...the main business headlines..........
Global markets resume slump
Stocks around the world resumed their downward slide, with the Standard & Poor's 500 Index slumping 8.9 per cent after the Institute for Supply Management said US manufacturing last month shrank at the fastest rate since 1982 and Federal Reserve chairman Ben Bernanke signalled a change in monetary policy. Stocks elsewhere responded with steep falls - in Asia the MSCI Asia Pacific Index lost 4.5 per cent, with Japan's Nikkei 225 Index down 6.4 per cent. In London the FTSE 100 opened two per cent lower.
A trillion reasons to be gloomy about the economy 
Australia cuts interest rates
Australia's central bank cut its benchmark interest rate by one percent to a six-year low of 4.25 per cent in Melbourne today, reported Bloomberg.com. It was the fourth reduction in as many months and a bigger cut than most analysts were expecting. Governor Glenn Stevens said monetary policy is now "expansionary", however the S&P/ASX 200 index slumped a further 4.2 per cent, with the banking sector leading the declines. Stevens said Australia's economy has been "more resilient" than other major economies.
More calls for interest rate cut
"Alarm" over the UK's economic prospects was increased by the latest CIPS/Markit survey of manufacturing, reported the Times. Its headline measure of industrial activity fell to the lowest level since January 1992, triggering concern over further job cuts. The data led to more calls for interest rate cuts and expectations increased that the Bank of England will cut its base rate by a full percentage point when it meets on Thursday. Investors fled shares and headed for the risk-free government bond market as a result.
Bankrupt Britain: how it could happen
New Star shares collapse
Shares in fund management group New Star Asset Management "plunged" nearly 43 per cent on Monday, said the Financial Times. Analysts has earlier warned that the company had "just days" to negotiate a deal with its banks to avoid "potentially devastating" outflows of funds. The group announced that it is in talks with its banks on a debt-for-equity swap, which would leave them owning the majority of its shares. It was left "red-faced" after it applied for its shares to be suspended, and the request was rejected by the authorities.
How Porsche took the hedge funds to the cleaners
US recession started a year ago
The US National Bureau of Economic Research - the body seen as the "arbiter of US recessions" - has said that the American economy's 73-month expansion "ended in December 2007", reported the Independent. The announcement cast further gloom over the world's markets, as it emerged that the body's "flexible definition of recession" meant that the US moved into recession in December 2007, on the basis that the economy peaked in that month. The US economy shrank at an annualised rate of 0.5 per cent in the third quarter of 2008.
America enters a new Depression
Cancelled M&A nears takeovers
The total value of cancelled merger and acquisition deals for this quarter is "closing in" on the value of deals actually completed, said the Financial Times. With BHP Billiton dropping its bid for Rio Tinto last week, the value of cancelled merger deals this quarter rose to $322bn, versus $362bn in completed deals, according to data from Thomson Reuters. However, if the "mammoth" takeover of Canadian telecommunications group BCE falls through, the two amounts will "draw level". The last time the comparison was this bad was in 1987.
After the credit crunch what next for the world?
...in brief..................
Aer Lingus rejects bid and Moss Bros issues profit warning
Aer Lingus rejected the €738m "cash offer" by rival Ryanair, 18 months after its previous €1.5bn bid was disallowed by the European commission, said the Independent. The Aer Lingus board said that the current bid "undervalues" a business with a "robust long-term future"…………
Another 1,150 redundancies were announced in the UK banking industry yesterday, as Credit Suisse cut 650 jobs and HSBC axed 500 positions, said the Independent. Both banks blamed tough economic conditions and HSBC said most of the jobs were from "support functions"…………
Tesco reported its weakest UK sales growth in 15 years, reported the Daily Telegraph. Britain’s biggest supermarket saw sales, excluding petrol, rise two per cent at shops open for at least a year in the third quarter, a "significant slowdown" since the second quarter’s four per cent increase…………
Pub operator Greene King "unveiled a 15.2 per cent slump in interim profits" this morning, reported the Times. The company, which operates 2,500 pubs in England and Scotland, said that it would maintain its dividend at 7.3p, however, after "meeting its debt obligations"…………
Aston Martin is cutting "up to a third" of its staff after a fall in sales, reported the Financial Times. The cuts are "among the biggest" by a British carmaker and will see the company shed up to 300 permanent staff and the same again in temporary employees…………
Moss Bros, the men's retailer courted briefly by Philip Green, has become "the latest high street chain to warn on profits". It said that total sales for the 44 weeks to 29th November dropped 3.7 per cent and for the last 18 weeks they were down 5.2 per cent…………
Will Theo Paphitis save Woolworths?
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