...the main business headlines..........
Wall Street rallies on bail-out hopes
US stocks made back more than half their previous day’s losses on hopes of a revival in the government bail-out plan. The S&P index closed up 5.3 per cent and the Dow Jones was 4.7 per cent higher, as investors bet that Congress would pass the $700bn bill in some form later this week. Regional banks, which had collapsed on Monday, were among the biggest winners, recouping much of their losses. Sovereign Bancorp was up 28.7 per cent, after a 63 per cent drop the day before and National City regained 29 per cent of its 63 per cent drop.
After bail out collapse, what happens now? 
Paulson's plan could cost a trillion dollars
Asian stocks rebound even as Japan’s business confidence hit
Shares in Asia rallied for the first time in seven days, in the wake of US gains overnight. The MSCI Asia Pacific Average, which represents stocks across the region, rose 1.7 per cent with bank shares like Westpac and Commonwealth Bank of Australia up in Australia and brokerage Nomura gaining in Japan. The turnaround came in spite of a negative business confidence survey in Japan, which saw the Bank of Japan’s Tankan index dropping below zero for the first time since 2003 and companies indicating reduced capital spending
Japan is proof that busted economies can come back
Pressure mounts on government savings guarantee
The UK government is facing “growing pressure” to raise the levels of guarantee on British savers’ bank deposits, reported the Financial Times. The calls are coming after Ireland promised to underwrite the totality of savers’ cash in its six largest lenders, in a bid to restore confidence in the battered sector. The move came as shares in Anglo-Irish took a major fall, raising the prospect of state intervention of some sort. While the guarantee may satisfy depositors, it “may fall foul” of European Commission state aid laws.
Financial crisis is a mess of Brown's own making
US real estate falls most ever
It was revealed yesterday that American real estate prices fell by the sharpest ever annual rate in July, reported the Independent. The Standard & Poor’s/Case-Shiller housing index fell by a “record” 16.3 per cent from its level a year ago, the biggest drop since it started in 2000. Prices are now down 20 per cent in the 20 largest urban centres in the US since the peak in July 2006. There was a glimmer of good news contained in the survey – the monthly rate of decline was seen to be slowing – however this gives “little cause for optimism”.
Scandal of the Freddie and Fannie bail-out
HBOS bid concerns as shares slump
HBOS shares collapsed another 14 per cent yesterday, in contrast to the recovery seen in the rest of the sector, on concerns Lloyds TSB will pull or reduce its offer to buy the bank, reported the Daily Telegraph. HBOS shares are now trading at a 35 per cent discount to the offer price, indicating a large degree of uncertainty in the deal. The decline prompted Prime Minister Gordon Brown to make a statement in which he said he was “confident” the merger would go ahead and he also pledged to do “whatever it takes” to maintain financial stability.
Lloyds merger wouldn't be allowed in normal times
Tories offer political ceasefire over banking crisis
A late-night meeting between Tory leader David Cameron, shadow Chancellor George Osborne and ex Prime Minister William Hague brought about an offer of a political ceasefire over the banking crisis, said the Times. In an interview with the newspaper, Osborne said that they “felt a duty” to act in the circumstances and that the Chancellor, Alistair Darling responded “warmly” to the offer, given the help it would offer in passing a planned Banking Bill through Parliament more quickly.
The Mole: Tory concerns over Cameron amid the economic crisis
...in brief..................
BHP Billiton wins takeover approval and UBS cuts more jobs
BHP Billiton has won approval for its hostile $101bn bid for Rio Tinto, from the Australian regulator. In spite of complaints from rivals in the region and overseas, the ACC found that the deal would not lower competition levels in any of the markets in which it operates…………
The chief executive of Baugur, the Icelandic investment group with stakes in a number of UK retailers, insisted yesterday that financing for each of its holdings was “secure”, said the Times. Gunnar Sigurdsson said that funding came from international banks, rather than Icelandic institutions…………
Tesco has talked about the positive potential for its financial services division, amid current market turmoil. It plans to launch a current account and enter the mortgage market in time, taking advantage of an expansion in margins, with partner Royal Bank of Scotland…………
The demand for gold bullion bars and coins from worried investors has led to shortages in the UK, particularly in coins, said the Financial Times. In the US too there have been supply problems, with the government suspending the sale of its gold American Buffalo coin last week…………
Barratt Development is slashing up to 43 per cent off property prices, analysts at Dresdner Kleinwort have discovered. The investment bank visited agents in Birmingham, Manchester, Leeds and Sheffield and found details of the deep discounts offered for those buying five or more properties…………
UBS, the biggest European loser from the credit crisis, is to cut 1900 jobs in its investment banking, equities and fixed income divisions said Bloomberg.com. The total represents about 10 per cent of total investment banking staff and comes on top of the 7000 job cuts already announced…………
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