business headlines
Markets fall as Japan GDP shrinks
Stocks fell in Asia after figures were released showing that the Japanese economy has entered recession, and crude oil prices declined on worries that the world’s economic situation is worsening. The move into recession was unexpected, as analysts had forecast a slight improvement in third quarter GDP, however the figure was down an annualised 0.4 per cent in the period. On Friday the US markets were again weak, with the Standard & Poor’s 500 losing more than four percent over the day. In the UK the FTSE 100 opened half a per cent lower.
The Japanese have seen it all before 
World leaders to support growth
World leaders gave assurances that they would do all they could to support global growth, at the Group of 20 summit in Washington over the weekend, said the Financial Times. Heads of all nations joined the commitment to do whatever was necessary to boost economies and stabilise the financial system, in talks which gave “fresh momentum” to national stimulus packages. Countries said they would create regulations to monitor global banks, covering credit derivatives and financial remuneration. The G20, rather then G7 appears to be taking the “leading role” in recovery planning.
What happens when a Western economy dies?
Obama focused on economy
President-elect Barack Obama said he and the US government will do “whatever it takes” to revive the economy, reported Bloomberg.com. In an interview for CBS News’s 60 Minutes programme, he emphasised his aim was to avoid the recession getting any worse and said he “shouldn’t worry about the deficit” until the economic problems were solved. He also advocated help for the auto industry, taking the form of a “bridge loan”, on condition that management and workers come up with a “sustainable” plan to keep it functioning afterwards.
Alexander Cockburn: economic woes pile onto Obama's in-tray
Severe recession forecast in UK
The UK is set to experience a recession “as severe as that of 1991” in a revised forecast from the CBI employers’ body, reported the Financial Times. The CBI expects the economy to decline 2.5 per cent from its peak, shrinking 1.7 per cent in 2009, before reaching the bottom late in the year. It believes unemployment will reach nine per cent in 2010, meaning three million people will be out of work. The CBI “took the unusual step” of announcing its revised forecast just two months after it predicted growth of 0.3 per cent in September.
The banking collapse is all your fault
Clean report for building societies
The Financial Services Authority and the Treasury are expected to give mutuals a clean bill of health this week, reported the Daily Telegraph. They are believed to have concluded that the sector is “adequately capitalised” and that no individual society is in need of an injection of government funds. The FSA has been carrying out “stress tests” on the sector, it is thought, and where the funding fell short it organised takeovers or mergers and capital raising. Barnsley, Cheshire, Derbyshire and Scarborough have all merged with rivals this year.
Banking crisis: a crash course
Treasury may sell bank shares
The Treasury is considering the sale of its £9bn of high-yielding bank shares to the City, reported the Times. The “lucrative” shareholdings, if sold to pension funds or other financial institutions, would reduce the cost to taxpayers of the bank bail-out and are attractive as a result of their 12 per cent yield. The plan is for fund managers to be offered these high-paying shares “in the hope” that they will then be encouraged to buy further ordinary shares in Royal Bank of Scotland, HBOS and Lloyds TSB, which were the beneficiaries of the £37bn government injection.
Hungary is counting the cost of capitalism
...in brief..................
Oil traders set to make huge gains and row breaks out at easyJet
Investors who bet in the summer that oil prices would fall are “set to make huge profits” today as December put options expire, said the Financial Times. Some speculators are likely to see returns of “more than 2,000 per cent” in less than six months…………
Top Goldman Sachs executives have waived their bonuses for 2008 in light of intense scrutiny from government and regulators. The Federal bail-out does not prevent banks which have received government injections from paying bonuses, but there is public unease over the issue…………
German millionaire Adolf Merckle, Germany’s fifth-richest person with a net worth of $9.2bn, has made a large loss on the rise in the VW shareprice, reported the Financial Times. After losing a “high three-digit million euro” sum, he is in talks with 40 banks over a loan…………
Iceland’s government pledged last night to refund UK savers’ money after the collapse of Icesave, to try to get funding from the International Monetary Fund. The $2bn IMF loan Iceland requires is on hold until it gives assurances to Germany, Britain and the Netherlands on guarantees…………
Online retailer Asos has “bucked the trend on the high street”, with a sharp increase in first half profits, reported the Times. Curent trading is proving “resilient” to the consumer slowdown, with pre-tax profits up 68 per cent for the six months to September 30th…………
A row has broken out between Sir Stelios Haji-Ioannou and the rest of the easyJet board, said the Daily Telegraph. It centres on whether the founder has the right to appoint two new non-executive directors. To do so he would need to become chairman, a role he does not want…………
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