US extends BoA cash injection
The American government yesterday agreed to extend a further $20bn of liquidity to Bank of America as it absorbs broker Merrill Lynch, reported Bloomberg.com. It also agreed to guarantee $118bn of its assets to “prevent the financial crisis from deepening”. The emergency measures show that the $350bn financial rescue fund has so far "failed to quell concerns" over the survival of some of the world’s largest banks. Shares in both Bank of America and Citigroup "tumbled" during yesterday’s trading over growing credit worries.
What green shoots? Global economy remains on life support 
Bonfire of the Vanities: the 2008 edition
Americans pile into gold as national debt and inflation soar
Markets recover on bank rescue
In New York stocks recovered during a volatile trading session, on optimism over further bank bail-outs. The Standard & Poor's 500 Index finished the day 0.1 per cent higher and the MSCI Asia Pacific Index pushed further ahead this morning, with a gain of 2.2 per cent. Tokyo's Nikkei 225 Average rose 2.6 per cent, with companies which rely on the US for their income gaining most. Seiko-Epson advanced 9.9 per cent and Honda Motor rose eight per cent. In London the FTSE 100 index started the day with a 1.7 per cent gain.
How hedge funders were driven to bankruptcy
Anglo Irish Bank nationalised
The Irish government nationalised Anglo Irish Bank last night after its share price collapsed and it saw “large scale deposit withdrawals”, reported the Financial Times. The bank is the Irish Republic’s third biggest but it has been struggling, and the move by Brian Lenihan, the finance minister, “ends all attempts to keep the bank in private ownership”. There were fears that the lender could be declared insolvent, which would have meant the government being required to settle “close to €100bn of liabilities”, including €50bn of customer deposits.
New UK bank bail-out planned
A new package of "radical measures" to ensure British banks increase their lending is "due to be hammered out" at the weekend, reported the Times. Ministers are working on proposals designed to inject fresh capital into the banking industry, relaxing balance-sheet requirements and guaranteeing "toxic" assets on the banks’ balance sheets. The move has been accelerated by falling bank share prices and warnings that otherwise the banks will be forced to cut consumer lending by a "cataclysmic" £400bn over the next few years.
What green shoots? The global economy remains on life support
Bail-out is the biggest bank heist ever
ECB cuts rates to lowest in 3 years
Interest rates in the eurozone fell by half a percentage point from 2.5 per cent to two per cent yesterday, "the lowest level in more than three years", said the Financial Times. The European Central Bank said the reason behind the cut was deepening recession in Europe, and at the same time it warned that borrowing costs "could fall further". ECB President Jean-Claude Trichet also did not rule out the use of other methods, such as government bond purchases, to stimulate growth. March appears to be the next likely date for a cut.
Philip Delves Broughton: bankruptcy beckons for not-so-great Britain
Lebedev to build newspaper empire
Former KGB spy Alexander Lebedev, in talks to buy the Evening Standard, is "seeking to build a newspaper empire in Western Europe", reported the Daily Telegraph. A spokesman for Lebedev said he wanted to buy other "influential" newspapers, including titles in the UK. He is thought to have already held talks with the Independent, with regard to making an offer for the group. The Daily Mail & General Trust yesterday said that talks about the sale of the Standard are "ongoing" but "may or may not lead to an offer". Lebedev owns 49 per cent of Russian newspaper Novaya Gazeta.
People: Lebedev to buy the London Evening Standard
...in brief..................
Equitable savers offered apology and Russia devalues ruble again
One million savers with Equitable Life were issued with an apology yesterday, but "no promise of early compensation", reported the Times. The Treasury finally released its response to the insurer's near-collapse, including plans to means-test payments, which were "condemned" by MPs…………
Intel warned of "rapidly deteriorating margins", with its production lines running at reduced capacity levels, said the Financial Times. It started off the earnings season for technology companies with a 90 per cent fall in profits and an "unprecedented" drop in sales…………
The recession is worse than we are being told
Fashion-chain Primark is "considering buying" two of London's prime sites from failed entertainment group Zavvi after a buoyant Christmas, said the Independent. The group is understood to be looking at Zavvi's Piccadilly Circus and Oxford Street sites…………
Housebuilder Bellway is expected to come in for criticism by shareholders after the company ignored performance targets to pay out "huge" bonuses to directors, reported the Guardian. The Association of British Insurers recently issued its strongest "red-top" warning over the company's actions…………
Mosaic, the fashion retail group which owns the Oasis brand, has hired boutique investment bank Hawkpoint to find a buyer for its shoe chain, said the Daily Telegraph. Mosaic is backed by troubled Icelandic investment group Baugur and is thought likely to sell brands including Karen Millen and Coast…………
Russia’s central bank devalued the ruble "for the fifth time in six trading days", allowing it to fall against the dollar and the euro, said Bloomberg.com. The bank wouldn't confirm the currency’s new trading range or likelihood of further devaluations in the future
Posts
