Finance Matters

• 17Feb

  Chrysler seeks further $5bn cash

  Business No Comments

  From The BBC:

  Troubled US carmaker Chrysler has asked for another bn (£3.5bn) from the US government, saying it plans to axe 3,000 jobs and cut three car models.
  The moves form part of its restructuring plan submitted to the Treasury Department on Tuesday.
  The US government provided Chrysler with a bn loan at the end of 2008 to keep the firm alive.
  Chrysler now says it expects the current downturn in the US car market to last another three years.
  ‘Said right things’
  The US’s third biggest carmaker said its radical surgery had the support of the United Auto Workers (UAW) union, dealers, and suppliers.
  The UAW says it has also reached tentative agreement with Ford and General Motors to help cut those firms’ labour costs.
  Meanwhile, Chrysler also said it planned to cut outstanding debt by bn and reduce fixed costs by 0m in 2009.
  Analyst Lincoln Merrihew, of TNS Automotive Consulting, said: “I’m curious to see how the government responds to this plan, but Chrysler has said all the righ…

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• 17Feb

  Shares fall on investor concerns

  Business No Comments

  From The BBC:

  US shares fell sharply in Tuesday trading, as investors waited for carmakers GM and Chrysler to submit details of their restructuring plans.
  At close the Dow Jones index was down 297.81 points, or 3.79%, at 7,552.60. The Nasdaq fell 4.17% or 63.70 points to 1,470.66.
  The falls tracked losses in the UK, France and Germany, where banking stocks were among the biggest fallers.
  Markets in London, Frankfurt and Paris all closed between 2% and 4% lower.
  Earlier in the day Asian markets had also suffered falls.
  Banking woes
  In the US, the broader S&P 500 also fell steeply, down 37.67 points or 4.56%, to 789.17.
  The falls came despite US President Barack Obama signing a 7bn (£548bn) economic stimulus package into law.
  Banking stocks fell in the UK due to continuing fears about the health of the sector.
  Lloyds Banking Group lost 8.7% after Chancellor Alistair Darling said the government was moving to limit staff bonuses in banks that had received state aid.
  Banking stocks in Franc…

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• 17Feb

  US tycoon charged over $8bn fraud

  Business No Comments

  From The BBC:

  Texan billionaire and cricket promoter Sir Allen Stanford has been charged over a bn (£5.6bn) investment fraud, US financial regulators say.
  The Securities and Exchange Commission said the financier had orchestrated “a fraudulent, multi-billion dollar investment scheme”.
  The SEC said the fraud was “based on false promises and fabricated historical return data”.
  English cricket bosses have pulled out of sponsorship talks with Sir Allen.
  The charges against Sir Allen, three of his companies and two executives of those companies followed a raid by US marshals on the Houston, Texas, offices of Stanford Financial Group.

  A US judge has frozen the assets of Sir Allen and the other defendants as well as those of the Stanford Group, its Antigua-based subsidiary Stanford International Bank (SIB) and another subsidiary, investment advisor Stanford Capital Management.
  A receiver has been appointed to “preserve assets for investors”, the SEC said.
  ‘Close circle’
  Sir Allen last year prom…

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• 17Feb

  HBOS risk control ‘dumbed down’

  Business No Comments

  From The BBC:

  Risk managers at HBOS were discouraged from challenging business decisions, a former employee has told BBC News.
  Anthony Smith said the risk group’s culture changed in 2005 after his boss Paul Moore was replaced by someone with no experience of risk or regulation.
  “There was definitely a dumbing down of the risk function and challenging the business… was not welcome,” he said.
  The bank said Mr Smith was a “junior employee” and the new director of risk was a “senior banker”.
  How HBOS was run has come under question in recent weeks after Paul Moore, former head of regulatory risk, alleged he was sacked after warning the bank about excessive risk-taking.
  HBOS denied the allegations and pointed out an inquiry had concluded they were “unfounded”, but the publicity led to the resignation of former HBOS chief executive Sir James Crosby as deputy chairman of the City watchdog the Financial Services Authority (FSA).
  ‘No knowledge’
  Anthony Smith, who worked for the banking group as a ma…

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• 17Feb

  Chancellor sets RBS bonus limits

  Business No Comments

  From The BBC:

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  Alistair Darling: “What you’re now seeing is a cultural change”
  Chancellor Alistair Darling has announced that the government is limiting bonuses paid out to staff by the Royal Bank of Scotland (RBS).
  “We want to see a cultural change where short-term bonuses are replaced with incentives for the long term,” he said.
  Mr Darling said bonuses at RBS would be cut from the £2.5bn paid last year to £340m. There would be “no reward for people who have failed,” he added.
  And future bonuses will no longer be paid in cash, but in shares.
  Profit share
  The bank would pay “the minimum it can with regard to its legal obligations,” the chancellor said, referring to the fact that some employees are contractually obliged to receive bonuses.
  Addressing concerns that directors are those that have benefitted most from the bonus culture in the past, the chancellor said front line staff would be getting some reward.

  “Of course they’ve…

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• 17Feb

  UK inflation rate declines to 3%

  Business No Comments

  From The BBC:

  Consumer Prices Index (CPI) inflation fell slightly in January to 3%, from 3.1% in December, figures have shown.
  CPI inflation has now fallen for four months in a row from a high of 5.2% in September, driven down by falls in energy costs and fuel prices.
  Retail Prices Index (RPI) inflation, which includes mortgage costs and is often used in pay negotiations, fell to 0.1% from December’s 0.9%.
  The drop in RPI may lead to pressure on employers to limit pay rises.
  ‘Extraordinary occurrence’
  The headline RPI rate of 0.1% is the lowest rate it has been since 1960.
  In addition to falling energy prices, the reduction in VAT from 17.5% to 15%, announced in the pre-Budget report in November, also had an effect.

  The low level of RPI inflation could lead to some tricky wage negotiations.
  “A zero or negative RPI could result in the extraordinary occurrence of average pay increases also falling towards zero,” said John Philpott at the Chartered Institute of Personnel and Development.
  In…

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• 17Feb

  Bogus debt adverts crackdown

  Money No Comments

  From The BBC:

  An official crackdown has been launched on misleading adverts by claims management firms offering to write-off people’s loans or credit card debts.
  Firms guilty of making dubious claims to lure customers could be closed down, the Ministry of Justice has said.
  The charity Citizens Advice said there had been a recent “rash” of bogus adverts from claims handling firms.
  It said statements that most loan agreements were “unenforceable” were particularly misleading.
  “These ads appear to offer an easy way out to people who have credit debts they are struggling to pay,” said Sue Edwards of Citizens Advice.
  Some claims firms suggest that any credit card or personal loan agreements struck before April 2007, and worth less than £25,000, may not be enforceable if the credit company does not have sufficiently accurate paperwork.
  “But many credit agreements do meet the legal requirements and therefore can’t easily be challenged as unenforceable,” Ms Edwards added.
  Criminal offence
  The Mini…

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• 17Feb

  Money Matters: can you afford to miss it?

  Money No Comments

  From The BBC:

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  Money Matters roadshow
  Miserably low savings rates, unemployment rising, share prices falling, gas and electricity prices still stubbornly high. It is hard to find many reasons to be cheerful so far in 2009.
  Money matters, and it has never mattered more than in the current economic climate as we all take a long hard look at our household balance sheets and batten down the hatches for what’s likely to be a pretty turbulent year ahead.
  If you are planning a spot of financial spring cleaning to recession proof your hard earned cash, then the Money Matters Roadshow is here to help.
  A team of money experts – plus a smattering of BBC financial journalists – will be at Manchester’s Trafford centre on Wednesday (February 18).
  If you cannot get along in person then sit back and absorb the coverage across BBC TV, radio and online throughout the day.

  And here on the website, you will be able to take part by asking questions t…

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• 17Feb

  Home sales may rise say surveyors

  Business No Comments

  From The BBC:

  Property sales may pick up in the next few months, according to a survey from the Royal Institution of Chartered Surveyors (Rics).
  It said lower house prices had prompted renewed interest from potential buyers, especially those who already own a house or flat.
  However, first-time buyers were still largely locked out of the market.
  House prices fell by 10% in 2008 in the UK, according to the government’s own house price survey.
  The figures from the Department for Communities and Local Government (DCLG) showed that the average UK house price had fallen to £195,317 by December, a drop of £22,690 over the year.
  Rics said it expected the pick up in interest from buyers to continue as prices decline.
  “Interest from owner-occupiers is likely to persist over the comings months as those with large deposits look to capitalise on the drop in house prices,” said Simon Rubinsohn, Rics chief economist.
  Lower prices
  Prices have dropped by about 20% since their peak in the summer of 2007, a…

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• 17Feb

  Home sales ‘may rise’

  Money No Comments

  From The BBC:

  Property sales may pick up in the next few months, according to a survey from the Royal Institution of Chartered Surveyors (Rics).
  It said lower house prices had prompted renewed interest from potential buyers, especially those who already own a house or flat.
  However, first-time buyers were still largely locked out of the market.
  House prices fell by 10% in 2008 in the UK, according to the government’s own house price survey.
  The figures from the Department for Communities and Local Government (DCLG) showed that the average UK house price had fallen to £195,317 by December, a drop of £22,690 over the year.
  Rics said it expected the pick up in interest from buyers to continue as prices decline.
  “Interest from owner-occupiers is likely to persist over the comings months as those with large deposits look to capitalise on the drop in house prices,” said Simon Rubinsohn, Rics chief economist.
  Lower prices
  Prices have dropped by about 20% since their peak in the summer of 2007, a…

  Click to read the full article »

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