The great interest rate rip off part 1

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Latvian debt crisis shakes Eastern Europe - Telegraph

 

The central bank has been burning reserves to defend the lat in Europe’s Exchange Rate Mechanism, but markets doubt whether Latvia has the political will to carry through draconian cuts in spending – or whether such a policy even makes sense at this stage.

Tremors hit bank shares in Stockholm and triggered a sharp fall in Sweden’s krona. Swedbank, SEB and other Swedish banks have $75bn of exposure to the Baltic states, and face cliff-edge losses if the pegs snap.

 

“Latvia may be a small country but it has vast repercussions for the region,” said Bartosz Pawlowski, of BNP Paribas. “If the currency breaks in Latvia, it is likely to break in Estonia and Lithuania as well, and perhaps Bulgaria, with effects on other countries like Romania.”

Fresh turbulence in the ex-Communist bloc would rattle West European banks, which have €1.3 trillion of exposure to the region. “We haven’t yet seen the full extent of the crisis in the East European banking system. Defaults are creeping higher,” he said.

The G20 deal in April to triple the IMF’s fire-fighting fund to $750bn has reduced the risk of a currency conflagration, but while

the larger reserves will buy time, it does not change the fact that some countries have taken on too much debt.

Latvia’s premier Valdis Dombrovskis warned against a devaluation “quick fix” but may have fuelled the flames further by admitting that the lat is overvalued by a third.

“If we’re talking of devaluation, it definitely won’t be less than 15pc. It’ll most likely be 30pc. Real incomes will shrink very fast. The immediate shock will affect absolutely everyone and everything,” he said.

 

Mr Bond appears to be getting restless.

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The world economy is tracking or doing worse than during the Great Depression (update) | vox - Research-based policy analysis and commentary from leading economists

 

New findings:

 

• World industrial production continues to track closely the 1930s fall, with no clear signs of ‘green shoots’.
  
• World stock markets have rebounded a bit since March, and world trade has stabilised, but these are still following paths far below the ones they followed in the Great Depression.
  
• There are new charts for individual nations’ industrial output. The big-4 EU nations divide north-south; today’s German and British industrial output are closely tracking their rate of fall in the 1930s, while Italy and France are doing much worse.
  
• The North Americans (US & Canada) continue to see their industrial output fall approximately in line with what happened in the 1929 crisis, with no clear signs of a turn around.
  
• Japan’s industrial output in February was 25 percentage points lower than at the equivalent stage in the Great Depression. There was however a sharp rebound in March.
  

The facts for Chile, Belgium, Czechoslovakia, Poland and Sweden are displayed below; note the rebound in Eastern Europe.

Updated Figure 1. World Industrial Output, Now vs Then (updated)

Updated Figure 2. World Stock Markets, Now vs Then (updated)

Updated Figure 3. The Volume of World Trade, Now vs Then (updated)

 

It can only be a recovery.

[gustavius rex]

Please note that this is the current situation after the $ trillions bail-out of banks; 0,5% base rates and other stimulus packages provided by most industrial countries. Without these measures the situation would be catastrofic and the result, a total collapse of the world economy on a scale that would make the 30:s depression look like a minor slow down of the economy. And, more is coming! The oil price will reach $85.00 by the end of the year and the housing market will not really recover for another 5 to 6 years. The auto industry will eventually collapse and more giants will like GM go to the brink of extinction. Prices of raw-material will increase due to transportation costs as will the finished products. UK, witout any real industry nor skilled workers will not be able to produce internally why the trade defecit will increase dramatically. The collapse of the banks will reduce any hidden offsets and the government will be forced to borrow more and increase taxes. Inward investments will disappear. Pressure on the £ will be increasing and the value drop dramatically. This should under normal circumstances improve export, but, as the UK have little or no export, beside Dyson and Scotch Whiskey, the lower value will only increse the cost of borrowing and re-payments of existing loans. UK guilts will be worthless and the cost of borrowing reach loanshark proportions. l have time after time stated that we are only in the beginning of HARD TIMES and not, as our fearless leaders assure us, in the beginning of a recovery. l am not a doomesday preacher, l'm actually a born optimist, but also, practical and objective. Beside all of this, should the meatheads in the conservatives and UKIP get us out of EU, then we shall see poverty on a scale never seen here since the times of Dickens.

GR

Edited June 6, 2009 by gustavius rex
spell

[interestrateripoff]

Abbey's flexible mortgage angers customers | Money | The Guardian

 

Abbey was this week accused of "unfairly" slashing the value of homes, and using this as an excuse to "grab" thousands of pounds that its mortgage customers had stashed away for the future.

 

In the last few weeks, many Abbey flexible* mortgage holders have received a bombshell letter telling them that *because of falling house prices, the bank has reduced the estimated value of their property.

 

That has a dramatic impact on the way people use the mortgage. In some cases it means thousands of pounds paid into their account – which they were perhaps hoping to dip into at a later date – has suddenly been whipped away. That means they are unable to access this money, which they might have been planning to use for a holiday or new car. It is thought as many as 8,000 people have received letters telling them that some, or all, of this cash has been removed. Justin Cuckow is one; he claims the Spanish-owned bank has behaved "outrageously".

 

By making a number of overpayments, he had built up £10,300 of what Abbey calls "available funds", that he could use in future to take a payment holiday or pay less each month, or to spend on whatever he wanted.

 

He thought he was behaving prudently* by shovelling in the extra cash. So he was shocked to receive a letter a few days ago telling him that, as part of a review of all Abbey's flexible mortgage accounts, the bank had reduced the estimated value of his flat from £143,000 to £130,000. That automatically reduced his credit limit by a similar amount, "which reduces your available funds to £0.00". The letter then rubbed salt in the wound: "Please note that if house prices increase in the future, we will not automatically increase your credit limit."

 

In other words, the £10,300 that Cuckow had carefully built up has been removed at a stroke.

Abbey has around 200,000 flexible mortgage customers. These deals give you the freedom to overpay when you want to, then underpay or take a break from your monthly payments if your circumstances change. But with Northern Rock also tightening up the rules on its flexible mortgages, some of these deals are looking a lot less user-friendly now that the economic backdrop isn't so rosy. Ray Boulger at broker John Charcol says if borrowers don't have confidence that they can use these home loans in the way they expect, "it destroys the whole concept of having that type of mortgage".

 

It doesn't help that Abbey's flexible loan is a pretty complex beast. It is made up of three parts – the mortgage loan, a savings pot, and your "available funds". The available funds are the difference between what you've borrowed (ie, the loan) and the maximum you are allowed to borrow (your credit limit). Abbey describes this facility as like an overdraft; you can "draw down" funds up to the maximum as needed. If you overpay, you can put this money into your savings pot, which is offset against the loan, or do what Cuckow did – pay it off your mortgage,* thereby increasing the available* funds.

 

He was surprised to discover the new figure for what his one-bedroom flat is allegedly worth was an automated valuation* based on Halifax's house price index*, which Abbey said, "provides us with an updated estimate each quarter of the purchase price of properties in your region".

 

After Cuckow complained, Abbey dispatched a surveyor to carry out a formal valuation, which put the value at £145,000 – some £15,000 more than the original valuation (and £2,000 more than he paid for it), and suggests the bank was wrong to swipe all his available funds.

 

The first margin calls from the banks?

[interestrateripoff]

Rio risks a China crisis

 

Chinalco 'disappointed' as Rio abandons deal in favour of cash call and BHP alliance

 

 

• US regulators push for change at top of Citi
  
• Political ups and downs leave sterling gyrating
  
• Blank says sorry to Lloyds investors
  
• Carphone looks to demerge next summer
  
• Credit Crisis Diary: 06/06/2009
  
• US unemployment rate jumps to 9.4 per cent
  
• Rio Tinto deal with Chinalco falling apart at eleventh hour
  

 

Jeremy Warner: Rio Tinto – another lesson in the perils of empire-building

 

Outlook: The Chinese are fuming and some shareholders are still demanding Tom Albanese's head on a platter. But in the round, Jan du Plessis, Rio Tinto's chairman, seems to have negotiated a satisfactory finale to the tale of corporate woe that began with Rio's top-of-the-market acquisition of Alcan two years ago.

 

 

• Jeremy Warner: Sir Alan Sugar – you're hired!
  
• Jeremy Warner: Ronson – Ernest's Alzheimer's was my idea
  
• Hamish McRae: The focus switches to the next Chancellor – and the one after that
  
• Jeremy Warner: Rio Tinto ditches its Chinese connection
  
• Jeremy Warner: Latvia must bite the bullet and devalue
  

 

Jobs is back: with a new iPhone

 

Gossip that the next-generation iPhone will be unveiled on Monday has the technology industry agog, says Nick Clark

 

 

• Is the credit crisis over at long last?
  

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Pound slides as Westminster's woes weigh heavily - Times Online

 

M&S man's £1m for 112 days' work

 

Steven Esom, the former head of food at Marks & Spencer dismissed after poor sales, received a payoff of £568,000

 

Carphone Warehouse begins drive to be nice

 

Sales staff at mobile phone retailer will get bonus related to rating from customers who judge their service skills

 

• Carphone Warehouse confirms plan to split
  

 

• Carphone Warehouse may shed staff
  

South of England leads housing market pick-up

 

Bellway, the housebuilder, says unemployment and oversupply in the sector mean that North is trailing in its recovery

 

• Bellway cuts dividend 83% on house demand fall
  

 

• Redrow house sales halve as downturn deepens
  

'Nonsense' that recession is waning, says IoD

 

Miles Templeman says it is critical to recognise that it is time to cut costs and for Government to cut public spending

 

 

GM selling Saturn brand to Penske dealership

 

GM, which has filed for Chaper 11 bankruptcy protection, now has only Saab to offload as it disposes of unwanted brands

 

Latvia pressed to push through budget cuts

 

Neighbouring European states fear financial woes could take toll on their economies after currencies take hit

 

• Swedish banks fear writedowns
  

 

• Latvian crisis deepens as Europe debates aid
  

P&G phasing out Max Factor in America

 

The Hollywood movie studio make-up brand will disappear from US stores early next year as P&G focuses on CoverGirl line

Action replay as Bollywood returns

 

India's film producers clinch new deal over share of box-office receipts after withholding new films from release

 

Sir Alan Sugar has yet to win over the business world - Times Online

[interestrateripoff]

Iceland to repay £2bn UK savings

Iceland has agreed to repay British and Dutch government money paid to savers following the collapse of Icesave bank.

Iceland near to Icesave deal

Icesave claim deadline passes

 

BBC NEWS | Programmes | Moneybox | Insurers 'pressure' crash victims

 

BBC NEWS | Business | Ministry warns on debt write-offs

 

OTHER TOP BUSINESS STORIES

Sir Alan hired in government role

 

Floating wind turbine launched

 

UK economy is 'shrinking faster'

 

Liverpool FC owners lose £42.6m

 

Lloyds faces ire of shareholders

 

Pace of US job cuts slows in May

 

MORE FROM BUSINESS

Cooper becomes Pensions Secretary

 

Oil prices head back towards $70

 

GM in deal to sell Saturn brand

 

Building society rules to tighten

 

Boeing sees orders fall sharply

 

Rio Tinto scraps China firm deal

 

Carphone to split by July 2010

 

Aer Lingus to vote on board pay

 

Fraud charge for Countrywide

 

Metronet's collapse 'cost £410m'

 

LDV's parliament lobby cancelled

 

Fears over Latvia currency remain

 

UK house prices 'up 2.6% in May'

 

Premier League 'defies downturn'

 

[interestrateripoff]

 

Inflation, Money Supply, GDP, Unemployment and the Dollar - Alternate Data Series

 

So the unofficial stats now has unemployment in the US at over 20%.

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Most U.S. Stocks Fall, Led by Banks, on Interest Rate Concern - Bloomberg.com

 

Most U.S. stocks fell, trimming a third straight weekly gain for the Standard & Poor’s 500 Index, as concern higher borrowing costs will threaten the economic recovery overshadowed a better-than-estimated employment report. JPMorgan Chase & Co. and Wells Fargo & Co. lost at least 1.5 percent as a majority of traders bet for the first time in months that the Federal Reserve will lift interest rates this year and the central bank’s Janet Yellen said rising bond yields may signal inflation concern. Boeing Co. jumped 4.1 percent, helping the Dow Jones Industrial Average almost erase its 2009 loss, as Bank of America Corp. raised its earnings estimates.

About nine stocks dropped for every seven that rose on the New York Stock Exchange. The Standard & Poor’s 500 Index slipped 0.3 percent to close at 940.09 at 4:04 p.m. in New York. It’s up 4.1 percent in 2009. The Dow added 12.89 points, or 0.2 percent, to 8,763.13 to trim its yearly decline to less than 0.2 percent.

“There was a spike in the number of people who think rates might have to be increased from this week versus last week,” said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages about $2 billion in San Antonio. “The market might be a little afraid of inflation creeping back in because of what the government has been pumping into the economy. Yellen making those comments was one more reason for the market to go back down.”

 

Yellen Says Fed Must Brace for ?Substantial Shocks? (Update3) - Bloomberg.com

 

Federal Reserve Bank of San Francisco President Janet Yellen said that policy makers need to be prepared for “substantial shocks” and that rising Treasury yields may be a “disconcerting” signal of inflation fears. “Recent experience raises the possibility that the Great Moderation is behind us, so we must be prepared for substantial shocks,” Yellen said today during a panel discussion hosted by the Fed Board of Governors in Washington. “Great Moderation” is a term used to describe the comparative economic stability seen in the U.S. and other major industrial countries, except Japan, since the mid-1980s.

Yellen’s comments on yields go beyond remarks made two days ago by Fed Chairman Ben S. Bernanke, who said in congressional testimony that the increases may reflect rising optimism about the economy and concerns about large federal deficits. Policy makers next meet June 23-24 in Washington and may consider whether to increase their planned purchases of $1.45 trillion of housing-related debt and $300 billion of long-term Treasuries.

Responding to audience questions, Yellen said that if she “had to write down a number” for the ideal long-term inflation goal, it would be 2 percent. That number is the preference of most Fed policy makers, she said, adding she would like to see more formal evaluation and research on the issue. She said she previously favored a 1.5 percent inflation rate.

“It’s a subject in which I have an open mind,” Yellen said.

Treasuries Tumbled

Treasuries tumbled today, driving two-year yields to an eight-month high, as traders began speculating the U.S. central bank will raise interest rates later this year.

The yield on the benchmark two-year note rose 34 basis points, or 0.34 percentage point, to 1.29 percent at 5:59 p.m. in New York, according to BGCantor Market Data. The jump was the biggest one-day increase since a 47 basis point surge Sept. 19, when Bernanke and then-Treasury Secretary Henry Paulson announced plans for what became the $700 billion Troubled Asset Relief Program.

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MarketWatch.com Story

 

SAN FRANCISCO (MarketWatch) -- The swift sell-off in Treasurys that's triggered a spike in benchmark rates over the past month is probably just a taste of what bondholders and borrowers will face when the economy gets back into growth mode.

That's one view from the discussion heating up among investors and economists over the last week, as yields on the 10-year Treasury /quotes/comstock/31*!ust10y (UST10Y 3.83, +0.12, +3.29%) , a benchmark for many mortgages and corporate loans, climbed a half-point in the last month to November levels.

"At some point, the economy will turn. Investors expectations will pick up. That's when you will really see yields pop," said James Barnes , a portfolio manager with National Penn Investors Trust Co., who manages about $500 million in debt securities.

 

For investors of every stripe, whether they put their money into T-bills, stocks or home equity, the recent jump in yields -- and a potential spike in the future -- is good news and bad.

On the plus side, higher yields mean investors are truly warming up to the idea that the economy is on the mend. As they snap up assets expected to rise as growth resumes, such as stocks, they've been selling Treasurys, driving up yields.

"Much of the increase in Treasury yields is function of decreasing risk aversion in markets," PNC investment strategists led by Bill Stone said Thursday.

 

Gold soars on inflation worries as oil touches 7-month high - People's Daily Online

June 05, 2009

Gold futures on the COMEX Division of the New York Mercantile Exchange rallied on Thursday as the crude oil climbed to its 7-month high, fueling the concerns on inflation. Silver and platinum both finished higher, too.

 

Gold price for August delivery gained 16.70 U.S. dollars, or 1.7 percent, to settle at 982.30 dollars an ounce, recovering most of the previous session's loss.

 

Investors saw more signs that the economy is bottoming out. The number of people on the unemployment insurance rolls fell slightly for the first time in 5 months.

 

The Labor Department reported the first-time claims for jobless benefits declined to a seasonally adjusted 621,000 from the previous week's revised figure of 625,000. However, investors tend to consider this good news as a warning that the inflation may be ahead and buy the precious metal as an alternative of safe-haven.

 

What's more, the commodities price which sharply went up on Thursday raised more worries on potential inflation.

 

Interest rates set to rocket | Money | The Guardian

 

It's one of the oddities about this recession. Why haven't more companies gone bust? Our banks are virtually all bankrupt. But corporate Britain seems in much better shape. Yes, Woolworth's is no longer. Vauxhall Motors teeters on the edge as its parent group, General Motors, goes into administration. But compare the FTSE250 this year with last year and the names (minus the foolhardy mortgage lenders) are nearly all the same.

It's been puzzling Tom Dobell, manager of the venerable £3.1bn M&G Recovery fund, which celebrated its 40th anniversary this week.

These are the best of times for a fund manager able to buy companies whose share prices have been in freefall, but which will survive and eventually prosper. Dobell reckons he has *opportunities galore. But he appears not to share the green-shoots mania that has gripped the media.

Some stockmarket pundits are excitedly talking about a V-shaped recovery, and a bounceback in growth that could be even faster than Alistair Darling predicted.

Maybe so. But I'd rather listen to a fund manager whose fund has been through several major recessions since its launch in 1969 and has still given investors a decent return.

There's almost a hint of bitterness when Dobell talks about how Britain's policymakers have squandered our industrial and commercial heritage.

 

If interest rates do shoot up the effects could be devastating especially if the BoE have to follow and put rates back up.

[interestrateripoff]

mps expenses: Gordon Brown billed taxpayer for two second homes - Telegraph

 

Mr Brown, who "flipped" the designation of his second home before moving into Downing Street, submitted an estimated electricity bill for his home in Fife which partly covered a period when his London flat was his designated second home.

He also claimed for council tax and service charge bills for his London flat which included periods when his second home was in Scotland.

 

In total, Mr Brown appeared to make claims totalling £512 for the "wrong" properties.

Mr Brown – who claimed more than £28,000 in second home allowances after moving into a grace and favour apartment in Downing Street in 2006 – has agreed to repay some money after he referred the matter to the parliamentary fees office. He has admitted making three separate mistakes on his expenses.

It is a humiliating blow for the Prime Minister, who publicly rebuked Alistair Darling, the Chancellor, this week for doing a similar thing.

Mr Darling appeared on live television to "unreservedly apologise" for claiming a £1,004 service charge bill for his London flat which covered several months when his designated second home was in Downing Street.

He repaid £668.

The news that Mr Brown overclaimed on his expenses will further weaken his position, and will strengthen the hand of ministers whose own questionable expense claims might have been used as a reason to remove them.

A detailed analysis of Mr Brown's expense claims also reveals that the Prime Minister claimed £30 on his office expenses for the cost of hiring a bagpiper to play at a ceremony for veterans.

George Wallace, who played at a "veterans' badge presentation" at a church in Kirkcaldy, told The Daily Telegraph: "I took a few hours off work but I said I wasn't worried about getting paid. I was quite surprised when the cheque came from Gordon Brown."

The Prime Minister's expense claims under the parliamentary additional costs allowance system have shown that Mr Brown submitted a claim on January 11, 2007 which included two electricity bills for his home in Fife.

One bill was for £382.39 and covered the period from July 3 2006 to September 28 2006, a period of 88 days.

Mr Brown had only switched his designated second home from London to Scotland on September 18, meaning the first 77 days of the bill related to a period when his London flat was his designated second home.

If the bill is divided into equal amounts for each day, Mr Brown had claimed for £334.59 of electricity when Fife was not his designated second home.

 

More at the link.

[JonCris]

For what it's worth (& I do believe the economy is in free fall) yesterday I spoke to a Volvo Dealer who told me they are run off their feet with orders when asked was this due to the scrappage scheme he replied "doubt it more like everyone is spending their nest egg before it becomes worthless or goes to pay higher taxes"

[liz5248]

Hi, I have had similar problems with Bristow and Sutor. I was made redundant in April and informed them that I could not keep up with the agreed payment and would make lesser payments when I could afford to do so, which I maintained.

 

They are now saying that as I did not maintain the origional agreement the full amount is now payable and because I cannot pay it they will come and seize my goods next week even if I am not present. I have explained to them that I now have a new job and get paid at the end of the month and will pay them then, but they will not except this.

 

I requested a break down of costs from them and have discovered that the £200 check that I sent them a few months back was used to pay a £180 bill for baliff attendance and a van the last time they visited and did not contribute to my payment plan.

 

My partner signed a walk in possession order so that they would except payment installments and now I am worried that the baliffs will attend while I am out at work and gain entry to my property. They have already threatened my with the police and a locksmith... can anyone suggest what the best course of action is as I don't seem to be able to get through to them despite emailing and calling them constantly!???

[interestrateripoff]

http://hisz.rsoe.hu/alertmap/woalert_read.php?glide=AP-20090604-21877-CHN&cat=dis〈=eng

 

A new infectious disease is spreading in large areas of Mainland China. Symptoms are similar to AIDS but it spreads faster between family members, even via bodily fluids like saliva. Mr. Lin from Yunnan Province caught a disease last May, unlike anything he had seen before. "This disease destroys immunity cells just like AIDS. The lowest amount of immunity cells of some patients is only 200, mine is 400. The doctor couldn't find many antibodies, so he called it 'Fear of AIDS' disease." Preliminary research shows that patients have symptoms of fatigue, chronic diarrhea, swollen lymph nodes, and weakened immunity. But doctors cannot find any sign of the HIV virus. "A huge number of people caught the nameless virus but the doctors cannot make a thorough check. So they make a conclusion that it's a 'Fear of AIDS' disease. The symptoms are very much like those of AIDS."

 

Because the Chinese Ministry of Health doesn't recognize the disease, it has not carried out any investigation. However, patients feel very horrified and sad when they see their family members and friends become infected by coming into contact with their saliva or sweat. "We hope that media reports can pressure the relevant departments to pay more attention to the disease. Do not make any irresponsible conclusions and say it is caused by fear or psychological effect – it is a real virus. Many doctors, including doctors from Beijing also say this is an infectious disease." Doctors from mainland China also believe patients might catch the disease. However, the exact number of people infected remains unknown and what the mortality rate is, and how many have died from it.)

 

The benefits of living in a closed secret society.

[interestrateripoff]

Hi, I have had similar problems with Bristow and Sutor. I was made redundant in April and informed them that I could not keep up with the agreed payment and would make lesser payments when I could afford to do so, which I maintained.

 

They are now saying that as I did not maintain the origional agreement the full amount is now payable and because I cannot pay it they will come and seize my goods next week even if I am not present. I have explained to them that I now have a new job and get paid at the end of the month and will pay them then, but they will not except this.

 

I requested a break down of costs from them and have discovered that the £200 check that I sent them a few months back was used to pay a £180 bill for baliff attendance and a van the last time they visited and did not contribute to my payment plan.

 

My partner signed a walk in possession order so that they would except payment installments and now I am worried that the baliffs will attend while I am out at work and gain entry to my property. They have already threatened my with the police and a locksmith... can anyone suggest what the best course of action is as I don't seem to be able to get through to them despite emailing and calling them constantly!???

 

Bailiffs and Sheriff Officers - The Consumer Forums

 

Debt Collection Industry - The Consumer Forums

 

Can I suggest you post your question in either of the above 2 forums, there you will get the advice you need.

[interestrateripoff]

VINCE CABLE: Oil - the next shock waiting in the pipeline | Mail Online

 

While Gordon Brown is playing musical chairs on the deck of the Titanic, normal people are worrying far more about paying their bills.

 

Motorists will have noticed that we are back up to £1-a-litre for unleaded petrol at many garages.

 

We may have not yet reached the heady heights of last summer, but the trend is unmistakable.

 

Even in a recession, there is the danger of inflation for some essential products such as petrol.

Stagflation is back - and perhaps, not too far off, another 'oil shock'.

Most of the pump price is made up of tax, so motorists don't see the full effect of the dramatic changes in the price of crude oil.

 

It rose steadily from a low of about $25 a barrel before the Iraq war to a peak of $140 last summer.

 

The world economy then crashed in the 'credit crunch' and crude fell back to $45 a few weeks ago. Prices at the pump also fell, but British motorists didn't get the full benefit.

One reason was that, until very recently, our currency was falling heavily against the dollar.

 

This meant that oil prices in pounds fell much less than in dollars.

 

But, still, prices were generally falling, giving some relief at a time when workers' pay and pensioners' living standards were being squeezed. No more.

 

While the boys in the City get excited over a recovery in share prices, the rest of the population sees altogether less welcome news on other prices.

But why should we have to worry again about high oil prices? It doesn't seem to make sense.

 

The United States, Britain, Europe and many other countries are still experiencing recession.

 

There is less demand for oil: fewer company cars travelling to work, fewer lorries on the road, fewer flights. The price should be falling, but it is doing the opposite - rising to $65 a barrel last week.

 

As I said previously, oil at $95 was recession inducing in some reports, I would argue this figure will have now come down for many economies oil at $70-$90 a barrel will cause a recession.

 

Catch 22.

[gustavius rex]

Sir Lord Alan Sugar (or is it now Lord Sir?) as the governments business tsar in the House of Lords!!!??? Please, let this not be true. Have we now slipped down to the level of governmental reality shows performed live in the House of Lords? Lord Sir or Sir Lord Alan is not nor was not the business giant we all are lead to believe. He once ruled over a business empire called Amstrad which he run down from an estimated value of £1,2 Billion at one time, to some £125 million, when he sold out to B Sky B. The reason for the dramatic fall in value, was a string of very bad business ventures with computers, e-mail telephones and so on. He's current value is some £825 million, mainly based on a property portofolio. He is, undoubtly smart and really worked himself up from a very basic background to become a success, but, really good when it comes to real big business? No l do not think so. This is just another media stunt by a government, that is not only in crisis, but, completely and totally without any grip of the current situation. l have earlier stated that the chinless wonder boys from the tories will not do better as they lack the experience and background to even begin to understand the fundamentals of what is going on and what the ordinary punter is going through. We need a change and that is a fundamental change, if we are going to survive as a first rate nation.

GR

[interestrateripoff]

Missing $165m: Madoff cleaned London out just before his arrest

 

Bernie Madoff, the $60bn fraudster, ordered his London office to sell its $165m portfolio of UK gilts only a month before he confessed to the FBI that his business was a "big lie".

 

 

• Deutsche's top trader pledges to stay at bank
  
• Lobbyists and agency rivals fight to shape the new Wall St
  
• Commercial mortgage lender to offer loans again after months in hibernation
  
• Talks poised to take caravan parks out of private equity firm's control
  
• Awards add spice to family firms
  
• Investors get jitters as Latvia pledges not to devalue the lat
  
• Civil servants will lead hunt to find new chairman for nationalised bank agency
  

 

Margareta Pagano: More balls, please, at the Treasury

 

With the economy in such a shocking state, Labour's only hope is a sharp U-turn on public spending – but does it dare?

 

 

• Hamish McRae: We must seize the opportunity to radically rethink our government
  
• Jeremy Warner: Rio Tinto – another lesson in the perils of empire-building
  
• Jeremy Warner: Sir Alan Sugar – you're hired!
  
• Jeremy Warner: Ronson – Ernest's Alzheimer's was my idea
  
• Jeremy Warner: Rio Tinto ditches its Chinese connection
  

 

Is this the last nail in the coffin of private final-salary pensions?

 

Experts warn of fresh crisis as chasm yawns between newly downgraded corporate schemes and gold-plated public plans. James Moore reports

 

 

• Cutting deals in La La Land
  

[interestrateripoff]

For what it's worth (& I do believe the economy is in free fall) yesterday I spoke to a Volvo Dealer who told me they are run off their feet with orders when asked was this due to the scrappage scheme he replied "doubt it more like everyone is spending their nest egg before it becomes worthless or goes to pay higher taxes"

 

This could also be the reason why house prices are having a bit of a bounce, those with money are spending it before it becomes worthless.

 

Hence the reason this is a bulltrap. Once the money is spent the only way is down. If people are spending there nest eggs I wonder what's happening to the banks capital ratios?

[interestrateripoff]

BBC NEWS | Business | City Diaries: 4 June

 

Most traders close to the action are struggling to overcome their bafflement at what has unfolded since March. The market's eerie upsurge defies all rational explanations.

Earnings have been shredded, North Korea waves nuclear bombs at its neighbours, Pakistan threatens to implode and, closer to home, there are no obvious drivers for a new round of growth or job creation.

The news is awful, but nobody sells. The threat of nuclear conflict in the Korean peninsula registers barely a blip. But the market grinds higher, and nobody cares.

Most of what sounds like good news is merely speculation about "green shoots". Newspapers seize upon whispers that house-prices are "rebounding" and these whispers risk turning into beliefs. But why should house prices be rising and where is the money to pay those still-high prices going to come from?

Around 600,000 Americans have been losing their jobs each month since Obama was elected. And now nearly 10% of American mortgages are default. The proportions are equivalent, if not worse, here in the UK.

Traders look on, baffled by the news reports even more than by the rally. Who is coming up with these reports, where do they get their ideas from and which data give them hope that things are improving? Are they aware of the dangers of false hope?

 

Bond 'crash'

Which lender, whether in receipt of government funds or not, would believe in "green shoots" when faced with a looming threat that might make the subprime crisis look like the warm up?

Between 2004 to 2007, many home-owners apparently logged Mr Greenspan's endorsement of "financial innovation" and took out mortgages with exotic names such as Option ARM. Many such mortgages had five-year terms and these will expire in various waves in the next three years, requiring a replacement. The interest rates at which these will reset depends on the bond market.

Whilst not widely reported in the regular news, the bond markets had a mini crash in May. There's even talk of the ending of the multi-decade bull market - a market characterised by rising prices - in bonds.

The bond market dwarfs the stock market. It's also generally considered to be more boring. But this market determines the price of long-term credit. Crashing bonds mean higher mortgage rates just as millions of mortgages are going to reset.

The risk is this: millions of home-owners who are already financially stretched will be pushed to breaking point once their mortgage resets, triggering another spiral of defaults, repossessions, write-downs, implosions and lay-offs.

 

More at the link.

 

This crisis is far from over, the US govt has got 0% interest rates for a reason they fear a big wave of losses from these resets which will dwarf subprime and look at what they nearly did. However it appears the US is running out of time and the bond market will force up rates triggering a collapse.

[interestrateripoff]

Setanta switch off is looming - Times Online

 

SETANTA, the sports broadcaster, is on the brink of collapse this weekend as it struggles to agree a rescue plan with rights holders and investors.

 

Deloitte, the accountancy firm, is on stand-by to put the company into administration. This would mean Setanta could disappear from the airwaves immediately.

 

For the past six months Setanta – which has 1.2m customers, considerably short of the 1.9m needed to break even – has been desperately trying to raise new capital to meet rights’ payments.The broadcaster has until tomorrow to pay the Scottish Premier League (SPL) £3m as part of its £31m a year deal.

 

The SPL held an emergency meeting last Wednesday to discuss the situation and has already decided to dip into its own emergency funds to distribute the payments to member clubs.

 

There are also huge repercussions for the Barclays Premier League, which is awaiting a £35m payment from Setanta due on June 15.

 

The company’s collapse could result in a fire sale of rights, including the £425m four-year deal for England and FA Cup matches it shares with ITV. Analysts say no-one will pay anywhere near Setanta’s rates to pick up the contract.

 

Setanta was started in a pub in Ealing, west London, in 1990 by founders Mickey O’Rourke and Leonard Ryan who bought the rights to the Republic of Ireland’s World Cup game against Holland and screened it, charging £5 entry.

 

The most likely outcome is understood to be a straightforward administration with most of the rights reverting to their holders.

 

I wonder what will happen to the TV rights, one would assume they'll be picked up by Sky, but at what price? Can Sky afford them?

[interestrateripoff]

http://business.timesonline.co.uk/tol/busi...icle6445838.ece

 

THE prime minister’s newly appointed business champion, Sir Alan Sugar, is planning to lead a roadshow of bankers around the country in an effort to get them lending to small and medium-sized enterprises.

 

In his first interview since taking up the new position, Sugar – who will be given a peerage – told The Sunday Times that getting the banks to start lending was at the “top of his agenda”.

 

Sugar, 62, will set up a panel, headed by himself and including a number of his business associates, to mediate between the banks and companies.

 

He has already mooted the idea with government and will start pitching it to bankers as early as next week.

 

Claude Littner, a former chief executive of Sugar’s Amstrad International and boss of Tottenham Hotspur, will sit on the panel.

 

“The banks have been told to help out and lend, but from what I hear that’s not happening,” said Sugar.

 

“I can’t put pressure on them but I can offer practical advice. The panel will act as a buffer between the banks and businesses. We can say ‘if it was my money I would invest with this company but not that company’. The banks need a bit of teaching too.”

 

Sugar’s appointment comes at a desperate time for the government, prompting many to suggest Gordon Brown’s decision was only intended to deflect attention from Labour’s problems.

 

“It’s fully understandable that it may look like that, but I’ve got to ignore that and focus on what I genuinely feel needs doing,” Sugar said. “As far as I’m concerned, this is politically neutral.”

 

Brown approached Sugar four weeks ago. “He said he’d like me to take a look at the problems that exist for small businesses and report them back to the government and to look at what the government is offering and make suggestions on how we could improve the situation for these companies – it’s as simple as that.”

 

Sugar will report to Lord Mandelson, the business secretary, Baroness Vadera, the business minister, and Lord Davies, the trade minister.

 

Why haven't we seen this before, clearly what was needed to solve the subprime crisis from America was a roadshow.

 

This is a simple cost effective idea, why haven't we seen this before?

 

All what Gordon Brown now needs to do is go on a roadshow of his own and he'll win the next election.

[interestrateripoff]

Royal Mail in threat to axe pension fund - Times Online

 

Royal Mail chairman courts controversy by saying that failure to privatise will end final-salary scheme for 150,000 staff

 

As I said at the start of the year the pension crisis would be revealed, the maths simply don't add up.

 

Darling bucks EU on banks - Times Online

 

The retailer John Lewis fears most

 

Dunelm Mill has left its market stall far behind to challenge the big players like Tesco, Debenhams and House of Fraser

 

 

Death of the final-salary pension

 

The days of the generous defined-benefit schemes to protect you in retirement are gone with big firms ditching their burdens

 

• Purnell resignation shocks Gordon Brown
  

 

• Morrisons joins final salary pension exodus
  

Carphone and Vodafone reconnect

 

Duo are set to end a three-year dispute by resurrecting a sales agreement between the manufacturer and the store chain

 

• Carphone Warehouse begins drive to be nice
  

 

• Ex-Vodafone head takes £500k for moving home
  

Ashley draws up bonus plan for Sports Direct staff

 

Controversial £50m bonus scheme could see 2,000 staff recieve windfall bonus of a year’s salary in free shares

 

 

How Rio dumped its China deal

 

Secret talks between old rivals Rio Tinto and BHP Billiton sparked a tie-up that shook the mining world to its core

 

Chrysler creditors ask Supreme Court to delay sale

 

Indiana pension funds that lent Chrysler money want the sale to a group led by Fiat delayed while they challenge the deal

 

• GM and Chrysler defend slashing dealerships
  

 

• GM sells Hummer to China and saves 3,000 jobs
  

Crillon hotel, Paris home of the stars, is put on the block

 

American owners are offering the glitterati the chance to buy the Paris residence many have called home for the night

 

• Royal palaces’ £32m repair backlog criticised
  

 

• Holiday Inn signs £10m Olympic sponsorship deal
  

Jobs tipped for early comeback

 

Apple’s talismanic boss may make a surprise return from sick leave to unveil the new version of the iPhone

 

 

Days of open-ended pensions are over

 

The decade of easy profits and cheap credit are over, the bubble has been pricked and it will not be reinflated any time soon

 

The lending tap won't open for some time

 

With so much going on in politics, the economy has benefited from being out of the spotlight, with sterling rallying significantly

Mr Subprime could not stop being toxic

 

In 2006, subprime mortgages were unheard of, Iceland had an economy and "toxic asset" omly conjured up images of Britney Spears

 

 

China and the Fed will tame Obama spending - Times Online

[interestrateripoff]

Protests against Putin sweep Russia as factories go broke | World news | The Observer

 

Russia's prime minister, Vladimir Putin, is facing the most sustained and serious grassroots protests against his leadership for almost a decade, with demonstrations that began in the far east now spreading rapidly across provincial Russia.

 

Over the past five months car drivers in the towns of Vladivostok and Khabarovsk, on Russia's Pacific coast, have staged a series of largely unreported rallies, following a Kremlin decision in December to raise import duties on secondhand Japanese cars. The sale and servicing of Japanese vehicles is a major business, and Putin's diktat has unleashed a wave of protests. Instead of persuading locals to buy box-like Ladas, it has stoked resentment against Moscow, some nine time zones and 3,800 miles (6,100km) away.

 

"They are a bunch of arseholes," Roma Butov said unapologetically, standing in the afternoon sunshine next to a row of unsold Nissans. Asked what he thought of Russia's leaders, he said: "Putin is bad. [President Dmitry] Medvedev is bad. We don't like them in the far east."

 

Butov, 33, and his brother Stas, 25, are car-dealers in Khabarovsk, not far from the Chinese border. Their dusty compound at the edge of town is filled with secondhand models from Japan, including saloons, off-roaders and a bright red fire engine. Here everyone drives a Japanese vehicle.

 

Putin's new import law was designed to boost Russia's struggling car industry, which has been severely battered by the global economic crisis. It doesn't appear to have worked. In the meantime, factories in other parts of Russia have gone bust, leading to rising unemployment, plummeting living standards and a 9.5% slump in Russia's GDP in the first quarter of this year.

 

An uprising that began in Vladivostok is now spreading to European Russia. Last Tuesday some 500 people in the small town of Pikalyovo blocked the federal highway to St Petersburg, 170 miles (270km) away, after their local cement factory shut down, leaving 2,500 people out of work. Two other plants in the town have also closed. The protesters have demanded their unpaid salaries, and have barracked the mayor, telling him they have no money to buy food. They have refused to pay utility bills, prompting the authorities to turn off their hot water. Demonstrators then took to the streets, shouting: "Work, work."

 

Putin visited Pikalyovo on Thursday and administered an unprecedented dressing-down to the oligarch Oleg Deripaska, throwing a pen at him and telling him to sign a contract to resume production at his BaselCement factory in the town. He also announced the government would provide £850,000 to meet the unpaid wages of local workers. "You have made thousands of people hostages to your ambitions, your lack of professionalism - or maybe simply your trivial greed," a fuming Putin told Deripaska and other local factory owners. But Deripaska had had little choice but to shut his factory, since Russia's construction industry has now virtually collapsed.

 

Across Russia's unhappy provinces, Putin is facing the most significant civic unrest since he became president in 2000. Over the past decade ordinary Russians have been content to put up with less freedom in return for greater prosperity. Now, however, the social contract of the Putin era is unravelling, and disgruntled Russians are taking to the streets, as they did in the 1990s, rediscovering their taste for protest.

 

The events of last week in Pikalyovo also set a dangerous precedent for Russia's other 500 to 700 mono-towns - all dependent on a single industry for their survival. When their factories go bust, residents have no money to buy food. Seemingly, the only answer is to demonstrate - raising the spectre of a wave of instability and social unrest across the world's biggest country.

 

Looks like Russia is about to kick off.

 

Civil unrest seems inevitable across the globe.

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[liz5248]

Thanks Interestrateripoff...I'm new to this and didn't know where to go!! Thanks for pointing me in the right direction x