...the main headlines..........
Markets rise as optimism takes hold
Stocks rose around the world as investors began to believe in government measures to bolster their economies. In New York yesterday the Standard & Poor’s 500 Index erased steep intra-day losses to close 0.2 per cent higher and in Asia the gains were replicated, with the MSCI Asia Pacific Index advancing one per cent. Australia & New Zealand Banking Group, Australia’s third-biggest, gained nine per cent after the country’s $28bn stimulus package was passed. In London the FTSE 100 Index opened 1.5 per cent higher this morning.
Can Barack Obama really steer the US off the rocks? 
Bail-out is the biggest bank heist ever
BT shares hit record low
After BT Group announced an 81 per cent fall in overall profits in the third quarter, its shares fell to an all-time low of 97p, reported the Daily Telegraph. The telecoms giant’s problems centre on its Global Service Division, which in large part contributed to the decline in earnings. The group is planning major restructuring in its battle to turn around the arm and chief executive Ian Livingstone warned of “hundreds of million of pounds” of write-downs to come, as a result of management contract reviews.
BT embraces wi-fi outlaws
Germany’s economy takes a dive
The economy in Germany contracted for the third quarter in a row as the global financial crisis “sapped export demand”, reported Bloomberg.com. The 2.1 per cent drop in gross domestic product was the biggest for 22 years, since the first quarter of 1987. Companies in Germany are “scaling back output” and cutting jobs as growth slows around the world. Europe’s biggest economy is expected to shrink 2.5 per cent this year, in its worst performance since the Second World War, according to the International Monetary Fund.
Only the EU divides us from the Germans
Government jobs pledge exposed
The UK economy is to “lose £1.35bn” after the government awarded one of the largest-ever train construction contracts to an overseas consortium, reported the Independent. Agility Trains, a group led by Japanese manufacturer Hitachi, will make the first 10 trains, or 70 vehicles, in Japan and large parts of the remaining 1,330 trains will also be constructed in Japan. Transport Secretary Geoff Hoon said initially that over 12,500 jobs would be created, but later Transport minister Lord Adonis confirmed only 2,500 of those would be “new jobs”.
They come over here, take our jobs
The Big Picture: Letting off steam
Obama working on housing plan
The Obama administration is working on a “landmark plan” to help US mortgage-holders, through subsidised monthly payments, reported theDaily Telegraph. The plan is to “sit at the heart” of the government’s housing revival programme, seen as crucial to help “kick-start a recovery” in the country’s housing market. In it, homeowners worried about missing mortgage payments could receive a subsidy before their problems started, a “significant change of tack” from current measures which offer help only afterwards.
Can Barack Obama really steer the US off the rocks?
SFO investigates AIG
The Serious Fraud Office has begun a “preliminary enquiry” into American insurance company AIG’s London operations, reported the Guardian. The office was founded by Joseph Cassano, the executive who led the group’s “ill-fated” move into complex debt derivatives. The insurer is now effectively 80 per cent-owned by the US government after it was forced to seek $85bn in emergency funds from the Federal Reserve. The SFO is working in conjunction with the US authorities and the UK Financial Services Authority.
AIG rescue and the Goldman Sachs connection
...in brief..................
New era for London Stock Exchange and Lara Croft goes East
The London Stock Exchange signalled a “new era” in its 208-year history by choosing Frenchman Xavier Rolet as its new chief executive, said the Financial Times. The appointment of ex-Goldman Sachs executive Rolet “draws a line” under the eight-year tenure of Dame Clara Furse…………
Rio Tinto’s deal with Chinalco, as it prepares to sell a stake that would see the Chinese company owning 18 per cent of the miner, is meeting opposition, reported the Daily Telegraph. Some shareholders believe the price it has secured is “too low” and regulators are likely to have their say too…………
“Thousands of staff” at troubled footwear chains Barratts and PriceLess Shoes are facing redundancy after its rescue plan was rejected, reported the Guardian. Deloitte administrators announced this morning that the companies’ creditors had refused its company voluntary arrangement…………
City foreign exchange trader Terry Freeman has been arrested as part of the investigation into a £40m investment fraud case, reported the Times. It is believed to be “Britain’s first major credit-crunch case” and centres on claims that his company, GFX, was running a Ponzi fund…………
Stanford Group, the Houston investment company led by billionaire R. Allen Stanford, is “under investigation” by US regulators, reportedBloomberg.com. The authorities visited six group offices last month, looking into the “consistent, above-average returns” offered on certificates of deposit…………
Even Lara Croft “couldn’t fight off the credit crunch” it seems, as her creator, troubled gaming company Eidos, announced that it had agreed to a bid from a Japanese buyer, said the Independent. Square Enix, the company behind the Final Fantasy series, has offered £84m for Eidos…………
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