investment of 174.4 billion U.S. dollars, up 55 percent from the 2008-2012 plan. The plan's publication has been postponed several times since September, as the company said it needed to be reviewed taking into consideration the international financial crisis and its effects on the oil market. According to the plan, 90 percent of the total investment, or 157.3 b ... (8 h ago)

• Precious metals soar on continued safe-h... Precious metals soar on continued safe-haven demand
01/24/2009
Supported by increasing safe-haven demand, prices of precious metals futures on the COMEX Division of the New York Mercantile Exchange rose sharply on Friday. Gold price for February delivery gained 37 U.S. dollars, or 4.3 percent, to 895.80 dollars an ounce. The precious metal hit as high as 903.80 dollars in the session, the first time above 900 dollars since last October. For the week, gold gained 55.90 dollars, or 7%, from last Friday's closing level of 839.90 dollars an ounce. ... (8 h ago)

• Suspension of new work permits hits Nepa... Suspension of new work permits hits Nepal's economy
01/24/2009
The suspension of new work permits for Malaysia following an announcement by the Malaysian government to stop recruitment of foreign workers will hit remittance -- one of the major contributors to Nepal's economy, The Himalayan Times reported on Sunday. The total contribution of remittance to the GDP is 17.4 percent, according to the Nepal Rastra Bank. If remittance falls by half due to drastic job cuts in Malaysia and the Gulf countries where there are more Nepalis -- the Balanc ... (8 h ago)

• China mulling expansion of zero-tariff o... China mulling expansion of zero-tariff on African products
01/24/2009
On the basis of levying zero tariff on products of 31 African countries, China is considering to include more African goods into the zero-tariff treatment, said Minister of Commerce Chen Deming. After visiting Kenya, Zambia and Angora in mid-January, Chen said quite a number of African countries had a certain amount of deficit in trade with China, and China will expand import from Africa accordingly. "On the basis of offering zero tariff for the goods from 31 least developed Afri ... (12 h ago)

• China's mutual funds increase 281.9 bln ... China's mutual funds increase 281.9 bln shares amid bearish market
01/24/2009
Figures from the China Securities Regulatory Commission (CSRC) show that in 2008 China's mutual funds enjoyed an increase of 281.9 billion shares despite the bearish market that dampened investment throughout the year. According to statistics ending Dec. 31, 2008, China had 464 mutual funds, with a combined net value of 1.89 trillion yuan (about 277 billion U.S. dollars) and a total shares of 2.464 trillion shares. Of all the mutual funds, 89 were newly founded in 2008. T ... (12 h ago)

• Outbound travel increases, domestic trav... Outbound travel increases, domestic travel shrinks during Spring Festival in Shanghai
01/24/2009
More people will choose to travel abroad during the Spring Festival holiday, or the Chinese Lunar New Year, and domestic travel market is shrinking, according to Shanghai's tourism authorities. A total of 39,377 people in Shanghai, the country's economic hub, will travel abroad between Jan. 21 to Feb. 1, up 5.26 percent year on year, according to the municipal holiday travel office. The number of people heading for Europe and Australia soared by30 percent to 40 percent year on y ... (12 h ago)

• Olympics help fuel Beijing's economic gr... Olympics help fuel Beijing's economic growth
01/24/2009
The Beijing Olympics and Paralympics helped fuel the Chinese capital's economic growth last year despite a global slowdown, the municipal bureau of statistics said Saturday. The bureau said Beijing's gross domestic product (GDP) totaled 1,048.8 billion yuan (about 153 billion U.S. dollars) last year, up 9 percent over 2007. The bureau's spokeswoman Yu Xiuqin voiced satisfaction with the growth rate, despite a significant drop from the average 12.4 percent posted between 2002 and ... (12 h ago)

• China raises rice prices to boost grain ... China raises rice prices to boost grain output
01/24/2009
China's top economic planner said Saturday it would raise the minimum state purchasing prices for rice in major rice-producing areas by as much as 16.9 percent this year. The move was aimed at protecting farmers' interests, keeping grain prices stable and boosting grain output as grain growers had experienced higher costs since last year, according to the National Development and Reform Commission (NDRC). The state purchasing prices for japonica rice will rise 15.9 percent to 190 ... (12 h ago)

• China central bank refutes currency mani... China central bank refutes currency manipulation allegation, warns trade protectionism
01/24/2009
The People's Bank of China, the country's central bank, disproved Saturday the allegations by a U.S. Treasury official that China is manipulating the exchange rates of its currency, saying the statement is untrue and misleading. Su Ning, vice governor of the central bank, said that the allegation could sidetrack the effort to track the real cause of the financial crisis. "President Obama -- backed by the conclusions of a broad range of economists -- believes that China is manipul ... (12 h ago)

• China removes gov't control over fertili... China removes gov't control over fertilizer price
01/24/2009
China will remove all government control over fertilizer prices starting from Sunday, the country's economic planner said Saturday. Prices of domestically produced fertilizers and all fertilizer imports except potash fertilizers will be decided by the market, said the National Development and Reform Commission (NDRC). Previously, China asked fertilizer producers and retailers to get approval for price increases and exercised controls on the extent of price increases in 2004, in o ... (12 h ago)

• THE WEEK'S WINNERS AND LOSERS THE WEEK'S WINNERS AND LOSERS
01/25/2009
WINNERS STEPHEN ROSS New York real estate big closes on purchase of NFL's Miami Dolphins. DICK PARSONS Former Time chief moves into the chairman' suite of Citigroup. SERGEY BRIN What recession? Google co-founder sees company's 4Q profit... (5 h ago)

• WAMU A $12.5B DEADBEAT: IRS WAMU A $12.5B DEADBEAT: IRS
01/25/2009
Washington Mutual Inc., the former parent of the biggest US bank to fail, owes $12.5 billion in back taxes, the Internal Revenue Service said in court papers filed in the company's bankruptcy case. The company filed papers Thursday asking US... (7 h ago)

• BREAKING UP HARDER TO DO BREAKING UP HARDER TO DO
01/25/2009
Irene Georgakis, a housewife in Queens, filed for divorce after learning on Valentine's Day 2007 that her husband of 24 years had a girlfriend. She thought she'd hit bottom. Then the economy nose-dived, and things got worse. Georgakis, 54, said... (7 h ago)

• SYMPATHY FOR WAMU HOLDERS SYMPATHY FOR WAMU HOLDERS
01/25/2009
Dear John: I have more than 400 shares of Washington Mutual stock. Will it be converted to JPMorgan shares? If so, where can I research the conversion rate? J.P. Dear J.P.: You have my sympathy. Washington Mutual was closed by the Office of... (7 h ago)

• FULD HIDES HOME FULD HIDES HOME
01/25/2009
Dick Fuld, who piloted Lehman Brothers into Chapter 11 last September, appears to be making moves so he doesn't lose his tony Florida seaside mansion in any civil lawsuits that may be filed against him. Weeks after the Sept. 15 bankruptcy filing... (7 h ago)

• BAD ECONOMY HITS SPORTS BAD ECONOMY HITS SPORTS
01/25/2009
The crumbling economy continues to intrude on sports. Struggling insurer AIG, which was taken over by the US government last year, said last week its wasn't going to renew its four-year, $98.9 million sponsorship with soccer powerhouse Manchester... (7 h ago)

• TIMES' MEXICO SAVIOR THE REAL SHADY SLIM TIMES' MEXICO SAVIOR THE REAL SHADY SLIM
01/25/2009
Eighteen months before Carlos Slim, the controversial Mexican billionaire, decided to ride to the rescue of The New York Times empire, a story on the $60 billion man ran in the Gray Lady. It called him a "robber baron" and a "crony" of Mexico's... (7 h ago)

• GOLDMAN'S RESEARCH TEAM HAS LOST CRED GOLDMAN'S RESEARCH TEAM HAS LOST CRED
01/25/2009
As stocks tank and Wall Street is re-made, even the best and brightest in the financial sector are getting their reputations shredded. Take, for example, Goldman Sachs, whose equity-research department is regarded as the gold standard on Wall... (7 h ago)

• THE REIGN OF THAIN WAS MAINLY JUST A PAI... THE REIGN OF THAIN WAS MAINLY JUST A PAIN
01/25/2009
WE know why colleagues call former Merrill Lynch CEO John Thain, "I-Robot." The emphasis was clearly on the "I." This week, with word that Thain spent $1.2 million to redecorate his office (including a $35,000 commode) the former Wall Street... (7 h ago)

• ROGUES' GALLERY ROGUES' GALLERY
01/25/2009
When John Thain was forced out as chief executive of Merrill Lynch last week after hurrying through billions in bonuses for executives at the money-losing brokerage and spending $1.2 million to redesign his corner office, the once-admired Wall... (7 h ago)

• DOUBLE DOWNED DOUBLE DOWNED
01/25/2009
Doubledown Media, the five-year old publisher of Trader Monthly, Dealmaker and other titles aimed at financial professionals, has put itself up for sale, The Post has learned. Randall Lane, CEO, refused to comment on whether the company was for... (7 h ago)

• HEDGIES CASH IN ON BANKS HEDGIES CASH IN ON BANKS
01/25/2009
As banking stocks suffered through one of their worst days ever last Tuesday - Citigroup, Bank of America, Wells Fargo, US Bank, JPMorgan Chase and others fell more than 20 percent - not every investor was taking their lumps. A group a savvy... (7 h ago)

• BARACK'S BANK BET BARACK'S BANK BET
01/25/2009
The heat is on the Obama Administration. Congressional leaders are pressing the White House to come up with a plan as soon as this week to save the banks and jumpstart the economy. As the Obama economic team huddles this weekend in an attempt... (7 h ago)

• Jim Horne, a Familiar Face in Ads From t... Jim Horne, a Familiar Face in Ads From the 1950s, Dies at 91
01/24/2009
Beginning in the late 1940s, Mr. Horne was perhaps the most widely seen male model in the country, appearing in hundreds of advertisements. (9 h ago)

• To Fleet Street by Way of the K.G.B. To Fleet Street by Way of the K.G.B.
01/24/2009
Britons aren’t sure what to make of an ex-K.G.B. officer’s deal to buy London’s most enduring afternoon newspaper, The Evening Standard. (10 h ago)

• Streaming Onto the Mall, and Into Laptop... Streaming Onto the Mall, and Into Laptops
01/24/2009
An estimated 1.8 million people watched the inauguration of Barack Obama in person. How many more watched it across the country? (10 h ago)

• Essay: See the Web Site, Buy the Book Essay: See the Web Site, Buy the Book
01/24/2009
Do elaborate Web sites and videos really sell books? As in so much of publishing, no one really knows. (17 h ago)

• Scene Stealer: Suddenly, Hollywood Seems... Scene Stealer: Suddenly, Hollywood Seems a Conservative Investment
01/24/2009
Although the movie business has been hurt along with nearly every other industry, it’s proving far more resilient to recession than most. (17 h ago)

• DirecTV Raises Its Sights for a Channel DirecTV Raises Its Sights for a Channel
01/23/2009
The satellite television provider picks up well-regarded series from other networks. (1 d ago)

• Banker Emerges as Cubs’ Top Bidder Banker Emerges as Cubs’ Top Bidder
01/23/2009
Thomas Ricketts got the backing of the Tribune Company’s creditors committee on Thursday to acquire the Chicago Cubs and Wrigley Field for around $900 million. (2 d ago)

• ABC to Merge 2 TV Units to Streamline an... ABC to Merge 2 TV Units to Streamline and Cut Costs
01/22/2009
The plan was prompted largely by a desire to streamline operations and cut costs as audiences for network television continue to dwindle. (2 d ago)

• Times Co. Is in Talks to Sell Part of Bu... Times Co. Is in Talks to Sell Part of Building
01/22/2009
The New York Times Company is in negotiations to sell a substantial portion of its headquarters building on Eighth Avenue in Midtown Manhattan to W. P. Carey & Company. (2 d ago)

• Advertising: Making Every Second, or $10... Advertising: Making Every Second, or $100,000, Count
01/22/2009
For advertisers, Super Bowl ads are just part of overall marketing campaigns. (2 d ago)

• The TV Watch: A Day Best Captured by Ima... The TV Watch: A Day Best Captured by Image, Not Narrative
01/22/2009
For many a historic event, being there is the next best thing to watching it on television. The inauguration of Barack Obama was the exception. (2 d ago)

• Publisher Rethinks the Daily: It’s Free ... Publisher Rethinks the Daily: It’s Free and Printed and Has Blogs All Over
01/22/2009
The Printed Blog, a Chicago start-up, plans to reprint blog posts on regular paper, surrounded by local ads, and distribute the publications free in big cities. (3 d ago)

• Obama Presses for Quick Jolt to the Econ... Obama Presses for Quick Jolt to the Economy
01/25/2009
President Obama stepped into the effort to assemble an economic recovery package, seeking to quell criticism and to retain leadership on an initiative that could define his term. (7 h ago)

• Mortgages: Safeguarding Against Loan Dis... Mortgages: Safeguarding Against Loan Discrimination
01/24/2009
New York State authorities announced a settlement this month with two mortgage brokers accused of discriminating against minority borrowers. (9 h ago)

• Strategies: A Quarter When Mutual Fund R... Strategies: A Quarter When Mutual Fund Rankings Didn’t Matter
01/24/2009
During the fourth quarter, the average five-star mutual fund lost nearly as much as the stock market itself. (17 h ago)

• The Count: The Horror of Examining a 401... The Count: The Horror of Examining a 401(k) Balance
01/24/2009
Those who can bring themselves to open the envelope are often stricken by columns of minus signs and descending numbers. (18 h ago)

• Wealth Matters: Surviving in a Financial... Wealth Matters: Surviving in a Financial World With Limits
01/24/2009
In a year when the sins of a few are being paid for by many, it is appropriate for people at all income levels to adopt some survival techniques. (1 d ago)

• Your Money: Doing the Right Thing by Pay... Your Money: Doing the Right Thing by Paying the Nanny Tax
01/24/2009
Consider a couple of reasons it may be wise for people who are not paying their housekeeper or baby sitter’s taxes to reconsider. (1 d ago)

• Costs and Tighter Rules Thwart Refinanci... Costs and Tighter Rules Thwart Refinancings
01/24/2009
Interest rates are falling, but many potential borrowers may not qualify for the best rates. (1 d ago)

• Patient Money: Seeing Straight Without B... Patient Money: Seeing Straight Without Breaking the Bank
01/24/2009
A month’s rent just for eyeglasses? Taking care of your eyesight doesn’t have to cost so much. (1 d ago)

• Cost of Living: Bankruptcy as a Step to ... Cost of Living: Bankruptcy as a Step to Solvency
01/23/2009
The idea of declaring bankruptcy may be unpleasant, but for many people right now it could be the best option. (1 d ago)

• More Americans Skipping Necessary Prescr... More Americans Skipping Necessary Prescriptions, Survey Finds
01/22/2009
Increasing numbers of Americans cannot afford prescription drugs for themselves or for their children, according to a new survey. (2 d ago)

• Growing Need for Medicaid Strains States Growing Need for Medicaid Strains States
01/22/2009
Medicaid enrollments are surging because of the recession and an increase in unemployment. (2 d ago)

• Former Merrill CEO Thain resigns from Bo... Former Merrill CEO Thain resigns from BofA
01/23/2009
John Thain resigned under pressure from Bank of America on Thursday after reports he rushed out billions of dollars in bonuses to Merrill Lynch workers in his final days as CEO. (1 d ago)

• Tech meltdown hits some harder than othe... Tech meltdown hits some harder than others
01/22/2009
The economic recession is hurting every industry, and technology is no exception. But the effects of the meltdown haven’t been spread evenly across the sector. (2 d ago)

• Microsoft slashing up to 5,000 jobs Microsoft slashing up to 5,000 jobs
01/22/2009
Microsoft Corp. said Thursday it is cutting up to 5,000 jobs over the next 18 months, a sign of how badly even the biggest and richest companies are being stung by the recession. (2 d ago)

• Apple quarterly profit beats expectation... Apple quarterly profit beats expectations
01/22/2009
Apple said its profit in the holiday quarter edged up 2 percent and beat expectations, but predictions for the current quarter came in lower than analysts were predicting. (2 d ago)

• Intel to cut up to 6,000 jobs in factory... Intel to cut up to 6,000 jobs in factory shakeup
01/22/2009
Intel Corp. plans to cut up to 6,000 manufacturing jobs as the company struggles with souring personal computer demand. (3 d ago)

• President Obama flexes his tech muscle President Obama flexes his tech muscle
01/23/2009
President Obama is showing some tech savvy. He plans to post weekly video addresses on YouTube, and is creating a new chief technology officer position in his cabinet. Kai Ryssdal speaks with CNET.com's Declan McCullough about the technology officer. (1 d ago)

• Bar mitvahs less outlandish in recession Bar mitvahs less outlandish in recession
01/23/2009
Before the recession, many bar mitzvahs were outlandishly extravagant with families spending lavishly on parties after the religious ceremony. But the economic downturn is bringing these parties back down to earth. Rebecca Sheir reports. (1 d ago)

• Weekly Wrap: All about Obama Weekly Wrap: All about Obama
01/23/2009
Even with all the bad news about the economy, the main focus of the week was on President Barack Obama. Kai Ryssdal speaks with Fortune Magazine's Leigh Gallagher and The New York Times's David Leonhardt about how the president is addressing the economy and his stimulus package. (1 d ago)

• Would you like a pay cut or layoff? Would you like a pay cut or layoff?
01/23/2009
To cope with the recession, many companies are considering layoffs or pay cuts. Across-the-board pay cuts are mounting and more are expected to follow. But is it better for companies to cut pay or let employees go? Jeremy Hobson reports. (1 d ago)

• Sovereign wealth funds suffering Sovereign wealth funds suffering
01/23/2009
Dubai investors who bought Barneys New York less than two years ago now want to put it up for sale. Sovereign wealth funds like Dubai's were once huge sources of cash for U.S. companies. But that's starting to change. Sam Eaton reports. (1 d ago)

• GOP wants more tax cuts in stimulus GOP wants more tax cuts in stimulus
01/23/2009
President Obama met today with congressional leaders to discuss the best way to kick-start the economy. House members will try to pass their bill next week, but a large number of Republicans take issue with some of the stimulus proposals. John Dimsdale reports. (1 d ago)

• Amid losses, GE still paying dividends Amid losses, GE still paying dividends
01/23/2009
General Electric is reporting a 44% drop in quarterly profit. Despite this, the technology conglomerate is still paying dividends to investors. Why? Alisa Roth reports. (1 d ago)

Business

Technology

Sports

Entertainment

This is abundant, look forward to looking into ea...
John gogs :: 12/28/2009

Who knows where to download XRumer 5.0 Palladium?...
CocoChanels :: 07/03/2009

Hi, my friends!! I want to get program XRumer 5.0 ...
MagicOPromotion :: 05/03/2009

Where is this money coming from except from the mo...
carl allen :: 04/11/2009

out of control
staystrong :: 02/23/2009

The poor thing! Once so high and mighty and far ab...
leaf :: 02/22/2009

It always amazed me how eagerly people flocked to ...
David :: 12/23/2008

• Financial meltdown claims its first casu... Financial meltdown claims its first casualty
01/25/2009
One down, how many more to go?With his country's economy melting, its three biggest banks nationalised and then placed in receivership and public anger rising, Iceland's Prime Minister Geir... (6 h ago)

• Global warming a last priority Global warming a last priority
01/24/2009
Some disturbing but not surprising data from the latest survey out of the Pew Research Center for the People & the Press which found that the economy and job are the top two public priorities for... (8 h ago)

• Thain's bonanza Thain's bonanza
01/23/2009
So John Thain has finally been ousted at Merrill Lynch.But the extraordinary part about this story is about his talent for self-enrichment and arrogance beyond belief. Merrill Lynch was in serious... (2 d ago)

• Financial crisis to drive fraud claims Financial crisis to drive fraud claims
01/22/2009
The financial meltdown will result in more fraud claims and legal disputes, according to the latest report from risk management consultants Kroll.The alarming part about this report is the warning... (3 d ago)

• Steve Jobs and board failure Steve Jobs and board failure
01/22/2009
Earlier this month, I did a blog entry looking at why Steve Jobs' health was an issue for investors. It boils down to one simple equation: Jobs is Apple's most important asset and his health... (3 d ago)

• It's the End of January. Do You Know Whe... It's the End of January. Do You Know Where Your Rebate Data Is?
01/24/2009
If you didn't qualify for the entire tax rebate the government handed out earlier this year, you may still be eligible to get that money after you file your 2008 return. Especially if you made... (12 h ago)

• Free Tax Help (and Some Things You Shoul... Free Tax Help (and Some Things You Should Know)
01/24/2009
Tax time is upon us. And before you run down with all you paperwork in tow and pay someone like H&R Block, consider your other options... Shannon Buggs had a good article about those other options... (12 h ago)

• Saving Money Isn't What It Used to Be Saving Money Isn't What It Used to Be
01/23/2009
Photo courtesy of iStockphoto, Image# 6667499 Just like the weather is blowing extremely cold air all around us right now, we certainly can feel the chill of financial events that are beyond our... (2 d ago)

• Sony sees first annual net loss in 14 ye... Sony sees first annual net loss in 14 years
01/22/2009
Sony projected it would report its first annual net loss in 14 years, and Chief Executive Howard Stringer vowed to turn around the company with pay cuts, job reductions and trendier gadgets. (3 d ago)

• Novices Given $1 Million to Start a Hedg... Novices Given $1 Million to Start a Hedge Fund on TV
01/23/2009
Avanta is making its UK television debut with Million Dollar Traders on BBC2. Aired for 3 weeks in January, the series will play out at Avanta's Austin Friars business centre in London. The... (1 d ago)

• Pessimism Deepens, Driving Down Stocks Pessimism Deepens, Driving Down Stocks
01/24/2009
U.S. stocks fell as disappointing earnings at companies from Microsoft to Fifth Third Bancorp increased concern that the recession is deepening and that banks need to raise more capital. (11 h ago)

• Wage discrimination limits bill clears S... Wage discrimination limits bill clears Senate
01/22/2009
A wage discrimination bill that heralds the pro-labor policies of the Democratic-controlled Congress and White House cleared the Senate Thursday. (2 d ago)

• More peanut products added to recall lis... More peanut products added to recall list
01/23/2009
The nationwide list of peanut products recalled for salmonella contamination continues to grow quickly, and a snack from the grocery chain Trader Joe's is among the latest. (1 d ago)

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