The great interest rate rip off part 1

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Breaking news

 

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• Portugal, Spain urge Ireland to accept funds to avoid contagion
   
  Ireland's banks received an additional £17bn in emergency funding from the Irish central bank over last two months
   
  
  • Ireland bailout: UK taxpayers could face £7bn bill
    
  • Ireland resists calls to seek aid
    
  • Ireland denies reports of EU bailout
    
  • Should Britain fund an Irish bailout?
    

  [*] Mortgage dearth blamed for slow autumn

   

  Persimmon says it is has not seen the usual autumn pick-up in sales, adding to evidence the housing market is slowing sharply

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  • House prices in biggest fall since 2007
    

  [*] US economists campaign against QE2

   

  Open letter urges Federal Reserve chairman Ben Bernanke to abandon plans to boost quantitative easing programme

   

  • UK firms seek £50bn quantitative easing
    

  [*] BHP Billiton restarts share buyback after potash deal collapses

   

  Mining group restarts the $13bn share buyback programme it suspended in 2007, bowing to investor pressure to return cash

  [*] All today's stories

 

 

• Welcome to the Guardian's new Ireland business blog
   
  Lisa O'Carroll is following the story of Ireland's financial troubles and the measures being put in place to rescue the troubled economy
  
  
• Obama's free trade conversion is a depressingly short term manoeuvre
   
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http://uk.reuters.com/article/idUKTRE6AC1K120101115

 

Mon Nov 15, 2010 7:27pm GMT

 

LONDON/MADRID (Reuters) - Ireland is not close to asking for an EU rescue, Eurogroup Chairman Jean Claude-Juncker was quoted as saying on Monday, but an Irish opposition leader said moves to support Dublin were already under way.

 

With pressure growing for quick action to prevent its crisis spilling over into other euro zone countries, the Irish government denied it would need a bailout.

 

But a senior member of the European Central Bank confirmed discussions were under way with Dublin and said that aid, if requested, would be available for Ireland's banks or for the state itself.

 

The governor of the Bank of Spain, one of a number of countries on the euro zone's periphery which has debt problems and has seen its borrowing costs spiral as a result of Ireland's troubles, prodded Dublin to act quickly by saying its indecision had increased jitters on financial markets.

 

There was some market speculation that euro zone finance ministers could announce some form of support after a meeting on Tuesday, but Juncker -- the group's chairman -- said Ireland had not requested aid and that a deal was not imminent.

 

"The Irish think that they can keep the problems they're facing under control," he told news agency Bloomberg." They are not near the point where they would ask for external help."

 

Economists say Prime Minister Brian Cowan's government may be able to wait until after a by-election later this month.

 

Irish opposition finance spokesman, Michael Noonan, told the BBC: "I'm extremely concerned. I think the reports (of an imminent bailout) over the weekend are true ... I think there is European intervention under way."

 

Portuguese Finance Minister Fernando Teixeira dos Santos also told Reuters there were no plans for it to request emergency foreign funding after the Financial Times quoted him as saying there was a high risk Lisbon would have to seek aid.

 

"Such a request is not imminent, there are no contacts, be it formal or informal," Teixeira dos Santos told Reuters. "The rest are rumours and speculation."

 

May the farce continue.

 

 

It is panto season after all.

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FTSE lifted by commodities, banks, U.S. retail data

 

LONDON (Reuters) - A rise in commodity shares and banks hauled the leading share index higher on Monday, with better than expected U.S. retail sales numbers also helping, providing a boost to global recovery hopes.

G20 5:19pm GMT

 

Caterpillar buying Bucyrus in big bet on mining

 

DETROIT/PROVIDENCE, Rhode Island (Reuters) - Caterpillar Inc made the biggest deal in its 85-year history on Monday, staking a claim in the booming global mining industry with a $7.6 billion (£4.7 billion) bid for Bucyrus International Inc .

8:31pm GMT

 

GM expected to price IPO above $30 per share - sources

 

NEW YORK (Reuters) - General Motors Co is expected to price its initial public offering at a minimum of $30 per share, above the initially proposed range, two people familiar with the matter said on Monday.

7:42pm GMT

 

BHP kills Potash Corp bid, revives $4.2 billion buyback

 

MELBOURNE (Reuters) - BHP Billiton scrapped its $39 billion (£24 billion) bid for Canada's Potash Corp and bowed to calls from investors to return cash, a move that came days after regulators blocked the year's biggest takeover deal. | Video

2:23pm GMT

 

U.S. retail sales jump, signal pick-up in growth

 

WASHINGTON (Reuters) - Sales at U.S. retailers posted their strongest gain in seven months during October, adding to signs the economy was regaining strength after hitting a soft patch in the summer.

7:06pm GMT

 

FSA opens latest insider dealing case

 

LONDON (Reuters) - The Financial Services Authority (FSA) launched its latest insider dealing and money laundering case on Monday, after increased scrutiny of these crimes by the regulator.

UK 6:32pm GMT

 

Bank's Weale says no compelling case to change policy

 

LONDON (Reuters) - There is no compelling case to change monetary policy right now given the uncertainty about the degree of slack in the economy and stubborn above-target inflation, Bank of England policymaker Martin Weale said.

UK 11:01am GMT

 

Bank pares back corporate credit support schemes

 

LONDON (Reuters) - The Bank of England announced a winding down of some of its measures to support corporate borrowing on Monday but said it would fire up a scheme to help smaller companies raise working capital.

3:52pm GMT

 

Euro zone September trade surplus above expectations

 

BRUSSELS (Reuters) - The euro zone had a bigger than expected trade surplus in September, data showed on Monday, as export growth outpaced the rise in imports year-on-year.

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UK 'may be liable for £6bn of Irish debt'

 

Downing Street said the UK was responsible for 12% of a stability mechanism that might be used in an attempt to restore confidence in the Irish economy.

 

• Public sector pension contributions may rise £4bn
  
• Sean O'Grady: The Irish deficit - where to go from here
  
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eBay: Britain's banks are failing small businesses

 

Online auction website 'names and shames' big four in survey

 

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Mark Leftly: Network Rail fails to account for Potters Bar

 

 

Even the warmest of summer days can turn cold when Iain Coucher is in brusque mood.

 

 

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Britain's best-known retailer hasn't always been consistent. As a new chief executive takes over, Richard Northedge reviews its progress

 

 

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Portugal says 'it may need bail-out'

 

Portuguese Finance Minister warns that the fall out from concerns over Ireland's public finances could create a contagion effect among its neighbours.

Europe stumbles blindly towards its 1931 moment

 

 

Eurozone debt crisis: the PIGS at risk

 

 

EU bailout: Q&A

 

 

Ireland leaves door open to £77bn EU bail-out

 

 

How the Irish debt crisis unfolded: timeline

 

 

ND MONEY »

 

 

Irish bonds rise on rescue hopes

 

Irish borrowing costs fell after the ECB vice president said country would be able to tap the EU rescue fund to bail out its banks.

How the Irish debt crisis unfolded: timeline

 

 

How safe is your money in an Irish bank?

 

 

Irish PM denies financial talks with EU

 

 

Ireland rescue - the cost to Britain

 

 

Ireland debt crisis: European banks' exposure

 

 

 

 

Economy may need more QE, says BoE's Weale

 

The Bank of England should provide another boost to the UK economy if ouput stays below trend as expected, according to one of its senior policymakers.

 

Fed's second dose of stimulus draws new fire

 

Group of economists and former Republican officials write open to Fed chairman Ben Bernanke as the political unity that accompanied the central bank's first round of QE fractures.

How the Tea Party is brewing up trouble for the world’s currencies

 

 

 

BHP blasts Canada as it pulls Potash bid

 

Mining giant launches attack on Canadian government after it formally withdraws $38bn bid for Potash Corporation of Saskatchewan.

Fee bonanza for BHP bankers

 

 

 

Rolls Royce shares fall again on engine fears

 

 

 

 

Greek debt position worse than feared

 

 

 

 

Leahy and Cameron urge business to be braver

 

 

 

 

Small businesses target £1.68bn in supplier savings

 

 

 

 

Santander denies pushing Pontin's into administration

 

 

 

 

BBC Worldwide sells Animal Planet stake for $156m

 

 

 

 

 

 

Market report today

 

Sportingbet surges, while the FTSE stays in positive territory.

 

The 'new bespoke'

 

Can custom-made suits ever be cut-price? James Hall investigates.

 

Business Bullet: PM

 

 

Latest news on: Markets, Ireland, Sterling, UK banks

 

Commodities focus

 

If there's a global gas glut, why are prices rising?

 

Eurozone debt crisis: the PIGS at risk

 

As Portugal becomes the latest European Union country to admit it could need an EU bail-out, here are the other countries, or PIGS, at risk.

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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8134921/Eurozone-debt-crisis-Portugal-admits-it-could-need-EU-bail-out.html

 

Fernando Teixeira dos Santos, the Portuguese Finance Minister, has warned that the fall out from concerns over Ireland's public finances could create a contagion effect among its neighbours.

 

"The risk is high because we are not facing only a national or country problem," he told Dow Jones news wires, in reference to the possibility that Lisbon will need international financial assistance.

 

“It is the problems of Greece, Portugal and Ireland. This is not a problem of only this country. This has to do with the euro zone and the stability of the eurozone, and that is why contagion in this framework is more likely.

 

“It is not because markets consider we have similar situations. They are only similar in what concerns markets, but as I said they are very different.”

 

He added: “Markets look at these economies together because we are all in this together in the euro zone, but probably they could look different if we were not in the euro zone.

 

“Suppose we were not in the eurozone, the risk of the contagion could be lower.”

 

The Portuguese minister insisted that Portugal was improving its finances as it struggled with burgeoning public debt and deficit levels and later tried to back away from suggestions Lisbon was poised to call for help.

 

"Such a request is not imminent, there are no contacts, be it formal or informal," he said. "The rest are rumours and speculation."

 

Got to love this bluff here, if Portugal wasn't in the Eurozone it would never have been able to borrow the money it has on the implicit guarantee that the German taxpayer will cover any defaults.

 

Looks like it's brown trouser time across Europe as too many politicians realise that the policy of ever expanding debt is unsustainable.

 

It would appear that the game is well and truly afoot now.

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15 November 2010 Last updated at 18:55

 

Irish resisting bail-out pressure

 

The Irish Republic insists it does not need financial assistance from the EU amid speculation that a bail-out is increasingly likely.

 

• Ireland resists bailout: Your views‎
  
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Banks in talks over bonuses cut

 

Britain's biggest banks are in talks about collectively reducing the total amount of money they will pay staff in the forthcoming bonus season.

 

 

 

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Banking on help

 

Will the ECB pull the plug on the Irish Republic?

New world order

 

When the G20 stopped being the G8 plus the rest

Legal aid cutbacks are unveiled

 

"Long overdue" cuts of £350m to legal aid funding in England and Wales are revealed, with money axed for thousands of civil cases.

 

• Clarke defends legal aid cuts Watch
  
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Weaker Dollar Seen as Unlikely to Cure Unemployment

 

By MOTOKO RICH and JACK EWING 13 minutes ago

 

 

With many American companies manufacturing their products abroad, the effect on exports of a weak dollar is diminished.

 

 

 

Fred Rollison/Bloomberg News

 

The new X3 model was rolled out at the BMW factory in Greer, S.C., last month. BMW opened a factory in Spartanburg, S.C., in September, where it had already hired 1,000 workers, with plans to hire 600 more.

 

 

 

 

 

 

Pressure on Ireland Eases After Talk of European Aid

 

By JAMES KANTER and STEPHEN CASTLE 9:05 AM ET

 

Meetings in Brussels this week will consider whether a bailout is needed, as Ireland argues that it can produce a credible budget.

 

• Greece Beats Ireland for Worst Deficit in Europe 6:48 AM ET
  
• Post a Comment | Read (18)
  

 

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By CHRISTINE HAUSER 12:22 PM ET

 

A 1.2 percent increase in October was better than expected, offering hope that consumer spending was set to improve in the quarter.

 

Wall Street Rises After Strong Retail Sales Report

 

By CHRISTINE HAUSER 2:26 PM ET

 

Caterpillar’s deal to buy Bucyrus for $7.6 billion, as well as a better-than-expected report on retail sales, encouraged investors to push stocks higher.

 

Caterpillar in $7.6 Billion Deal for Bucyrus

 

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By NICOLA CLARK 6:17 AM ET

 

The reports come as Qantas Airways said that one of its Boeing 747s had to return to Australia on Monday after experiencing electrical problems.

 

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By BETTINA WASSENER

 

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G.M. Retirees Weigh Buying Its Stock Again

 

By BILL VLASIC and NICK BUNKLEY

 

Thousands of former workers whose stock in the carmaker was wiped out must decide whether to buy shares again.

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http://www.nytimes.com/2010/11/16/business/economy/16exports.html?ref=business

 

A weakening currency traditionally helps a country raise its exports and create more jobs for its workers. But the declining value of the dollar may not help the United States increase economic growth as much as it might have in the past.

Though a weakened dollar would help exports to some degree, business executives and economists said that because of the ways American multinational companies operated, it was uncertain whether it would cause much of an increase in hiring.

 

The issue is crucial for President Obama, who made economic growth and job creation the main themes of his recent 10-day trip to Asia. He has also held out the prospect that a surge in exports would reduce the nation’s stubborn unemployment rate, currently 9.6 percent.

 

Other world leaders have complained that American policies, especially the monetary easing the Federal Reserve announced this month, will depress the dollar and give American exporters an unfair advantage.

 

Mr. Obama and Treasury Secretary Timothy F. Geithner have repeatedly defended the central bank’s action as a move designed to encourage American businesses to borrow, invest and hire rather than one specifically aimed at lowering the value of the dollar.

 

But even if the Fed’s action does end up weakening the dollar, American workers may not benefit much. For one, many American manufacturers, from General Motors to General Electric, often make goods in the countries where they are sold rather than shipping the products abroad. This effectively takes exchange rates out of the equation, since they are using only one currency.

 

What’s more, companies that do send goods to other countries often buy components from abroad, so the advantage of a weaker dollar in selling is offset by the higher cost of buying.

 

“There are very few corporations that would see this just in one way,” said Martin Regalia, chief economist at the United States Chamber of Commerce. “It cuts across a whole bunch of lines.”

 

Even when a company enjoys a relative surge in foreign sales, it won’t necessarily lead to a hiring spree. That’s because the largest proportion of American exports are still manufactured goods, which are no longer so labor-intensive. “The net export effect is going to be positive, but it won’t be the driver of jobs,” said Daniel J. Meckstroth, chief economist of the Manufacturers Alliance, a trade group, adding: “You can replace people with machines.”

 

Still Bernanke is in job that's the important message he is an economic genius who can do no wrong......

 

Could the low dollar be to help Wall Street more than the American people?

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http://www.businessinsider.com/did-ireland-discover-a-legal-loophole-that-will-prevent-it-from-needing-a-bailout-2010-11

 

Tinfoil hat time, courtesy of reader Brendan Moroney who writes in, speculating that Ireland has found a loophole that explains why there's not been a bailout yet, and why the rest of Europe is so eager to have it take a bailout:

 

The Government of Ireland may have identified a legal loop-hole in the Euro support agreement put together for the occasion of the Greek Bailout back in May 2010.

 

This loop-hole has allowed Ireland's banks access billions of Euros of funding from the ECB over the past few weeks (Sept. 2010 to present), without the ECB having the power to force any of it's structural change on to Ireland.

 

Realising too late what is possible under the agreement, European's financial leader are falling over themselves to pressure Ireland's Government to cease subverting the support mechanism in such a manner and instead to row-in behind the spirit of the agreement. Hence the pressure over the past week-end for Ireland to access funding directly.

 

The ECB, never intend itself to be a no-strings-attached clearing house for Irish banking obligations.

 

The Government of Ireland has withdrawn from the bond market during this same time-frame. Budget figures have been announced for 2011 and Irish banks are availing of agreed support from the ECB.

 

It is the European Central Bank that is in uncharted waters and feels suddenly that it has lost control. What it intended to be a stability pact has emerged as a de-stabalising pact where a country with 1% of the economy of Europe is eating 15% of the funding of Europe.

 

Until Euopean leader have the opportunity to reform this recent agreement, the Euro seems to be the hostage of Ireland.

 

This basically makes sense, and it dovetails nicely with what Channel 4 econ reporter Faisal Islam tweeted earlier, that per his sources, most of the pro-bailout pressure was coming from the ECB, rather than Berlin.

 

Too funny for words, unbelievable how many of the others in trouble are doing the same?

 

The ECB, never intend itself to be a no-strings-attached clearing house for Irish banking obligations.

 

 

Pure comedy genius.

 

No wonder Ireland is in no rush to get a bailout.

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http://www.nypost.com/p/news/opinion/opedcolumnists/class_dismissed_why_middle_income_rcd27q5kphT3ZnUCH7vh4L/0

 

Anne, 45, has always considered herself middle-class: As a single mom earning $65,000 a year in ad sales, she was able to rent a one-bedroom apartment on the Upper East Side for $1,000 a month and send her daughter, now 12, to private school. “I was able to make it,” she says. “Even go on vacation sometimes.”

In the span of 15 months, she has come to define herself as poor — even if the government won’t, denying her multiple applications for welfare and food stamps because, she says, she once made “too much money.”

Upon losing her job in June 2009 — her company was going under — “I was plunged into immediate poverty,” she says. “It was a surprise attack.”

 

Anne has borrowed money from her sister and her retired parents — who are struggling themselves — to pay the rent; she applied for a Section 8 and was able to slash it in half, to $500 a month. She depleted her 401(k). She had no savings, was living paycheck-to-paycheck. But she still felt economically safe, given her location and her tax bracket and her white-collar job.

“Now, when I go to the grocery store, I have to decide what is absolutely essential for my child,” Anne says. “Sometimes, I’m eating whatever-in-a-can. A lot of the time, I’m literally walking around without a penny in my pocket.” She deliberates before taking her daughter on a day trip downtown, because a round-trip subway fare will cost $9. She negotiated a tuition break with her daughter’s school, and the ease of that leads her to believe she’s not the only parent who’s asked, which she does not find especially comforting.

She’s $16,000 in debt to credit card companies. One of her local grocers, who once let her buy food on a running tab, now has a bill collector after her. She has her résumé up online, but when headhunters call and ask her age, “suddenly they never call me back,” she says. “I’m depressed. None of my friends are able to find jobs. I am living day-to-day.”

 

 

Coming to the UK soon?

 

http://en.wikipedia.org/wiki/M-shape_Society

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http://www.businessinsider.com/ireland-24-hour-ultimatum-2010-11

 

Set the clocks!

 

According to The Guardian, Ireland has been given a 24 hour ultimatum:

 

An increasingly isolated Irish government was coming under mounting pressure tonight to seek a European or International Monetary Fund bailout within 24 hours amid fears that contagion from its crippled banking sector might spread through the weaker eurozone countries.

 

Portugal, Spain, the European Central Bank and opposition parties all urged Brian Cowen's coalition government to remove the threat of a second crisis in six months by putting a firewall between Ireland and its partners in the 16-nation single currency.

 

It's a little unclear where the 24 hour number comes from though. Later in the article it says this.

 

Ireland's opposition's finance spokesman, Michael Noonan, said he believed European intervention was "under way" and matters would come to a head within 24 hours. The government, he said, was "fighting a rearguard action for appearances purposes".'

 

Would an opposition finance spokesman actually have this info? Not clear.

 

What's clear is that the rest of Europe is eager to resolve thie mess fast. They're not happy about Irish banks suckling at the ECB's teet while the government gets to wait until sometime next year to hit the actual bond market again.

 

AND the rest of Europe is eager to make Ireland rid itself of its notoriously low corporate tax rate.

 

(via Politics.IE)

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http://www.telegraph.co.uk/finance/economics/8135507/IoD-says-UK-economic-growth-will-fall-short-of-forecasts.html

 

Cutting its growth expectations for 2011 from 1.8pc, the influential trade body said that while "too much doom and gloom" surrounds the austerity measures in the Spending Review, there needs to be "greater realism" about weaknesses in the economy.

It believes the recovery is taking the shape of a "square root sign", representing an uptick followed by flatter growth. If its analysis is correct, the IoD warned that the Chancellor may have to make more cuts or raise taxes to reduce the deficit as planned.

 

The institute said the robust expansion seen in the second and third quarters of this year is a temporary growth spurt that is set to level off in the face of the fiscal squeeze and households reducing their debt. The IoD's prediction undercuts the roughly 3pc growth the Bank of England has forecast for the next couple of years, as well as the 2.3pc rate the Office for Budget Responsibility (OBR) expects for 2011.

 

So if there needs to be realism about growth there also has to be realism about tax revenues....

 

Still I'm sure the deficit will be contained...

[interestrateripoff]

Breaking news

 

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  [*] All today's stories

 

 

• Industrial blackspots hamstrung by 18% unemployment, study finds
   
  The authors of a study are calling for a financial tax to help create jobs after research cast doubt on the ability of the private sector to improve prospects for the worst-hit third of the country
  12 comments
  
  • The public sector employment map of Britain
    

  [*] Inflation hits 3.2% as petrol prices jump

   

  Mervyn King writes another explanatory letter to the chancellor as inflation remains stubbornly above its 2% target

  110 comments

  • Inflation: what the economists say
    
  • Mervyn King's letter to the chancellor (pdf)
    
  • Chancellor's letter to Mervyn King (pdf)
    
  • UK inflation since 1948
    

  [*] Sir Stelios profits as easyJet plans to pay first dividend

   

  Founder Sir Stelios Haji-Ioannou could net £10m a year as largest shareholder of budget airline

  [*] More business news

  [*] Rok cuts further 1,800 jobs

  [*] Punch parts company with finance chief

  Post your comment

[interestrateripoff]

Lenders call for mortgage rules rethink as market misfires

 

 

Mortgage lenders begged ministers to intervene to prevent the financial watchdog pushing ahead with its crackdown on irresponsible lending, as Persimmon became the latest housebuilder to warn that the property market was in a fragile state.

 

• Inflation fears send shares sliding new
  
• 1,800 more jobs to go at Rok new
  
• Nuclear warhead workers take industrial action
  
• First EasyJet dividend marks £99m profits rise
  
• House prices dropped 0.8% in September
  
• UK inflation rises to 3.2 per cent in October
  
• Asda set to create 7,500 jobs through expansion plans
  

 

David Prosser: The £7bn cheque that is set to give Osborne nightmares

 

Outlook: It hardly seems reasonable to ask British taxpayers to shell out to save a country that has been fighting a price war on tax against us

 

• Mark Leftly: Network Rail fails to account for Potters Bar
  
• Stephen Foley: What seemed a good idea has become a lethal trap for Obama and his allies
  
• Stephen Foley: Searching question Google can't answer
  
• David Prosser: The market doubters undermining Resolution's insurance experiment
  
• David Prosser: Damned if they do, and damned if they don't
  

 

Third time unlucky as BHP drops $39bn bid for Potash Corp

 

The world's largest miner failed to win Canada's backing despite making more than $1bn in concessions. Nikhil Kumar reports

 

• The Business on: Robert Wiseman, Chairman, Robert Wiseman Dairies
  
• M&S's U-turns: Will the latest plans last?
  
• Argh, me hearties, here be treasure!
  
• Losing the magic: How Euro Disney became a nightmare
  
• The business on...Rob Tincknell, Director, Treasury Holdings
  

[interestrateripoff]

16 November 2010 Last updated at 20:11

 

Eurozone must 'resist alarmism'

 

The European Commision warns against "alarmism" as it confirms talks with the Irish Republic over its "serious banking problems".

 

• Brian Cowen addresses Irish parliament Watch New
  
• Stephanomics: Crunch time
  
• Hewitt: Fear and the euro
  
• Q&A: Irish problems explained
  
• Peston: How big is the crisis?
  

 

GM share offer could raise $18bn New

 

US car giant General Motors says its offer of shares to the public could raise $18bn - $5bn more than first hoped.

 

• General Motors sees profits surge
  
• General Motors prepares for profitable future
  

 

 

UK inflation rate rises to 3.2%

 

The UK inflation rate rose unexpectedly to 3.2% in October, prompting another letter from the Bank of England governor.

 

 

 

• Builders Rok cuts 1,800 more jobs
   
  The collapsed construction firm Rok announces a further 1,800 redundancies after efforts to sell some parts of the firm failed.
  
• Rotherham claims enterprise gong
   
  A South Yorkshire town with a history of high unemployment is crowned the most "enterprising" place in Britain.
  
• Blow for exchange company losers
   
  Customers who lost travel money when an exchange company collapsed will only recoup a "small percentage" of lost funds.
  
• Strong rise in Burberry profits
  
• ITV revenues rise on ads recovery
  
• Overseas sales boost for Wal-Mart
  
• Easyjet profits on passenger rise
  
• Survey confirms house price falls
  
• Pension changes 'to be easier'
  
• First orders for Chinese jetliner
  
• Man Utd owners set to repay loans Sport
  
• Russia's Severstal sees profit jump
  
• Barroso deplores EU budget blow
  
• South Korea raises interest rates
  

 

Measuring the pain

 

How big could the crisis facing Europe turn out to be?

 

Promises, promises

 

Eurozone fines itself between a rock and a hard place

[interestrateripoff]

CPI rises but Bank ready to act in either direction

 

LONDON (Reuters) - Inflation unexpectedly rose further above its target in October but the Bank of England said it was ready to change policy in either direction as the risks to the outlook were substantial on both sides.

Continue Reading

 

 

 

Bank could launch further QE if needed - King

 

LONDON (Reuters) - The Bank of England could do more quantitative easing if it were judged necessary to meet the inflation target over the medium term, Bank of England Governor Mervyn King said on Tuesday.

4:19pm GMT

 

Worst FTSE fall since August on Irish debt worries

 

LONDON (Reuters) - The top share index recorded its biggest fall in three months on Tuesday as concerns over Irish government debt and the prospect of another euro zone bailout dragged banking and commodity-related stocks lower.

4:59pm GMT

 

GM boosts IPO pricing, offers more preferred shares

 

NEW YORK/DETROIT (Reuters) - General Motors has increased the preferred stock on offer by a third and raised the price for common stock in its landmark IPO, bringing the U.S. government closer to break-even on its controversial bailout.

7:17pm GMT

 

Wal-Mart sees U.S. same-store sales up for holidays

 

NEW YORK (Reuters) - Wal-Mart Stores Inc expects U.S. same-store sales to rise during the holiday shopping season, when it hopes to lure its low- to middle-income customers with discounts on toys and electronics and free shipping for online orders.

4:52pm GMT

 

Asda Q3 sales rise and to create 7,500 jobs

 

LONDON (Reuters) - Asda reported a return to underlying sales growth in its fiscal third quarter, helped by a focus on low prices and the relaunch of its core own-brand grocery range.

UK 1:02pm GMT

 

Irish rebuff bailout call in euro zone crisis

 

BRUSSELS (Reuters) - Ireland said it was discussing stabilisation measures with its European partners on Tuesday and ways to cut its heavily indebted banks' funding costs in what a top EU official called a "survival crisis" for the euro zone. | Video

6:15pm GMT

 

BA union opts not to recommend offer to cabin crew

 

LONDON (Reuters) - The union representing cabin crew at British Airways said the management's last offer in a year-long dispute could not be recommended to members.

UK, Aerospace & Defence 4:10pm GMT

 

Iceland draft deal with Britain said ready

 

REYKJAVIK/AMSTERDAM (Reuters) - Iceland's business lobby said on Tuesday it had seen the outline of a draft deal on repaying Britain and the Netherlands and that it was much improved from one rejected by voters in March.

6:20pm GMT

 

Rolls-Royce scrambles for A380 engines; delays seen

 

LONDON/SYDNEY (Reuters) - Enginemaker Rolls-Royce has asked Airbus to return Trent 900 engines from A380 superjumbo production lines so they can be used to replace faulty ones on aircraft already in service. | Video

[interestrateripoff]

Stocks Lower on Global Worries

 

By GRAHAM BOWLEY 56 minutes ago

 

 

Concerns about rising inflation in Asia and the possibility that Ireland might need a bailout hung over the market.

 

 

 

 

 

#nytint-tabContent { width: 395px ! important; background-color: white ! important; }

• DOW
  
• S & P 500
  
• NASDAQ
  

 

 

 

 

 

 

Pressure Grows on Ireland to Accept a Financial Rescue

 

By LANDON THOMAS Jr. and JAMES KANTER 1 minute ago

 

As Irish officials held discussions late into the night with European finance ministers, it was becoming evident that Ireland would have to accept a rescue package to calm investor nerves.

 

• Europe Fears That Debt Crisis Is Ready to Spread
  

 

Currency Fight With China Divides U.S. Businesses

 

By DAVID BARBOZA 10 minutes ago

 

American businesses that import Chinese goods face higher prices, but U.S. exporters predict sales growth.

 

DealBook

 

Blackstone Raises Dynegy Offer to $5 a Share

 

By MICHAEL J. DE LA MERCED 30 minutes ago

 

Blackstone declared its new bid "best and final," one day after publicly declaring that it would not raise its offer.

 

Wal-Mart Doldrums Continue in U.S.

 

By STEPHANIE CLIFFORD 40 minutes ago

 

Although the giant retailer reported a rise in profit, its same-store sales in the United States declined for the sixth quarter in a row.

 

Boeing and Airbus Waver on Reworking Planes

 

By CHRISTOPHER DREW and JAD MOUAWAD 2:00 PM ET

 

Airlines want more fuel-efficient versions of the 737 and A320, but the planes’ makers are looking to new aircraft.

 

Apple Begins Selling Beatles Downloads

 

By MIGUEL HELFT and BEN SISARIO 1:39 PM ET

 

The band’s record label and company announced the decision, after years of wrangling by one of the last holdouts against digital music sales.

 

Google Accuses China of Violating W.T.O. Rules on Internet Access

 

By KEITH BRADSHER 48 minutes ago

 

The company released a policy paper asserting that Beijing had limited Internet users’ access to information providers outside China.

 

India Auction for Cellphone Spectrum Was Rigged, Report Says

 

By HEATHER TIMMONS 7:56 AM ET

 

A multibillion-dollar auction in India's booming, nearly 700 million-subscriber cellphone market was rigged to favor a few companies, the government asserted Tuesday.

 

G.M. Raises Price Range for Stock Sale

 

By BILL VLASIC 9:54 AM ET

 

The automaker increased the offering price for its shares to $32 to $33 because of strong demand.

 

• DealBook: For Treasury, a Hidden Cost for Helping G.M.
  

 

Under Attack, Fed Officials Defend Buying of Bonds

 

By SEWELL CHAN

 

In a rare on-the-record interview, the president of the Federal Reserve Bank of New York said the Fed’s program was not intended to affect the dollar’s value.

 

 

 

• Voices of Foreclosure Speak Daily About Desperation and Misery
  
• U.S. Wholesale Prices Rise, Led by Gasoline 10:32 AM ET
  
• Weaker Dollar Seen as Unlikely to Cure Joblessness
  
• Facebook Offers New Messaging Tool
  

[interestrateripoff]

http://www.bbc.co.uk/news/business-11755320

 

Greece's 2009 budget deficit was worse than previously calculated, making it the largest in the eurozone, new figures have shown.

 

The country's deficit last year stood at 15.4% of its annual economic output, said Eurostat, the European Union's statistics office.

 

This is higher than the 13.6% figure reported in April.

Due to the revision, Greece said its 2010 deficit would only be cut to 9.4%, not its earlier target of 7.8%.

 

It comes as Athens is continuing efforts to reduce the deficit through austerity measures that have sparked protests from workers.

 

The Greek government is also being visited by EU and International Monetary Fund officials on Monday, who will decide whether to release more funds.

 

Greece is seeking the third part of its 110bn-euros ($150bn; £93bn) rescue deal, which was arranged in May.

Prime Minister George Papandreou said over the weekend that Greece might be forced to ask for an extension to the time before it has to start repaying aid money.

 

The Greek government said Eurostat had revised up the 2009 deficit figure for three main reasons; a downward revision of the country's economic growth rate that year, an adjustment of social security funds, and by adding data from certain public sector bodies into the general government figures.

 

As a result, its 2009 deficit of 15.4% overtook the Republic of Ireland's 14.4% figure, which was previously calculated as the worst.

 

Are the Irish the distraction for the mess in Greece? Get everyone focussed on the Irish debt problem whilst the Greek one just keeps getting worse?

 

Still at least we have a Royal wedding to all look forward to. I hope we are all going to get the day off work.

 

See it's easy to forget about money worries we just need a good news story.

[interestrateripoff]

FHA Annual Report: Still Writing Crap

Here it is folks....

Isn't that special? FHA is still writing loans with 70% of them having LTVs over 95%. Worse, almost 30% of the total volume is being written on credit under a 680 FICO - "impaired" to some extent" - and 10.5% against credit between 600-640.

Sound underwriting? Well that's open to question. What's pretty certain is that 70% of those loans are at risk of going into negative equity with less than 10% decline in home prices in the next couple of years, because during the first couple of years you pay almost nothing in principal.

Then there's SFDPA loans, which I have repeatedly called a screw job on the government - and which I maintain still are. From the report:

Loans with SFDPA have claim rates that are up to three times those of other FHA single-family loans.

In other words, the default rate is three times higher and the people get screwed and lose their house three times more often. The only people who "benefit" from these programs are the SFDPA "agencies" who claim to be non-profits. This crap should have been stopped years ago and the people responsible thrown in prison - not only due to the "enhanced" losses, but also due to the screw job that this imposed on everyone else in the market. Proof? Right here:

With SFDPA

there was strong evidence that downpayments were effectively being financed in the mortgage via higher home sale prices

.23

In other words, the price of the house as reported was not the true sale price and was being concealed through these "gifts." That's supposed to be a federal offense, and while this might be a "dodge" that people came up with we should not have stood for it, and still shouldn't. Yeah, I know this was banned - but the damage is still there.

 

More at the link.

[interestrateripoff]

The EU's Lies Blow Up In Their Face

Austria is now reported to have said "NUTS" to Greece.

Finance Minister Josef Proell says that the December tranche of Austria's contribution -- 190 million euros ($258 million)-- will only be paid out if Greece can show that it has raised the amount of money it pledged to take in through taxes.

And that, my friends, is that.

Greece isn't going to raise taxes further, and it hasn't met its commitments. In fact, it has now been shown that Greece was lying even more severely than previously believed.

This entire EU "rescue fund" is about to come apart.

I hope you're appropriately protected - my prediction that the next leg of this mess was going to initiate in Europe appears to coming to fruition.

Oh, and Ireland isn't assured to "go smoothly" either.

[interestrateripoff]

Open Letter to Bernanke from 23 Economists Complaining About QE II; GOP Lawmakers Call for Abandoning $600 Billion Bond Purchase; Curtain of Idiocy

 

 

 

Please consider this Open Letter to Ben Bernanke from 23 economists posted in the Wall Street Journal.

We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.

 

We subscribe to your statement in the Washington Post on November 4 that “the Federal Reserve cannot solve all the economy’s problems on its own.” In this case, we think improvements in tax, spending and regulatory policies must take precedence in a national growth program, not further monetary stimulus.

 

We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy.

 

The Fed’s purchase program has also met broad opposition from other central banks and we share their concerns that quantitative easing by the Fed is neither warranted nor helpful in addressing either U.S. or global economic problems.

 

A spokeswoman for the Fed responded:

 

“As the Chairman has said, the Federal Reserve has Congressionally-mandated objectives to help promote both increased employment and price stability. In light of persistently weak job creation and declining inflation, the Federal Open Market Committee’s recent actions reflect those mandates. The Federal Reserve will regularly review its program in light of incoming information and is prepared to make adjustments as necessary. The Federal Reserve is committed to both parts of its dual mandate and will take all measures to keep inflation low and stable as well as promote growth in employment. In particular, the Fed has made all necessary preparations and is confident that it has the tools to unwind these policies at the appropriate time. The Chairman has also noted that the Federal Reserve does not believe it can solve the economy’s problems on its own. That will take time and the combined efforts of many parties, including the central bank, Congress, the administration, regulators, and the private sector.”

For a list of the economists signing the letter please see the article.

 

GOP Lawmakers Pressure Bernanke Over QE II

 

I am pleased to report yet another Fresh Attack on Fed Move by members of Congress and others.

The Federal Reserve's latest attempt to boost the U.S. economy is coming under fire from Republican economists and politicians, threatening to yank the central bank deeper into partisan politics.

 

The economists have been consulting Republican lawmakers, including incoming House Budget Committee Chairman Paul Ryan of Wisconsin, and began discussions with potential GOP presidential candidates over the weekend, according to a person involved.

 

The increasingly loud criticism of the Fed comes as some economic officials outside the U.S. are criticizing the central bank's move to effectively print money, which has the side effect of pushing down the dollar on world currency markets. President Barack Obama last week defended the Fed. The move to buy more bonds, known as quantitative easing, "was designed to grow the economy," not cheapen the dollar, he said.

 

Organizers of the new campaign predicted the Fed will increasingly find itself caught in the political crosshairs, though. A tea party-infused GOP is eager to heed voters' rejection of big-government programs, and conservatives say a new move by the Fed to essentially print more money make it ripe for scrutiny by the incoming Republican House majority and potentially an issue in Mr. Obama's 2012 re-election campaign.

 

"Printing money is no substitute for pro-growth fiscal policy," said Rep. Mike Pence, an Indiana Republican who has been privy to early discussions with the group of conservatives rallying opposition to the Fed plan. He said the signatories to the letter "represent a growing chorus of Americans who know that we should be seeking to stimulate our economy with tax relief, spending restraint and regulatory reform rather than masking our fundamental problems by artificially creating inflation."

 

Some prominent liberal economists, including Nobel laureates Joseph Stiglitz and Paul Krugman, already have challenged the efficacy of quantitative easing, arguing that more fiscal stimulus is needed to restore the economy to health.

 

Signatories to the letter criticizing the Fed insisted they aren't trying to undercut the central bank's independence.

 

"It's fair to have a public debate about what the right monetary policy is," Mr. Holtz-Eakin said. "I'm a long way away from being comfortable with the idea of the Congress running monetary policy."

Curtain of Idiocy

 

For starters QE II is guaranteed to fail.

 

 

• Three Reasons QEII Will "Backfire"; Pavlov's Dogs and the "No Choice" Argument Yet Again
  
• "Money’s Already Quite Cheap"
  
• Bill Gross' Arrogant Endorsement of Fed's QE Policy he calls History's Most "Brazen Ponzi Scheme"
  

 

Second, the Fed is attempting to hide behind a "dual mandate" which is virtually impossible to meet.

 

Dual Mandate Equals Mission Impossible

 

Here's the deal.

 

1. The Fed can control money supply but it will have no control over interest rates (or anything else).

 

2. The Fed can control short-term interest rates, but then it would have no control over money supply (or anything else).

 

That is the full and complete extent of the Fed's "control". Note that neither price stability nor unemployment is in either equation. The reason is the Fed controls neither.

 

The simple truth of the matter is the Fed can print money, but it cannot control where it goes, or even if it goes anywhere at all. Indeed the Fed can encourage but not force banks to lend, and encourage but not force consumers to borrow.

 

The Fed certainly cannot induce hiring. The unemployment rate at 10.6% is proof enough.

 

Thus, the Fed is attempting to hide behind a Congressional mandate that is as idiotic as suggesting black can be white. It does so because Bernanke is an academic fool as well as an economic illiterate, blind to the real world economy.

[interestrateripoff]

Mortgage-Backed Securities Without Mortgages?

We may be about to find out.

The number of deals the RMBS Investor Clearing House now has a big enough interest in to request action by bond trustees has climbed about 30 percent since a July statement by Franklin. The clearing house allows bondholders to coordinate without divulging to each other which securities they own.

The group added three new portfolios Nov. 12 that weren¡¯t included in the most recent total, Franklin said in an e-mail from Dallas that day. A quarter of bond investors in any single deal marks the minimum threshold to force mortgage-bond trustees to grant access to loan files that may help investors prove mortgage sellers should buy back bad

debt

or take other action.

Remember, the allegations made by various legal folks in the practice (and apparently validated by the case law thus far) is that not one note has been able to be produced that contains all of the required conveyances and endorsements.

What's going to happen when (or if) these folks gain access to the files and find that they're missing - that is, that the custodian doesn't have them?

Well now that would be interesting, no? "Mortgage-backed securities" that in fact have no mortgages in them? Why that would be a wee problem, no?

Everything we know up to this point strongly suggests that this is exactly what is going to be discovered, and as a consequence, the RMBS Investor Clearing House is definitely an entity to watch.

The wheels of justice turn slowly, but they do turn, and if in fact basically none of these notes have been properly conveyed into the trusts, and as such the trusts are a legal nullity, then investors have spent billions of dollars as unknowing participants in a massive fraudulent scheme.

[interestrateripoff]

http://www.dailymail.co.uk/news/article-1330218/Irelands-debt-crisis-kill-EU-stone-dead-warns-Herman-Van-Rompuy.html

 

Van Rompuy speaks out as eurozone totters towards new crisis

EU finance ministers battle to stop Irish turmoil triggering domino effect

Portugal and Spain could be next to face possible default

Irish debt price rises again as expectation of immediate bail-out falls

 

[url=http://www.dailymail.co.uk/news/article-1330218/Irelands-debt-crisis-kill-EU-stone-dead-warns-Herman-Van-Rompuy.html#ixzz15TrmEmzr][/url]

 

 

Tick tock.

[interestrateripoff]

http://www.telegraph.co.uk/finance/economics/8138739/Greek-rescue-frays-as-Irish-crisis-drags-on.html

 

The clash caught markets off-guard and heightened fears that Europe's debt crisis may be escalating, with deep confusion over the Irish crisis as Dublin continues to resist EU pressure to request its own rescue.

 

Olli Rehn, the EU economics commissioner, said escalating rhetoric in Europe was turning dangerous. "I want to call on every responsible European to resist the centrifugal tendencies and existential alarmism."

 

Swirling rumours hit eurozone bond markets, while bourses tumbled across the world. The FTSE 100 fell 2.4pc to 5681.9, and the Dow dropped over 200 points in early trading. The euro slid two cents to $1.3460 against the dollar as the US currency regained its safe-haven status.

 

Austria's finance minister Josef Proll said he was "very critical" of Greece's performance, saying Athens had failed to meet the tax revenue targets agreed under the EU Memorandum.

 

Credit default swaps on Greek debt rocketed 97 basis points to 950 as investors woke up to the awful possibility that the EU could turn its back on Athens, which will run out of money by mid-January without loans. A Greek default would trigger $300bn (£188bn) worth of CDS contracts.

 

A 'Troika' of EU-IMF inspectors is currently in Greece but has not indicated whether the next €6.5bn (£5.5bn) tranche will be approved. German influence is crucial, yet Greek premier George Papandreou courted fate on Monday when he accused Chancellor Angela Merkel of driving the weaker EMU states into bankruptcy by scaring investors with talk of "haircuts".

 

Quick talk about the Irish, talk about the Portuguese debt crisis. Just don't talk about the Greeks.

 

Did I mention the Royal wedding?

 

So if the Greeks run out of money by Jan no wonder the Irish can play chicken as they've got enough money to last until June/July 2011. The Irish are gambling that Greece will implode before them.