Business Headlines
Asian stocks snap losing streak
Markets rallied in Asia after four days of declines, pushing US index futures up and seeing the FTSE 100 open nearly three per cent higher on Tuesday. The MSCI Asia Pacific Index climbed two per cent in late Tokyo trade after losing nearly 20 per cent during the rout of the last four days, as investors started to find value in the area. Yesterday price-to-book values fell to their lowest on record in Japan and the Hang Seng index traded at its lowest valuation since the Asian crisis.
Economy: a trillion reasons to be gloomy 
Japan’s return from financial oblivion
ECB signals rate cuts
Interest rates in Europe are likely to be cut by the European Central Bank next week, it signalled on Monday. Jean-Claude Trichet, the ECB president, said that an improved inflation outlook meant that lower rates were likely to be announced on November 6th. The market is expecting a cut of half a percentage point to 3.25 per cent, followed by further cuts in December and 2009. Trichet’s comments indicate that there are unlikely to co-ordinated cuts this time, although other countries are likely to act independently.
Credit crunch bail-outs are threat to democracy
Financial crisis costs $2.8tr
The recent financial turmoil has cost the world $2.8tr, according to the Bank of England. The Bank also warned of “further instability” in its twice-yearly Financial Stability Report, said the Financial Times. It mentioned “significant risks” for the banking system, in spite of the recent £50bn bank bail-out, with problems spreading to hedge funds and insurance companies. Sir John Gieve, deputy governor for financial stability, voiced concerns over the hedge fund and insurance sectors being forced to liquidate holdings.
Economy: a trillion reasons to be gloomy
IMF may need to ‘print money’
After bailing out economies across the world, the International Monetary Fund may soon run out of funds, reported the Daily Telegraph. As a result it might have to go to Western countries for an injection of funds, or even resort to the “nuclear option” of printing its own money. It has committed nearly a quarter of its current funds of $200bn to Iceland and Ukraine, with talks underway at the moment with Pakistan, Hungary, Belarus and Serbia. Analysts believe this is just the tip of the iceberg and that it may need three times its current reserves.
Hungary is counting the cost of capitalism
What happens when a Western economy dies
New home sales rise in US
Sales of new homes in the US increased unexpectedly last month, a rare “bright spot” in the troubled housing market, reported the Independent. In September the number of purchases was annualised at 464,000, up 12,000 from August, outstripping analysts’ expectations. The level was still well below last year’s amount but buyers are being “increasingly tempted” by low prices as builders lower purchase costs by an average of 9.1 per cent, according to data from the Commerce Department.
America enters a new Depression
The next sub-prime mortgage crisis
Pensions down by a third
Workers have seen their pensions decline by nearly a third over the past year, reported the Guardian. Research by Aon Consulting showed that defined contribution pension schemes have lost £157bn since last October, a drop of 28 per cent, despite contributions of £6.7bn being paid into the scheme in the period. Aon said that the downturn was particularly “taking its toll” on those who are close to retirement, as they may have to work for longer to make up the shortfall.
...in brief..................
BP profits leap and Aegon gets funds from Dutch government
BP reported an 83 per cent rise in profits in the last quarter after enjoying an “unprecedented rise” in oil prices during the period, said the Daily Telegraph. For the quarter oil was on average 58 per cent higher than a year ago, although it has since slumped…………
Cuba could have America over a barrel
Shares in Volkswagen more than doubled on Monday as Porsche revealed it had had increased its stake from 35 to 74.1 per cent. The move outraged investors, particularly hedge funds, who were forced to cover short positions, sending VW’s stockprice up 147 per cent…………
The £12bn computer programme linking patients’ records across the country has “ground to a halt”, raising questions over whether it will ever operate properly, said the Financial Times. It is just the latest problem to hit the project, which has been dogged by concerns since its launch in 2002…………
Online grocery service Ocado has gone to shareholders to raise another £40m through a rights issue. The company, which delivers goods for John Lewis supermarket-owned Waitrose, has net debt of more than £100m and has not made a profit in eight years…………
Kazakhstan’s four biggest banks are set to sell shares for as much as $5bn to increase their capitalisation and improve liquidity, the government reported. The state is likely to buy 25 per cent of voting stock in the banks as the financial crisis continues to take its toll…………
Hague-based insurer Aegon, owner of US insurer Transamerica, has received a 3bn euro “lifeline” from the Dutch government, reported Bloomberg.com. It is the second Dutch financial company to be bailed out after ING Group went to the authorities for funding…………
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