One article and the end-of-the-week’s economic headlines
[There's so much rumour and unconfirmed statements with - in most
cases - the small print not visible to the naked eye that I think
I'll stop there.]
XXXXXXXXXXX CS
===================
TELEGRAPH 12.12.08
Sterling's fate hangs on Gordon Brown's ability to pay it all back
Sterling has had a miserable month.
By Edward Hadas, breakingviews.com
The UK currency has fallen 12pc on the Bank of England's trade-
weighted index. Meanwhile, the spread on UK government credit default
swaps has almost doubled - to 110 basis points.
Peer Steinbrück has a plausible explanation for why. The German
finance minister told Newsweek magazine that there had been a
"breathtaking" shift "from decades of supply-side politics all the
way to a crass Keynesianism".
That Britain has willingly rediscovered Keynesianism is undeniable.
The UK has abandoned the fiscal prudence it once championed -
temporarily, according to Gordon Brown, the prime minister - in
favour of a budget deficit of 8pc of GDP. John Maynard Keynes did not
love deficits himself, but the economist's name is closely associated
with enthusiastic government borrowing.
But whether the new approach is "crass" is open to debate.
Steinbrück's accusation has some force to it. There is something
simplistic about the government's claim that an economy which is
overleveraged, shrinking and runs a big trade deficit can borrow its
way out of trouble.
The pound's troubles haven't yet hurt the government where it hurts
most, in the cost of borrowing. The 10-year government bond yields a
modest 3.6pc. Gilts, along with most government debt, have benefitted
from investors' panic.
But a tumbling currency brings many sorts of pain: higher prices for
imported goods that cannot easily be made at home, costly losses at
any banks which have net foreign currency liabilities and foreboding
over the ability to finance the burgeoning deficit.
Like any heavily indebted family or company with a negative cash
flow, the UK relies on the continuing willingness of its creditors to
stay supportive. If they go away, the pound could drop to
ridiculously low levels. A dirt-cheap currency would eventually
stabilise, as exporters seized opportunities. But the transition
would be agony.
No government wants to go through that. To keep foreign creditors
sweet, Brown and Alistair Darling, the Chancellor of the Exchequer,
need to explain clearly how they will cut the country's new debts. If
they can't come up with a plan, they should do something crass but
constructive: borrow less.
===================
ECONOMIC HEADLINES 12.12.08
Ananova
Santander to axe 1,900 UK jobs
Spanish banking giant Santander is to axe 1,900 jobs in its three UK
businesses next year under efficiency moves.
The job cuts will hit staff at Abbey, Alliance & Leicester and
Bradford & Bingley, and compulsory redundancies have not been ruled out.
Head offices in London, Leicester and Bradford will be affected by
the cuts, which are equivalent to 8% of Santander's UK workforce.
Unions reacted with dismay to the news, especially as it was
announced so close to Christmas.
The Times
HBOS investors vote for Lloyds TSB merger
Shareholders back rescue deal but banks' stocks continue to dive
after HBOS reveals £8bn in bad debts and charges
Post Office workers plan pre-Christmas strike
Festive deliveries face delays after 2,000 staff pledge to walk out
on December 19 over planned office closures
John Lewis reverses double-digit sales fall
High street bellwether reports trade down 6.6% but says VAT cut
helped eased previous sharp declines in sales
BAA airport passenger numbers tumble 8.9%
Heathrow and Stansted owner serviced one million fewer flyers due to
strikes, demonstrations and the downturn
• BAA faces fines after airlines complain
• Heathrow T5 disaster a lesson for Dubai T3
Employers say pay cuts can’t be ruled out
Unions gave warning that pay cuts could sweep across industry as
companies attempt to reduce costs while retaining staff
Financial Times
Bush considers rescue for carmakers
The Bush administration said it was considering rescuing Detroit’s
troubled car industry with funds intended to prop up the financial
system in the wake of the US Senate’s failure to agree a $14bn
emergency loan for General Motors and Chrysler
Markets tumble as auto bail-out collapses
German MPs say bank bail-out is failing
Dramatic appeal adds to pressure on Merkel
FT index adds to house price gloom
House prices in England and Wales fell by 1.7 per cent in November,
as measured by the FT House Price Index, registering the ninth
consecutive monthly drop and wiping out all housing equity earned for
the past two years -
‘Energy crunch’ looming, warn MPs
The Commons’ business and enterprise committee is urging the
government to step in to ensure energy companies invest in new power
stations and gas storage facilities
Telegraph
y,
HBOS takes £8bn write-down as economy slows
HBOS reveals its bad debts will top £8bn this year, wiping out more
than half of the £15.5bn of emergency capital raised so far.
HBOS's horrific numbers mean more taxpayer pain
Today's numbers from our biggest mortgage lender lay bare the state
of the econom
Wall Street skids after collapse of US car bail-out
The FTSE 100 opened sharply down after the US senate rejected a car
industry bail-out and HBOS revealed a jump in writedowns.
FTSE drops on US car bail-out gloom and HBOS
Crashed auto rescue will cause an economic pile-up
Bankruptcy beckons for the Big Three. But even if General Motors,
Ford and Chrysler find a last-minute solution to avoiding Chapter 11,
the US Senate's refusal to sanction $14bn of auto aid will cause an
economic pile-up.
[There's so much rumour and unconfirmed statements with - in most
cases - the small print not visible to the naked eye that I think
I'll stop there.]
XXXXXXXXXXX CS
===================
TELEGRAPH 12.12.08
Sterling's fate hangs on Gordon Brown's ability to pay it all back
Sterling has had a miserable month.
By Edward Hadas, breakingviews.com
The UK currency has fallen 12pc on the Bank of England's trade-
weighted index. Meanwhile, the spread on UK government credit default
swaps has almost doubled - to 110 basis points.
Peer Steinbrück has a plausible explanation for why. The German
finance minister told Newsweek magazine that there had been a
"breathtaking" shift "from decades of supply-side politics all the
way to a crass Keynesianism".
That Britain has willingly rediscovered Keynesianism is undeniable.
The UK has abandoned the fiscal prudence it once championed -
temporarily, according to Gordon Brown, the prime minister - in
favour of a budget deficit of 8pc of GDP. John Maynard Keynes did not
love deficits himself, but the economist's name is closely associated
with enthusiastic government borrowing.
But whether the new approach is "crass" is open to debate.
Steinbrück's accusation has some force to it. There is something
simplistic about the government's claim that an economy which is
overleveraged, shrinking and runs a big trade deficit can borrow its
way out of trouble.
The pound's troubles haven't yet hurt the government where it hurts
most, in the cost of borrowing. The 10-year government bond yields a
modest 3.6pc. Gilts, along with most government debt, have benefitted
from investors' panic.
But a tumbling currency brings many sorts of pain: higher prices for
imported goods that cannot easily be made at home, costly losses at
any banks which have net foreign currency liabilities and foreboding
over the ability to finance the burgeoning deficit.
Like any heavily indebted family or company with a negative cash
flow, the UK relies on the continuing willingness of its creditors to
stay supportive. If they go away, the pound could drop to
ridiculously low levels. A dirt-cheap currency would eventually
stabilise, as exporters seized opportunities. But the transition
would be agony.
No government wants to go through that. To keep foreign creditors
sweet, Brown and Alistair Darling, the Chancellor of the Exchequer,
need to explain clearly how they will cut the country's new debts. If
they can't come up with a plan, they should do something crass but
constructive: borrow less.
===================
ECONOMIC HEADLINES 12.12.08
Ananova
Santander to axe 1,900 UK jobs
Spanish banking giant Santander is to axe 1,900 jobs in its three UK
businesses next year under efficiency moves.
The job cuts will hit staff at Abbey, Alliance & Leicester and
Bradford & Bingley, and compulsory redundancies have not been ruled out.
Head offices in London, Leicester and Bradford will be affected by
the cuts, which are equivalent to 8% of Santander's UK workforce.
Unions reacted with dismay to the news, especially as it was
announced so close to Christmas.
The Times
HBOS investors vote for Lloyds TSB merger
Shareholders back rescue deal but banks' stocks continue to dive
after HBOS reveals £8bn in bad debts and charges
Post Office workers plan pre-Christmas strike
Festive deliveries face delays after 2,000 staff pledge to walk out
on December 19 over planned office closures
John Lewis reverses double-digit sales fall
High street bellwether reports trade down 6.6% but says VAT cut
helped eased previous sharp declines in sales
BAA airport passenger numbers tumble 8.9%
Heathrow and Stansted owner serviced one million fewer flyers due to
strikes, demonstrations and the downturn
• BAA faces fines after airlines complain
• Heathrow T5 disaster a lesson for Dubai T3
Employers say pay cuts can’t be ruled out
Unions gave warning that pay cuts could sweep across industry as
companies attempt to reduce costs while retaining staff
Financial Times
Bush considers rescue for carmakers
The Bush administration said it was considering rescuing Detroit’s
troubled car industry with funds intended to prop up the financial
system in the wake of the US Senate’s failure to agree a $14bn
emergency loan for General Motors and Chrysler
Markets tumble as auto bail-out collapses
German MPs say bank bail-out is failing
Dramatic appeal adds to pressure on Merkel
FT index adds to house price gloom
House prices in England and Wales fell by 1.7 per cent in November,
as measured by the FT House Price Index, registering the ninth
consecutive monthly drop and wiping out all housing equity earned for
the past two years -
‘Energy crunch’ looming, warn MPs
The Commons’ business and enterprise committee is urging the
government to step in to ensure energy companies invest in new power
stations and gas storage facilities
Telegraph
y,
HBOS takes £8bn write-down as economy slows
HBOS reveals its bad debts will top £8bn this year, wiping out more
than half of the £15.5bn of emergency capital raised so far.
HBOS's horrific numbers mean more taxpayer pain
Today's numbers from our biggest mortgage lender lay bare the state
of the econom
Wall Street skids after collapse of US car bail-out
The FTSE 100 opened sharply down after the US senate rejected a car
industry bail-out and HBOS revealed a jump in writedowns.
FTSE drops on US car bail-out gloom and HBOS
Crashed auto rescue will cause an economic pile-up
Bankruptcy beckons for the Big Three. But even if General Motors,
Ford and Chrysler find a last-minute solution to avoiding Chapter 11,
the US Senate's refusal to sanction $14bn of auto aid will cause an
economic pile-up.
Posts
