Daily Mail
"The financial crisis that has crippled Greece and Ireland will spread to other debt-ridden European countries in the New Year, according to the Centre for Economics and Business Research.Among those in the firing line will be Italy and Spain – the third and fourth biggest economies in the single currency bloc behind Germany and France.'We give the euro only a one in five chance of surviving in its present form for 10 years,' says CEBR chief executive Douglas McWilliams.The hard-hitting report also warns that Britain faces a tough 2011 as austerity measures bite."
Thursday, 30 December 2010
Italy's debt costs approach red zone
Telegraph
"Italy's borrowing costs have jumped to the highest level since the financial crisis over two years ago, raising concerns that Europe's biggest debtor may slip from the eurozone's stable core into the high-risk group on the periphery. "
"Italy's borrowing costs have jumped to the highest level since the financial crisis over two years ago, raising concerns that Europe's biggest debtor may slip from the eurozone's stable core into the high-risk group on the periphery. "
Wednesday, 29 December 2010
Microsoft co-founder relaunches tech patent suit
Reuters
"Microsoft Corp (MSFT.O) co-founder Paul Allen relaunched a wide-ranging patent lawsuit against Apple Inc (AAPL.O), Google Inc (GOOG.O), Facebook and others with specific allegations that the companies are illegally using technology owned by his company."
"Microsoft Corp (MSFT.O) co-founder Paul Allen relaunched a wide-ranging patent lawsuit against Apple Inc (AAPL.O), Google Inc (GOOG.O), Facebook and others with specific allegations that the companies are illegally using technology owned by his company."
G20 and EU 'posturing' could exacerbate future banking crises
Telegraph
"The efforts of the G20 and European Union to overhaul financial regulations have been lambasted for being "disingenuous political posturing" that are "increasing the likelihood of future meltdowns", an influential think-tank has warned. "
"The efforts of the G20 and European Union to overhaul financial regulations have been lambasted for being "disingenuous political posturing" that are "increasing the likelihood of future meltdowns", an influential think-tank has warned. "
Sunday, 26 December 2010
The UK inflation genie is out of the bottle
Telegraph
"Some of us have been warning this would happen. Since late 2008, this column has asserted that the UK faces inflationary dangers and that talk of British "deflation" was deeply disingenuous, an intellectual conceit to justify massive virtual "money printing" and the extension of endless soft credits to banks that should, in fact, be allowed to fail.
Such a position has been seen as heresy – not least because "quantitative easing" has friends in high places. QE, for now, has helped politically connected bankers to dodge the implications of their own hubris and incompetence. It has allowed successive British governments to stick their fingers in their ears and avoid tackling root-and-branch banking reform.
To argue that QE is dangerous and that, as a corollary, the UK faces high inflation has been to be treated by the UK's policy-making elite as some kind of economic Herod. I might as well have been suggesting we slay the first born. In recent weeks, though, the mood has changed. Reality has thankfully broken through. "
"Some of us have been warning this would happen. Since late 2008, this column has asserted that the UK faces inflationary dangers and that talk of British "deflation" was deeply disingenuous, an intellectual conceit to justify massive virtual "money printing" and the extension of endless soft credits to banks that should, in fact, be allowed to fail.
Such a position has been seen as heresy – not least because "quantitative easing" has friends in high places. QE, for now, has helped politically connected bankers to dodge the implications of their own hubris and incompetence. It has allowed successive British governments to stick their fingers in their ears and avoid tackling root-and-branch banking reform.
To argue that QE is dangerous and that, as a corollary, the UK faces high inflation has been to be treated by the UK's policy-making elite as some kind of economic Herod. I might as well have been suggesting we slay the first born. In recent weeks, though, the mood has changed. Reality has thankfully broken through. "
Friday, 24 December 2010
Oil pushes closer to $100 as cold snap stokes demand
Telegraph
"Benchmark Brent crude hit an intra-day high of $94.74 a barrel in early trading in London on Friday, the highest level since October 2008."The latest surge has brought $100 per barrel within range for Brent crude in particular," according to analysts at Barclay Capital in a weekly report.The rally in Brent crude is partly due to the severe cold snap in continental Europe and Britain, with more freezing temperatures and snow predicted in parts of Europe over the weekend expected to boost fuel demand further.US crude futures, the global benchmark, are trading at a 26-month high.Oil prices have climbed more than 30pc climb from this year's low in May, reviving concerns that prices could once again hit economic growth for fuel importing countries. "
"Benchmark Brent crude hit an intra-day high of $94.74 a barrel in early trading in London on Friday, the highest level since October 2008."The latest surge has brought $100 per barrel within range for Brent crude in particular," according to analysts at Barclay Capital in a weekly report.The rally in Brent crude is partly due to the severe cold snap in continental Europe and Britain, with more freezing temperatures and snow predicted in parts of Europe over the weekend expected to boost fuel demand further.US crude futures, the global benchmark, are trading at a 26-month high.Oil prices have climbed more than 30pc climb from this year's low in May, reviving concerns that prices could once again hit economic growth for fuel importing countries. "
Wednesday, 22 December 2010
Bloomberg sues European Central Bank over Greece 'hidden borrowings'
Telegraph
"Bloomberg News has filed a lawsuit against the European Central Bank, seeking to make it disclose documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis. The lawsuit asks the European Union’s General Court in Luxembourg to overturn a decision by the ECB not to disclose two internal documents drafted for the central bank’s six-member executive board in Frankfurt this year, the newswire reported on Wednesday.
The notes show how Greece used swaps to hide its borrowings, according to a March 3 cover page attached to the papers obtained by Bloomberg News.
ECB President Jean-Claude Trichet withheld the documents after the European Union and International Monetary Fund led a €110bn bailout for Greece. The dossier should be disclosed to stop governments from using the derivatives in that way again and show how EU authorities acted on information they had on the swaps, according to the suit, filed by Bloomberg Finance LP, the parent of Bloomberg News. "
"Bloomberg News has filed a lawsuit against the European Central Bank, seeking to make it disclose documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis. The lawsuit asks the European Union’s General Court in Luxembourg to overturn a decision by the ECB not to disclose two internal documents drafted for the central bank’s six-member executive board in Frankfurt this year, the newswire reported on Wednesday.
The notes show how Greece used swaps to hide its borrowings, according to a March 3 cover page attached to the papers obtained by Bloomberg News.
ECB President Jean-Claude Trichet withheld the documents after the European Union and International Monetary Fund led a €110bn bailout for Greece. The dossier should be disclosed to stop governments from using the derivatives in that way again and show how EU authorities acted on information they had on the swaps, according to the suit, filed by Bloomberg Finance LP, the parent of Bloomberg News. "
Monday, 20 December 2010
Euro falls amid continuing debt crisis fears
Telegraph
"A string of negative announcements from the ratings agencies about various eurozone countries' debt levels have added to the pressure caused by the bail-outs of Greece and Ireland. Moody's also said last week it may downgrade Spain's credit rating again."
"A string of negative announcements from the ratings agencies about various eurozone countries' debt levels have added to the pressure caused by the bail-outs of Greece and Ireland. Moody's also said last week it may downgrade Spain's credit rating again."
Sunday, 19 December 2010
Coming in from the cold Iceland has been tough with creditors and kind to itself. Ireland may wish it had done the same
the economist
"Iceland’s recuperation seems to offer two big lessons for Ireland and other troubled euro-zone countries. The first is that the extra cost to a country of not standing by its banks can be surprisingly small. Iceland let its banks fail and its GDP fell by 15% from its highest point before it reached bottom. Ireland “saved” its banks and saw its output drop by 14% from peak to trough.
A second lesson is that the benefits to a small country of being part of a big currency union are not all they were once cracked up to be. ......For all the euro’s faults, it is doubtful whether Icelanders would be keen to hold and use kronur if they were not forced to by capital controls. Easing these will be tricky. Local savers have little choice but to buy government debt, keeping yields artificially low. Firms and householders are overburdened with debts, some of which are indexed to inflation. House prices have plummeted, leaving many householders in negative equity. Around 40% of the new banks’ assets are non-performing. Not many Icelanders believe in recovery.
Even so, that Iceland’s economy has done little worse than Ireland’s is still a triumph. It has been tough with its creditors and disregarded some international norms—and recovered. Ireland has stood by its banks to the benefit of the wider European banking system. Its reward has been “rescue” loans at an interest rate that makes it hard to fix its finances. The next Irish government may look at Iceland and decide to play hardball with Europe. "
"Iceland’s recuperation seems to offer two big lessons for Ireland and other troubled euro-zone countries. The first is that the extra cost to a country of not standing by its banks can be surprisingly small. Iceland let its banks fail and its GDP fell by 15% from its highest point before it reached bottom. Ireland “saved” its banks and saw its output drop by 14% from peak to trough.
A second lesson is that the benefits to a small country of being part of a big currency union are not all they were once cracked up to be. ......For all the euro’s faults, it is doubtful whether Icelanders would be keen to hold and use kronur if they were not forced to by capital controls. Easing these will be tricky. Local savers have little choice but to buy government debt, keeping yields artificially low. Firms and householders are overburdened with debts, some of which are indexed to inflation. House prices have plummeted, leaving many householders in negative equity. Around 40% of the new banks’ assets are non-performing. Not many Icelanders believe in recovery.
Even so, that Iceland’s economy has done little worse than Ireland’s is still a triumph. It has been tough with its creditors and disregarded some international norms—and recovered. Ireland has stood by its banks to the benefit of the wider European banking system. Its reward has been “rescue” loans at an interest rate that makes it hard to fix its finances. The next Irish government may look at Iceland and decide to play hardball with Europe. "
Will the Euro go down in flames?
Daily Mail
"Even a £635bn safety fund has failed to silence alarm bells over currency crisis spreading to Britain - so can anyone stop the Euro going down in flames?.....Politicians in Europe seem incapable of damping down the flames. An EU summit late last week agreed to establish a permanent £635bn fund to deal with any euro crisis from 2013 onwards. Kapilan Pillai, financial analyst at boutique investment bank Matrix, said: 'If Portugal goes over after what's already been committed to Greece and Ireland, then the £635bn fund will not be big enough to bail out Spain.'
"Even a £635bn safety fund has failed to silence alarm bells over currency crisis spreading to Britain - so can anyone stop the Euro going down in flames?.....Politicians in Europe seem incapable of damping down the flames. An EU summit late last week agreed to establish a permanent £635bn fund to deal with any euro crisis from 2013 onwards. Kapilan Pillai, financial analyst at boutique investment bank Matrix, said: 'If Portugal goes over after what's already been committed to Greece and Ireland, then the £635bn fund will not be big enough to bail out Spain.'
Friday, 17 December 2010
Petrol price hits another new high: Drivers spend £8m a day more than a year ago
Daily Mail
"The price of petrol has soared to a new record high just as the great Christmas getaway begins – with even more pain in the pipeline for Britain’s 33million drivers.The average price has risen from last week’s record of 121.76p a litre to 122.14p. It means it is now selling at the equivalent of £5.55 a gallon.UK petrol car owners are now spending £8 million a day more on fuel than a year ago."
"The price of petrol has soared to a new record high just as the great Christmas getaway begins – with even more pain in the pipeline for Britain’s 33million drivers.The average price has risen from last week’s record of 121.76p a litre to 122.14p. It means it is now selling at the equivalent of £5.55 a gallon.UK petrol car owners are now spending £8 million a day more on fuel than a year ago."
European Central Bank arms itself for Spanish crisis
Telegraph
"The European Central Bank (ECB) is to double its capital base to cope with "credit risk" stemming from the eurozone debt crisis, paving the way for direct action to shore up the Spanish debt markets if necessary. "
"The European Central Bank (ECB) is to double its capital base to cope with "credit risk" stemming from the eurozone debt crisis, paving the way for direct action to shore up the Spanish debt markets if necessary. "
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