...the main business headlines..........
Stocks plunge around the world
UK stocks fell sharply at the open after stocks in Asia took another tumble. The FTSE 100 plunged 10 per cent initially before recovering some of its losses. In Tokyo the Nikkei 225 stock average slumped 11.4 per cent. The failure of Yamato Life and a real-estate investment trust in Japan sent financial stocks down sharply and helped push the MSCI Asia Pacific Index down seven per cent in early afternoon trade in Tokyo. Yesterday US stocks suffered another setback, with the Dow Jones Industrial Average closing below 9,000 for the first time since 2003.
Japanese insurer goes to wall
Yamato Life insurance, a 98 year-old Japanese insurer, was forced to seek bankruptcy protection today, reported Bloomberg.com. It was the first bankruptcy in the sector in seven years and another sign of the far-reaching effects of the credit crisis. The company was hurt as the value of its assets collapsed in the wake of global shareprice falls and it was left with a solvency ratio of 26.9 per cent. Among the company's biggest shareholders is Shinsei Bank, which saw its stockprice plummet 13 per cent in morning trade in Tokyo.
Japan's return from financial oblivion 
Cracks show in G7 unity
Finance ministers of the world's seven biggest nations meet later on Friday with investors hoping that they can some up with a plan to save the global economy, reported the Financial Times. Yet while the world's central banks cut interest rates in concert, governments appear determined to "stick to their own national rescue plans" even at the expense of a global solution. There are "persistent disagreements" within G7 on how to solve the crisis, with some in Europe blaming the US for allowing Lehman to fail, meaning a co-ordinated plan is unlikely to emerge from today's meeting.
Who will pay for the incompetence that led to the financial collapse?
UK and Iceland clash over banks
Britain and Iceland were increasingly at loggerheads, after the latter's nationalisation of its major banks put £800m of local authority funds at risk, said the Financial Times. On Thursday Iceland was forced to nationalise its biggest bank - Kaupthing - and blamed the move partly on the British government's use of anti-terror laws to freeze assets in the UK. The deposits by local authorities will be looked at on a "case by base" basis, with a blanket reimbursement unlikely. Gordon Brown has said he will pursue all avenues to have the funds returned by Iceland.
IMF readies $200bn rescue fund
Dominique Strauss-Kahn, the managing director of the IMF, said he had a "war chest" of $200bn available, which could be used by needy governments within weeks, reported the Guardian. The IMF has activated its "emergency loan facility", which allows some criteria to be waived, and IMF members could be called on for further top-ups. Strauss-Kahn also said that recapitalising banks, as the UK has already done and the US plans to, must also comprise part of any successful rescue plan. Analysts questioned the likely effectiveness of the IMF's move however
The next sub prime mortgage crisis
Welcome to Wall Street's cash machine
Bush to address nation
President George Bush will make an announcement to the American public this morning at 10.25am US time, in an effort to calm volatile markets, said Bloomberg.com. He plans to reassure the country that Treasury Secretary Hank Paulson is making "every effort" to stabilise the financial system, after the Dow Jones closed below 9,000 and the Standard & Poor's Index fell 7.6 per cent, on concerns that the credit crisis is spreading to automakers, insurers and energy companies. Market watchers voiced doubts that the statement would do anything to stem the tide.
Cash was king, now gold is God in the US
...in brief..................
Belgium bails out banks and Sugar buys in to Woolies
The Belgian government has offered to guarantee all new bank financing for a year after bailing out Dexia with governments in France and Luxembourg for the second time in a week. Other domestic banks will also be able to take advantage of the arrangement…………
India has reduced the amount of reserves lenders need to retain to the least since 2001 as it tries to bolster the nation's economy. Overnight the rupee had slumped to its lowest level ever and overnight lending rates doubled.The central bank will also pump 600bn rupees into the system…………
Citigroup has admitted defeat in its attempted takeover of failed US bank Wachovia. Wells Fargo, which muscled in on the deal, is now to continue with its private bid for the whole of the bank in contrast to Citi's government-brokered cherry-picking of its assets…………
Property developers the Candy brothers are set to benefit from the collapse of Icelandic bank Kaupthing. Clauses in their contracts on building developments allow them to purchase stakes at market value if one party goes into administration…………
Thousands of the UK's richest investors are facing hefty losses of at least 25 per cent of their money in a supposedly low-risk AIG fund, said the Independent. Television presenter Jeremy Clarkson is one of many to lose out on investments in AIG Life's 'Enhanced Fund'…………
AIG rescue and the Goldman Sachs connection
Sir Alan Sugar has acquired a near-four per cent stake in struggling retailer Woolworths. The millionaire founder of Amstrad Computers is the latest entrepreneur to take a stake in a UK company as a result of financial turmoil. A consortium led by Icelandic group Baugur owns 10 per cent of the company.
Posts
