Markets mixed on stimulus worries
Asian stocks fell again on concerns that planned US stimulus measures will not be enough to revive its economy. The MSCI Asia Pacific Index fell 1.7 per cent, with Japan’s Nikkei 225 Stock Average slumping three per cent on its re-opening after yesterday’s holiday. Yesterday the Standard & Poor’s 500 Index gained 0.8 per cent as politicians continued to debate the $789 spending plan. S&P futures fell 0.2 per cent after the close and in London the FTSE 100 opened 1.3 per cent lower, after a half a per cent gain yesterday.
The Obama White House: Geithner unimpressive at stimulus launch 
Crosby resigns amid political storm
Sir James Crosby resigned from his position as deputy chairman of the Financial Services Authority as a “political storm erupted”, reported the Financial Times. It emerged that concerns about the risk management of HBOS, of which Crosby was chief executive, were raised by the FSA as long ago as 2002. Crosby has been the subject of allegations that he “ignored warnings” over the bank’s rapid growth, subsequently bailed out by the taxpayer. The conservative party questioned Gordon Brown’s judgement over the appointment of Crosby to the regulator.
The Mole: after Black Wednesday comes Incredibly Awkward Thursday
UK unemployment at 12-year high
Unemployment in the UK rose by 146,000 to 1.97m in the fourth quarter, the “highest level” since August 1997, reported the Times. The figure was in fact lower than analysts had expected, predicting it would reach two million between October and December. However the number of redundancies in the period was 259,000, the highest figure since records began. Most economists think the jobless numbers will continue to worsen in the coming months, with some expecting unemployment to reach 3.5m during 2010.
Wanted: domestic servants for the political classes
Agreement reached on US package
Leaders of Congress reached an agreement on a compromise stimulus package yesterday, reported the Financial Times. Treasury Secretary Tim Geithner was attempting to address criticism that the plan was lacking in specific targets and the eventual package is likely to be “smaller” than the versions passed by the House and the Senate. It is expected to be passed into law by President Obama by the target date of Monday. After considerable and “intense” debate the White House has put pressure on the parties to reach a deal after it “trimmed” spending to below $800bn.
The Obama White House: Senate passes bill - just
BoE set to print money
The Bank of England is set to launch a policy of printing money, also known as “quantitative easing”, to try to lift the economy out of recession, said the Independent. With the BoE expecting growth to hit a low of minus four per cent this summer, a “savage downgrade” from its previous forecasts as recently as last November, the door has been opened to the measures. However there is “doubt” in the City as to whether the approach will succeed, with previous attempts at this kind of easing in Japan seen as “ineffective”.
The recession is worse than we are being told
Australia rejects stimulus package
The Australian Senate rejected an A$42bn stimulus package aimed at preventing the country from sliding into recession, reported Bloomberg.com. The government failed to convince the upper house, in spite of its efforts to win support by reducing “one-off grants” to income earners and giving money to projects put forward by the Australia Greens party. The government wanted to spend A$28.8bn on infrastructure projects and distribute A$12.7bn to families and those on a low-income, which would have “sent the budget into deficit”.
In pictures: Australia in flames
...in brief..................
Chinalco takes $19.5bn stake in Rio Tinto and Muzak goes to wall
Aluminium Corp of China agreed to invest $19.5bn in Rio Tinto, in the country’s “largest overseas acquisition”, said Bloomberg.com. Chinalco will buy convertible bonds in the company and use the rest of the funds to acquire stakes in projects. It would own 18 per cent of Rio if it converted the bonds…………
Bookmaker William Hill is understood to be “considering” raising between £200m and £500m of new funds as part of a £1.2bn refinancing, said the Times. The group is thought to be looking at a rights issue to bolster its balance sheet, although it is not “especially stretched”…………
All bets are on with recession gambling
The founder of London estate agency Foxtons, John Hunt, has made a “multi-million pound profit” by betting on a fall in the shares of developer Hammerson, reported the Daily Telegraph. Hunt, who sold his company for $370m in 2007, sold 1.3m Hammerson shares short…………
Employment minister Tony McNulty – who earns a salary of £104,050 – has admitted that he “could not survive” on the basic unemployment benefit, reported the Independent. His comments were seized upon by the TUC general secretary Brendan Barber, who said it showed an increase was necessary…………
The Madoff saga rumbles on with revelations that Mrs Madoff withdrew $15.5m from a Massachuetts brokerage that provided her husband with clients, reported the Financial Times. She is said to have taken out the funds “in the three weeks before his December 11th arrest”…………
People: Ruth Madoff withdrew $10m before arrest
Muzak, the company that gave the world “lift music”, has had to file for bankruptcy protection in the US, reported the Guardian. The company – which rocker Ted Nugent once offered $10m to close down – has debts of $500m after subscription cancellations…………
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