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for 02/28/2010
(last updated 7:30am EST 02/28/2010)
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HSBC chief expected to miss out on 40% p... HSBC chief expected to miss out on 40% pay rise after investors demand U-turn
02/28/2010
Big base-salary increase likely to inflame shareholders after bosses at rival banks waive bonuses HSBC, Britain's largest bank, is expected to abandon plans to boost the pay of its chief executive, Michael Geoghegan, by as much as 40% ahead of its full-year results tomorrow. A revolt by investors looks likely to force the bank's board to jettison the deal, which was designed to protect board incomes amid a wider public row over bankers' rewards. The proposal would have increased Geoghegan's base salary to as much as £1.5m this year, from £1.1m in 2009. Finance director Douglas Flint was in line to received a similar percentage increase, taking his salary from £700,000 to more than £900,000. Investors are understood to have told bank chiefs it was wrong for them to alter the balance of pay and bonuses before major regulatory upheaval in the industry. Shareholders are also concerned that public anger at bank bonuses could boil over if institutions are seen to insulate themselves from future downturns with higher levels of base pay. In recent weeks the chief executives of the UK's other big banks have waived bonus awards. John Varley, the boss of Barclays, and RBS chief executive Stephen Hester followed the example of Eric Daniels, the boss of Lloyds Banking Group, who gave up a planned £2.3m bonus. But Geoghegan is known to believe he should be rewarded for steering the bank through the crisis without taking direct government funds. The bank imposed a boardroom pay freeze last year. The HSBC chief announced last year he would be moving to Hong Kong to expand the bank's business in Asia, which many investors are keen to see become the focus of the group's activities. He said last month that he was concerned about attacks on bonuses and new taxes due to take effect in April, in particular the new 50% top rate of income tax. He is entitled to a performance-related bonus this year of up to 400% of his salary, worth about £4.3m. HSBC currently defers around 40% of its bonuses, but has yet to outline its plans for 2010. Executive chairman Stephen Green, a committed Christian, is keen to show restraint while politicians ponder regulation of pay in the City. In contrast to Geoghegan, he has spoken of the Square Mile losing touch with the wider business community and the legitimate misgivings of the public. "You've had bonuses paid off gross income, you've had bonuses paid off first-day [profits], you've had bonuses paid without any capital charge and so you can see how that gives rise to the wrong and frankly inflated numbers," he said. Analysts believe the bank will report that pre-tax profits have increased by 13% on 2008 to reach $10.5bn (£7.2bn). Geoghegan is under pressure to show the bank is well placed to cope with continued economic uncertainty and a possible deterioration in markets that have helped generate profits over the last year. Analysts are concerned that a boom in bond trading and capital-raising for corporate customers, which brought huge profits in the first half of last year, has declined and will remain subdued during 2010. Profits halved to £3bn in the first half of the year, mainly due to massive writedowns on HSBC's Household business in the US, which was heavily involved in sub-prime loans. But bad debts in the US, Europe and Asia eased in the latter part of 2009 as most major economies emerged from recession. HSBC has made provision for $67bn of losses on loans since 2006 and is expected, like the other major banks, to continue writing off loans well into 2011. HSBC Executive pay and bonuses Banking Phillip Inman guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Vote now to mobilise the power of your p... Vote now to mobilise the power of your pension fund
02/28/2010
More than a thousand people have already registered their protest over Shell and BP's tar sands involvement. You can do the same Pension fund democracy has begun. Since last week, more than 1,200 people have gone online to register a protest with their pension fund about BP's and Shell's involvement in exploiting Canadian tar sands. The tar sands campaign is being run by lobby group Fair Pensions and its supporters include the Co-operative, trade union Unison, and a number of faith groups. It is adding to the pressure on the oil companies, and on state-controlled Royal Bank of Scotland, which has lent an estimated $7.5bn over the past three years to firms involved in this kind of activity. This action could just be the start of a broader movement to enfranchise pension fund members over a range of investors' issues from bankers' bonuses to women on the board. If you want to register a protest about tar sands, click onto the web tool at www.countingthecost.org.uk . Royal Dutch Shell BP Oil Oil Oil and gas companies Ruth Sunderland guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
British firms face onslaught from tar sa... British firms face onslaught from tar sands campaigners
02/28/2010
Lobbyists bid to turn RBS, BP and Shell annual meetings into green referendums British companies spearheading the drive to exploit the Canadian tar sands will come under renewed assault this week from an increasingly vocal group of shareholders and environmentalists who are planning to turn the forthcoming BP, Shell and Royal Bank of Scotland annual meetings into a referendum on these controversial operations. The Co-operative and the Fair Pensions lobby group are releasing a special briefing paper designed to counter recent statements by the oil companies that sought to justify their involvement in carbon-intensive oil extraction in Alberta on the basis that it was needed to meet rising oil demand. Friends of the Earth, Platform and other green groups are publishing a new report, Cashing in on Tar Sands – RBS, UK Banks and Canada's Blood Oil , which claims RBS has provided loans of $7.5bn (£4.9bn) in the past three years to companies carrying out this kind of mining in North America. There are signs the oil companies and the Canadian government are becoming increasingly concerned about the reputational damage that could be inflicted on them: a special "tar sands day of learning" was held at the headquarters of the Royal Bank of Canada in Toronto on 1 February to bolster the confidence of fellow bankers and investors. The Co-op's investor briefing, designed to rally further opposition, warns institutional investors with highly diversified portfolios that allowing BP and Shell to pursue their costly tar sands extraction could undermine their holdings in other areas of the economy. "The issue for many large investors is not just whether the macroeconomic conditions necessary to ensure the profitability of oil sands production are in place, but whether the continued expansion of oil sands production could aggravate climate change, thereby putting at risk gross domestic product growth and the performance of their portfolio as a whole," says the new document. Fair Pensions last week announced the establishment of a new web tool allowing individual pension holders to lobby their fund managers, who are big investors in BP and Shell. More than 1,200 people have taken advantage of it on www.countingthecost.org.uk. The Friends of the Earth and Platform report is being released tomorrow, on the day a coalition of non-governmental organisations seeks a judicial review against the Treasury over its willingness to allow RBS to finance companies alleged to be exacerbating climate change and disregarding the human rights of local indigenous peoples. RBS is now largely publicly owned and the NGOs believe the government could stop it from acting in ways that are counter to its climate-change policies. Tar sands oil has soared up the investment, political and environmental agenda since the Copenhagen climate change summit highlighted the need for a clampdown on the most carbon-intensive activities that are the biggest threat to global warming. Shell, a leader in the tar sands business, had shown signs of backtracking in recent months, with new chief executive Peter Voser saying: "We look at them as being developed, but at a much slower pace." But the company will still go ahead with plans to increase production by 100,000 barrels a day, which it is said will raise CO2 emissions from its current level of 3.7m tonnes a year to 5m by 2015. BP is more bullish than ever: chief executive Tony Hayward said it could be getting 100,000-200,000 barrels a day from tar sands by 2015 and was already preparing two US refineries specially to process this kind of crude. Despite mounting opposition from politicians, as well as some investors and non-governmental organisations, Hayward is convinced: "Canadian heavy oil is going to be a very important part of America's energy." But not if the Co-op and Fair Pensions can help it. They have had a resolution accepted for BP and Shell's AGMs, asking both companies to undertake reviews on the risk of tar sands extraction, with reports to be made to the 2011 AGMs. The BP resolution wants details of "assumptions made by the company in deciding to proceed with the Sunrise [tar sands] Project regarding future carbon prices, oil price volatility, demand for oil, anticipated regulation of greenhouse gas emissions and legal and reputational risks arising from local environmental damage and impairment of traditional livelihoods". Both BP and Shell insist that they can extract oil from tar sands in a responsible way, with the latter arguing that CO2 emissions can be minimised by using carbon capture and storage (CCS) techniques. Shell says a planned CCS plant in Edmonton, Alberta would take more than 1m tonnes a year out of the atmosphere by 2015 and could be expanded in future. Tar sands, or oil sands, are deposits of sand and clay saturated with bitumen, which is oil in a solid or semi-solid state. The region where they have been found, in the ancient forests of Alberta, is said to cover an area bigger than England. When the bitumen is close to the surface it is excavated in an opencast mine. The land is cleared and the bitumen-soaked sand is dug out with mechanical shovels and loaded on to trucks to be taken to a separation plant. BP stresses it does not get involved in such controversial strip-mining, but bringing the oil out from deeper deposits has its own serious problems: it requires power and steam-generating plants that use a lot of energy and water. In some cases, steam has to be injected into wells to encourage the bitumen to flow. BP claims the method of production used in the Sunrise Project only emits 5% more greenhouse gases than commonly imported conventional fuels. But the Co-op says the Jacobs report, which is quoted by the oil company in support of these figures, is "subject to challenge" because it has not been peer-reviewed. "Peer-reviewed studies and US government studies show that the relative emissions of oil sands are much higher than BP claim," says the briefing paper, which questions the companies' assumptions that global oil prices will remain high enough in future to justify the heavy investment costs of bringing oil out of the ground in this way. Analysts at Deutsche Bank recently pointed out that continuing high oil prices – currently close to $80 per barrel – could trigger a permanent switch to more efficient oil use and low-carbon alternatives: "The value of high capex [capital expenditure] intensity, long lead time, currently undeveloped oil such as undeveloped Canadian heavy oil sands … could be far lower than the market expects." The involvement of a major investor such as the Co-op in the campaign against tar sands is relatively new, but back at its 2008 annual meeting Shell was accused by an individual shareholder of "selling suicide on the forecourt". Comment, page 52 Oil Oil and gas companies Oil BP Royal Dutch Shell Co-operative Group Royal Bank of Scotland Canada Terry Macalister guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Takeover frenzy is leaving Branch Office... Takeover frenzy is leaving Branch Office Britain with an identity crisis
02/28/2010
Overseas takeovers sever the link with local traditions – and undermine employees' sense of economic responsibility If there is one good thing to come out of Kraft's takeover of Cadbury, it is that the Takeover Panel is finally taking a look at a system that tilts the odds too far in favour of foreign predators. UK companies are among the least equipped in the world to defend themselves against hostile takeovers, because our markets are so open, even in comparison with the US where companies often use poison pills and other bid-repellents. Businesses here are also vulnerable because the process is easily manipulated by the bidder. The takeover timetable allows predators to place targets under siege for extended periods: Kraft went public with its interest in August, but the 60-day clock only started ticking in December. Roger Carr, the former chairman of Cadbury, raised this and other issues including increasing the shareholder voting threshold from a simple majority to 60%, and the possibility of disenfranchising hedge funds and other short-term investors. The panel will look at this and publish a consultation paper. It will take its time, and it is unlikely to come up with wholly satisfactory reforms: it is not within its remit, for instance, to delve into whether a bid is in the public interest, though I'm with Vince Cable in thinking that this important test should be restored. This is not a simple issue. There are question marks over what constitutes a British company: Cadbury was described as one, but about half of its shares were controlled by US investors, compared with just under 30% by UK institutions – and the former chief executive was an American, albeit one who took British citizenship. In some sectors, this country has benefited from foreign investment: we wouldn't have a car industry or a chemicals industry without it. And the overseas takeover game is not all one-way traffic, as UK companies also buy businesses abroad. No one would argue we should pull up the drawbridge – it is a question of proportionality. The UK has seen more foreign takeovers in the past six years than Japan or Germany, both of which are larger economies. Carmaking, investment banking, utilities, ports, airports, chocolate, glass manufacture, steel: it is all in overseas hands. Ownership matters, especially in a recession. Inflows dry up – new foreign direct investment in the UK fell by 90% last year – and existing spending can be savagely cut. Companies are likely to prioritise their home markets, leaving jobs and pensions in the UK at risk: Tata, for instance, is increasing steel production in India while mothballing its Redcar plant. Even in benign conditions, when the centre of gravity of a business moves out of the UK, research and development ebbs away. The risk is that this country could dwindle into Branch Office Britain, and that the owners of assets will be remote and unaccountable. There is a deeper issue here – of what US economists Professors Rachel Kranton and George Akerlof call "identity economics", or the idea that people's sense of self, and their view of what kind of behaviour is acceptable, determines their economic actions. In a good company, employees identify with the business, believe they are responsible for its success and want to do a good job simply because they think it is the right thing to do. Heritage, traditions and local ties are an important part of that sense of identification; without it, relationships and the sense of responsibility that goes with them are weakened. The consequences are visible in all parts of business life: from securitised sub-prime mortgages, where the link between borrower and lender was severed, to faceless US hedge funds determining the fate of Cadbury, to customer service being outsourced to anonymous call centres, to over-bonused bankers living in a bubble. We've had an economic identity crisis – one on a grand scale. Mergers and acquisitions Cadbury Kraft Economics Ruth Sunderland guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Greek controversy puts Goldman Sachs in ... Greek controversy puts Goldman Sachs in the firing line – again
02/28/2010
The US investment bank dubbed the 'vampire squid' for its global reach is exemplary in managing risk but less successful in negotiating conflict It is the most profitable investment bank on the planet, and is viewed as an awesome money-making machine that runs rings around its rivals and rewards its high fliers with jaw-dropping multibillion-pound bonuses. Welcome to the world of Goldman Sachs, which has a reputation for managing risk second to none and where savvy traders took huge bets against the overvalued American mortgage market months before the onset of the credit crunch three years ago. But Goldman's knack for making huge dollops of cash from the markets is matched by its tendency to attract controversy to a degree that separates it from competitors. The latest furore is over the role Goldman played in helping Greece conceal its debts , which enabled the country to join the European single currency in 2001. Although it acted entirely legally, critics have heaped opprobrium on the bank, claiming that Goldman sails close to the wind in its endless quest for power and money. The most stinging criticism last week came from Phil Angelides, chairman of the US financial crisis inquiry commission, who said he had been most struck so far in his probe by the way in which Goldman had been "creating and selling securities and then betting against them". In reference to Greece, he said the practice extended to the creation and selling of foreign debt instruments. "I find it troubling," he said. Perhaps the wave of anti-Goldman sentiment can be explained by envy. After all, it is extremely good at what it does and seems more brazen and aggressive than other investment banks, although flamboyant displays of wealth and ego by people who work there are frowned upon. Though Goldman sometimes goes where others fear to tread, rival banks are never far behind. Take the row over Greece, which has drawn up a deficit-cutting plan to avoid fiscal collapse amid fears that it could default on its loans. JP Morgan and Merrill Lynch were also involved in European currency swaps that helped countries such as Greece and Italy meet EU debt rules enforced by Brussels. But it was the Goldman deal, probably the largest, that attracted attention in Risk magazine in 2003 and which was followed up elsewhere in the media. Goldman is under fire for reaping as much as £192m in fees through a complex currency transaction in 2001 that helped Athens borrow cash without putting it on its books as a loan. The so-called swap deal, permitted under EU law at the time, helped Greece meet eurozone limits on government borrowing. Under the arrangement between Goldman and Greece, the government in effect obtained a $1bn loan without adding to its public debt burden. The allegations sparked uproar in Europe last week, where ministers are discussing a possible Greek bailout, but only if it dramatically cuts public spending. Stung by the criticism, a senior Goldman banker, Gerald Corrigan, was forced to admit that the deal could have been more transparent when he appeared before a UK parliamentary committee. "With the benefit of hindsight, the standards of transparency could have been and probably should have been higher," he said. In his testimony, Corrigan said that countries had sought to control their budget deficits for centuries and that Goldman was only one of several banks that had helped countries to manage their debt burdens. Goldman commented on the Greek deal on its website: "The Greek government has stated (and we agree) that these transactions were consistent with the European principles governing their use and application at the time." But analyst Nicholas Dunbar said: "What gets lost amid the furore is that here is another example of the relationship between financial innovators at investment banks and institutional clients, including governments, which were anxious to skirt various restrictions. It was hard for Goldman's publicity-shy derivatives innovators to resist applying their skills. Better oversight of derivatives dealers is long overdue." In the US, Ben Bernanke, US Federal Reserve chairman, said he was looking into Goldman's role in arranging swaps for Greece. Bernanke called any financial instruments that destabilise a firm or country "counterproductive". "We are looking into a number of questions relating to Goldman Sachs and other companies and their arrangements with Greece," Bernanke said. Across the Atlantic, the EU's statistics office, Eurostat, reinforced the view that Greece had indulged in some questionable financial practices over the years. Commenting on the Goldman transaction, it pointed out that this kind of deal was "not usual practice for the governments of member states and, therefore, specific rules for such government transactions did not exist [until 2008]". It added: "Concerning the specific off-market swap operation, Greek authorities had not informed Eurostat about this kind of government transaction. On the contrary, during a Eurostat visit to Greece on 15-19 September 2008, the Greek authorities declared that, in Greece, government units are not allowed by law to engage in off-market financial derivatives." To outsiders, Goldman always appears to be ahead of the game. While other banks largely confine themselves to advising and acting for clients, Goldman has shown greater willingness to risk its own capital, prompting critics to liken it to a huge hedge fund that is prepared to use its balance sheet to take positions in almost anything you care to mention: commodities, mortgages, currencies, equities and commercial property. The bank has used its cash to establish an influential private equity arm, bidding for British firms such as Associated British Ports (ABP) and BAA, while also supporting bids for ITV and Marks & Spencer, stoking controversy in the Square Mile. By 2007, the trading side had contributed a greater share of revenue than ever before: net income reached $46bn, of which $31bn came from trading and investing its own capital. Last year, however, Wall Street faced a wave of public anger at how banks had survived and prospered even though they had received government money to prop up their finances at the height of the financial crisis. Goldman, which received $10bn of Treasury support, was the lightning rod for criticism amid suspicion that it had deep links with governments around the world, with former senior executives disproportionately represented in positions of power in the US and elsewhere. Hank Paulson, for instance, a former Goldman boss, was treasury secretary at the time that Goldman and other investment banks received American government cash – infuriating Main Street, where millions were being made redundant as the worst recession in living memory took hold. Rolling Stone magazine's damning description of the gilded investment bank as a "great vampire squid" – because its tentacles seem to appear in so many parts of public life – resonated with the bank's detractors. "They get up people's noses because their contacts book is second to none, although that is hardly a crime," says a rival banker. In the years before the credit crunch, Goldman's European private equity arm chased down deals in the soaring mergers and acquisitions market. First there was the decision, credited to Michael Sherwood, co-chief executive of Goldman Sachs International, to back Philip Green's attempt to buy Marks & Spencer in 2004. Later, the private equity division was involved in "bear hug" bids – not technically hostile, but not wholly friendly either – for bar owner Mitchells & Butlers and Associated British Ports. Goldman's actions have prompted worries about conflicts of interest. There are numerous examples: in the US it advised General Motors on the sale of its property arm and joined a buyout group making a bid. It was on both sides of the merger of the New York Stock Exchange and Archipelago. In the UK, J Sainsbury dropped Goldman as its broker amid reports it intended to back a bid for the rival retailer M&S; while broadcaster BSkyB severed its connection after the bank backed plans for a buyout of ITV, Sky's competitor. One of its most controversial moves was a bid in 2006 for BAA, the former British Airports Authority, after it was invited to help with its defence against a takeover launched by Spain's Ferrovial. Although Goldman said its approach to BAA was friendly and portrayed it as a white knight bid to fend off Ferrovial, the move was viewed as unorthodox to say the least by Marcus Agius, then BAA chairman. Shortly afterwards, Goldman bosses stopped the bank using its own money to finance hostile takeover bids, as they threatened to damage the bank's standing with its corporate clients. An investment banker says: "Goldman is very good at risk management, but when it comes to managing conflict, it has been less smart." Those with long memories recall that the bank, which acted for Robert Maxwell in numerous share trades, was criticised in a UK government report into the collapse of the swindler's business empire in the 1990s. Goldman denied any impropriety. In his latest film, Capitalism: A Love Story, Michael Moore drives up to its New York city HQ, 85 Broad Street, in an armoured Brink's security van, leaps out with a sack with a giant dollar sign on it, looks up at the building and yells: "We're here to get the money back for the American people!" In recent months, the Service Employees International Union has protested outside Goldman's Washington office, calling for it to donate its bonus pool to homeowners facing foreclosure. As the most successful bank on Wall Street, and because of its reputation for paying some of the highest bonuses, Goldman has faced unprecedented public criticism. There is outrage that, having taken government money to survive the crash, Goldman is in such rude financial health and is handing out billions to its bankers. And there is anger that Goldman received the second-largest payout of taxpayer cash via the US government's bailout of the insurer AIG. Under pressure, the bank's chief executive, Lloyd Blankfein, recently apologised for its role in the financial crisis and announced a $500m pledge to small businesses. He said: "We participated in things that were clearly wrong and have reason to regret. We apologise." This month, Goldman unveiled bonuses for senior staff that were far lower than expected in a bid to mollify public opinion. In London, staff payments were capped at £1m, while executives were awarded shares, rather than cash, which cannot be sold until 2015. Looking to the future, Goldman, like all investment banks, is threatened by plans announced by Barack Obama that would prevent banks trading purely for their own account and ban them from owning hedge funds and private equity firms. That means banks would have to choose between owning an insured depository or owning proprietary trading operations and holding stakes in hedge funds and private equity firms. They would, however, be able to continue proprietary trading related to their customers' businesses, as well as undertake conventional investment banking for clients. If Obama can get his plans through Congress, banks could be broken up with riskier operations spun off. Whether the so-called masters of the universe can get around that one remains to be seen. Blankfein's rise Like many who make it to the top of Wall Street, Goldman chief executive Lloyd Blankfein, pictured, comes from a humble background. He grew up in a public housing project in Brooklyn and attended Harvard on financial aid. His family had emigrated from eastern Europe in the 1880s and had at first prospered in the New York garment industry, but suffered during the Great Depression. Blankfein's father worked for the US postal service as a clerk. His son was bright and, after graduating, attended Harvard Law School and then spent several years as a corporate tax lawyer. Later, he grew interested in finance, but was rejected by Goldman and Morgan Stanley. He took a position selling gold coins for J Aron, a small commodities trading house, determined to make it big on Wall Street. As luck would have it, Aron was taken over by Goldman, so Blankfein joined via the back door. In 1988, he was named as a partner and less than a decade later was running the fixed-income, currency and commodities division. He was the first trader to be appointed CEO in 2006, illustrating the decline in importance of the investment banking division. He is married to Laura Jacobs Blankfein; they have three children. In 2007, Blankfein paid $27m for an apartment at 15 Central Park West. He was paid $9m in 2009 – a far cry from the $69m he collected in 2007. Goldman Sachs Banking Investing US economy Europe Greece European commission European monetary union Ben Bernanke BAA Marks & Spencer Obama administration AIG Credit crunch Financial crisis Richard Wachman guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Once again, Ireland's young prepare to l... Once again, Ireland's young prepare to leave
02/28/2010
Ireland enjoyed a boom like no other in the last 10 years, fuelled by foreign investment and runaway property speculation. But it is all over now, and the desire to emigrate, set deep in the nation's psyche, has taken hold once more In the tiny sub-post office at Liscarney, on the road out of Westport, under the snow-touched pyramid of Croagh Patrick, postmaster William Joyce is considering his schooldays. "In my class maybe a third left. It was America then." Joyce, 54, got married and stayed put. "I've the farm as well as the post office and the wife works; one job is not enough around here." His three teenage sons are at college, the first generation of the family to reach further education. "I knew the boom wouldn't last. All the young crowd working on borrowed money with two cars to every house, out every weekend, they didn't see the day coming when it would have to be paid back. They knew nothing else. But the minute the banks stopped, everything stopped. "Now it's people coming in here for the social welfare and the young lads are all looking for visas for Canada." His youngest is thinking of Germany. "I wouldn't stop them, any of mine. What am I going to say when I know myself what it's like on 60 acres of worthless land? Travel is education." Cattle farmer Richard Duffy has come in and is nodding. "If I'd worked as hard as I've worked in any other country I'd be a millionaire three times over," he says. "You can point at the banks and the developers for all these people left with huge debts, but the government here makes up its own way as it goes along. But you have to put some blame on the people for taking it lying down. If this was France or Spain we'd be having a revolution." Ireland, which went from being one of Europe's poorest countries to one of its richest in less than a decade, has hit the bottom. Gross domestic product fell 7.3% last year. This month a report by financial experts Davy Research concluded that the republic had largely wasted a decade of high income during the boom, with private enterprise investing its wealth "in the wrong places". Most people blame the government for spending too much and regulating too little, and allowing construction to dominate. There is weariness with an almost tribal political system that has seen the same people returned to power over three decades. But now the real human wrench is under way: the first generation to have enjoyed the benefits of the wholesale reversal of Ireland's recent wretched history is leaving. A Boston Globe headline recently declared that: "The Irish are coming – again". About 60,000 Irish citizens have moved to Australia, Canada and New Zealand in the past year alone. The number granted residence visas for Australia increased by 25% last year to 2,501. Another 22,786 people aged under 35 took up working holiday visas. A seminar held in Dublin by Australian Visa Specialists last month attracted "a phenomenal response" with long queues of mostly young families and single men. In the US, where new visa restrictions are making immigration far tougher, there are already an estimated 50,000 "undocumented" Irish immigrants. There is pressure on the Obama administration to give them an amnesty. In Westport, a pretty town on the beautiful coast of Co Mayo, unemployment figures out last month showed a leap of 9.1%, with nearly 2,000 now jobless. And the figure is continuing to rise. "It means Westport is an unemployment blackspot," says Michael Ring, the Fine Gael TD (MP) for the town. One of his constituents has just left his cramped office: she had come for advice on how to tackle the repayments on her 260% mortgage now she had lost her job. "The big worrying trend is unemployment, especially the over-25s. We have people emigrating now because that's what we have done since the foundation of the state, but a lot of doors are closed; its much harder to get into America or Britain. Everyone in this country is frightened: we have never seen a recession hit so fast," he said. "There are houses around here half-built that will never be lived in. Negative equity is bad enough but here, where the banks weren't even looking at incomes before they loaned out money, it's criminal. We went mad and now we've gone down the pan." Over the past few years Westport has been a thriving tourist town, its economy touched and turned to gold by the raging success of Ireland's boom. Hundreds of Polish and Latvian workers flooded in to fill jobs in the thriving service industry – the 11 hotels and numerous restaurants and bars – and, the fastest-growing industry of all, house-building. Local young men and women had left their parents' farms and gone off to college and university, or trained in the construction trades. Carpentry, building and plastering had suddenly all become a ticket to a startling wage packet. Culture flourished, in music festivals and art shows: a talented bunch of locals star in their own online soap opera, the Covies . A whole generation was educated, employed and aspiring. Unlike their parents, they were able to go abroad with a return ticket – for a holiday. The population of Mayo had started to rise after 150 years of steady decline triggered by the famine of the 1840s, which wiped out a third of the population, and subsequent shockwaves of emigration that emptied the west of Ireland and swelled the workforces of newly industrialising England and America. A county that had nearly 400,000 people in 1841 was down to 109,000 in 1971. But then came the Celtic Tiger, and then, as it waned, the second boom, in property. Around Westport the landscape boasts spanking new white-and-yellow houses, with colonnades and arches and pristine PVC window frames, poking out of the tussocky fields. New driveways have filled up with giant cars, safely away from the mud of the sheep-filled paddocks with their old dry stone walls. The paths inland through the Delphi valley, where hundreds of famine victims seeking food lay down and died on the hike from landlord to landlord, are now trails for mountain bikes and walkers that lead to revamped hotels with spas and eco-credentials. While in Dublin much of the property speculation was in the commercial market, in rural Ireland – with no shortage of land – it was in houses, and everyone with a few euros in the bank became a part-time builder. But now many buildings stand empty, while for the owners of others the mortgages will be crippling. Prices have fallen so far that a plot of building land in Athlone valued at €31m in 2006 was reported last week to be worth €600,000. Ger Scahill, 25, used to earn good money in the construction business. So much so that he bought himself a plot of land with a loan from the bank. He had a mortgage approved for the house he planned to build on it. "I just wanted to make sure I was building something up for myself, I could maybe rent it out and go away for a year or so and have something to come back to." But his timing was off, the bust had begun and the bank pulled the plug. It left him with an empty plot of land and repayments of €850 a month. Now unemployed, he gets an €800 dole cheque each month. He says: "So I'm stuck here for a bit, but a lot of the lads have gone, especially in the last while. About a quarter of those I was at college with have gone. I've three friends in Canada who seem to be doing OK. My girlfriend is mad to go because all her friends have gone too. My dad was always saying about saving for a rainy day, but you didn't see this coming." One of Ger's sisters, Laura, had already gone to England. For their mother Ena there are mixed feelings. She and her husband, also named Ger, themselves spent three years in England before coming back to raise their four children in Westport. "On one hand our family now have seen the good times and that's all been taken away from them and that's hard," she says, sitting at the table of the large comfortable house the couple built and run as a B&B. "But I was one of 11 raised on a tiny place on the side of Croagh Patrick and five of us left the country. It's part of our heritage that young people leave. I think its great for everyone to travel but I'd like to see them come back. Laura would love to come home but she can't right now." Ger senior is far more hearty. "It's a great time to go, get some experience of the world. This is a reality check and it's good for our country. In the past days people had to go on a one-way ticket, there was no coming back. We should learn from the Latvians and Poles who came over here and lived on a shoestring and were happy here and then went back with some money in their pocket." At its height, Westport played host to more than 1,000 eastern European workers. Most of those who came have gone back, or moved on to other European countries where there might be jobs to be had. In a newly built flat near the centre of town Aneta Dobrowolska, 24, is visiting her friend Piotr Kubasik, one of the hardcore of east Europeans who are hanging on. Kubasik lost his job as head chef when his restaurant closed before Christmas and now has two days work a week at a cafe. He's going to hang on until the summer if he possibly can. "I'm not ready to give up on it yet," he shrugs. Dobrowolska has had a baby with an Irish man. "I guess that means I'm staying," she says. "I'd like to give back to this country, I am at business school and we have a lot of ideas in that class I tell you." The spirit of entrepreneurship has carried the Irish into the boom and many hope it will carry them out of the bust. Older people are showing signs of getting a little frustrated with the shell-shocked boomers, or Tiger cubs, as some commentators have started to call them. Bill Cullen, a self-made Dublin millionaire, last week caused a storm when, exasperated by young unemployed people bemoaning their lot on a TV show, called them a mollycoddled generation. "I certainly don't feel mollycoddled and you can't forget that a lot of people missed out on the boom years completely," says Ruairi McKiernan, the 32-year-old founder of SpunOut.org, a youth web-driven organisation based in Galway City. "There's a lot of unskilled unemployed and there are stiff immigration controls and a global recession they can't get past in Boston or Sydney. That's a lot of young men susceptible to mental health problems and the suicide problem is already huge. But sometimes at our lowest moments of crisis is where there is an opportunity," he says. "Emigration is a safety valve that Ireland has always used. It's sadly ingrained in the culture, but while we bang on about the glory days when the Irish built this and the Irish built that, you have to remember not everyone did well, we often made up disproportionate numbers of homeless, particularly in London. "We shouldn't accept that losing our brightest and best is always progress. Certainly people go away and thrive in dynamic places but we are appealing to people to stay, to make a stand. This is a time when Ireland is totally leaderless, [there's] chaos at the helm, with the church, state, unions and banks all scrambling to put out the fires they helped start," he says. "Our parents were too frightened to challenge the status quo. A lot of that was because of the power of the church, but now that's tumbling then maybe this is our time. We can't keep on pointing the finger, we've been really, really placid, using pubs as health centres for self-medication. This is a huge opportunity. We are a young, well-educated people and this is our pivotal moment." While other European economies – Greece, Spain, Portugal and Italy – have crashed into similar crises, it is in Ireland that the people themselves have felt the pain the most. But the length of the boom years, has also given them the best education. At Trinity College Dublin, the students hurrying across the sleet-slicked 18th-century cobblestones seem confident about their futures in carefully chosen, recession-proof professions. Accountancy is doing well; anyone studying architecture has long since jumped course. Many are staying on for longer than they planned. Almost all are considering a period abroad. Professor Philip Lane is head of the economics department. "As far as the international situation goes we are worse than Greece because the Greek household hasn't suffered so much; the closer analogy is probably Spain. Boom and bust is nothing new and nor are banking crises. The scale and speed of the downturn here was the dreadful thing and the huge reliance on construction. The big lesson has to be regulation. "For our students it is tough; there are huge generational issues. The lottery draw here was what age you were: that was what mattered in the damage done. Those in their twenties and early thirties have been hammered. But nations survive," he says. "Emigration is hard-wired into the Irish and they will go and continue to go. The issue there is that the people who leave may never come back and it's the lonely guy in the East End bedsit in London that we should be worrying about," says Lane. Back in Westport, in Matt Molloy's pub in Bridge Street, 80-year-old Mick Lavelle nurses a mug of tea, and the reputation of being something of a sage. On request, he sings The Millionaire, his song about a Westport man who dreams he's won the lottery only to wake up to the shock of his miserable reality. "They're saying it's a song for Ireland today and its meaning for the young men isn't lost on anybody, but nor would it have been lost for me as a young man when I was travelling about the world. We'll go off and build the world and then come home where we belong," he says. "I did." Ireland Global recession Tracy McVeigh guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Ruth Sunderland: Tough road to recovery ... Ruth Sunderland: Tough road to recovery for taxpayer's banks
02/28/2010
There was some good news from RBS and Lloyds this week, but the outlook remains a largely gloomy one The state-controlled banks, Lloyds and RBS, each had some positive news to report with their full-year results last week but they face a long and uncertain journey back to full health. Stephen Hester at RBS could point to his investment bank powering ahead – even though he was restricted to a paltry £1.3bn bonus pool, and claimed he could have done much better if he'd been allowed to pay more to keep his talented staff. Eric Daniels at Lloyds was happy about cost savings on his shotgun marriage with stricken HBOS, and at the decline in impairments, which peaked in the first half of this year and fell by 21% in the second. It must be said that the absolute figure for bad debts, mainly on the now-notorious loan portfolio run by former Bank of Scotland banker Peter Cummings, is enormous, having ballooned to £24bn. Overall RBS confessed to £3.6bn of red ink and the figure was £6.3bn at Lloyds; taxpayers are still nursing a £17bn loss on the shares. There is no immediate prospect of the government selling its stakes, and neither bank can demonstrate that it has fulfilled its responsibility to get credit flowing. Hester and Daniels, who went without their bonuses, have both made progress, but the outlook is cloudy, with an election looming and debate raging over banking reform. In the US, President Obama wants to hive off proprietary trading, and here the Bank of England governor, Mervyn King, again voiced his support for the separation of utility and casino banking. He cited his belief that a separation is necessary for London's survival as a financial centre. The fortunes of the UK retail banking divisions are closely linked to that of the domestic economy, where Daniels is predicting a weak upturn this year, with flat house prices and a weak commercial property market. Even that might be over-optimistic; the possibility of a double-dip recession and a downward lurch in property cannot be ruled out. It could have been worse, but the banks have a tough road ahead. Banking Lloyds Banking Group Royal Bank of Scotland Ruth Sunderland guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Sterling faces pressure as election loom... Sterling faces pressure as election looms, but who's next?
02/28/2010
The pound may look vulnerable, but the UK is not alone Sterling is set for a white-knuckle ride in the run-up to the general election, as the fiscal face-off between the Conservatives and Labour keeps the UK's hefty deficit in the headlines, and investors fret about the consequences of a hung parliament. News on Friday that GDP expanded more rapidly than first thought at the end of last year – by 0.3% in the final quarter, instead of the 0.1% early estimate – failed to lift the embattled pound, which at one point hit its lowest level for nine months against the dollar. Analysts say foreign exchange markets are likely to keep up the pressure on sterling, until they see the detailed tax and spending plans of whatever government takes power. "In the run-up to the election, the fact that the fiscal position is going to be highlighted is probably a drag," said Dhaval Joshi, head of strategy at RAB Capital. He argues that while the UK is far from the only country wrestling with a deficit, sterling has an Achilles heel – the heavy reliance of equity and bond markets on foreign cash. Almost half of the UK's equities, 46%, are owned by overseas investors, compared to just a quarter of the US market. In the bond markets – which could be a critical gauge of confidence now quantitative easing is being withdrawn – more than half of the market is in foreign hands, once corporate bonds as well as gilts are taken into account. That compares to just a quarter in the US (see charts). In the good times, the prevalence of foreigners on the UK's share registers was taken as an impressive symbol of a globalised economy. But, as Joshi points out, it makes the currency especially vulnerable, because if overseas investors want to withdraw funds and plough them into a different market, they will also have to exchange their pounds for another currency. He doesn't believe that makes a "sterling crisis" inevitable – but it does create a worst-case scenario in which the FTSE drops because investors fear a worldwide "double dip" while a decisive plan for public finances is stymied by a hung parliament, leading to UK bonds being singled out for a sell-off. Both of these could put intense downward pressure on the pound. Danny Gabay, director of economics consultancy Fathom, says the UK has in effect already had a sterling crisis: the pound is about 25% lower against the currencies of major trading partners than before the credit crunch. Contrary to policymakers' hopes that the depreciation should rebalance the economy by boosting exports, he warns that the weakness of Europe's economy means demand is likely to be stagnant. "We and Europe are now both on course for a flat-to-negative first quarter. If Europe has stalled, then to whom and to what are we meant to export?" He believes that as the UK struggles to emerge strongly from recession, the pound will come under further pressure. Not everyone is convinced by that argument, however. David Bloom, head of foreign exchange strategy at HSBC, says although attention is likely to focus on the UK in the weeks running up to an election, there are plenty of other countries facing their own crises. "This is the classic schoolboy error of ignoring the difference between an absolute problem and a relative problem. Who are we going to have a crisis against – Greece? The eurozone? Dubai?" he says. "You have to imagine a scenario where the UK has an independent problem that no one else has." Like Bank of England governor Mervyn King, who has played down the parallels with Greece, Bloom argues that any party winning a majority is likely to announce firm plans for bringing the finances back under control. "Let's face it, we have got a fiscal problem, but we've got a big tax base and we'll sort it out," he said. He describes what happened in the financial markets over recent months as a "rotating sovereign debt crisis". The recession of the past 12 months has been worldwide and, with interest rates at rock bottom in many countries, governments have been forced to dig deep to offset the worst effects. Investors focus for a short time on one government that is struggling, then switch their attention to the next potential victim. For the next few weeks, as the parties engage in a slanging match about public finances, the pound may be the whipping boy. But Bloom reckons once the election is out of the way, attention will turn to another large economy with a devastated financial sector, a spiralling budget deficit and an election in the offing: the US, where the state of the public finances is likely to be a key issue in the November mid-terms. Currencies Economics Europe US economy FTSE Mervyn King Heather Stewart guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Babcock faces 'put up or shut up' order ... Babcock faces 'put up or shut up' order in VT bid
02/26/2010
• Takeover Panel expected to order predator to put up or shut up • Babcock must raise its offer to capture VT, say analysts The Takeover Panel is to intervene in the battle for control of VT Group, the defence services provider, by issuing its predator, Babcock International, with a put-up-or-shut-up order, forcing it to make a firm bid within a month. A ruling from the panel is expected next week, with the authorities keen for the bidding war to be brought to a swift conclusion after weeks of uncertainty. Babcock has made two indicative offers in the past fortnight; its latest bid values VT at about £1.25bn, or 700p a share. The company, which runs submarine bases for the Royal Navy at Faslane and Plymouth, also made two informal approaches to VT last year, both of which were rebuffed. The situation is complicated by the fact that VT has for several months been trying to buy Mouchel, a smaller rival. Its efforts have been thrown into disarray by Babcock's approach. Headed by Paul Lester, VT amassed a cash pile in 2009 after selling its shipbuilding interests to BAE Systems. Lester has called Babcock's indicative offer "strategically unsound" and has hinted that VT could abandon its bid for Mouchel and return funds to shareholders as part of its defence against the unwanted approach. A merger of VT and Babcock would create a support services group with interests in defence, engineering and nuclear power. But VT has spent the past five years withdrawing from building ships for the Ministry of Defence, moving instead into support services. For instance, it provides engineering back-up for the coastguard's search and rescue helicopters. VT argues that a return to focusing on defence would make the combined group too vulnerable to cutbacks in military spending after the general election. An observer said: "This is an argument about scale, which would be achieved if VT merged with Babcock, versus diversification via a deal with Mouchel." According to Babcock, a takeover of VT would see the two companies cutting about £27m off combined annual costs. Babcock, whose chairman is Mike Turner, the former BAE chief executive, insists that it will make an offer only on condition that it is allowed to conduct due diligence at VT. It has approached the target's shareholders to try to persuade them to force Lester to begin negotiations and open the company's books. About 40% of investors in VT have stakes in Babcock and vice versa. But shareholders are split over whether Lester should talk to Turner. Insiders at Babcock, which employs about 17,000 staff, point out that VT itself tried to buy Babcock four years ago, showing that the two companies are an obvious fit. But VT contends that Babcock is strategically challenged because it could find itself heavily exposed to defence cuts. However, Howard Wheeldon, senior strategist at the City broker BGC Partners, said: "This [battle] involves the two largest and most successful UK-based engineering support businesses. The logic for a merger is very hard to argue against." Besides refitting ships and submarines, Babcock trains military engineers and has sizable civil interests: stringing high-voltage electricity lines, repairing railways and decommissioning nuclear plants. VT also has substantial defence service contracts. Both companies developed into service groups from manufacturing origins. Babcock has indicated that it is prepared to offer between 685p and 715p a share for VT. But analysts said today that they believe the price should be at least 750p a share, or as high as 775p. VT closed tonight up 6p at 667½p. Babcock International VT Group Mergers and acquisitions Richard Wachman guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Serco's profits soar 34% to £194.7m Serco's profits soar 34% to £194.7m
02/26/2010
Worldwide rush to outsource public services to the private sector outstrips Serco's ability to bid for them Serco said today that the rush to outsource by governments around the world had led to £28bn of opportunities that were too much for the support services group to bid for in their entirety. The UK-based group, which runs services as wide-ranging as Royal Navy tugs in Britain and prisons in Australia, has already secured a record £17bn of future orders. "There are more opportunities than we are able to bid for," said Christopher Hyman, chief executive of Serco. The company today reported an annual 34% increase in pre-tax profits to £194.7m. The need for many governments to cut rising public-sector debt was speeding up the process of outsourcing but . Hyman insisted his company could raise standards as well as lower costs. "When we took over running the local education authority in Walsall, the number of school-leavers going into further education was 18%. Now the figure is 48%. That makes me feel good as a parent," he said. Shares in Serco increased by 7%. Hyman said the company was benefiting from the flexible business model that allows it to move its management services expertise around the world. "We won contracts in different sectors and countries, so if one area or ­territory slows down we can move where the growth is, and that helped us last year," he said. The group, which also runs air traffic control towers in the United States and London's Docklands Light Railway, easily beat City expectations. The results came after rival Capita also reported 17% profit growth in 2009. Andrew Darke, a service-industry analyst at Ambrian Securities, said the future looked bright: "Serco continues to deliver solid, predictable growth, and has excellent revenue visibility, which provides significant investor confidence." Serco recently made a significant acquisition in the US and has increased revenues earned overseas from 25% a year ago to 36%. Hyman said the company hoped to expand further into the defence sector but dismissed speculation that it might make a bid for defence services firm VT Group, which is currently fighting off an approach from Babcock International . Serco, which is now valued by the City at about £2.7bn, also aims to expand further into India after buying Indian outsourcer InfoVision Group in 2008. Serco Privatisation VT Group Terry Macalister guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
O2 resists iPhone challenge from Orange O2 resists iPhone challenge from Orange
02/26/2010
Matthew Key, who runs Telefonica O2 Europe, said he had not seen a mass exodus of British customers lured on to rival networks by the iPhone. O2 sold more iPhones in the UK than Orange in the run-up to Christmas, according to boss Matthew Key, despite the hype surrounding Orange's success in ending O2's two-year exclusive hold on the Apple device. On Thursday, Orange announced it sold 222,000 iPhones in the last quarter of 2009 , having only had the handset since mid-November. The iPhone helped the company, owned by France Telecom, persuade more people to sign up to long-term contracts than it has ever managed in a fourth quarter before. Vodafone and Tesco Mobile are also now selling the iPhone to their customers. But Matthew Key, who runs Telefonica O2 Europe, said he had not seen a mass exodus of British customers lured on to rival networks by the iPhone. "I cannot tell you a specific number but [what] I can tell you is we sold more iPhones than Orange in the fourth quarter – we did more than 222,000," he said, after O2 announced its fourth-quarter results. "We are seeing absolutely no evidence of customers leaving us to go back to Orange or Vodafone who had previously come to us from them to buy an iPhone." In the last three months of 2009, O2 added 338,455 new users, taking its customer base to 21.3 million and retaining its position as the UK's largest network. Of those new users, 235,486 signed up to long-term contracts. Its performance in terms of new customer numbers, however, was the worst of the four major UK networks. In the same period, Orange gained 404,000, T-Mobile 571,000 and Vodafone 410,000. The industry's fourth-quarter figures, however, raise the question of whether someone has lost customers or there is double-counting, because it is very unlikely that 1.7 million people picked up a mobile phone for the first time just before Christmas. Key reckons some players – not, he stressed O2 – have been throwing very cheap pre-pay deals at customers and distorting the market. It raises the prospect of a repeat of the so-called "box-breaking" that hit the industry a few years ago. Box-breaking occurs when a mobile phone company subsidises an attractive handset for pre-pay users. People buy the handset, throw away the operator's Sim card and either have the handset unlocked so that they can use it with their existing Sim card – effectively getting a cheap handset upgrade – or sell it, often overseas. On paper it looks like the operator has made a sale but over time it becomes obvious that the buyer is not using their network and effectively they have wasted the handset subsidy. "I look at the net customer additions in quarter four and logically it cannot make sense," admitted Key. "We suspect that some of the other operators have driven business that has been about driving customer numbers in the short term, but actually in the medium term that customer will not spend any money with them." Orange Telecommunications industry iPhone Apple Richard Wray guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
The demise of Lehman Brothers spells doo... The demise of Lehman Brothers spells doom for New York nightclubs
02/26/2010
The collapse of Lehman Brothers left a trail of financial misery in its wake - not least, it seems, among the local nightlife establishments where the bank's gentleman traders let off steam after work. The China Club , a self described "high intensity night clubber's paradise", just around the corner from Lehman's old building, filed for chapter 11 bankruptcy protection this week citing, among other things, a collapse in business from Lehman. "The debtor began to experience a significant downturn in business in late 2007 due to the overall downturn in the economy, compounded by the layoffs at Lehman Brothers, many of whose employees were regular customers at the club," says an affidavit in court by Daniel Fried, president of the club's parent company. China Club, just off Times Square, is only three blocks from the old Lehman Brothers building, which now houses Barclays Capital. It sounds a glamorous place - its new year's eve party to welcome in 2010 was hosted by Danielle Staub, a star of the reality television show "The Real Housewives of New Jersey". But perhaps it isn't to the taste of Barclays employees. China Club isn't the only local nightclub to go bust this week - Cheetah's, a nearby club known for serving up sushi on partially naked women, has also filed for bankruptcy according to Crain's New York Business, which says the place was one of the top ten strip clubs in New York. The world weeps. Lehman Brothers Financial crisis Banking Andrew Clark guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Intercity trains upgrade postponed Intercity trains upgrade postponed
02/26/2010
• £7.5bn contract for 1,400 new carriages will now be subject to independent review • Conservatives claim that Department for Transport has 'badly let down' passengers A £7.5bn contract to replace Britain's ageing intercity train fleet has been postponed after the government blamed the state of the debt markets and slow growth in passenger numbers for creating uncertainty over the deal. Rail industry sources claimed that the delay to a deal for 1,400 new carriages was the result of the dire state of the public finances and said it would leave some of Britain's busiest long-distance routes at the mercy of decades-old rolling stock. Ministers also confirmed that the second phase of a programme to extend trains on the west coast main line will not be carried out, despite an increase in passengers on the London-to-Glasgow route. The transport secretary, Lord Adonis ,today ordered an independent review of the intercity proposals, citing financial market conditions and lower-than-expected passenger growth as the main reasons for the delay. Adonis added that a decision to electrify the Great Western route by 2016 has changed the requirements of the order, which originally envisaged a mixed fleet of trains that could operate using both electric and diesel power. "In all the circumstances, the government does not believe it would be appropriate to enter into this particular contract in the immediate run-up to a general election," he said. Sir Andrew Foster, former controller of the Audit Commission, will conduct the independent review and the government will push ahead with the order if he decides it is still the right strategy, Adonis said. The fleet of distinctive but increasingly elderly InterCity 125 and InterCity 225 trains, bought by British Rail in the 1970s and 1980s, is a familiar sight on the UK's long-distance lines. The Conservative party said that the transport secretary had "badly let down" passengers. Theresa Villiers, shadow transport secretary, said: "The Intercity Express Programme has been blighted by government incompetence at every turn. It was Labour's obsessive micromanagement of our railways that led to Whitehall officials designing trains down to the last bolt, which created huge cost inflation." The consortium left in limbo by the government announcement, Agility Trains, led by Hitachi, the Japanese manufacturer, said that it was "disappointed" that a formal contract would be delayed beyond the election. Passenger Focus, the rail user watchdog, urged the next government to pick up the programme as soon as possible. "Passengers desperately want to see these new trains with more seats and a more comfortable journey in service as quickly as possible," said Anthony Smith, chief executive of Passenger Focus. The Department for Transport (DfT) also confirmed that it will not carry out the second part of an order for new Pendolino carriages on the west coast main line. The DfT has already backed plans to acquire 106 more carriages for the route, but has now declined an option to buy a further 42. A DfT spokesman said: "Current passenger demand and projections mean that taking up the option to purchase an extra 42 vehicles would not represent good value for taxpayers' money." Virgin Trains, which operates the west coast main line franchise, said that it would have pushed ahead with the rest of the order: "We understand that of course the DfT must make decisions based on a number of factors but, from an operator's point of view, we would have no hesitation in adding extra carriages in view of the current and projected growth levels." Transport Transport policy Rail transport Virgin Rail FirstGroup Dan Milmo guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Record-breaking diamond sale boosts Petr... Record-breaking diamond sale boosts Petra
02/26/2010
A Hong Kong jewellery company has paid the highest price on record for a rough diamond to snap up London-listed Petra Diamonds ' rare stone discovered at its South African Cullinan mine last autumn . Petra's Aim-listed shares are up 1.75p, or 3%, at 60.5p after it announced the "507 carat Cullinan Heritage" was sold today for $35.3m, the highest sale price on record for a rough diamond. The diamond was bought by Chow Tai Fook Jewellery Company from Hong Kong but the purchaser has yet to reveal its plans for the gem. Petra said the high sale price reflected the "incredible rarity of the diamond, which combines its remarkable size with exceptional colour and clarity." At 507.5 carats it is the 19th largest gem diamond ever discovered. The Cullinan Heritage was recovered in September 2009 from Petra's Cullinan mine in South Africa which has produced the majority of the world's most famous and important diamonds, some of which form part of Britain's crown jewels.. Chief executive Johan Dippenaar comments today: "It is fitting that The Cullinan Heritage should achieve a sale price of $35.3 million, the highest sale price on record ever achieved for a rough diamond, as it has the potential to produce one of the world's most important polished gems. The sale proceeds further bolster Petra's treasury and will be invested in the growth of our core assets." Analysts at Ambrian said the sale price was $10m above its estimates. They comment: "This is clearly excellent news, and represents $10m additional cash above our estimate for the diamond, or an extra 1.8p/share." Katie Allen guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
UK's escape from recession stronger than... UK's escape from recession stronger than first thought
02/26/2010
Official GDP figures for fourth quarter of 2009 revised up to 0.3% from 0.1% Britain's escape from recession was stronger than previously thought in the final three months of last year, as the services sector bounced back. The economy grew by 0.3% in the fourth quarter, rather than 0.1% as previously estimated , the Office for National Statistics said this morning. This marked the first time the economy had grown since the first quarter of 2008, when the UK's deepest and longest postwar recession on record began. But City economists, who had pencilled in 0.2% growth, said the figures did not change the overall economic picture, which remains weak. Some warned that the economy could slip back into recession in the first three months of this year. "Certainly a pleasant surprise for ­everybody," said Marc Ostwald at Monument Securities. "Does it really fundamentally change anything in terms of the outlook for the economy? Not really. At the end of the day it's not an indication that it is going to be anything durable. The pick up in manufacturing probably owes as much to restocking as anything else, and that may also be the case for services." The ONS revised growth in the dominant service sector higher to 0.5% from 0.1%, marking the fastest growth since the start of 2008 and following a 0.3% drop in the third quarter. The rebound was fuelled by strong growth in computer, legal and accountancy services, while banking and other financial services stayed weak and government services were flat. Household spending also recovered at the fastest pace since early 2008, with a 0.4% increase. Manufacturing expanded by 0.8% in the fourth quarter. Overall, the production industries, including mining and utilities, grew by 0.4% following a 1% fall in the previous quarter. The pound, which has been battered by the markets this week , rose briefly on the data. Adam Chester at Lloyds TSB Corporate Markets said: "A sigh of relief that actually we have indeed pulled out of recession in the fourth quarter. But I don't think we are out of the woods. The first quarter is now going to be the focus and given the weak January we have had and the bad weather, there is still a distinct possibility that we could dip back into the red in the first three months." A collapse in business investment in the fourth quarter yesterday sparked fresh talk of a possible double-dip recession and a sterling crisis in the run-up to the election. Jim Rogers, one of the world's leading financiers, warned the pound could plummet within weeks and described it as a potential "basket case". The Treasury was guarded in its assessment of today's GDP figures. "While it is welcome to see an upward revision, recent data in the European Union and elsewhere has indicated that there are risks and uncertainties to this recovery, and there is no room for complacency," said a Treasury spokesman. "Withdrawing support that has helped us get to this point would put the recovery at risk." Alistair Darling warned today that spending cuts and wage curbs will be inevitable, although he also cautioned against premature action that could choke off the nascent economic recovery. The chancellor said Britain faces much tighter public spending after the election. The issue is "when and how fast". "I make no bones about it," he told the Irish Times. "There are going to be some difficult decisions taken – public spending is going to be tighter. That is on the back of public spending having more or less ­doubled over the last 10 years." He added: "There will be things that will be cut, things that will be postponed. It is said that in the public sector wage increases will be held a lot lower than they have in the past. If we don't back down on our borrowing, then you will simply end up spending money on servicing debt instead of spending on things that people would probably like to have monies spent on." He cautioned, however, against acting too soon. "Until you have got recovery established – in the absence of private sector investment coming back – if you start to reduce your spending too soon, then the risk is you derail the recovery and tip us back into recession," he said. Danny Gabay at Fathom Financial Consulting noted that the third-quarter GDP number was revised lower to a fall of 0.3% and together with other back revisions this left the level of GDP a little lower than expected last year, despite the better fourth-quarter outturn. "That will come as a surprise to the Bank of England," he said. "So, while the news on the fourth quarter is welcome, we would hold off on the champagne for now." Economic growth (GDP) Green shoots Economics Recession Julia Kollewe guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Iceland delegation walks out on talks Iceland delegation walks out on talks
02/26/2010
Reykjavik will now hold referendum expected to reject deal for return of cash owed to UK and Netherlands Negotiations with Iceland over the repayment of £2.3bn owed to the UK broke down last night after representatives of the island nation walked out of talks in London. The withdrawal means that Iceland will next week hold a referendum expected to reject a deal for repayment of cash owed to Britain and the Netherlands as a result of the collapse of Landsbanki, the bank behind the Icesave internet savings account. The UK and Dutch governments said they were "disappointed" that no deal had been reached after 18 months of talks. Sources close to the talks said that Iceland had been offered an advantageous floating interest rate on the debt that would have represented a significant cut on the 5.5% currently being charged. Also on the table was a two-year interest holiday worth £400m A Treasury spokesman said: "The UK and Dutch governments are disappointed that despite their best efforts over the past year and a half the Icelandic government is still unable to accept our best offer on the Icesave loan. We have consistently supported Iceland's economic recovery and our latest proposal built upon this, offering the Icelandic government the same interest rate as their current loan from the Nordic countries and, in addition, an offer to waive interest for the first two years amounting to €450m. This money is still outstanding to UK and Dutch taxpayers and we remain committed to reaching a final agreement with Iceland." Jan Kees de Jager, finance minister of the caretaker Dutch government, reacted even more sharply, saying: "If they [Iceland] think this will be paid by the Dutch taxpayer, they are wrong." Iceland's finance minister, Steingrimur Sigfusson, said his negotiating team was returning to Reykjavik after encountering "significant differences" in the talks. The UK and Netherlands authorities stepped in with guarantees for deposits of 229,000 Britons and 114,000 Dutch nationals with savings in Icesave accounts. The UK is seeking £2.3bn and the Netherlands €1.33bn (£1.16bn) back from Reykjavik. It is estimated that assets within the Landsbanki loan book will cover most of the claims from the UK and Dutch authorities, leaving Iceland's 317,000 taxpayers with an estimated bill of £400-£600m. The existing deal has been passed by Iceland's parliament but president Olafur Grimsson refused last month to sign it into law amid widespread public opposition, triggering the referendum on 6 March. Iceland Icesave Netherlands guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Palm shares plummet on Wall Street Palm shares plummet on Wall Street
02/25/2010
Pioneering smartphone manufacturer predicts substantial shortfall in three-month revenue, sparking precipitous drop in its stock as it battles Apple and BlackBerry The pioneering smartphone manufacturer Palm, originally renowned for its breakthrough Palm Pilot models, saw its shares plummet 17% on a profits warning as it revealed that its sales are struggling in the face of competition from BlackBerrys and Apple iPhones. Palm conceded todaythat its latest phones, including the critically acclaimed Pre and the cut-price Pixi, have failed to take off as quickly as it had hoped. "­Driving broad consumer adoption of Palm products is taking longer than we anticipated," said Palm's chief executive, Jon Rubinstein. A trading update from the Californian company forecast revenue for the three months to February of $300m-$320m (£195m-£210m), far short of analysts' predictions of about $425m. The warning is a serious setback for Palm, which has been fighting an uphill battle to challenge bigger players such as Apple and the Canadian company Research in Motion, which makes the BlackBerry smartphone. By early afternoon on Wall Street, Palm's shares had slumped by $1.45 to an 11-month low of $6.64. Although it broke ground early in handheld devices with its Pilot models in the 1990s and later its web-compatible Treo phones, Palm has fallen behind in the race to capture the imagination of ­consumers. Its Pre phone, released last year, runs on a new operating system called WebOS and incorporates a phone, a GPS system, wireless internet and a slide-out keyboard. It has won several industry awards but has lagged in other areas – for example, few third-party applications are available for the Pre in comparison to the hundreds of thousands written for Apple's iPhone. Experts have become increasingly dubious about Palm's growth prospects. Ehud Gelblum, an analyst at Morgan Stanley, was initially positive but said in a research note that his optimism had waned, blaming Palm's US network provider: "Verizon has puzzlingly refrained from providing the marketing muscle behind the products that we had expected." In the US, Palm has recently launched the budget-model Pixi, priced at $99, in an effort to attract younger customers. Telecommunications industry Technology sector Mobile phones Telecoms Profit warnings Andrew Clark guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Superdry fashion label presses ahead wit... Superdry fashion label presses ahead with flotation
02/25/2010
SuperGroup shrugs off concerns after New Look and Matalan drop IPO plans and wins blue-chip backing for listing SuperGroup, the fashion company behind the fast-growing Superdry label, insisted today that it was full steam ahead with its stock exchange listing despite speculation that some City fund managers had balked at the price tag being proposed. The institutional investor roadshow ends tomorrow and insiders said three "blue-chip" institutions were among those to have indicated they would participate in the offer, with other "chunky" orders for stock also in the pipeline, ahead of the formal bookbuilding process, which is due to begin next week. One broker said the rating to which SuperGroup is aspiring was considered "too aggressive" by some investors, although he added: "That's not to say they won't get it away." SuperGroup said last week that it would press on with an initial public offer (IPO) despite the bad omens of the fashion chain New Look's abandoned listing and Matalan pulling the plug on its sale process . It has also emerged that SuperGroup's management, led by the chief executive, Julian Dunkerton, and other existing investors plan to share £105m of the £125m the company plans to raise through the institutional and retail share offer, with only £20m to be retained to fund expansion. SuperGroup plans to raise £5m from the retail IPO, which is due to open on 15 March. The company is expected to make its debut on the stock exchange by the end of the month. New Look was not alone in failing to persuade investors to back them, so the coming days will be a nerve-jangling time for SuperGroup executives, who include the brand and design director James Holder, who previously developed the Bench label. The travel booking group Travelport and Legoland's owner, Merlin Entertainments , also abandoned IPOs after fund managers steered clear of private equity-backed businesses. SuperGroup's business case is boosted by the continuing involvement of Dunkerton as chief executive and the fact that the company is free of debt. Figures seen by the Guardian show sales at SuperGroup, which had a turn­over of £76.1m in 2009, were up 94% in the first six months of the current financial year. The company is understood to have booked profits of £7.8m in the same period – more than the previous year as a whole – and is on track to make profits after exceptional items of £25.7m. Operating margins for the first half of 2010 were 14.3%, compared with 6.1% in the equivalent period last year. Superdry, which Dunkerton launched six years ago, has had several years of stellar growth thanks to the patronage of celebrities such as David Beckham and Zac Efron. The group, which includes the Cult chain, has 40 shops as well as 54 concessions in House of Fraser. The company said it would use proceeds from the flotation to open more stores as well as develop its smaller brands, which include SurfCo California and 77Breed. Speaking out in support of SuperGroup, Max Ward, manager of Independent Investment Trust, said: "I am hugely impressed with what has been achieved by SuperGroup in the last five years. "I think they have a colossal opportunity ahead and if they come even close to realising this opportunity, the shares will be seen to have been outstanding value at the flotation price." Investing Fashion Retail industry London Stock Exchange New Look Zoe Wood guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Obama reforms likely to founder in the S... Obama reforms likely to founder in the Senate
02/25/2010
Legislation to introduce the 'Volcker rule' and a consumer financial protection agency faces the prospect of failure or substantial compromise The White House's push to overhaul America's system of financial regulation is facing heavy dilution in Congress, and a key measure to ban Wall Street banks from risky trading is likely to be watered down or dropped entirely from legislation. In an effort to get Senate Republicans on board, President Barack Obama is ­facing the prospect of major compromise. In addition to a rethink of the so-called ­"Volcker rule" banning banks from proprietary trading, the administration is struggling to win support for a new consumer financial protection agency, which was intended to be the centrepiece of the reforms. Treasury secretary Timothy Geithner summoned key banking lobbyists to a meeting in Washington today to try to win support for re-hashed legislation. Groups attending included the American Bankers Association, the US Chamber of Commerce and the Financial Services Forum, all of which are sceptical about legislative restrictions on Wall Street's activities. Even the Federal Reserve's chairman, Ben Bernanke, is doubtful about prospects for the Volcker rule, which, as outlined by the administration in January, would prohibit banks from running hedge funds or from trading with their own money. Bernanke told the Senate banking committee this week: "I think it would be difficult to do on a purely legislative basis because of the potential for unintended consequences." A representative of one industry group at today's summit told the Guardian that the Volcker rule – named after Paul Volcker, a former chairman of the Fed – was proposed "very late in the game" and that there was little appetite for it even among senior Democrats in the Senate: "The treasury's having a very hard time providing any type of language or definition around it." To overcome Republican stalling tactics in the Senate, the Democrats need a filibuster-proof majority of 60-40, which requires cross-party support. Several moderate Republicans, led by Tennessee's Bob Corker, accept a need for regulatory reforms to avert a repeat of the credit crunch, although they only want a limited package. Corker told CNBC television: "I think we're going to get to a place soon on a bill that's going to stand the test of time." The Obama administration could try to enforce the Volcker rule through existing regulatory agencies, rather than enacting it in legislation. Five former treasury secretaries signed a letter this week supporting the measure, including two from George W Bush's administration, John Snow and Paul O'Neill. But the proposed consumer financial protection agency is distasteful to conservatives, who dislike any extension of government. The body is intended to safeguard against predatory lending, credit card traps and unreasonable bank account charges. To get around opposition, it could become an arm of the treasury, without any rule-setting authority, rather than a standalone body. "We're going to see some tamping down, watering down, softening down of what Obama put on the table," said Ethan Siegel of the Washington Exchange, which provides political analysis to institutional investors. Measures viewed as achievable bipartisan goals include a tax on big banks' assets to raise as much as $117bn in reimbursement for public bailout money. Republicans are also supportive of creating resolution authority for the US government to wind up banks considered "too big to fail" through a controlled process, to avoid a repetition of the shambolic collapse of Lehman Brothers. Banking US economy Obama administration Financial crisis United States Andrew Clark guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Madoff daughter-in-law seeks name change Madoff daughter-in-law seeks name change
02/25/2010
Stephanie Madoff says fraudster's name opens her to death threats and humiliation The name "Madoff" is too much of a burden to bear for a daughter-in-law of Wall Street's most notorious fraudster. Stephanie Madoff, the wife of one of Bernard Madoff's sons, is seeking legal approval to drop the tainted monicker to escape death threats, embarrassment and humiliation. Legal papers filed in Manhattan reveal that Mrs Madoff wants to formally change her surname, and those of her two young children, to a less eye-catching "Morgan". She explains that her father-in-law, who is serving a 150-year jail sentence for masterminding a $65bn (£40bn) Ponzi scheme , was "recently featured prominently in the news for defrauding numerous investors in his companies". She told New York's supreme court that in December 2008, she was informed of "certain death and other threats made against the Madoff family" adding: "Though the threats were deemed unfounded, your petitioner fears for her safety and the safety of her children." Stephanie Madoff is married to Bernard Madoff's eldest son, Mark, who held a senior position in the trading division of Madoff Investment Securities. Although he denies any knowledge of his father's fraud, Mark and his younger brother, Andrew, have both had their assets frozen as a liquidator seeks to reclaim funds from them to reimburse victims. The application for a name change says Stephanie Madoff wants to avoid the "embarrassment, harassment and endangerment associated with the name". Her husband has filed an affidavit saying he has no objection, though he intends to keep his father's name himself. The couple have a three-year-old daughter, Audrey, and a one-year-old son, Nicholas. Bernard Madoff has been labelled as the biggest conman in financial history since he admitted at the end of 2008 that his fund management business had been a pyramid scheme for decades, using new deposits to pay out fantasy profits to past investors without doing any genuine trading. While investors believed they had $65bn of savings, liquidators have only been able to retrieve a few million dollars. Madoff's 5,000 victims included hedge funds, Jewish charities and private investors including well known names such as the film director Steven Spielberg, Nobel Prize winning author Elie Wiesel and the actor Kevin Bacon. At least two cases of suicide have been linked to Madoff's crimes. In a separate development , the FBI announced that it had arrested a former operations director of Madoff's firm, Daniel Bonventre, at his New York home. Bonventre, 63, has been charged with fraud, conspiracy and tax evasion. Law enforcement authorities are continuing to examine who else was in the loop about Madoff's fraudulent operation. The jailed financier's former chief financial officer, Frank DiPascali, has been providing information after pleading guilty under a co-operation deal in the hope of a light sentence. The US marshals service raised more than $1m in November by auctioning off Madoff's personal belongings, with lots ranging from clothing to dog bowls, golf shoes and boogie boards. Madoff, 71, is serving his sentence at a federal prison in North Carolina. Bernard Madoff United States Credit crunch Andrew Clark guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds
Chinese mainland to further open agricul... Chinese mainland to further open agricultural product market to Taiwan: ministry economist
02/28/2010
The chief economist of Ministry of Agriculture said Sunday the mainland would ensure Taiwan's agricultural products to have more access to the mainland market following a series of favorable entry policies launched in recent years. Chen Mengshan told Xinhua that the mainland would help Taiwan farmers to expand market presence in the Chinese mainland, and protect the intellectual property rights of the island's agricultual products through tightened market supervision. The Chinese mainland ...
Huawei opens research, development cente... Huawei opens research, development center in Turkey
02/28/2010
Huawei, a leading Chinese company in new generation telecommunication solutions, Saturday opened its research and development center in the largest Turkish city of Istanbul. Speaking at the opening ceremony, Huawei Global Vice President Jiang Yafei said "We will become a strong team full of innovative spirit through the research and development center in Turkey and grow towards a successful future in the global telecom industry." Huawei started its operation in Turkey in 2002 and now has m ...
Pudong Development Bank to sell 20% stak... Pudong Development Bank to sell 20% stake to China Mobile: report
02/28/2010
Shanghai Pudong Development Bank, a mid-sized Chinese lender, has agreed to sell a 20-percent stake in itself to telecom giant China Mobile, the Shanghai Securities News reported Saturday. The Shanghai-based bank's shares were suspended from trade Friday when the bank announced it may bring in a new strategic investor. The bank, partly owned by Citigroup Inc, will raise about 40 billion yuan (5.86 billion U.S. dollars) through the sale of 2.2 billion shares to the world's biggest mobile ph ...
Backgrounder: Recent major trade dispute... Backgrounder: Recent major trade disputes between China and the U.S.
02/27/2010
Chinese Premier Wen Jiabao said Saturday that trade disputes between China and the United States must be solved via "equal negotiations" rather than sanctions. Below is a review of recent major trade disputes between the two countries: Feb. 24, 2010 -- The United States on Wednesday imposed preliminary duties ranging from 11 to 13 percent on steel pipes from China. Feb. 6, 2010 -- The United States slapped preliminary anti-dumping duties ranging up to 231.4 percent on gift box and other ...
Advancing ECFA conforms to interests of ... Advancing ECFA conforms to interests of people across Taiwan Strait: Wen
02/27/2010
&$ &$Chinese Premier Wen Jiabao (L) chats with Internet surfers on two state news portals in Beijing, China, Feb. 27, 2010. (Xinhua/Ma Zhangcheng)&$ &$ &$ &$Live : Premier Wen gives online interview&$ &$ Premier Wen Jiabao said during an online chat with Internet users Saturday that advancin ...
Premier vows to tame "wild horse" of sky... Premier vows to tame "wild horse" of skyrocketing housing prices
02/27/2010
&$ &$Chinese Premier Wen Jiabao (L) chats with Internet surfers on two state news portals in Beijing, China, Feb. 27, 2010. (Xinhua/Ma Zhangcheng)&$ &$ &$ &$Live : Premier Wen gives online interview&$ &$ Chinese Premier Wen Jiabao on Saturday said he was determined to tame the "wild horse" o ...
Premier Wen vows to prevent possible inf... Premier Wen vows to prevent possible inflation
02/27/2010
&$ &$Chinese Premier Wen Jiabao (L) chats with Internet surfers on two state news portals in Beijing, China, Feb. 27, 2010. (Xinhua/Ma Zhangcheng)&$ &$ &$ &$Live : Premier Wen gives online interview&$ &$ Chinese Premier Wen Jiabao pledged to prevent possible inflation with a moderately loose ...
Chinese Premier hopes to maintain good t... Chinese Premier hopes to maintain good trade relation with United States
02/27/2010
&$ &$Chinese Premier Wen Jiabao (L) chats with Internet surfers on two state news portals in Beijing, China, Feb. 27, 2010. (Xinhua/Ma Zhangcheng)&$ &$ &$ &$Live : Premier Wen gives online interview&$ &$ Maintaining a good trade relation between China and the United States could bring fundam ...
China's Wen confident in 2010 economy de... China's Wen confident in 2010 economy despite most complicated situation
02/27/2010
&$ &$Chinese Premier Wen Jiabao (L) chats with Internet surfers on two state news portals in Beijing, China, Feb. 27, 2010. (Xinhua/Ma Zhangcheng)&$ &$ &$ &$Live : Premier Wen gives online interview&$ &$ Chinese Premier Wen Jiabao said Saturday he was confident in China's economic developmen ...
China still faces serious employment pre... China still faces serious employment pressure, says Premier Wen
02/27/2010
&$ &$Chinese Premier Wen Jiabao (L) chats with Internet surfers on two state news portals in Beijing, China, Feb. 27, 2010. (Xinhua/Ma Zhangcheng)&$ &$ &$ &$Live : Premier Wen gives online interview&$ &$ China is still facing serious challenges in employment, though labor shortage has been f ...
China's massive stimulus plan proved eff... China's massive stimulus plan proved effective: Chinese Premier
02/27/2010
&$ &$Chinese Premier Wen Jiabao (L) chats with Internet surfers on two state news portals in Beijing, China, Feb. 27, 2010. (Xinhua/Ma Zhangcheng)&$ &$ &$ &$Live : Premier Wen gives online interview&$ &$ China's massive stimulus plan has been proved to be effective and China's economy has bo ...
Chinese premier encourages university gr... Chinese premier encourages university graduates to start own businesses
02/27/2010
&$ &$Chinese Premier Wen Jiabao (L) chats with Internet surfers on two state news portals in Beijing, China, Feb. 27, 2010. (Xinhua/Ma Zhangcheng)&$ &$ &$ &$Live : Premier Wen gives online interview&$ &$ Chinese Premier Wen Jiabao said Saturday the government encourages university graduates ...
Chevron production feared to drop by 62%... Chevron production feared to drop by 62% in Indonesia
02/27/2010
Chevron Pacific Indonesia, one of the main oil producer in Indonesia, said that its oil production may drop by 62 percent should the government impose a new environmental law, a media reported here Saturday. The firm has set a target to produce 400,000 barrels of oil per day (bopd) this year. "Chevron production will decline to 152,000 bpod, far lower than our target," Chevron general manager support Bambang Pratesa was quoted by the Jakarta Post as saying. The manager said that current ...
Chevron production feared to drop by 62%... Chevron production feared to drop by 62% in Indonesia
02/27/2010
Chevron Pacific Indonesia, one of the main oil producer in Indonesia, said that its oil production may drop by 62 percent should the government impose a new environmental law, a media reported here Saturday. The firm has set a target to produce 400,000 barrels of oil per day (bopd) this year. "Chevron production will decline to 152,000 bpod, far lower than our target," Chevron general manager support Bambang Pratesa was quoted by the Jakarta Post as saying. The manager said that current ...
Volkswagen 2009 profit declines 80% Volkswagen 2009 profit declines 80%
02/27/2010
&$ &$The photo taken on Jan. 25, 2010, shows a Porsche sports car assembly line at the Volkswagen's plant in Hannover, north of Germany. Volkswagen, the biggest European carmaker, said Friday that its 2009 profit plunged by nearly 80 percent in the global slump but predicted that sales and operating profit would rebound this year.(Xinhua/AFP Photo)&$ &$ &$ <img src='/mediafile/201002/27/P201002271320552343 ...
Volkswagen 2009 profit declines 80% Volkswagen 2009 profit declines 80%
02/27/2010
&$ &$The photo taken on Jan. 25, 2010, shows a Porsche sports car assembly line at the Volkswagen's plant in Hannover, north of Germany. Volkswagen, the biggest European carmaker, said Friday that its 2009 profit plunged by nearly 80 percent in the global slump but predicted that sales and operating profit would rebound this year.(Xinhua/AFP Photo)&$ &$ &$ <img src='/mediafile/201002/27/P201002271320552343 ...
World Coffee Conference kicks off to dis... World Coffee Conference kicks off to discuss sustainable coffee production
02/27/2010
&$ &$A cup of cappuccino sits on a table during the World Coffee Conference in Guatemala City February 26, 2010. Guatemala will produce less coffee than previously forecast in the 2009/10 season due to bad weather, increasing pressure on already tight global supplies, the head of the national growers group Anacafe said on Friday.(Xinhua/Reuters Photo)&$ &$ The 3rd World Coffee Conference kicked off on Friday to dis ...
World Coffee Conference kicks off to dis... World Coffee Conference kicks off to discuss sustainable coffee production
02/27/2010
&$ &$A cup of cappuccino sits on a table during the World Coffee Conference in Guatemala City February 26, 2010. Guatemala will produce less coffee than previously forecast in the 2009/10 season due to bad weather, increasing pressure on already tight global supplies, the head of the national growers group Anacafe said on Friday.(Xinhua/Reuters Photo)&$ &$ The 3rd World Coffee Conference kicked off on Friday to dis ...
Bank of Canada appoints Macklem as senio... Bank of Canada appoints Macklem as senior deputy governor
02/27/2010
The Board of Directors of the Bank of Canada announced on Friday that Tiff Macklem had been appointed senior deputy governor for a term of seven years beginning July 1, 2010. Macklem, who has had a long association with the Bank of Canada, is currently associate deputy minister of the federal Department of Finance and Canada's Group of Seven finance deputy. In this capacity, he has helped develop measures to mitigate the impact of the global financial crisis and has been closely involved in d ...
Bank of Canada appoints Macklem as senio... Bank of Canada appoints Macklem as senior deputy governor
02/27/2010
The Board of Directors of the Bank of Canada announced on Friday that Tiff Macklem had been appointed senior deputy governor for a term of seven years beginning July 1, 2010. Macklem, who has had a long association with the Bank of Canada, is currently associate deputy minister of the federal Department of Finance and Canada's Group of Seven finance deputy. In this capacity, he has helped develop measures to mitigate the impact of the global financial crisis and has been closely involved in d ...
Video: Toyota Town Looks Ahead Video: Toyota Town Looks Ahead
02/28/2010
The people of a Northern Kentucky town that hosts Toyota's biggest U.S. plant speak about the carmaker and look ahead at its future. Russ Mitchell reports.
Video: Body Talk at Job Interviews Video: Body Talk at Job Interviews
02/27/2010
Janine Driver, author of 'You Say More Than You Think', shows CBS News' Kaylee Hartung just how much our bodies have to say in a job interview.
Video: Body Language on the Job Video: Body Language on the Job
02/27/2010
Our body language sends signals to our bosses and co-workers all the time. Body language expert, Janine Driver shows us some gestures that could impact your career
Video: How to Live on Less Video: How to Live on Less
02/27/2010
Many families are struggling to make ends meet as the jobless rate hovers around 10%. Jill Schlesinger gives some practical ways to pay bills while searching for a new job.
Dumb Job Interview Mistakes Dumb Job Interview Mistakes
02/27/2010
You Won't Believe Some of These; Expert Offers Tips on Right Way to Conduct Yourself
Long-Term Joblessness "Off the Charts" Long-Term Joblessness "Off the Charts"
02/27/2010
Hitting Middle Class Particularly Hard; Millions of Such Jobs Gone Forever, Reports John Blackstone
Video: Snow Increases Jobless Rate? Video: Snow Increases Jobless Rate?
02/27/2010
Snowed in workers become laid off workers, says the Department of Labor, blaming the new jump in unemployment claims as weather-related. Michelle Miller reports.
Bad Batch of Girl Scout Cookies Yanked Bad Batch of Girl Scout Cookies Yanked
02/27/2010
Bakery Recalls Lemon Chalet Cremes After Complaints of Foul Odor and Taste
Snowed-In States Plowing Through Budgets Snowed-In States Plowing Through Budgets
02/27/2010
Brutal Winter is Leaving Governments and Workers Buried in Debt; 100,000 Jobs May Be Lost Due to Snow
Diamond Sold for Record Breaking $35.3M Diamond Sold for Record Breaking $35.3M
02/26/2010
507-Carat Gem Fetches Highest Price Ever for a Rough Diamond
UN Moves Closer To Lifting Iraq Sanction... UN Moves Closer To Lifting Iraq Sanctions
02/26/2010
Trade Sanctions Have Stymied Iraq's Economy Since 1991 Invasion of Kuwait
U.S. Economic Growth Sputtering U.S. Economic Growth Sputtering
02/26/2010
Hight Unemployment, Foreclosures Keep Recovery From Picking Up Steam
How High Will Mortgage Rates Go? How High Will Mortgage Rates Go?
02/26/2010
Moneywatch.com: Fed Actions Will Push Rates Up, but They Probably Won't Get Too Much Higher Too Quickly
Target Thinks Little Bribe Will Do Wonde... Target Thinks Little Bribe Will Do Wonders
02/26/2010
Retail Realities: Target Is Getting Serious About Discounts for One Card Type: Its Own
AIG Posts $8.87B Loss in 4Q AIG Posts $8.87B Loss in 4Q
02/26/2010
Insurer Says it May Need More Government Support; Chalks up Loss to Weak Market, Loan Paybacks
Trick Youself to Save More $$ Trick Youself to Save More $$
02/26/2010
Kiplinger's Shares Tips on How You Can Save Behind Your Own Back!
Apple Marks 10 Billionth Song Download Apple Marks 10 Billionth Song Download
02/26/2010
71-Year-Old Louis Sulcer Wins $10,000 for Downloading Johnny Cash Hit "Guess Things Happen That Way"
Unemployment Extension Fails in Senate Unemployment Extension Fails in Senate
02/26/2010
GOP Sen. Jim Bunning Blocks Action over Concerns About Swelling Deficit
January Home Sales Fall 7.2% January Home Sales Fall 7.2%
02/26/2010
Sales of Previously-Occupied Houses Dropped for 2nd Straight Month in January, Now at Lowest Level Since Summer
4th Qtr. Economic Growth Beat Expectatio... 4th Qtr. Economic Growth Beat Expectations
02/26/2010
5.9% Expansion Was Strongest Showing in 6 Years, But Growth in 2010's 1st Qtr. Expected to Be Slower
Financial reform compromise rebuffed in ... Financial reform compromise rebuffed in Senate
02/28/2010
Marathon negotiations in the Senate on financial regulatory reform were set to continue on Sunday with a renewed focus on financial consumer protections after key Republicans rejected a compromise offer from the banking committee chairman.
Buffett: Execs should pay price for risk... Buffett: Execs should pay price for risks
02/28/2010
Billionaire Warren Buffett, in his annual letter to shareholders, sternly urged companies to develop harsh penalties for executives who get into trouble with risky investments.
Gatorade drops Tiger Woods as spokespers... Gatorade drops Tiger Woods as spokesperson
02/26/2010
Add Gatorade to the list of endorsement deals that Tiger Woods has lost. A spokesperson for the drink, sold by PepsiCo Inc., confirmed that it had ended its relationship with the golfer.
Fannie Mae seeks $15.3 billion more in a... Fannie Mae seeks $15.3 billion more in aid
02/26/2010
Fannie Mae needs another $15 billion in federal assistance, bringing its total to more than $75 billion. And worse, the mortgage finance company warned its losses will continue this year.
Lawmaker: Toyota withheld key evidence Lawmaker: Toyota withheld key evidence
02/26/2010
A House lawmaker says internal Toyota documents show the automaker deliberately withheld key vehicle design and testing evidence in lawsuits filed by Toyota drivers injured in crashes.
Stocks edge higher after mixed economic ... Stocks edge higher after mixed economic data
02/26/2010
The stock market eked out a gain as investors took glum economic news in stride. The small gains still left stocks with a loss for the week but the Dow and S&P 500 logged their best month since November.
BofA’s Lewis pay package worth $32,171 BofA’s Lewis pay package worth $32,171
02/26/2010
Former Bank of America CEO Ken Lewis received a compensation package valued at $32,171 in 2009 as the bank struggled with loan losses and repaid billions in federal bailout money.
When CEOs have Buffett in their boardroo... When CEOs have Buffett in their boardroom
02/26/2010
What's it like to have America's greatest investor as your shareholder? Buffett's biographer talks to CEOs who know.
U.S. may consider wages in awarding cont... U.S. may consider wages in awarding contracts
02/26/2010
The White House is looking at a new policy that would give an advantage in bidding on government contracts to companies that offer a "living wage" and generous benefits.
Existing-home sales tumble 7.2 percent Existing-home sales tumble 7.2 percent
02/26/2010
Sales of previously occupied homes took a large drop for the second straight month in January. It was another sign the housing market's recovery is faltering.
Pittsburgh tops list of best housing mar... Pittsburgh tops list of best housing markets
02/26/2010
Families in the market for a house are shopping at the right time: Nationally, homes are near the most affordable they've been in 18 years.
Regulators: Strict bank rules don’t hurt... Regulators: Strict bank rules don’t hurt lending
02/26/2010
Regulators fended off complaints Friday from lawmakers and small business owners that overly strict rules for banks have prevented crucial credit from flowing to where it is needed most.
Wicked winter adds to economy’s woes Wicked winter adds to economy’s woes
02/26/2010
The three major snowstorms that have slammed the Northeast this winter have been more than just huge hassles — they may be creating yet another headwind for a wobbly economy.
Raises or rebuilding? It’s a tough call... Raises or rebuilding? It’s a tough call
02/26/2010
Business is starting to creep upward at some small companies. But owners who need to rebuild their businesses may not yet be able to give raises to their hard-working employees.
Are celebrity gift suites souring some? Are celebrity gift suites souring some?
02/26/2010
As gifting has become more popular and more public, top stars rarely show up anymore. It would be tacky, especially in this economy. And offering the suites is very expensive for businesses too.
U.S. seeks to shield retirement savings U.S. seeks to shield retirement savings
02/26/2010
Vice President Joe Biden on Friday proposed new rules to help protect workers' retirement savings as part of a broader effort to bolster the finances of middle class voters.
NYT: Romancing the curling stone on Wall... NYT: Romancing the curling stone on Wall St.
02/26/2010
NYT: Wall Street trading is often described as a blood sport. But inside the great investment houses, there's another sport of the moment. Curling.
Economy ends 2009 at faster pace than th... Economy ends 2009 at faster pace than thought
02/26/2010
The economy rocketed ahead at a 5.9 percent pace in the final quarter of 2009, stronger than initially estimated. But the growth spurt isn't expected to carry over into this year.
10 of the most brilliant marketing ideas 10 of the most brilliant marketing ideas
02/26/2010
Entrepreneur.com: Every now and then an advertising idea comes along that infiltrates the culture in subtle ways for decades to come. Read about 10 of the best campaigns.
Six hazards facing the stock market Six hazards facing the stock market
02/25/2010
Nearly a year after the stock market staged one of the biggest rallies in history, investors  worry that this bull may be getting wobbly. There’s no shortage of cause for concern.  
The Haggler: Free Assistance (Well, for ... The Haggler: Free Assistance (Well, for 90 Days)
02/28/2010
After buying a Slingbox and a SlingCatcher to watch American television shows overseas, a consumer has trouble with installation — and writes to the Haggler.
Strategies: More Often Than Not, the Ins... Strategies: More Often Than Not, the Insiders Get It Right
02/28/2010
Company insiders didn’t sense the bull market’s peak in 2007, or the depth of the subsequent decline. But, a professor says, their trading has been a generally reliable indicator over the longer term.
Mortgages: Another Foreclosure Alternati... Mortgages: Another Foreclosure Alternative
02/27/2010
With short sales beyond the reach of some homeowners, another foreclosure alternative is emerging: “deeds in lieu of foreclosure.”
Shortcuts: Too Many Choices: A Problem T... Shortcuts: Too Many Choices: A Problem That Can Paralyze
02/27/2010
An overload of options, researchers say, may actually push people into decisions that are against their own best interest.
Patient Money: Nudging Schools to Help S... Patient Money: Nudging Schools to Help Students With Learning Disabilities
02/27/2010
Federal law says schools must provide an appropriate education for all children with learning disabilities, but parents can help by becoming advocates and experts.
Your Money: Preparing for the Inevitable... Your Money: Preparing for the Inevitable Bursting Bubble
02/27/2010
There’s bound to be another bubble and another one after that. A way to survive their collapses is to honestly assess your long-term goals.
An Ode to Fiscal Responsibility An Ode to Fiscal Responsibility
02/26/2010
Another poem about overdraft fees, this one taking the banks' side.
Answers About Same-Sex Couples and Taxes... Answers About Same-Sex Couples and Taxes: Part 4
02/26/2010
In our fourth installment of Ask the Expert, Tina Salandra, a certified public accountant, continues to answer questions from same-sex couples about taxes.
New Rules Aimed at Increasing Retirement... New Rules Aimed at Increasing Retirement Savings
02/26/2010
The United States Department of Labor announced two rules Wednesday intended to increase the quality of information American workers use to make retirement savings investment decisions.
How Are You Preparing for the Next Bubbl... How Are You Preparing for the Next Bubble?
02/26/2010
Have you become more defensive recently? Or are you trying to take advantage of the uncertainty?
U.S. Weighs Requiring Lenders to Conside... U.S. Weighs Requiring Lenders to Consider Changes Before Foreclosures
02/26/2010
The proposal would differ from the current practice, which strongly encourages lenders to evaluate defaulting borrowers for a modification but does not make it mandatory.
Buffett: Execs should pay price for risk... Buffett: Execs should pay price for risks
02/28/2010
Billionaire Warren Buffett, in his annual letter to shareholders, sternly urged companies to develop harsh penalties for executives who get into trouble with risky investments.
Gatorade drops Tiger Woods as spokespers... Gatorade drops Tiger Woods as spokesperson
02/26/2010
Add Gatorade to the list of endorsement deals that Tiger Woods has lost. A spokesperson for the drink, sold by PepsiCo Inc., confirmed that it had ended its relationship with the golfer.
BofA’s Lewis pay package worth $32,171 BofA’s Lewis pay package worth $32,171
02/26/2010
Former Bank of America CEO Ken Lewis received a compensation package valued at $32,171 in 2009 as the bank struggled with loan losses and repaid billions in federal bailout money.
When CEOs have Buffett in their boardroo... When CEOs have Buffett in their boardroom
02/26/2010
What's it like to have America's greatest investor as your shareholder? Buffett's biographer talks to CEOs who know.
U.S. may consider wages in awarding cont... U.S. may consider wages in awarding contracts
02/26/2010
The White House is looking at a new policy that would give an advantage in bidding on government contracts to companies that offer a "living wage" and generous benefits.
Regulators: Strict bank rules don’t hurt... Regulators: Strict bank rules don’t hurt lending
02/26/2010
Regulators fended off complaints Friday from lawmakers and small business owners that overly strict rules for banks have prevented crucial credit from flowing to where it is needed most.
Are celebrity gift suites souring some? Are celebrity gift suites souring some?
02/26/2010
As gifting has become more popular and more public, top stars rarely show up anymore. It would be tacky, especially in this economy. And offering the suites is very expensive for businesses too.
10 of the most brilliant marketing ideas 10 of the most brilliant marketing ideas
02/26/2010
Entrepreneur.com: Every now and then an advertising idea comes along that infiltrates the culture in subtle ways for decades to come. Read about 10 of the best campaigns.
Couple sued for installing ‘ugly’ IKEA k... Couple sued for installing ‘ugly’ IKEA kitchen
02/25/2010
A wealthy Icelandic couple is being sued for installing a cheap IKEA kitchen into an apartment they rented out at a swank hotel in New York City.
Restaurant chain sees recession bets pay... Restaurant chain sees recession bets pay off
02/25/2010
Clarence Otis, CEO of Darden Restaurants, avoided deep discounts, large layoffs and major changes during the recession. Now, many say that tactic is paying off.
In a Country of Monopoly Newspapers, Pal... In a Country of Monopoly Newspapers, Palo Alto Is Awash in Competition
02/28/2010
The vast majority of American cities have but a single newspaper, but Palo Alto has three.
Larger Threat Is Seen in Google Case Larger Threat Is Seen in Google Case
02/27/2010
In Italy, three Google executives were held criminally responsible for content posted on the company’s system, suggesting that Google is a content provider that could be regulated.
When American and European Ideas of Priv... When American and European Ideas of Privacy Collide
02/27/2010
An Italian ruling against Google highlights the clash between Europe’s love of privacy and America’s of free speech.
An Olympic Victory for ‘Shutter Island’... An Olympic Victory for ‘Shutter Island’
02/27/2010
The movie made $41 million in its first week, a career best for Leonardo DiCaprio and Martin Scorsese, thanks largely to its ad campaign.
New York World: ‘We Wail With You, Haiti... New York World: ‘We Wail With You, Haiti’
02/27/2010
Unique perspectives of the earthquake and its aftermath from New York’s foreign language newspapers.
On Wall Street, a Romance With Curling On Wall Street, a Romance With Curling
02/26/2010
The oddball of the Olympics has captivated traders thanks to CNBC, which covers curling after the closing bell.
Cablevision Posts Profit in Quarter Cablevision Posts Profit in Quarter
02/26/2010
The company’s only money-losing division was its Newsday newspaper, where ad revenue fell by 20 percent.
Bankruptcy for Paper Maker Bankruptcy for Paper Maker
02/26/2010
White Birch Paper’s United States unit filed for Chapter 11 in Virginia. The parent filed in Quebec, citing declining demand for newspapers.
Advertising: Bringing Groups Together to... Advertising: Bringing Groups Together to Revamp an Industry
02/26/2010
The Four A’s merged two conferences together this year, recognizing how specialists in different areas are collaborating more often on campaigns for clients.
Small talk: Snowmen, faking, Phoonk 2 Small talk: Snowmen, faking, Phoonk 2
02/26/2010
Marketplace's Brendan Newnam and Rico Gagliano chat with fellow staffers George Judson, Amy Scott and Stacey Vanek-Smith about under-the-radar stories: Protesting snowmen, fake kidnapping, and a prize for watching Phoonk 2 alone.
Conservation projects displace locals Conservation projects displace locals
02/26/2010
Several years ago three U.S. companies sank millions of dollars into a forest reserve in southern Brazil to earn credits to cover some of their carbon emissions back in America. How does the scheme work on the ground? Michael Montgomery reports in collaboration with Mark Schapiro.
Wall Street is no longer in my dreams Wall Street is no longer in my dreams
02/26/2010
Like many other young people, Youth Radio's Lauren Silverman used to swoon at the idea of working in the towers of high finance. But now she's thinking differently.
Weekly Wrap: Bernanke and health care Weekly Wrap: Bernanke and health care
02/26/2010
Atlantic Magazine's Megan McArdle and Visible Economy's Mike Mandel talk with Bob Moon about what they took away from Federal Reserve Chairman Ben Bernanke's appearance on Capitol Hill and whether the current health care bill does enough to control costs.
Ruling to put spotlight on fraud cases Ruling to put spotlight on fraud cases
02/26/2010
The Supreme Court will soon hear the appeal of Enron CEO Jeffrey Skilling, who is serving a 24-year prison sentence. Brett Neely reports there are signs the justices may overturn an anti-fraud statute used to convict him.
Public utilities differ on gas regulatio... Public utilities differ on gas regulation
02/26/2010
A trade group of utilities has backed efforts to block the Environmental Protection Agency from regulating greenhouse gas emissions. But that group doesn't speak for all of its members. Jennifer Collins reports.
Small biz owners seek action on lending Small biz owners seek action on lending
02/26/2010
As of this week, the Small Business Administration has run out of stimulus funding to guarantee bank loans on favorable terms. At a House hearing, legislators grilled bankers and regulators on what they plan to do to jump-start lending. Mitchell Hartman reports.
Weather makes economic data hazy Weather makes economic data hazy
02/26/2010
Home sales were down last month while the Gross Domestic Product was up 5.9% at the end of last year. The latest economic data have one thing in common: snow. John Dimsdale reports it's having an increasing impact on the economy's performance.
Why print won't die Why print won't die
02/28/2010
The iPad has been hailed as another nail of coffin of print.Indeed, in his book Print is Dead Jeff Gomez says the internet is killing print little-by-little by removing it as a necessity for most people. Information is spread by websites and most people communicate by email. Sports scores and classified ads are found in newspapers but most people get this information online. Print is gradually being erased. Gomez argues that publishers should see this as an opportunity, not a threat. "Just as videos ...
Is China the next Toyota? Is China the next Toyota?
02/28/2010
That's the suggestion from political commentator Adam Hanft. Writing in the Huffington Post, Hanft says Toyota is paying the price for pursuing growth for its own sake, and the same could happen to China.Hanft writes: "China's rapid ascendancy carries with it a far greater risk of overstretch and structural weakness than Toyota's. China's problems are more pervasive and threatening than a sticky pedal, lumpy floor mats, or even electronic signaling issues. Bribery and institutionalized corruption have resulted in massive amounts of unsafe construction and ...
SEC delays global accounting standards SEC delays global accounting standards
02/27/2010
Plans for the United States to move to global accounting standards have been delayed for another 12 months with the Security and Exchange Commission announced it was extending the time line for US businesses to comply with International Financial Reporting Standards (IFRS). The SEC has extended the deadline to no earlier than 2015. Under the original road map put together by former SEC chief Christropher Cox, it was 2014.Check the wording of the announcement. SEC chief Mary Schapiro still gives the impression of supporting ...
Death of American capitalism Death of American capitalism
02/27/2010
We might be looking at the death of American capitalism. Ask Charlie Munger, Warren Buffett's partner and vice-chairman of Buffett's Berkshire Hathaway.In a recent piece in Slate Magazine , Munger writes a parable about the US economy, drawing on the story of a place called Basicland, a country that was established in the 1700s by the Europeans, a place where trade was encouraged, property right respected, where there was a simple banking system that provided loans to credit worthy businesses but nothing to the ...
The Madoff legacy The Madoff legacy
02/26/2010
Bernard Madoff is behind bars but his legacy continues. A crime of that size is not going to sink without trace.First we have news that his director of operations Daniel Bonventre has been arrested for false filings with the Securities and Exchange Commission and four counts of filing false federal-tax returns. He is the sixth person to be charged in this case, including Madoff, and there are likely to be a few more.Then we have reports that Madoff's daughter-in-law and mother of his grandchildren, ...
Greece heads to junk status Greece heads to junk status
02/26/2010
The Greek tragedy just gets worse and it doesn't look like Greece will get out of this mess easily.First, we have ratings agency Moody's warning that that Greece could see its long-term credit ratings cut by two notches. This follows a similar statement from Standard & Poor's. This is dangerous territory now: if Greece's credit rating is cut, it would increase the country's borrowing costs which would make it even more difficult for the government to cut its budget deficit. Furthermore, it would cripple ...
Google's growing pains Google's growing pains
02/25/2010
Google has been hit by a perfect storm in Europe.In Italy, a court has convicted three Google executives of privacy violations because they didn't act quickly enough to pull down an online video showing an autistic boy getting abused. Google claims the convictions breach the principles of Internet freedom and in any case, it's impossible for providers to pre-screen thousands of hours of footage uploaded every day onto sites like YouTube. Google will appeal and we can expect this case to get plenty more ...
Europe's summer of discontent signals a ... Europe's summer of discontent signals a crack up
02/25/2010
It had to happen. With Europe's economic woes forcing governments to cut spending, riots had to start happening. As the The Times says, the riots in Athens signal the summer of discontent.David Charters writes from Brussels that the unrest is the result of political ineptitude. Europe's politicians have failed to deal with the problem. "A general strike is planned next month in Portugal after a public-sector wage freeze, while Spain is witnessing growing unrest over plans to raise the retirement age. In the eurozone's ...
Liening on NY homeowners Liening on NY homeowners
02/28/2010
As the mortgage melt down paralyzed the economy across the US and throughout New York State, one company in the center of the storm had all the business it could handle. The little-known law firm of Steven J. Baum PC, which is based in suburban Buffalo, NY, and represents dozens...
Buying retail(ers) Buying retail(ers)
02/28/2010
It's only late February, but retail stocks are already trading like Christmas is around the corner. Boosted by reports of upbeat post-holiday shopping trends, shares of big retail chains have surged nearly 6 percent during the past month, according to the Standard & Poor's Retail Index. That's nearly...
Euro sidesteps Greek tragedy Euro sidesteps Greek tragedy
02/28/2010
Dear John: If the US Treasury wavered on the redemption of a series of notes coming due, the dollar would be hit hard. So why is the euro still trading so high against the dollar when the central bank chairman, Jean-Claude Trichet, offers only a budgetary lecture to Greece and...
Feed bad executives more pain: Buffett Feed bad executives more pain: Buffett
02/28/2010
Wall Street executives should have been punished greater financially -- perhaps even have been fired -- for not managing risk successfully during the Great Recession thus needing a bailout to survive, according to Warren Buffett. The billionaire chairman of Berkshire Hathaway, in his annual letter to shareholders, said investors who...
70.5 is the new 65 70.5 is the new 65
02/28/2010
For millions of Americans dreaming of retiring at the traditional age of 65, here are three words of warning -- not so fast. Seventy-and-a-half is the new sixty-five for millions of Americans who have seen their retirement nest eggs take a beating thanks to the Great Recession. "Sure, and it...
ObamaCare bleeds NYers ObamaCare bleeds NYers
02/28/2010
Here's one number that wasn't mentioned during last week's Presidential Health Care Summit -- the Democrats want to levy a new income tax to fund ObamaCare and the residents of New York and New Jersey will likely end up paying about 25 percent of it. How so...
Toy story: lower prices Toy story: lower prices
02/28/2010
The prices on toys under the tree next Christmas may continue to be easier on parents' wallets, according to BMO Capital Markets toy sector analyst Gerrick L. Johnson. In a note to clients, Johnson said the mood at Toy Fair last week was "optimistic" but that many executives were sticking...
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