Aloha Airlines went into Chapter 11 last week. That was not enough. Now the carrier says it is ending passenger service after 60 years of operation. Aloha is small and flies in only one market, but the reasons for its demise still had to do with falling ticket prices forced down by competition and risking fuel prices. It is no coincidence that carriers like AMR (NYSE:AMR), Delta (NYSE:DAL), and Northwest (NWA) are near their 52-week lows. Someone, somewhere thinks that one or more of these airlines won't make it, at least in its current incarnation. And, that would probably not...
LONDON (MarketWatch) -- Operations at British Airways' new Terminal 5 at London's Heathrow airport are gradually improving, but the meltdown surrounding its launch last week has led the airline to consider delaying the move of its long-haul business.
LONDON (MarketWatch) -- Friends Provident said Monday that it's rejected a takeover bid valued at 3.5 billion pounds ($7 billion) made by J.C. Flowers, refusing to open discussions with the private-equity group.
Asia-Pacific markets started the week on a down note, following Wall Street's Friday decline. The MSCI Asia Pacific index had dropped 1.7 per cent to 139.33 by late afternoon in Tokyo, and looked on on... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 10:13 am
Most large corporations amplify the distrust that the common man has for them by making misstatements from time to time. It is Wal-Mart's (WMT) turn in the gauntlet of public opinion. The world's largest retailer seems to be making claims that shoppers who hit its stores will save $2,500 a year. It may have taken a room full of math professors to come to that number, and Wal-Mart thinks it is right. "The figure represents the company’s calculation of its overall impact on an American household, not the average savings for Wal-Mart shoppers, and this has led an influential watchdog...
U.S. stock futures on Monday pointed to a downbeat finish to a downbeat first quarter, with attention on Wall Street turning to President Bush’s new plan to regulate financial markets.
A new piece of research shows that Apple (AAPL) has the largest impact of any global brand. Reuters writes that "The poll by online magazine brandchannel.com asked its readers to identify the brands with the greatest impact on their lives, and say how they affected readers' behaviour and their view of the world." Microsoft (NASDAQ:MSFT) turned up as the brand most respondents would like to see "revamped". The poll covered 2,000 people in 107 countries. The data shows how fleeting the force of well-regarded fame can be. In 2000, Apple was a company with a niche PC, the Mac. Much...
Teva Pharmaceutical Industries Ltd., seeking to expand its operations in the fast-growing Spanish market, agrees to acquire Bentley Pharmaceuticals Inc. for $15.02 a share, or $360 million.
Shares in British Airways fell 5pc in early trading after Goldman Sachs put a 'sell' rating on the shares and chaos at Heathrow's Terminal 5 was expected for a fifth day. Source: Telegraph Business | 31 Mar 2008 | 9:50 am
Shares in British Airways fell 5pc in early trading after Goldman Sachs put a 'sell' rating on the shares and chaos at Heathrow's Terminal 5 was expected for a fifth day. Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 9:50 am
Melco International Development Ltd., the Hong Kong-listed company controlled by Lawrence Ho, the son of Macau gambling tycoon Stanley Ho, reports 2007 net profit fell 5% from a year earlier owing to distortions in last year’s figures created by a big one-off gain.
YouGov, the online market research company, reported a 29 per cent increase in
half year profits, fuelled by 43 per cent organic growth, and a series of
acquisitions in the United States, Germany and Scandinavia. Source: Latest Business News from Times Online | 31 Mar 2008 | 9:41 am
Yahoo! (YHOO) has started another business which Microsoft (MSFT) can shutter when it buys the big web portal.. Yang & Company are starting a site aimed at women ages 25 to 54. According to The Wall Street Journal "it a key demographic underserved by current Yahoo properties." That may be because it is overserved elsewhere and women have only so much time to spend on the internet each day, save agoraphobics. Large womens magazines which include properties with loyal following like Vogue, Good Housekeeping, Women's Day, and Allure have had websites for years. NBC owns large women's website iVillage. What...
Yahoo! (YHOO) has started another business which Microsoft (MSFT) can shutter when it buys the big web portal.. Yang & Company are starting a site aimed at women ages 25 to 54. According to The Wall Street Journal "it a key demographic underserved by current Yahoo properties." That may be because it is overserved elsewhere and women have only so much time to spend on the internet each day, save agoraphobics. Large womens magazines which include properties with loyal following like Vogue, Good Housekeeping, Women's Day, and Allure have had websites for years. NBC owns large women's website iVillage. What...
NEW YORK (Reuters) - Citigroup Inc will set up an independent credit card unit, Bloomberg reported on Monday, citing two sources with direct knowledge of the plan.
A mystery wrapped in an enigma. Money is cashing out of equity funds at an alarming rate. Much of that goes into money markets funds. If the stock market ever goes up again, that liquid capital could come back and fuel a rally. But when? And, in the meantime, does investment capital continue to pull out of stocks? According to the FT, a study from Emerging Portfolio Fund Research shows that $100 billion was taken out of equity funds in the first quarter. Most of that came out of funds with stock investments in the US and Europe. While the...
PARIS (Reuters) - France's Pernod Ricard won a hotly contested auction on Monday to buy the maker of Sweden's Absolut vodka for 5.63 billion euro ($8.87 billion), beating favorite Jim Beam bourbon-maker Fortune Brands.
Britain’s Tesco is halting for three months the expansion of its U.S. operation Fresh & Easy, the food-retailing unit meant to carve out a niche between convenience stores and the massive warehouse-style retailers.
FRANKFURT (Reuters) - Stock index futures fell before the start of Wall Street trading on Monday, with the focus on economic data for clues about the duration and earnings impact of a recession that many analysts believe is now under way.
Asian markets dropped Monday, with Japanese stocks dragged down by financials such as Mizuho Financial Group on worries about global credit markets, while exporters such as Honda Motor Co. fell in the wake of a drop on Wall Street and a stronger yen.
The Federal Reserve would have the power to regulate virtually the entire banking and securities industry under proposals to be unveiled Monday by Treasury Secretary Henry Paulson, according to a summary of the proposals provided to CNN late Friday.
Sweden’s Handelsbanken said Monday that it will shut down its fixed income and foreign exchange proprietary trading desks in New York, as even a lender that’s been relatively unscathed from the U.S. subprime lending downturn said its operations were becoming too risky.
The French drinks group has won the auction for Vin & Sprit, the Swedish owner of Absolut vodka, with a bid totalling €5.63bn including debt Source: FT.com - US homepage | 31 Mar 2008 | 9:00 am
Pernod Ricard, the French drinks company, on Monday emerged as the winner of the auction to buy Sweden's Vin & Sprit, the maker of Absolut vodka, with a bid totalling 5.63bn ($8.9bn).Pernod, which... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 9:00 am
Paragon Group, the specialist mortgage lender which narrowly averted collapse
last month with a £287 million rescue rights issue, warned shareholders
today that a fall in the market value of its hedging instruments would hit
profits this half. Source: Latest Business News from Times Online | 31 Mar 2008 | 8:50 am
European equities were lower on Monday, with Switzerland's UBS trailing the banking sector on fears it may need to raise more cash help cover its exposure to liquidity problems.In early trade, the FTSE... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 8:35 am
What in the world is going on here? Why is Washington spending billions to bail out Wall Street titans while leaving struggling homeowners to fend for themselves? Why are the Federal Reserve and the Treasury acting as if they're afraid the world may come to an end, while the stock market seems much less concerned? And finally, what does all this mean to those of us who aren't financial professionals?
Cairn Energy said on Monday that production from its projects in Rajasthan might exceed current forecasts as the energy company returned to profit following last year's public offering of its Indian operations... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 8:19 am
Solomon Lew, the Australian billionaire and former chairman of retailer Coles, has made an unsolicited takeover bid for Just Group valuing the fashion retailer at close to A$900m.The cash and shares offer... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 8:19 am
Minoru Mori, Japans most prolific developer, will finish one of the worlds tallest buildings in May, and plans to build or help build 10 more huge complexes in downtown Tokyo. Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 8:18 am
Denying Georgia and Ukraine the right to move towards Nato membership would amount to appeasement of Russia, according to Mikheil Saakashvili, Georgia's president Source: FT.com - US homepage | 31 Mar 2008 | 8:18 am
TOKYO (Reuters) - U.S. investment firm Lone Star said on Monday it has no unpaid tax liabilities in Japan, denying a claim by the national tax agency that it owes money.
Pernod Ricard this morning won the four-way auction for Sweden's Vin &
Sprit with a cash bid of €5.6 billion (£4.4 billion) for the state-owned
company that owns Absolut Vodka, the second most popular vodka in the United
States. Source: Latest Business News from Times Online | 31 Mar 2008 | 8:12 am
Pernod Ricard has bought the world's number one vodka brand, Absolut, as part of the €5.6bn (£4.5bn) acquisition of its owner Vin & Spirit. Source: Telegraph Business | 31 Mar 2008 | 8:10 am
Pernod Ricard has bought the world's number one vodka brand, Absolut, as part of the 5.6bn (4.5bn) acquisition of its owner Vin & Spirit. Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 8:10 am
Hawaiian carrier Aloha Airlines says it is to stop operating, blaming competition and high fuel prices. Source: BBC News | Business | World Edition | 31 Mar 2008 | 8:08 am
Tonight marks the end of the year's first quarter. It is a timely moment to reflect on the bear market of 2007-08. Optimists hope we reached the bottom of the bear market on Tuesday morning January 22. Source: Telegraph Business | 31 Mar 2008 | 8:00 am
Tonight marks the end of the year's first quarter. It is a timely moment to reflect on the bear market of 2007-08. Optimists hope we reached the bottom of the bear market on Tuesday morning January 22... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 8:00 am
Northern Rock's former chief executive, Adam Applegarth, will be entitled to receive monthly payments of about £63,330 over the next 12 months as part of a severance package. Source: Telegraph Business | 31 Mar 2008 | 8:00 am
The two top executives at Countrywide Financial Corp. -- the nation's largest mortgage lender -- are slated to receive a combined $19 million in payouts as part of the company's pending takeover by Bank of America, according to regulatory filing this week.
Sometimes the world is a bit too much. From looming recessions to crashing investment banks, from the escalating war in Iraq to the deflating housing market - why not take a break and turn to a magazine... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 Mar 2008 | 7:54 am
According to Reuters, the Treasury Department will announce a proposed major overhaul of the US financial regulatory system. Reuters writes that Yahoo! (YHOO) introduced Shine, a site for women. Reuters writes that the Apple (AAPL) brand is the one which has the most impact on world consumers according to a new survey. The Wall Street Journal writes that IAC/Interactive (IACI) faces a number of market challenges now that it has won a case giving CEO Barry Diller the right to break-up the company. The Wall Street Journal writes that Lehman (LEH) lost $350 million in a fraud and will sue...
French alcohol giant Pernod Ricard is to buy Vin & Sprit, maker of Absolut vodka, from the Swedish government. Source: BBC News | Business | World Edition | 31 Mar 2008 | 7:46 am
We canvassed the country to find towns with the best mix of business advantages and lifestyle appeal. Check out our 100 top picks and find the perfect place to build your dream.
The "open skies" deal between the US and Europe comes into effect, aiming to open up trans-Altantic air travel. Source: BBC News | Business | World Edition | 31 Mar 2008 | 7:38 am
UK insurance group Friends Provident turns down a £3.5bn takeover offer from US investment firm JC Flowers. Source: BBC News | Business | World Edition | 31 Mar 2008 | 7:37 am
Up to 11,000 jobs could be cut from the UK's financial services industry over
the three months, according to forecasts by the CBI. Source: Latest Business News from Times Online | 31 Mar 2008 | 7:37 am
NEW YORK (Reuters) - Aloha Airgroup Inc, parent of Aloha Airlines Inc, is shutting down on Monday, days after filing for bankruptcy protection, the Wall Street Journal reported in its online edition.
Shares in Friends Provident spiked higher this morning after the insurer
confirmed that it had received and rejected a fresh £3.5 billion cash bid
proposal from the American private equity group J C Flowers. Source: Latest Business News from Times Online | 31 Mar 2008 | 7:27 am
Markets in Asia were down. The Nikkei fell 2.3% to 12,536. Hitachi was down 5.3% to 591. KDDI was down 4.7% to 609000. The Hang Seng fell 1.9% to 22,840. China Life (LFC) was down 4.1% to 26.8. China Unicom (CHU) was down 3.7% to 16.3. The Shanghai Composite sold off 3% to 3,473. Data from Reuters. Douglas A. McIntyre
Friends Provident has rejected a revised takeover proposal from Christopher Flowers, the US financier, which values the life assurer at about £3.5bn. Source: Telegraph Business | 31 Mar 2008 | 7:15 am
WASHINGTON (Reuters) - The U.S. housing secretary will resign Monday morning under pressure after accusations of improper allocation of federal contracts, the Wall Street Journal reported in its Monday edition.
Northern Rock will this morning reveal it is giving disgraced former chief
executive Adam Applegarth a £760,000 pay-off. Source: Latest Business News from Times Online | 31 Mar 2008 | 7:00 am
Coverage that goes beyond property and liability risk might come in handy.
Buying insurance is crucial for a small company, but it's often overlooked or given short shrift. In the process, owners can leave their businesses vulnerable to huge payouts for something as mundane as a clerical error or as cataclysmic as flooding.
Without laptops, that is. Silicon Valley is unplugging -- at least in conference rooms.
As the capital of information technology, Silicon Valley may have more gadgets per capita than any other place on the planet. Yet, even here, "always on" can be a real turnoff.
Negative data on Vytorin and Zetia, long in coming, may change the way many heart disease patients are treated.
Two of the world's bestselling drugs to lower cholesterol may have no benefit, researchers reported Sunday in a development that could significantly alter how patients are treated for heart disease. Based on the news, a top medical journal encouraged doctors to stop routinely prescribing them.
Moqtada al-Sadr called on his followers to stop fighting Iraqi government forces in Basra as he attempted to avert a widening of internal Shia conflict Source: FT.com - US homepage | 31 Mar 2008 | 6:54 am
Reuters - France's Pernod Ricard said on
Monday it had won an auction to buy Sweden's Vin & Spirit AB
, the maker of Absolut vodka, in a deal worth 5.63
billion euros ($8.87 billion) including debt.
WASHINGTON (Reuters) - Treasury Secretary Henry Paulson will reveal in full sweeping new plans on Monday for streamlining a hodgepodge of regulation faulted for permitting the U.S. mortgage crisis to balloon into a full-blown economic threat.
Reuters - Wall Street analysts have cut their
first-quarter earnings forecasts for U.S. companies and are now
projecting a sharper decline, figures from Reuters Estimates
showed on Monday.
NEW YORK (Reuters) - Wall Street analysts have cut their first-quarter earnings forecasts for U.S. companies and are now projecting a sharper decline, figures from Reuters Estimates showed on Monday.
NEW YORK (Reuters) - Wall Street analysts have cut their first-quarter earnings forecasts for U.S. companies and are now projecting a sharper decline, figures from Reuters Estimates showed... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 6:21 am
Reuters - The dollar is likely to remain under
pressure for the next few months at least, but its weakness is
not inconsistent with the Bush administration's strong dollar
policy, former U.S. Treasury undersecretary Tim Adams said on
Monday.
HONG KONG (Reuters) - The dollar is likely to remain under pressure for the next few months at least, but its weakness is not inconsistent with the Bush administration's strong dollar policy, former U.S. Treasury undersecretary Tim Adams said on Monday.
HONG KONG (Reuters) - The dollar is likely to remain under pressure for the next few months at least, but its weakness is not inconsistent with the Bush administration's strong dollar... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 6:13 am
PARIS (Reuters) - France's Pernod Ricard said on Monday it had won an auction to buy Sweden's Vin & Spirit AB , the maker of Absolut vodka, in a deal worth 5.63 billion euros ($8.87... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 6:08 am
Reuters - Tata Motors Ltd , India's top
vehicle maker, will invest 60 billion rupees ($1.5 billion) to
expand manufacturing capacities over four to five years,
Managing Director Ravi Kant said at a news conference on
Monday.
MUMBAI (Reuters) - Tata Motors Ltd , India's top vehicle maker, will invest 60 billion rupees ($1.5 billion) to expand manufacturing capacities over four to five years, Managing Director... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 6:05 am
MUMBAI (Reuters) - Tata Motors Ltd , India's top vehicle maker, will invest 60 billion rupees ($1.5 billion) to expand manufacturing capacities over four to five years, Managing Director Ravi Kant said at a news conference on Monday.
Microsoft has moved to strengthen the entertainment credentials of its Xbox by striking a content deal with a new Hollywood digital group that counts Sean "Diddy" Combs and Djimon Hounsou among its clients Source: FT.com - US homepage | 31 Mar 2008 | 5:56 am
Chinese Premier Wen Jiabao said the government would promote a stable and healthy development of the country's stock markets, state media reported Monday. "In the final... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 5:55 am
Lehman Brothers filed suit against one of Japan's biggest trading firms for $352m after the US investment bank fell victim to an alleged fraud perpetrated by two former employees of Marubeni Source: FT.com - US homepage | 31 Mar 2008 | 5:51 am
NEW YORK (Reuters) - Stocks fell on Friday as a profit warning from J.C. Penney raised concerns about slowing consumer spending while persistent worries about credit-related problems... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 5:33 am
SAN FRANCISCO (Reuters) - Yahoo Inc is introducing a new media site focused on women's daily lives, the latest in a string of sites that include ones for gadget enthusiasts and food lovers, Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 5:31 am
Zimbabwe's Election Commission finally began announcing results of the weekend's bitterly contested presidential and parliamentary elections with the results from six parliamentary constituencies split between President Robert Mugabe's Zanu-PF and the opposition Movement for Democratic Change (MDC). Source: FT.com - US homepage | 31 Mar 2008 | 5:29 am
TOKYO (Reuters) - U.S. investment bank Lehman Brothers will file a lawsuit on Monday against Japanese trading house Marubeni Corp , saying it was defrauded of more than $355 million, a... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 5:06 am
Reuters - Treasury Secretary Henry Paulson
will reveal in full sweeping new plans on Monday for
streamlining a hodgepodge of regulation faulted for permitting
the U.S. mortgage crisis to balloon into a full-blown economic
threat.
Reuters - Treasury Secretary Henry Paulson
will reveal in full sweeping new plans on Monday for
streamlining a hodgepodge of regulation faulted for permitting
the U.S. mortgage crisis to balloon into a full-blown economic
threat.
WASHINGTON (Reuters) - Treasury Secretary Henry Paulson will reveal in full sweeping new plans on Monday for streamlining a hodgepodge of regulation faulted for permitting the U.S. mortgage Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 5:03 am
Lehman Brothers filed a lawsuit against major Japanese trading company Marubeni on Monday, demanding $350 million in a case of alleged fraud. Lehman Brothers Holdings Inc. is seeking to Source: Infocious RSS raw feed - channel BNewsBusiness | 31 Mar 2008 | 4:57 am
A finalised plan to split Telecom into at least three separate divisions will ensure better and cheaper internet and phone services for most consumers, industry groups say.
Communications Minister David Cunliffe today approved... Source: New Zealand Herald - Business | 31 Mar 2008 | 3:58 am
AFP - Japanese share prices fell 1.50 percent in morning trade on Monday, tracking losses on Wall Street sparked by weak US economic data and a profit warning from a major retailer, dealers said.
The residential housing market continues to weaken with new figures showing the number of residential building consents issued falling 10 per cent from a year ago.
Statistics New Zealand (SNZ) today said 1874 consents for new dwelling... Source: New Zealand Herald - Business | 31 Mar 2008 | 12:30 am
Banks are going to the Fed and getting money at 2.5% and putting it onto their balance sheets. What do the big money centers do with the money? They make investments in high-yield instruments. Or, put it into their proprietary trading operations. A bank that takes in $10 billion could make a $1 billion return on that over the course of a year, perhaps more, by "playing the spread" on the dirt cheap cash from Bernanke & Company. The game the banks are playing at the expense of tax-payers due to inexpensive money from the Fed is outstanding for investors...
The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis. Source: Telegraph Business | 31 Mar 2008 | 12:01 am
City traders have seen their bonuses fall by an average of 40pc, as average pay for top London bankers fell £290,000 last year, with those working in the credit markets facing the most severe cuts, according to a survey by a financial sector recruitment firm. Source: Telegraph Business | 31 Mar 2008 | 12:01 am
City high-flyers will be the target of a recruitment drive by the Financial Services Authority as it plans to increase its budget by £15m to hire as many as 100 new staff in the wake of its handling of the Northern Rock crisis. Source: Telegraph Business | 31 Mar 2008 | 12:01 am
Capital flight from Russia over the first two of months this year reached $20bn (£10bn), exceeding the outflows seen at the height of the 1998 default crisis. Source: Telegraph Business | 31 Mar 2008 | 12:01 am
Reserve Bank of New Zealand governor Alan Bollard has hit back at doomsayers who are baying for an early cut in interest rates, arguing the economy remains solid and inflation remains a problem, meaning interest rates are on hold... Source: New Zealand Herald - Business | 30 Mar 2008 | 11:59 pm
The sharemarket was slightly down today as the Government announced it had accepted a plan to separate the operations of the market's largest company, Telecom.
Telecom was down 1c early to 382, having risen 5c on Friday.
Communications... Source: New Zealand Herald - Business | 30 Mar 2008 | 11:21 pm
For much of Britain, the City is another country, if not another world. On the
average Briton’s consciousness, the Square Mile is mapped out as terra
incognita. As the increasingly scary events of the credit crisis have
unfolded, this lack of understanding has mingled with fear of the unknown to
fuel suspicion of the mysterious, and seemingly now dangerous, black arts of
the City’s money men.<br/>
<br/>
It has become a commonplace observation, meanwhile, to point to a supposedly
yawning reality gap between the Square Mile’s present, ever-deepening woes
and purportedly more benign conditions in the “real economy” across the rest
of the UK.<br/>
<br/>
The dubious implication is that the City can be left to reap the financial
whirlwind sown by its own greed and irresponsibility, while the rest of us
sit out the storm in relative security.<br/>
<br/>
The Bank of England Governor lent some credence to this view last week,
pointing to the “remarkable resilience”, so far at least, of consumer
spending and employment, and agreeing there is a sharp division of economic
experience between the City and the real economy.<br/>
<br/>
Mervyn King did not quite endorse the idea that the Square Mile can somehow be
quarantined as a sort of financial plague island, while the rest of Britain
remains immune from global financial pestilence. Yet the Governor sought to
draw a line between the Bank’s policy moves to tackle the root causes of the
credit squeeze blighting the markets, and action to address wider dangers to
the economy as a whole. He argued that the first was largely a question of
lack of liquidity that called for specific measures, while interest rate
cuts to fend off any threat to the wider economy should be seen as separate.
It was “absolutely vital to distinguish clearly”, these two sets of problems
and responses, he said.<br/>
<br/>
Mr King’s desire to draw this distinction is understandable while the Bank
continues to be vexed by what he calls the “difficult balancing act” between
conflicting pressures from persistent inflation and vulnerable growth.<br/>
<br/>
With the Bank still deeply wary of aggressive interest rate cuts as soaring
food and fuel costs continue to stoke price pressures, insistence that the
credit crunch calls for separate and different remedies helps Mr King and
his colleagues to hold the line against demands for sharply lower rates.<br/>
<br/>
Unfortunately, the idea that the financial world and the real economy can
exist in separate orbits, with little influence on each other, is a forlorn
hope. Indeed, two events in the past week have made it all too clear that
these two worlds now threaten to collide with potentially explosive results,
and severe fallout for all of us.<br/>
<br/>
The intensity of the influence of the financial and “real world” spheres on
each other was underlined by Friday’s report from Nationwide Building
Society of a fifth consecutive monthly fall in house prices.<br/>
<br/>
News of this latest blow to homeowners, which cut annual growth in house
prices to a 12-year low of just 1.1 per cent, came as the funding drought in
money markets compelled three leading lending institutions to raise mortgage
rates, despite the Bank’s cuts in base rates.<br/>
<br/>
With outright year-on-year falls in house prices set to become grim reality as
soon as next month, and the likelihood that the credit crunch will mean that
home loans become scarcer and still more costly, these events raised the
threat that Britain could be gripped by a vicious circle similar to that
afflicting America.<br/>
<br/>
Negative developments in financial markets and the real economy now threaten
to feed on each other, with falling house prices battering property market
sentiment, cutting demand and making lenders still more cautious, depressing
house prices yet further. The downward spiral risks being intensified as a
housing slump then saps consumer spending, weakening growth, imperilling
jobs and adding to strains on institutions as more borrowers default.<br/>
<br/>
The stark reality is that far from being somehow separate and distinct, the
fates of Britain’s financial sector and the real economy have been, and
remain, intimately bound up.<br/>
<br/>
As Michael Saunders, of Citigroup, suggests, for the past decade both spheres
have thrived as the financial sector provided the easy credit that fuelled a
boom in domestic demand and asset prices. That, in turn, sustained City
optimism over strong returns, made lenders feel secure to carry on lending
with a casual attitude to risk, and made borrowers feel safe to keep on
borrowing. “The financial excesses and real economy excesses of recent years
are two sides of the same coin,” Mr Saunders says.<br/>
<br/>
Now, the symbiotic relationship of the financial world and the real economy is
turning toxic, as the virtuous cycle of credit-fuelled economic expansion
goes into reverse.<br/>
<br/>
Worse still, as Mr Saunders says, the excesses of recent times have left a
legacy of record indebtedness for companies and households, steep interest
and repayment costs, depleted savings and stretched asset prices. These
leave Britain exposed to the credit squeeze’s imminent impact.<br/>
<br/>
Citigroup’s calculations reveal how, after years of living beyond our means,
the combined deficit of UK nonfinancial companies and households – the
excess of what we spend over what we earn in income and profits - has leapt
to 3.3 per cent of GDP, more than double the 2006 level, and the highest
since 1989.<br/>
<br/>
British households’ savings rate last year plunged to just 2.9 per cent of
incomes, the lowest since 1959, while companies have now blown the big cash
piles built early this decade. Repayment costs on borrowings for both
households and companies are now the highest since the early 1990s.<br/>
<br/>
Years of financial sector largesse have left the rest of us deep in the red,
and both the financial world and the real economy are now deeply, and
similarly, vulnerable as a result. Source: Latest Business News from Times Online | 30 Mar 2008 | 11:00 pm
Non-executive directors of Marks & Spencer (M&S) are expected to veto
any pay rise for Sir Stuart Rose as a result of his controversial elevation
to the post of executive chairman. Source: Latest Business News from Times Online | 30 Mar 2008 | 11:00 pm
Foreign investors will have their say in the $60 billion ($£30.1 billion)
battle for control of Norilsk Nickel today when they vote on who should
control the board of the Russian mining company. Source: Latest Business News from Times Online | 30 Mar 2008 | 11:00 pm
<a href="http://business.timesonline.co.uk/tol/business/economics/"><b>Economics</b></a><b>
</b> Source: Latest Business News from Times Online | 30 Mar 2008 | 11:00 pm
The separation of Telecom into at least three separate divisions will mean faster cheaper broadband and phone services for most consumers, Communications Minister David Cunliffe says.
Mr Cunliffe today announced he had approved... Source: New Zealand Herald - Business | 30 Mar 2008 | 10:30 pm
The New Zealand dollar lost a cent against the greenback amid fears the global credit crunch will make the funding of current account deficits difficult.
The kiwi fell from US80.60c around midnight Friday to about US79.40c seven... Source: New Zealand Herald - Business | 30 Mar 2008 | 10:05 pm
Outflows reached $98bn in the quarter ending March 28, a record shift that accelerates a longer-term trend away from US and western European stock markets Source: FT.com - US homepage | 30 Mar 2008 | 9:09 pm
Bank of America is considering scrapping the sale of its equities prime brokerage business, after receiving only lukewarm interest from potential bidders including Barclays Capital of the UK and France's BNP Paribas Source: FT.com - US homepage | 30 Mar 2008 | 9:09 pm
George W. Bush, US president, and Gordon Brown, UK prime minister, have agreed to step up co-operation over the crisis in financial markets Source: FT.com - US homepage | 30 Mar 2008 | 9:01 pm
ANZ Bank called in the receivers to Australian brokerage group Opes Prime on Friday after it found irregularities in its accounts and massive losses.
The bank was owed A$650 million by Opes Prime, but said it was backed by enough... Source: New Zealand Herald - Business | 30 Mar 2008 | 9:00 pm
The challenges facing FGIC have deepened after Standard & Poor's cut the bond insurer's rating into junk territory and said the insurance provided by FGIC was now in effect worthless Source: FT.com - US homepage | 30 Mar 2008 | 7:27 pm
Giant radio systems exporter Tait has scored a major United States deal, after winning the right to supply the federal Government with high-tech equipment.
Bill Fredrickson, president of Tait Radio Communications in the US, said... Source: New Zealand Herald - Business | 30 Mar 2008 | 5:00 pm
Kayak design and counting viruses would seem to have absolutely nothing in common.
But a Dunedin company has applied technology it developed for a foldable kayak to the biochemistry world of nano technology and the measurement,... Source: New Zealand Herald - Business | 30 Mar 2008 | 5:00 pm
People are swapping cheese brands and trading down as dairy prices soar, and there's no certainty when shoppers will get some relief.
The price of a 1kg block of mild cheese has risen 60 per cent in the past year, and now costs... Source: New Zealand Herald - Business | 30 Mar 2008 | 5:00 pm
There has been some misplaced optimism that financial stocks bottomed earlier this month based on the notion that much of the bad news about write-offs had come out. Mid-month, the Fed increased the amount of money available to banks to $200 billion. The collateral the agency is willing to take is not of a much higher grade than wall paper. Last week, unexpectedly, financial shares took a terrible turn South. Among the really large companies in the group most were off 10%. Lehman (NYSE: LEH), Washington Mutual (NYSE: WM), Merrill Lynch (NYSE: MER), and Wachovia (NYSE: WC) were down much...
Shareholders of Scottish & Newcastle are due to meet on Monday to call time on the UK's largest brewer. Source: BBC News | Business | World Edition | 30 Mar 2008 | 1:39 pm
US investment bank Lehman Brothers says it has been the victim of a $350m fraud in Japan. Source: BBC News | Business | World Edition | 30 Mar 2008 | 10:41 am
Reuters - France's Pernod Ricard said on
Monday it had won an auction to buy Sweden's Vin & Spirit AB
, the maker of Absolut vodka, in a deal worth 5.63
billion euros ($8.87 billion) including debt.
Reuters - Wall Street analysts have cut their
first-quarter earnings forecasts for U.S. companies and are now
projecting a sharper decline, figures from Reuters Estimates
showed on Monday.
Reuters - The dollar is likely to remain under
pressure for the next few months at least, but its weakness is
not inconsistent with the Bush administration's strong dollar
policy, former U.S. Treasury undersecretary Tim Adams said on
Monday.
Reuters - Tata Motors Ltd , India's top
vehicle maker, will invest 60 billion rupees ($1.5 billion) to
expand manufacturing capacities over four to five years,
Managing Director Ravi Kant said at a news conference on
Monday.
Reuters - Treasury Secretary Henry Paulson
will reveal in full sweeping new plans on Monday for
streamlining a hodgepodge of regulation faulted for permitting
the U.S. mortgage crisis to balloon into a full-blown economic
threat.
AFP - Japanese share prices fell 1.50 percent in morning trade on Monday, tracking losses on Wall Street sparked by weak US economic data and a profit warning from a major retailer, dealers said.