Britannia Radio

The details of the Equitable Life scandal of government 
mismanagement  pay-out a`re emerging today.  Long overdue , the 
government delayed as long as possible while subscribers died.  The 
outcome is complicated and needs careful examination - especially of 
the small print where Gordon Brown usually hides the sting in the 
tail of every policy.

Equally the small busainess loan scheme has met with a sceptical 
reception with the Guardian writing ""David Cameron is preparing to 
denounce Labour's latest move, the credit guarantee scheme due to be 
announced by Lord Mandelson, the business secretary, this morning, as 
a pale and over-complex imitation of the £50bn scheme he has 
championed since November."    Watch this for the small print too.

Considered reports on these will follow later

Overseas  China is causing concern for its effects on the global 
economy.

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TELEGRAPH   14.1.08
World Economic Forum highlights Chinese slump as biggest risk to 
global economy
A major slump in the Chinese economy is now one of the biggest risks 
facing the world this year, according to an authoritative report.

By Edmund Conway, Economics Editor

The spectrum of risks in 2009 has broadened and deepened in the wake 
of the biggest financial crisis since the 1930s, the World Economic 
Forum's closely-watched assessment warned.

Despite sharp falls in equity and property prices over the past 12 
months, there remains a large and threatening probability of a 
further collapse in asset prices, while the UK and a number of other 
countries could face a fiscal crisis as governments spend 
unprecedented amounts on their economic response.

However, among the most pressing risks highlighted by the Forum's 
Global Risks report is the increasing likelihood that China suffers a 
hard landing this year.

The country has been the powerhouse for worldwide economic growth in 
recent years, reliably turning in double-digit gross domestic product 
growth, but 2009 could be very different, according to one of the 
report's authors, Daniel Hoffman, chief economist at Zurich Financial 
Services.

"We would define a hard landing for China as being below 6pc, and we 
all know that while China is trying to do everything it can to 
prevent that from happening it looks more and more likely," he said.  
"The biggest implications are domestically, for China's population, 
but there are serious global ramifications. China has been a major 
importer of goods and as it implodes this will have a serious impact 
on the wider economy."

Economists' hopes that China and the rest of the emerging economy 
would help support the global economy through the recession have been 
dashed in recent weeks by a flurry of data suggesting these countries 
are fast being hit by the fall in demand for their goods. Some now 
suspect that China could even see its GDP shrink this year, as it is 
hit extremely hard by the global slump in demand.

The report also contained a warning directed closer to home. It said 
another major risk was that rich countries including the US, the UK, 
Spain, Australia and others build up excessively large budget 
deficits as they attempt to spend their way out of recession. The 
extra amount of debt could in turn cause fiscal crises, in which 
governments find it hard to raise money from overseas, causing a 
further slide in their currencies and undermining their efforts to 
kickstart their economies.

Likewise, although most attention is now focused on economic measures 
and rising unemployment, asset prices could fall sharply again this 
year as banks are forced to write down more assets, causing a vicious 
spiral of asset selling.

The report, published together with Citigroup, Marsh & McLennan, 
Swiss Re, the Wharton School Risk Center and Zurich Financial 
Services, comes ahead of the Forum's annual meeting in Davos. With 
many heads of state including UK Prime Minister Gordon Brown, German 
Chancellor Angela Merkel and Russian Prime Minister Vladimir Putin 
set to appear, as well as business leaders and financial regulators, 
many hope the meeting will bring a new international accord on 
mitigating the economic crisis.

Speaking at the launch of the risks report, John Drzik, chief 
executive of Oliver Wyman, said: "There are many lessons we can all 
learn from the present financial crisis. High among them is the need 
to embed better risk governance. As the report makes clear, there are 
several measures both government and corporate leaders can take to 
ensure they ask the right questions, understand their risk exposures 
more fully and improve ways of mitigating them."
==========================
ECONOMIC SHORTS    14.1.09
TELEGRAPH.
=Treasury mulls 'bad bank'
A 'bad bank' may be created to house toxic assets.
=Banks need lending targets
Former MPC member says targets needed to unlock crisis.

FINANCIAL TIMES
=Deutsche Bank expects full-year loss
Lender blames 'exceptional conditions'
=Citigroup moves towards break-up
Plan to separate higher-risk businesses

TIMES
=Jaguar Land Rover cuts managers in 450 jobs cull
Struggling carmaker will lay-off 300 senior staff and defer pay rises 
as Britain's jobless figure continues to soar
=Councils line-up thousands of job losses
Survey of forty of the 442 local authorities by The Times finds they 
are planning a total of 7,000 redundancies between them
=Barclays to wield axe with 2,100 staff to go
The lender follows Merrill Lynch and Bank of America by announcing 
steep job reductions across its business

EU OBSERVER
  Anti-government riots hit Latvia -
A 10,000-strong rally in Riga protesting the Latvian government's 
response
to the economic crisis descended into rioting as hundreds of 
demonstrators
clashed with police and attempted to storm parliament.   [Follows  
earl,ier Greek riots -cs]