The great interest rate rip off part 1

[interestrateripoff]

http://market-ticker.denninger.net/archives/1484-So-THATS-Where-The-Money-Went!.html

 

Back when Lehman went under I wrote a couple of Tickers in which I referenced short-term lines that the NY Fed had open at the time of the collapse, and was wondering what the devil happened to them.

It appears that there was more than just what was "announced" out, however, and that some of that money might have been subject to improper "preference" as Lehman entered bankruptcy:

Billing records filed with the court show the examiner is investigating an issue that has angered many of Lehman's creditors: how the Federal Reserve and the New York Fed -- which lent Lehman $46 billion in cash and securities before its bankruptcy filing last September -- were paid promptly and in full, while tens of billions of dollars in other debts were left to be sorted out in court. It remains unclear when and how much Lehman creditors will be repaid.

Ah. Now that's a problem, but from my view there are two issues here - the bankruptcy law issue and a potentially-illegal "preference" payment, and then there is the part that the WSJ isn't talking about:

Why didn't the NY Fed and Federal Reserve simply seize the collateral they had posted from Lehman for those "loans" and liquidate it?

Remember folks, we are repeatedly told by The Fed that all loans they make are backed by sufficient collateral to prevent loss and are "haircut" to provide them with a margin against potential loss.

If this is in fact true then there was no reason for The NY Fed or Federal Reserve to receive any sort of "preference" payment (unlawful though such a payment would be), as the proper and expected thing to do is simply to seize the collateral they have possession of and sell it!

As such there are only two reasonable explanations for The NY Fed's behavior:

 

• They didn't actually have collateral for those loans, in which case Bernanke is a damned liar, The Fed has been handing out money in violation of the law requiring proper collateral and haircuts, and the next question becomes "how many other times has The Fed done this and are they still doing it?"
  

or

• The collateral they took was insufficient to cover the loan(s) balance, in which case Bernanke is also a damned liar, in that The Fed, contrary to The Federal Reserve Act and thus the law was effectively issuing unsecured loans. (Was that "collateral" worthless CDOs, as just one possibility?)
  

Of course there is another possibility: The Fed simply doesn't give a damn about what the law says when it comes to preference and established US legal procedure, and neither did the people running Lehman at the time - that is, they believed they could simply do whatever they wanted, preference rules be damned.

But that latter explanation doesn't make a lot of sense. If you have sufficient security in the form of posted collateral and have actual possession of it (electronic or otherwise) in accordance with the law requiring same there is no reason to play this sort of game - simply sell the collateral and recover your money.

Whatever the truth this is just one more reason why we need a full and complete audit of The Federal Reserve.

Given this little disclosure yesterday my curiosity related to the circumstances surrounding Bear Stearns credit line with the NY Fed is heightened considerably. As I have noted on multiple occasions that line was unexpectedly yanked as we went into the weekend where Bear ultimately failed. This act was the proximate cause of their forced merger and near-total destruction of the value held by Bear Stearns' shareholders, and we have never had a cogent explanation for that action; indeed, any such line of inquiry has been met with stony silence.

If, as required by Section 13 of The Federal Reserve Act, the loans made to Bear were properly secured by collateral, there was no reason for The NY Fed to yank those lines on what amounted to essentially zero notice, as had Bear defaulted they could have (once again) simply seized and sold the collateral.

But that line was yanked, which leads to the same two questions that I have related to Lehman's credit line in relationship to Bear Stearns.

Lawlessness, or even the appearance of lawlessness, is unacceptable in any government-linked agency, and we the people have a right to know what is happening with our money.

Audit The Fed!

 

 

Yep the Fed needs auditing.

[interestrateripoff]

Elderly won't have to sell their homes to fund care... if they make one-off payment of £8,000, say Tories | Mail Online

 

The Tories say they will prevent the elderly ever having to sell their homes to pay for long-term residential care.

Shadow Chancellor George Osborne revealed that pensioners will be invited to pay an £8,000 lump sum when they reach 65.

 

In return, the state will pick up all their care-home costs for life and guarantee they can pass on their homes to their children.

 

The Home Protection Scheme, to be set up next year if the Tories win the general election, is designed to eliminate the misery of the 45,000 middle-class people who have to sell their homes every year to pay for residential care - a scandal exposed by the Daily Mail's Dignity for the Elderly campaign.

 

It will strike a major blow for families, who find worry over how to pay expensive care home bills for frail relatives worsens an already fraught time.

 

The voluntary scheme, which will be at the heart of the Tory election manifesto, is far simpler and cheaper than the plan outlined recently by Labour under which a £20,000 lump sum is taken either on retirement or from the estate on death.

 

It is one of a raft of proposals which the Conservatives will roll out at their party conference in Manchester next week in the hope of convincing voters that they are a credible government in waiting.

 

In an exclusive interview with the Daily Mail, Mr Osborne revealed that he is preparing to detail deep spending cuts to tackle the spiralling national debt while avoiding tax hikes.

A nice little cash grab, anyone think £8k will cover long term care?

 

If your paying £8k at 65 there hardly seems anytime for that to accrue into a large enough sum to cover the costs.

 

Papering over the cracks again and solving nothing.

[interestrateripoff]

World Bank could run out of money 'within 12 months' - Telegraph

 

The World Bank is close to running out of money, its president, Robert Zoellick, has disclosed.

 

The Bank, whose job it is to support low-income countries, has had to hand out so much cash in the wake of the financial crisis that its resources could run dry within 12 months.

 

“By the middle of next year we will face serious constraints,” said its president Robert Zoellick, as he launched a major campaign to persuade rich nations to pour more money into the Washington-based institution.

 

He conceded that such a task was likely to be extremely difficult, given the difficulties facing countries in the wake of the developed world’s biggest recession since the Second World War. However, Mr Zoellick, speaking at the opening of the IMF and World Bank annual meetings in Istanbul, said the Bank needed a capital increase of as much as $11.1bn (£6.9bn) to keep functioning. He said he hoped that its shareholders, including the UK and other leading nations, would decide on resources before its spring meeting next April.

 

The money would be shared between the International Bank for Reconstruction and Development – the key part of the bank, which lends to poor nations – and the International Financial Corporation (IFC), which lends to companies.

 

Mr Zoellick said: “We recognise that all countries are under budgetary strain and it is not an easy time to be asking for these things”.

 

He said that a shortfall of cash for the IFC was a cause for particular concern, Mr Zoellick added, “because one of the issues in this recovery is the hand-off from government stimulus programs to private-sector development.”

 

OMG

 

Printy Printy

 

The blackhole created is immense thank god we have global recovery and house prices are going back up!!!

 

If you scripted this as a farce the believability factor would have long since gone.

 

Everyone is running out of money yet the propaganda machines of govt continue to insist all is well and we are over the worse.

[interestrateripoff]

Northern Rock accused of forcing mortgage rates up by starving rivals of cash | Mail Online

 

Nationalised Northern Rock was yesterday accused of forcing up mortgage rates by starving rivals of vital cash from savers.

The practice has left millions of borrowers paying more for their mortgages because building societies cannot afford to cut rates, it was claimed.

Building societies rely on raising money from high street savers to finance their lending to homebuyers.

But Northern Rock has launched a string of 'Best Buy' savings account deals with which building societies cannot compete.

Without attracting savers' cash, some say they are no longer able to lend.

Economists estimate that Northern Rock and Government-run National Savings & Investments together raked in £7 out of every £10 saved in the last six months of 2008.

The added lure for savers is that both say all money is 100 per cent guaranteed by the Government.

 

At least we have the recovery.

[interestrateripoff]

House prices: rise 'unsustainable' - Telegraph

 

Nationwide Building Society said that house prices rose by 0.9pc in September and are back to levels seen 12 months ago. But property experts warn that the recovery may prove to be short-lived.

Seema Shah, economist from Capital Economics, said that the upturn will not continue for much longer and that falls in house values will be inevitable.

 

She said: "Prices will start falling again because the rise we are seeing now, is due to lack of supply. There are more buyers than properties, but as prices increase, so will the number of people looking to sell – it's basic psychology."

"Unlike previous recessions, with interest rates so low, many home owners are not struggling as much with their mortgage payments, so there are fewer sellers coming onto the market. The housing market activity is still very low, worse than any point during the crash of the nineties."

Brigid O'Leary, senior economist at the Royal Institution of Chartered Surveyors, also said that the house price recovery could prove short-lived.

She said: "Just as house prices fell very quickly at the start of the downturn, the recent turnaround has been surprisingly strong. The quarterly change now stands at 3.8pc, the highest since August 2004. Significantly, the regional breakdown shows that house prices actually rose in all regions, by an average of 3.7pc, between Q2 and Q3 of this year.

 

Surely the jobless recovery can sustain houseprices? It's not like people need to work to service there debts.

[interestrateripoff]

William K. Black: The Two Documents Everyone Should Read to Better Understand the Crisis

 

As a white-collar criminologist and former financial regulator much of my research studies what causes financial markets to become profoundly dysfunctional. The FBI has been warning of an "epidemic" of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds.1 When the person that controls a seemingly legitimate business or government agency uses it as a "weapon" to defraud we categorize it as a "control fraud" ("The Organization as 'Weapon' in White Collar Crime." Wheeler & Rothman 1982; The Best Way to Rob a Bank is to Own One. Black 2005). Financial control frauds' "weapon of choice" is accounting. Control frauds cause greater financial losses than all other forms of property crime -- combined. Control fraud epidemics can arise when financial deregulation and desupervision and perverse compensation systems create a "criminogenic environment" (Big Money Crime. Calavita, Pontell & Tillman 1997.)

The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence. To understand the crisis we have to focus on how the mortgage fraud epidemic produced widespread accounting fraud.

Don't ask; don't tell: book profits, "earn" bonuses and closet your losses The first document everyone should read is by S&P, the largest of the rating agencies. The context of the document is that a professional credit rater has told his superiors that he needs to examine the mortgage loan files to evaluate the risk of a complex financial derivative whose risk and market value depend on the credit quality of the nonprime mortgages "underlying" the derivative. A senior manager sends a blistering reply with this forceful punctuation:

Any request for loan level tapes is TOTALLY UNREASONABLE!!! Most investors don't have it and can't provide it. [W]e MUST produce a credit estimate. It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.

Fraud is the principal credit risk of nonprime mortgage lending. It is impossible to detect fraud without reviewing a sample of the loan files. Paper loan files are bulky, so they are photographed and the images are stored on computer tapes. Unfortunately, "most investors" (the large commercial and investment banks that purchased nonprime loans and pooled them to create financial derivatives) did not review the loan files before purchasing nonprime loans and did not even require the lender to provide loan tapes.

The rating agencies never reviewed samples of loan files before giving AAA ratings to nonprime mortgage financial derivatives. The "AAA" rating is supposed to indicate that there is virtually no credit risk -- the risk is equivalent to U.S. government bonds, which finance refers to as "risk-free." We know that the rating agencies attained their lucrative profits because they gave AAA ratings to nonprime financial derivatives exposed to staggering default risk. A graph of their profits in this era rises like a stairway to heaven [PDF]. We also know that turning a blind eye to the mortgage fraud epidemic was the only way the rating agencies could hope to attain those profits. If they had reviewed even small samples of nonprime loans they would have had only two choices: (1) rating them as toxic waste, which would have made it impossible to sell the nonprime financial derivatives or (2) documenting that they were committing, and aiding and abetting, accounting control fraud.

 

Read more at: William K. Black: The Two Documents Everyone Should Read to Better Understand the Crisis

 

 

Anyone think this is over yet and the recovery will manage to sweep this mess under the carpet?

[interestrateripoff]

 

[interestrateripoff]

Mish's Global Economic Trend Analysis: Huge Downward Jobs Revisions Coming

 

Huge Downward Jobs Revisions Coming

 

 

 

Once again today's job numbers show Collectively, Economists Are A Perpetually Optimistic Lot. Payrolls were expected to drop 175,000, the median of 84 estimates in a Bloomberg News survey of economists. Forecasts ranged from decreases of 260,000 to 100,000.

 

Jobs losses this month totalled 263,000, worse than even the most pessimistic economist projection.

 

Actually, economists missed by another 13,000 because revisions subtracted 13,000 from payroll figures previously reported for August and July.

 

Moreover, the unemployment rate hit the highest level since 1983.

 

Bloomberg discusses the above in U.S. Economy: September Job Losses Exceed Forecast.

 

What really caught my eye though is the expected backward revision coming February 2010.

The Labor Department today also published its preliminary estimate for the annual benchmark revisions to payrolls that will be issued in February. They showed the economy may have lost an additional 824,000 jobs in the 12 months ended March 2009. The data currently show a 4.8 million drop in employment during that time.

 

The projected decrease was three times larger than the historical average, the Labor Department said. Most of the drop occurred in the first quarter of this year, probably due to an increase in business closings, the government said.

Birth / Death Revisions

 

For months on end, I have been harping about how ridiculous the Birth/Death Model assumptions are, most recently in Jobs Contract 21th Straight Month; Unemployment Rate Hits 9.8%

 

At this point in the cycle birth death numbers should have been massively contracting for months. The BLS is going to keep adding jobs through the entire recession in a complete display of incompetence.

 

The Wall Street Journal has more on this story in Early Job Cuts Worse Than First Thought, as More Companies Go Belly Up.

“Most of the additional job loss… appears to be due to in part to an increase in the number of business closings,” said BLS Commissioner Keith Hall in a statement.

 

The BLS’s birth/death model underestimated just how many businesses were folding — particularly during the January through March quarter — as the recession worsened.

 

Economists had been bracing for a downward revision, but not necessarily one of this magnitude, which means the U.S. has likely shed more than 8 million jobs since December 2007. For example, in a note Thursday, Goldman Sachs economist Ed McKelvey said he expected the revision to be “on the order of -150,000 to -200,000.”

 

“It’s a huge number, much more than usual,” said Nigel Gault, chief U.S. economist at IHS Global Insight. The government’s models “tend to assume dying firms get replaced, but that didn’t happen.”

 

Mr. Gault said the revisions suggest the economy was doing even worse in the first quarter than previously assumed, and cast doubts on the recovery.

Look for the BLS to partially correct previous errors in the January jobs report (coming out in February). Note that the BLS claims "Most of the drop occurred in the first quarter of this year, probably due to an increase in business closings."

 

Probably?

 

In other words the BLS is going to revise the number by 824,000 and does not even know why even though supposedly it knows when and by how much.

 

At any rate, that is an extra 68,666 jobs per month the BLS was off between March 2008 and March 2009 with most of the drop coming January-March 2009.

 

If the BLS conveniently changes the participation rate, the reported unemployment rate may not even drop.

 

It seems Mish isn't convinced by the figures either.

 

Mass fraud appears to be happening at governmental level.

[interestrateripoff]

Mish's Global Economic Trend Analysis: Collectively, Economists Are A Perpetually Optimistic Lot

 

In what should be no surprise to anyone, car sales crashed after the cash-for-clunkers program ended. Nonetheless, economists and analysts once again managed to be surprised by the rate of decline.

 

Please consider GM, Toyota, Ford Say U.S. Sales Fell After ‘Clunkers’ Aid Ended.

 

General Motors Co., Toyota Motor Corp. and Ford Motor Co. said sales fell in September as waning demand after the “cash for clunkers” rebates may have cut industry deliveries to the second-slowest rate this year.

 

The seasonally adjusted annual sales rate slid to 9.3 million vehicles, based on the average of 8 analyst estimates compiled by Bloomberg. Analysts’ sales estimates are adjusted for one more sales day this month than in September 2008.

Adjusted Sales vs. Estimates

 

 

• GM sales fell 47 percent compared to the 44 percent decline projected by analysts.
  
• Ford sales fell 8.9 percent compared to the 5 percent decline projected by analysts.
  
• Chrysler sales fell 8.9 percent, matching the average analyst estimates.
  
• Nissan sales fell 11 percent compared to the 7.1 percent decline projected by analysts.
  
• Honda sales fell 23 percent, compared to the 13 percent decline projected by analysts.
  
• Toyota sales fell 16 percent compared to the 13 percent decline projected by analysts.
  
• Hyundai bucked the industry slide with a 27 percent increase.
  

Chicago Surprise

 

Yesterday, inquiring minds were reading Reflections on the Unexpected Negative Surprise in Chicago Purchasing Index PMI.

 

“A lot of people would be looking for a pullback, but we’re going to see improving fundamentals in the base economy, and with that higher earnings,” said William Dwyer, chief investment officer at MTB Investment Advisors, which manages $13 billion in Baltimore.

 

Moments after Dwyer finished yapping, the Chicago PMI numbers came out.

 

The Standard & Poor’s 500 Index lost 0.7 percent to 9,678.27 at 9:47 a.m. in New York after the Institute for Supply Management’s gauge of business activity slipped to 46.1 in September, lower than the reading of 52 estimated by economists in a Bloomberg survey.

 

More analysis at the link.

[interestrateripoff]

BA alliance could breach EU competition law, say officials

 

EU regulators fear that Anglo-American alliance will dominate aviation market / Investigation to look at ticket price agreements and transatlantic schedules

 

 

• EDF looks to cut debts with €4bn sale of UK electricity distribution business
  
• Property values increase for fifth month in a row
  
• Tesco attacks new attempt to limit grocery over-expansion
  
• AIT and former boss raise their offer for Goldshield
  
• US unemployment hits 26-year high of 9.8%
  
• Business Diary: 03/10/2009
  
• IMF chief calls for tax on financial sector
  

 

David Prosser: Blinded by housing's false dawn?

 

Outlook: Panic over? Nationwide Building Society says that after a fifth month running of property market inflation, house prices are now back at the level of a year ago. At this rate, we shall soon climb back to the highs of 2007.

 

 

• David Prosser: Stand up for small shops
  
• David Prosser: The capital's biggest media experiment yet
  
• David Prosser: BAE Systems has a gun put to its head
  
• Hamish McRae: Investors worried about the risk of inflation take a shine to gold
  

[interestrateripoff]

House prices back at pre-Lehman levels

 

Economists and estate agents put a dampener on the figures, however, saying that a sustained recovery was unlikely 24 Comments

 

• British house prices return to 2008 levels
  

 

SABMiller and Heineken get a thirst for Femsa

 

A consolidation in global beer brands looks likely as big brewers eye lucrative Mexican and South American markets

 

• Big shot: Dambisa Moyo, director, SABMiller
  

 

• Van Boxmeer seeks to refresh Heineken's image
  

 

US jobs hits FTSE for fourth day of falls

 

The US jobless rate, at 9.8 per cent, is at the highest level since 1983 when Ronald Reagan was the US president 2 Comments

 

• Fed should not be the sole regulator, says Bernanke
  

 

• US hopes lifted of early exit from recession
  

 

Sugar team-mate nets £2.6m from Powerleague

 

Claude Littner, business troubleshooter and a regular on The Apprentice, sells his stake in five-a-side football centres

 

• Sugar's roadshow to boost bank lending
  

 

• City strikes gold on the soccer pitch
  

 

 

IMF's Strauss-Kahn puts bank tax on the agenda

 

The IMF/G7/World Bank meetings in Instanbul this weekend will try to reverse some of the actions taken a year ago

 

Competition test for supermarkets is a step closer

 

The watchdog has recommended a test to make it harder for supermarket chains to open new stores

 

 

Foreign retailers stop West End shutters falling

 

The West End’s resilience attributed to international retailers

 

• West End online for a 'virtual Christmas'
  

 

• Companies face business rates rise of up to 25%
  

RBS names new risk and remuneration directors

 

State-owned lender appoints Aviva's former finance chief and the ex-boss of Coca Cola's UK and Ireland business

 

• RBS to appoint new boardroom directors
  

 

• RBS investment arm ‘could move to London’
  

Britain to rely on imports for half winter gas

 

National Grid to use highest proportion on record of foreign fuel as production from the North Sea continues its steep decline

 

 

EDF tries to cut debts by €4bn with UK sale

 

French energy giant seeks exit from Britain's biggest power-distribution business, which keeps on the lights at Heathrow

Call for internet gambling rules to be delayed

 

Rules that would enforce a US ban on internet gambling in two months should be delayed by a year

 

• Online gambling groups flee US law
  

KPMG and PwC raided in Iceland probe

 

Data relating to inquiry into collapsed Icelandic banks seized from accountants' Reykjavic offices

 

• Big audit firms left unprotected against claims
  

 

• Iceland: How a nation went down the toilet
  

Lufthansa's bmi buy sparks rumours

 

Purchase of holding from SAS prompts speculation that German group may be preparing to sell airline as complete entity

 

Home truths on overseas aid

 

No one will be spared the next government’s spending squeeze, except for one select group of people

 

• The Chinese plug the leak
  

 

 

BAE: no option but to stand its ground

 

The threat of a criminal prosecution on corruption charges could not come at a worse time for the UK's defence industry

[interestrateripoff]

World Bank could run out of money 'within 12 months'

 

President Robert Zoellick launches major campaign secure funding from rich nations as financial crisis sees bank's coffers running dry.

EDF starts €4bn auction for UK electricity arm

 

Britain's biggest electricity network has officially been put up for sale in an auction that is already attracting a list of foreign buyers.

 

Banks and traders threatened by new international tax

 

The International Monetary Fund is drawing up plans for an international tax on banks.

Watch out bankers: now the IMF wants to tax you too

 

 

IMF says UK must reform pensions and healthcare

 

 

 

FTSE 100 closes below 5,000 as bid talk fades

 

The FTSE 100 ended the week below 5,000 as traders pulled back after bid talk faded and US employers cut more jobs than expected in September.

Banks feel the strain as APS weighs heavily

 

 

 

Evening Standard to go free

 

London's Evening Standard has announced plans to scrap its 50p cover price and become a free newspaper, sacrificing £12m in revenue for a wider circulation.

 

BAE executives meet investors after SFO talks fail

 

BAE Systems executives met with shareholders after the SFO announced the defence company faces prosecution for alleged corruption.

SFO's determination to shoot down BAE isn't cost-effective justice

 

 

 

More Business News

 

 

• Tesco attacks watchdog's 'senseless' planning test
  
• British house prices rise for fifth month
  

Ontex, the nappy giant, on sale for €1.3bn

 

 

EU warns BA, AA and Iberia over Oneworld alliance

 

 

Xstrata gets October deadline for Anglo American bid

 

 

KPMG and PwC Reykjavik offices raided by police

[interestrateripoff]

Breaking news:

 

• Merkel ally sees little room for German tax cuts - Reuters
  
• China's CNPC ups, BP lowers stake in Iraq oil deal - Reuters
  
• German FDP says may not extend nuclear plants' lives - Reuters
  
• Irish "yes" to help EU decision-making-Juncker - Reuters
  
• G7 grapples with exchange rates, own future - Reuters
  
• Latvian gov lower 2010 budget cut to 225 mln lats - report - Reuters
  
• Deutsche, German savings bank want lenient rules - Reuters
  
• Merkel ally sees limited room for German tax cuts - paper - Reuters
  
• Pop Milano chief says may miss capital tgt-paper - Reuters
  
• ECB's Quaden believes double-dip not probable - Reuters
  

 

 

 

• Nationwide doubts house crash is over, despite rising prices
   
   
  UK's biggest building society warns of 'considerable headwinds' in the property market, although prices are back to 2008 levels 10 comments
   
  
  • Interactive: UK house prices
    

   

  [*] US unemployment at 26-year high

   

   

  Non-farm payroll figures for September show number of job losses sharply exceeded economists' forecasts. By Andrew Clark in New York

   

  • Disappointing US jobs data sends FTSE 100 lower
    

   

  [*] IMF wants tax on banks' risky behaviour

   

   

  Dominique Strauss-Kahn says financial institutions should bear cost of insuring against world economic crises. By Larry Elliott in Istanbul 25 comments

   

  • Cut NHS costs to pay off debt, IMF warns Britain
    
  • German jobs 'saved by subsidies'
    
  • Larry Elliott: A false economic dawn?
    

   

  [*] Madoff's family sued for nearly $200m

   

   

  Irving Picard accuses brother, sons and niece of using corrupt investment empire as a 'family piggy bank'

   

  [*] World Bank asks rich nations to stump up

   

   

  Bank president Robert Zoellick says more money is needed to help developing countries pull out of financial crisis.

   

  • Global economy expanding slowly
    
  • Backing for Bank could open door to more QE
    
  • UK GDP shrank by less than expected in Q2
    

   

  [*] UK construction industry continues to contract, says Cips

   

   

  Purchasing managers index falls to 46.7 in September as employment levels drop for 16th consecutive month 1 comment

   

  • Pound falls on manufacturing woes and credit crisis
    
  • FSA: Investors must reveal short-selling
    

   

 

 

• 
  FT lures advertisers into uncharted waters as How To Spend It goes online
   
   
  The FT hopes the wind is set fair for the online launch of its glossy title but some doubt whether luxury brands will advertise on the web. By Katie Allen
   
  
• Supermarkets should face local 'competition test', says watchdog
   
   
  Competition Commission urges tighter planning rules to stop grocery stores squeezing out rivals
   
  
• Fraud office seeks BAE's prosecution
   
   
  Former attorney general Lord Goldsmith backs SFO's move to prosecute arms firm on corruption charges
   
  
  • The BAE files: how the Guardian broke the story
    

   

  [*] Lloyds writes Blank cheque

   

   

  Lloyds Banking Group is paying for the office expenses of its former chairman until January

   

  • Clawback on bonuses: nice theory but will it work?
    
  • Nils Pratley: The long goodbye to Victor Blank
    
  • Bankers bow to pressure on pay
    
  • Adam Applegarth lands private equity job
    
  • What happened to the other credit crunch bankers?
    

   

  [*] Xstrata - 'put up or shut up' on Anglo

   

   

  Anglo American welcomes Takeover Panel deadline for Xstrata to launch a formal offer or walk away Post your comment

   

  [*] Bank of America's 'ironic hero' retires

   

   

  Ken Lewis took a bank in good shape into the credit crunch – and steered it into needing a $45bn bailout

   

 

 

More business news
 

• 
  
  • LSE in talks to buy rival Turquoise
     
     
     
    

[interestrateripoff]

Politics: Ministers look after themselves - surprise, surprise

 

PAMPERED ministers have had their pensions secretly boosted with millions of pounds of taxpayers’ cash.

 

Their pension pot has grown by more than 30 PER CENT in just one year — leaving them open to charges of hypocrisy over promises to crack down on bloated pensions paid to other public sector workers.

 

Official figures, hidden in Whitehall departments’ accounts, reveal the pension pot for 100 government ministers now stands at £9MILLION . . . UP from 6.8MILLION last year.

 

The average pension pot for a minister is now £94,000 — and that’s on top of their gold-plated MP’s pension which sees them rake in £30,000-a-year after 20 years’ service.

 

The MPs’ pension scheme, one of the most generous in the country, costs taxpayers £13million a year. Ministers’ pensions, which they can claim when they stand down, are also inflation-proof and calculated on their average salary over the time they were in office.

 

And rule changes that come into force next year — when current ministers look set to be booted out of office in a general election — mean they can claim it from the age of 55.

 

The revelation comes just days after ministers pledged to CUT pensions for council chiefs — and after Gordon Brown promised to SLASH public spending.

 

Communities Secretary John Denham told the Labour Party conference on Tuesday that entitlements for high-earning council bosses would be curbed curb costs.

 

He told the party faithful: “We all know it’s all got out of hand and it’s just got to stop.”

 

But Denham has built up a ministerial pension pot of £142,000, meaning he will get a total pension of around £40,000-a-year. Labour’s deputy leader Harriet Harman has a pension pot worth £304,000 meaning her total pension will be around £60,000.

 

As Prime Minister, Gordon Brown is entitled to a pension of half his £132,000-a-year salary — which comes on top of his £64,766 MP wage. He has turned that down saying his pension should be worked out in the same way as other ministers. But he has yet to change the law to make that happen.

 

Looking after themselves again. Very decent of them.

[interestrateripoff]

Run nearly broke Royal Bank of Scotland - Times Online

 

A SECRET run on Royal Bank of Scotland almost forced the bank into collapse on each of the last four trading days before it was bailed out by the government last October, The Sunday Times can reveal.

 

Between £1 billion and £2 billion was being sucked from RBS every day for more than a week, according to sources involved in the bailout. This created an even bigger funding problem for the bank, which was already struggling to finance overnight credit lines in global money markets.

 

RBS would have collapsed much earlier were it not for signficant levels of support from the Bank of England and the US Federal Reserve, the insiders have revealed.

 

RBS’s deposit base was being hit on several fronts. The Irish government’s decision to guarantee deposits at its domestic banks forced a savage run on RBS-owned Ulster Bank — which was not covered by the agreement.

 

Coutts, the private banking arm of RBS, was hit by wealthy individuals spreading deposits around different financial institutions to prepare for any potential collapse. At the time, only £35,000 of any individual’s savings were safe in the event of collapse — substantially less than the average balance held by Coutts clients.

 

It's amazing how fast bank runs can now happen especially with people having access to PC's and be able remove money at will.

[interestrateripoff]

http://www.nytimes.com/2009/10/04/us/politics/04jobless.html?_r=1&ref=business

 

In the wake of further job losses in September, President Obama on Saturday called the new figures “sobering” and said that he was working with his economic advisers “to explore additional options to promote job creation.”

 

Mr. Obama suggested that a health care overhaul would help revive the economy and create jobs. The president’s remarks, in his weekly radio and Internet address, came as the White House and Congressional Democrats considered steps to help the unemployed, including extending enhanced unemployment benefits past December, continuing a tax credit for workers who have been laid off and extending a tax credit for first-time home buyers.

 

The jobless numbers, released by the Labor Department on Friday, showed that the unemployment rate for September had risen to 9.8 percent from 9.7 percent and that 263,000 jobs were lost last month.

 

The House on Friday approved legislation that would provide 13 more weeks of benefits to states with unemployment rates of 8.5 percent or higher. Democratic leaders in the Senate are pushing a measure that would also provide aid to states that do not meet the threshold.

 

Senator Harry Reid of Nevada, the majority leader, is promoting legislation that would provide four more weeks of unemployment coverage to all states, while states over the 8.5 percent threshold would get 12 more weeks.

 

Lawrence H. Summers, director of the National Economic Council, said in an interview with The Atlantic online that the administration should “continue to support people who are in need, whether it’s unemployment insurance, or the Cobra program,” which provides health insurance for the unemployed.

 

In his address, Mr. Obama said there had been progress compared with last winter, when the job market was “losing an average of 700,000 jobs each month.” But the president described the report as a reminder that a recovery would be long and halting.

 

Yet more papering over the cracks, if they do this that will mean more people stay on the official statistics longer? Won't that mean the official unemployment figures will get worse?

 

They don't appear to have thought this one through.

[interestrateripoff]

http://www.nytimes.com/2009/10/04/business/economy/04shelf.html?ref=business

 

AFTER the financial markets melted down last year, there was some great political theater in Washington. Alan Greenspan, the former Federal Reserve chairman, told the House Government Oversight and Reform Committee that he couldn’t believe what had happened. “We are in the once-in-a-century credit tsunami,” he said.

 

Richard S. Fuld Jr., the last chief executive of the bankrupt Lehman Brothers, lamented that he, too, had been blindsided. No one, he assured the committee, “was prepared for this one.”

 

Such performances were gripping, in their way. But they may take on a level of absurdity after reading “This Time Is Different: Eight Centuries of Financial Folly” (Princeton University Press) by two economics professors, Carmen M. Reinhart of the University of Maryland and Kenneth S. Rogoff of Harvard.

 

The authors use copious amounts of data — well, actually, numbing amounts — to make the compelling case that any well-informed person should have seen the Great Recession coming. The essence of their book is that while financial crises come in different varieties, they are not mysteriously born of undersea earthquakes, but frequently occurring events that can be spotted and even controlled if politicians and regulators know what to look for.

 

“Our basis message is simple: We have been here before,” the authors write. “No matter how different the latest financial frenzy or crisis always appears, there are usually remarkable similarities with past experience from other countries and from history. Recognizing these analogies and precedents is an essential step toward improving our global financial system, both to reduce the risk of future crises and to better handle catastrophes when they happen.”

 

These academics have found the same disturbing patterns in economic data from more than 66 countries: A nation’s political leaders loosen regulations governing the financial system. Banks use the new freedom to borrow money and earn juicy returns. Soon, these sovereign states are awash with money from foreign investors. But beware these torrents of outside wealth. They are accompanied by bubbles in stocks, commodities and real estate.

 

Often, policy makers and business leaders step forward and say that nobody should be fearful. Yes, bubbles have burst before — but now, they say, investors are safe because the old dangers no longer lurk.

 

As the authors note, this was said about Latin America and Africa in the 1970s, Asia in the 1990s and, of course, the United States in the last decade.

 

Bubbles, however, inevitably go splat. And what happens next isn’t pretty. Countries like Mexico, Argentina, Brazil and Nigeria defaulted on debt in the 1980s. In the late ’90s, Ms. Reinhart and Mr. Rogoff note, “Korea, Indonesia and Thailand, among others, were forced to go to the International Monetary Fund for gigantic bailout packages, but even this was not enough to stave off deep recessions and huge currency depreciations.”

 

And, of course, we all know what happened in the United States. The authors point out that Mr. Greenspan and his successor, Ben S. Bernanke, “argued vigorously that the Federal Reserve should not pay excessive attention to housing prices, except to the extent that they might affect the central bank’s primary goals of growth and price stability.” Famous last words.

 

Some of the book’s findings are obvious. Bubbles are dangerous? Gee, you don’t say. But others are revelatory. Americans have every reason to be ashamed of the real estate boom. Many of us believed that we had earned the instant wealth we accrued as housing prices spiked. But people worldwide suffered when this easy money disappeared.

 

It turns out that the United States isn’t the only nation where a banking crisis was preceded or accompanied by a real estate bubble. The authors found that over the last 100 years, this has happened in tandem with 21 major banking crises. No wonder they suggest the International Monetary Fund keep a close eye on property values.

 

Sounds and interesting book.

 

So house price bubbles eventually lead to financial collapse. Who'd have guessed that.

[interestrateripoff]

Will California become America's first failed state? | World news | The Observer

 

Los Angeles, 2009: California may be the eighth largest economy in the world, but its state staff are being paid in IOUs, unemployment is at its highest in 70 years, and teachers are on hunger strike. So what has gone so catastrophically wrong?

 

Patients without medical insurance wait for treatment in the Forum, a music arena in Inglewood, Los Angeles. The 1,500 free places were filled by 4am. Photograph: John Moore/Getty Images

California has a special place in the American psyche. It is the Golden State: a playground of the rich and famous with perfect weather. It symbolises a lifestyle of sunshine, swimming pools and the Hollywood dream factory.

But the state that was once held up as the epitome of the boundless opportunities of America has collapsed. From its politics to its economy to its environment and way of life, California is like a patient on life support. At the start of summer the state government was so deeply in debt that it began to issue IOUs instead of wages. Its unemployment rate has soared to more than 12%, the highest figure in 70 years. Desperate to pay off a crippling budget deficit, California is slashing spending in education and healthcare, laying off vast numbers of workers and forcing others to take unpaid leave. In a state made up of sprawling suburbs the collapse of the housing bubble has impoverished millions and kicked tens of thousands of families out of their homes. Its political system is locked in paralysis and the two-term rule of former movie star Arnold Schwarzenegger is seen as a disaster – his approval ratings having sunk to levels that would make George W Bush blush. The crisis is so deep that Professor Kenneth Starr, who has written an acclaimed history of the state, recently declared: "California is on the verge of becoming the first failed state in America."

Outside the Forum in Inglewood, near downtown Los Angeles, California has already failed. The scene is reminiscent of the fallout from Hurricane Katrina, as crowds of impoverished citizens stand or lie aimlessly on the hot tarmac of the centre's car park. It is 10am, and most have already been here for hours. They have come for free healthcare: a travelling medical and dental clinic has set up shop in the Forum (which usually hosts rock concerts) and thousands of the poor, the uninsured and the down-on-their-luck have driven for miles to be here.

The queue began forming at 1am. By 4am, the 1,500 spaces were already full and people were being turned away. On the floor of the Forum, root-canal surgeries are taking place. People are ferried in on cushions, hauled out of decrepit cars. Sitting propped up against a lamp post, waiting for her number to be called, is Debbie Tuua, 33. It is her birthday, but she has taken a day off work to bring her elderly parents to the Forum, and they have driven through the night to get here. They wait in a car as the heat of the day begins to rise. "It is awful for them, but what choice do we have?" Tuua says. "I have no other way to get care to them."

Yet California is currently cutting healthcare, slashing the "Healthy Families" programme that helped an estimated one million of its poorest children. Los Angeles now has a poverty rate of 20%. Other cities across the state, such as Fresno and Modesto, have jobless rates that rival Detroit's. In order to pass its state budget, California's government has had to agree to a deal that cuts billions of dollars from education and sacks 60,000 state employees. Some teachers have launched a hunger strike in protest. California's education system has become so poor so quickly that it is now effectively failing its future workforce. The percentage of 19-year-olds at college in the state dropped from 43% to 30% between 1996 and 2004, one of the highest falls ever recorded for any developed world economy. California's schools are ranked 47th out of 50 in the nation. Its government-issued bonds have been ranked just above "junk".

Some of the state's leading intellectuals believe this collapse is a disaster that will harm Californians for years to come. "It will take a while for this self-destructive behaviour to do its worst damage," says Robert Hass, a professor at Berkeley and a former US poet laureate, whose work has often been suffused with the imagery of the Californian way of life.

Now, incredibly, California, which has been a natural target for immigration throughout its history, is losing people. Between 2004 and 2008, half a million residents upped sticks and headed elsewhere. By 2010, California could lose a congressman because its population will have fallen so much – an astonishing prospect for a state that is currently the biggest single political entity in America. Neighbouring Nevada has launched a mocking campaign to entice businesses away, portraying Californian politicians as monkeys, and with a tag-line jingle that runs: "Kiss your assets goodbye!" You know you have a problem when Nevada – famed for nothing more than Las Vegas, casinos and desert – is laughing at you.

This matters, too. Much has been made globally of the problems of Ireland and Iceland. Yet California dwarfs both. It is the eighth largest economy in the world, with a population of 37 million. If it was an independent country it would be in the G8. And if it were a company, it would likely be declared bankrupt. That prospect might surprise many, but it does not come as news to Tuua, as she glances nervously into the warming sky, hoping her parents will not have to wait in the car through the heat of the day just to see a doctor. "It is so depressing. They both worked hard all their lives in this state and this is where they have ended up. It should not have to be this way," she says.

It is impossible not to be impressed by the physical presence of Arnold Schwarzenegger when he walks into a room. He may appear slightly smaller than you imagine, but he's just as powerful. This is, after all, the man who, before he was California's governor, was the Terminator and Conan the Barbarian.

But even Schwarzenegger is humbled by the scale of the crisis. At a press conference in Sacramento to announce the final passing of a state budget, which would include billions of dollars of cuts, the governor speaks in uncharacteristically pensive terms. "It is clear that we do not know yet what the future holds. We are still in troubled waters," he says quietly. He looks subdued, despite his sharp grey suit and bright pink tie.

Later, during a grilling by reporters, Schwarzenegger is asked an unusual question. As a gaggle of journalists begins to shout, one man's voice quickly silences the others. "Do you ever feel like you're watching the end of the California dream?" asks the reporter. It is clearly a personal matter for Schwarzenegger. After all, his life story has embodied it. He arrived virtually penniless from Austria, barely speaking English. He ended up a movie star, rich beyond his dreams, and finally governor, hanging Conan's prop sword in his office. Schwarzenegger answers thoughtfully and at length. He hails his own experience and ends with a passionate rallying call in his still thickly accented voice.

"There is people that sometimes suggest that the American dream, or the Californian dream, is evaporating. I think it's absolutely wrong. I think the Californian dream is as strong as ever," he says, mangling the grammar but not the sentiment.

 

More at the link.

 

Luckily we are having a global jobless recovery, so nothing at all to worry about.

 

 

Depressing that the political elite are this stupid and allow booms to get out of control.

 

The dominoes are waiting to fall, when it happens it will be fast and everyone will say it was "unexpected".

[interestrateripoff]

Alistair Darling battles to keep UK on the world's economic top table - Telegraph

 

The Chancellor said the UK, which is one of the IMF's biggest contributors, would insist on "no taxation without representation". The Chancellor's decision to refer to the mantra of the American revolutionaries is significant since the US is pushing hard for smaller countries including the UK to give up their permanent seats on the Washington-based Fund. Indeed, Treasury insiders at the IMF and World Bank's annual meetings in Istanbul have referred to the stand-off half-jokingly as the "Bosphorus Tea Party".

Mr Darling also refused to close the door to one of the more controversial ideas floated in the meetings – a global tax on finance. He said there was "a high-level interest in" IMF managing director Dominique Strauss-Kahn's proposal to put a new charge on banks to help pay for an "insurance fund", either to guard against future crises or to help poorer countries.

 

Hinting that the US is firmly against the idea, Mr Darling said: "Trying to get a truly global agreement would be very difficult because I know that some countries, including some very large countries, are very hostile to it."

Speaking on the sidelines of the meetings, which also coincide with a summit of the Group of Seven leading economies, Mr Darling said: "The principle of no taxation without representation is as true today as it ever was. We are one of the largest donors to the IMF at the moment and I feel very strongly that we therefore need to be represented."

World leaders have been engaged in behind-the-scenes discussions over the weekend to modernise the IMF – an institution forged in the wake of the Second World War – and the broader set of institutions which manage the global economy. As a result, the G7 is effectively being replaced with the broader G20, which actually consists of 22 nations and the IMF is being reformed to give more votes and more power to emerging world powerhouses such as India and China.

Britain is one of eight nations on the 24-seat policymaking committee of the IMF with a permanent seat, while others have to share their seats with smaller countries. Insiders said the G7 is currently investigating whether to throw out this system and instead have a completely constituent-based system, in which the UK would have to share its seat, possibly with other non-euro members in the EU.

 

More at the link.

 

The UK is bankrupt, although we may be too big for the IMF to rescue.

[interestrateripoff]

Treasury plan to force banks to lend in poorer communities | Business | The Observer

 

Plans to force Britain's banks to pump money into poor communities in exchange for their massive taxpayer bailouts are being drawn up by the Treasury, a senior minister has revealed.

 

Liam Byrne, chief secretary to the Treasury, said last week that the time was ripe to consider a UK version of America's Community Reinvestment Act, introduced in the 1970s to prevent banks abandoning deprived areas.

 

The CRA has resulted in American banks lending billions of dollars in rundown inner-city districts, and, with public anger at the activities of financial institutions running high, Byrne said he was actively considering a similar scheme for Britain.

 

"It is an interesting idea, which we are exploring earnestly at the Treasury," he told a fringe meeting at last week's Labour conference in Brighton.

 

The chief secretary added that there were two issues that worried him and his Treasury team – the lack of any hard evidence that particular communities were being frozen out by the British banking industry, and concerns that CRA-induced lending to poor households in the US had triggered the sub-prime crisis.

 

"These are serious questions for us to explore," Byrne said. "But we wouldn't be looking at it if we didn't think it would be a good idea."

 

The financial crisis of the past two years had provided the perfect opportunity to force the banks to behave with a greater sense of responsibility, he believed. "If we are not going to do it now, we will never do it," he said.

 

And people really doubt the belief that debt is wealth.

 

This govt will make the poor rich by enticing them into debt.

 

Genius.

 

We are in a new economic paradigm, clearly the way out of this debt crisis is to create even more debt to generate wealth.

 

Debtalism is the politicians answer to all problems.

[interestrateripoff]

UK must not let 'zombie' banks drain the economy - Telegraph

 

The gap between our massive public and private sector borrowing needs and what lenders will actually stump up amounts to a colossal 15pc of GDP this year and next, the IMF boffins calculate, compared to 3pc in the eurozone and 2.4pc in the US.

Spiralling public borrowing will also push up interest rates, the IMF reminds us, undermining a fragile economic upturn. History suggests a one percentage point increase in fiscal deficits, if maintained, generates a 0.3 percentage point rise in long-term rates.

The UK's deficit is headed for 12pc of GDP, up from just 3pc in 2005. Do the maths, if you dare. Also keep in mind that the rates companies and mortgage holders ultimately pay are generally some way above long-term money market rates – particularly, as now, when the banks are doing everything possible to push the costs of previous mistakes onto their so-called customers.

The UK and much of the Western world now faces what economists used to call "crowding out". When I studied economics in the 1980s, we were taught that high public borrowing squeezes the private sector's ability to access finance – not only in absolute terms, but by pushing up rates for everyone.

After all, that's what had happened the decade before. "Crowding out" is a major reason the UK suffered such a dearth of enterprise and investment in the 1970s, causing feeble growth and high unemployment. And of all the world's major economies, it's the UK that's now vulnerable to the same disease – given our massive fiscal deficit. The verdict on the UK's fiscal position was a mere footnote, though, among some far more grave IMF warnings.

This column has often argued that true recovery won't happen until Western banks "fess-up" their sub-prime losses. As long as our banks refuse to write down their multi-billion dollar positions in toxic

"sub-prime" waste, parking them instead off balance sheets, credit markets will stay in torpor, firms will be starved of working capital and jobs will keep being lost.

It's because banks are harbouring massive opaque losses that they won't lend freely to each other, so gumming up the wheels of finance on which our economy depends. More than that, until banks take the write-downs, and the inevitable restructuring and mergers, they will continue shoving money into their bottomless sub-prime pits, allowing loan books to contract even further.

Some say we're out of this crisis. Such wishful thinking needs to be tempered by the IMF's estimate that while banks around the world have recognised around $1,300bn (£817bn) of sub-prime and related losses since 2007, there's at least another $1,500bn to come.

Why "at least"? One reason is that banks go to endless lengths to disguise their losses – even to the IMF. These numbers are also partially dependent on share prices. If the FTSE-250 falls, for instance, then UK bank losses from sub-prime and other bad loans get even worse. And Western stock markets are now way above fair value – pumped-up as they are by a combination of hope, hype and short-term government cash.

Banks in the US have recognized 60pc of their anticipated losses, says the IMF, while those in the UK and Eurozone have "fessed-up" 40pc. No wonder the IMF is warning of a "significant" risk of another downward lurch in the global recession.

The UK's political classes, no doubt, will dismiss all this as yet more doom and gloom from a typically "dismal scientist". But even if these lingering sub-prime liabilities don't cause another systemic financial crisis, their on-going presence on bank balance sheets, and our continued policy of keeping such banks alive using government bail-outs and printed money, will squeeze the life out of our economy for years to come.

When I argue against quantitative easing (QE) and debt-fuelled Keynesian boosts, I'm often met with a glib one-word response: "Japan". Many "experts" have been brain-washed into thinking that unless we print money with abandon and prostrate ourselves with more state debt then the UK, too, will endure "a lost decade".

This is dangerous nonsense. Japan didn't stagnate in the 1990s because it refused to do QE and a massive fiscal expansion, or because it waited and did both half-heartedly. Japan suffered a 10-year slump precisely because its too-big-to-fail, politically-connected "zombie" banks were allowed to stagger on, acting as a massive drain on the broader economy. And, much as it pains me to write it, that's precisely what's happening in the UK.

A good article. We are no where near out of this recession yet, even if they do manage to end the technical recession.

 

So does that mean we can expect interest rates to go up by at least 2.7%? (9*0.3) I assume that is how it's calculated.

 

No wonder share prices have been going up then, is this the banks trying to avoid there insolvency being exposed further?

 

Luckily we have the jobless recovery so all will be well, perhaps we just need to create even more debt to fix the problem?

Edited October 4, 2009 by interestrateripoff

[interestrateripoff]

No comparing with Kowloon - Times Online

 

For mainland China’s 100 billionaires, there is a new status symbol — a house in the English shires. The usually gossipy country house trade is staying tight-lipped about which Chinese entrepreneur is buying what — although some estate agencies concede that staff are busy learning Mandarin.

 

But it is strongly rumoured that the Grade II-listed Great Westwood in Kings Langley, Hertfordshire, is being acquired for £11.3 million by a big name from Beijing or Shanghai. The seven-bedroom Georgian house, every inch recently renovated, went up for sale in the spring for £15 million. It last changed hands in 2005 for £5.5 million — but, at that time, the property, which sits in 44 acres, needed a facelift.

 

Are these buyers distorting the housing figures?

[interestrateripoff]

Nurses' pay rise job loss | News Of The World

 

NURSES have been warned every ONE PER CENT pay rise they get means the loss of 10,000 NHS jobs.

 

They are set for a 2½ per cent wage rise in April but health chiefs say paying it could mean 25,000 jobs vanishing.

 

A clause in their 2008 deal said it could be renegotiated if the economy slumped - but union chiefs are vowing to fight for the rise.

 

Sir Robert Naylor, boss of the huge University College London Hospitals Trust said: "A simple calculation is that given there are over one million people employed by the NHS, every 1 per cent you put onto the wage bill is the equivalent of 10,000 jobs."

 

He said there were limited options for savings and a freeze was needed.

 

His predictions are in line with reports that jobs may have to go to achieve at least £20 billion of savings over three years. Job losses are not likely until after the election.

 

Sir Robert is the highest paid NHS chief executive on £230,000-a-year. Last year he got a 30 per cent rise.

 

He warned: "It is unrealistic for staff and the public to think there will be pay rises for staff given the economic circumstances."

 

Does he also accept it's unrealistic for him to keep his 30% rise then? Sorry silly me big Chief Exec's are worth every penny.

 

I think I'd have more respect for anyone saying this if they offered to slash there own salary to show what's needed, you know lead by example.

 

I'm sure he could slash his own wage by 50%.

 

Although we all know that won't happen.

[interestrateripoff]

BAE rejected £300m offer to settle ‘bribery’ case

 

Directors of BAE have not accepted the SFO's settlement offer after being advised they would be open to civil lawsuits 9 Comments

 

• SFO’s phoney war will end in a settlement
  

 

• Drawing Flak
  

 

£500m debt rescue for Gala Coral

 

Buyout firms are expected to give up half stake in bookmaker and gaming giant in return for lenders cancelling loans 2 Comments

 

• SFO’s phoney war will end in a settlement
  

 

• Gala Coral to shed 300 jobs in fresh purge
  

 

Lloyds to reignite bosses’ bonus row

 

A long-term incentive plan could see chief executive Eric Daniels' pay matched to RBS chief's £9.6m pay package 1 Comment

 

• Darling to weigh new tax on banks
  

 

• The seven days that saved our banks
  

 

Run nearly forced the collapse of RBS

 

Between £1bn and £2bn was sucked daily from RBS in the days before the government bailout last October 4 Comments

 

• The seven days that saved our banks
  

 

• RBS names new risk and remuneration directors
  

 

 

Darling to weigh new tax on banks

 

The Treasury will study IMF tax proposals to give funding to poor countries and offer insurance against future financial crises

 

Davis sets ITV chairmanship deadline

 

The former Reed Elsevier chief is expected to soon say if he will accept one of Britain’s most high-profile boardroom jobs

 

US chemical giant eyes ICI complex

 

Ministers will examine plans to inject tens of millions of pounds in a project to revitalise the northeast's chemicals industry

 

• ICI big guns name a price
  

 

• ICI turns back the clock with sale of Uniqema chemicals
  

Aviva's Dutch float

 

Britain's largest insurer is expected to announce it will raise at least £1bn through a partial flotation of Delta Lloyd

 

• Aviva savers to share in £470 million payout
  

 

• Aviva accused of 'derisory' settlement in High Court
  

Legoland owner in £2bn US splash

 

Blackstone is set to buy some well-known US visitor attractions including SeaWorld and the Busch Gardens parks in Florida

 

 

Philip Morris sues Irish government

 

Tobacco giant will launch a legal action over a ban on the display of cigarettes in shops, saying the rule is anti-competitive

 

 

China leads charge for the West’s oil firms

 

In the past several months, government-backed groups have beeb snapping up assets from Kazakhstan to Iraq, Russia and Canada

 

• China oil deals flow with $1bn acquisition
  

 

• Can China make a great green leap?
  

New boss takes to his monocyle

 

The industry has yet to get back on its feet yet Takanobu Ito, who has taken the top job at Honda, doesn’t do doom and gloom

EDF tries to cut debts by €4bn with UK sale

 

French energy giant seeks exit from Britain's biggest power-distribution business, which keeps on the lights at Heathrow

 

 

It’s time for Osborne to lift the Tory veil

 

There is a good chance Tories will form the next government, so there is added pressure to explain their economic policy

 

Crash could not kill our faith in capitalism

 

The communist spectre that Karl Marx predicted would be haunting Europe is instead haunting Europe’s left-wing parties

[interestrateripoff]

[/url]

 

BAE ready to admit guilt over corruption allegations

 

BAE Systems is ready to plead guilty and accept a fine in order to bring a swift end to the SFO's six-year inquiry into claims of corruption.

 

Darling battles to keep UK on economic top table

 

Britain will not give up its permanent seat on the IMF without a fierce fight, the Chancellor indicated on Saturday.

Treasury issues bonus demand to investment banks

 

 

 

Wall Street faces day of reckoning over Bear Stearns

 

Ralph Cioffi Jnr and Matthew Tannin were once masters of the universe – now they face trial for their role in the collapse of Bear Stearns.

 

Lisbon Treaty could save Ireland €200m a year

 

Ireland's overwhelming approval of the Lisbon Treaty could save the country €200m a year in debt costs, economists said tonight.

 

Virgin and BT square up to Sky on pay-TV prices

 

Virgin Media and British Telecom say Sky's "near monopoly" of the market means increased prices for viewers of sport and film channels.

ITV's CEO debacle throws up leading questions

 

 

 

Tesco profits hit by rivals in economic downturn

 

The recession's impact on the UK's cut-throat supermarket sector will be laid bare this week when Tesco unveils flat first-half profits.

Asda Boss Andy Bond says 'growth is hard'

 

 

 

More Business News

 

Cadbury family to fight Kraft for 'patriotic reasons'

 

 

CEO Tom Albanese to chair Rio Tinto investment committee

 

 

RSA abandons $1bn rights issue

 

 

UK car manufacturers on road to recovery as sales rise

 

 

Ascot left reeling by cost of £210m grandstand

 

 

• Osborne must show the City leadership – and more Ken Clarke
  

 

• UK must not let 'zombie' banks drain the economy
  

 

 

• East is taking over from West in an irreversible shift of power
  

 

Death of the G7 is a blow for Britain

 

They came not to praise the old emperor but to bury him.

Tories need to come up with solutions for our fiscal state