Archive for December 2008

Good News? Surely Not…

December 19, 2008

Bad news for the bad news mongers – UK retail sales have gone up for the second month in a row.  This means that it is possible the government’s VAT slash to 15% until the end of 2009 has actually worked.  The Bank of England’s interest rate cut to 2% also could be a factor that has increased sales.  Apparently consumer confidence has grown higher than expected. 

The media in the UK seems to be on a bit of a feeding frenzy for bad financial and economic news, and each day report more surveys on how things are going badly and are set to get worse.  Stories such as unemployment figures increasing – to their highest level since 1999 – and crises for shop owners and car manufacturers have dominated the headlines.  But if you look closer at some of the figures they release, you can actually take some perspective.  Yes, unemployment has risen.  But not by a vast amount and not to a level as bad as the last recession.  I feel that there are too many surveys taking place at the moment!  Or at least too many with negative projections.  Yesterday we heard about Jaguar Land Rover meeting with the government for aid, but nothing has been handed over, no money has actually changed hands.  One felt that the media were secretly hoping for another car disaster such as the Big Three in the USA earlier this month.

There’s a possibility of some scare-mongering in the air, and I think that today’s news of good results should give people something to smile about.  At last! 

Merry Christmas and Happy Holidays everyone!  I raise my glass to good news.

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Madoff – Do Fools Rush In When Money Talks?

December 18, 2008

So what are we supposed to think about Bernie Madoff?  I mean clearly there’s some seriously dodgy dealing going on.  Has been for many years – in fact today we hear that watch dogs were given a lead to him a decade a go!  Nothing happened then – why?  And why has it taken so long for anyone to do something about this man’s alledged fraud?  These are questions being asked by analysts and commentators at the moment, but what I want to know is who should we be really focussing on in our moral standpoint?

It’s fair to say that Madoff acted in a way that should be punished if he is found guilty.  Rinsing not just banks but charities for billions of dollars is not a way to a clean conscience.  But what of those people that moved such large amounts of money into his care?  Were they ignoring the signs?  Did they never think this is just too good to be true?  There have been some who have said that it is common for people to get overexcited when things are looking up where their money is concerned.  Madoff ran his dodgy dealings in a very exclusive way so that everyone wanted to be part of his luxurious club and benefit from his expert money handling.  But should they have thought more carefully before handing over their funds?  Was he just the white collar criminal who was playing to people’s need for exclusivity and power?  Did he make them hear what they wanted to hear? 

It’s possible.  But I suppose it is a little unfair to say “I told you so” to someone who’s owed millions and is not likely to get that money back.  Ever.

I will watch with baited breath when the case comes to court.

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Madoffgate – Worse than Enron?

December 16, 2008

Much embarrassment in the world of banking today as investors weigh up their losses in Madoffgate.  Yesterday, Nicola Horlick hit out at watchdogs for failing to spot this huge alleged fraud earlier, and today we are getting more and more reports of the amount that each bank involved is set to lose.  And it ain’t a pretty number (don’t forget the possible total Madoff rinsed is around $50 billion!)  This case has even been named by some as bigger and worse than Enron back in the first part of this century.

What really packed a punch today as I read the news was the fact that it isn’t just banks and wealthy private investors that are being stung by this case – it is also charities that face closure.  Surely that is a step too far for old Madoff?  Until now he might have been viewed as something of a ‘gentleman gone wrong’, a white collar criminal (if found guilty) but the fact that charitable foundations who relied on him are now to fail and be unable to help those in need makes him a much darker figure.

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Fraudster Out on Bail

December 15, 2008

Nicola Horlick, boss of Bramdean Alterntives has hit out at financial watchdogs in the Madoff fraud scandal.  She has accused them of failing in their jobs for not realising earlier that the former Nasdaq boss was rinsing a number of bank using his hedge funds.  This is being seen as the biggest alleged fraud case ever recorded.  Horlick’s comments are fair enough really given that her company are victims of the 70-year-old fraudster – they had nearly 10% of their investments going through him. 

Apparently he also faces up to 20 years in jail if found guilty – well deserved it would seem given the amount of banks which stand to lose out: Santander, BNP Paribas and Royal Bank of Scotland all stand to make losses out of this.

Even though he’s apparently being transparent over this scandal, Mr Madoff did plan to pay off a select few before coming clean.  What is stunning is that he could be to blame for plunging banks that are already suffering a great deal in the economic crisis into further turmoil.  Could he have found a worse time to be caught out?!  I doubt he will want to show his face in public despite being released on $10 million bail.  

Have a Guilty Christmas, Bernard Madoff.  I look forward to some more background information on why a man so trusted and intelligent was playing trickster for such a long time…….



On Benefits? Start Jobhunting

December 10, 2008

….so says the UK government in plans to be revealed later today.  It doesn’t matter if you’re a single parent with kids to bring up – you will be forced to make an effort to find work.  Those who do not make enough effort to seek employment (reasonable jobs of course) or turn up to job interviews are to be penalised.  The plans  are going to be greeted with some negative feedback from ministers – both Labour and opposition parties.  The idea behind the push is that the government feels that enough is not being done to fight the plunging economy in Britain.  But it will not please many that such drastic measures are to be taken.  Many feel that this is too little too late and will do little except force people into more impossible situations. 

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Shocking: Good Financial News!

December 8, 2008

Note the date!  There is good news on finance today!  Yes, you read correctly – GOOD NEWS ON FINANCE.  Shocking but true. 

Yes, today the stocks in many places including Europe and Asia took an upward surge after hopes were increased for a stimulus from the USA.  Apparently Barack Obama is sticking to his word so far, and announced plans on how he is planning on injecting funds into the economy, thereby creating millions of new jobs.  SImilar announcements came from India, with projections of billions of dollars to be inserted into the economy over there.

Also a change in the news: oil has risen again in price, after announcements of production of barrels to go down.

Are we on the up??

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Queen’s Big Banking Bill

December 3, 2008

Roll out the red carpet – the Queen’s in town.  And she’s ready to make her big speech any minute now – well more accurately it’s Gordan Brown’s speech, but we Brits love a bit of a show so we wheel out the Monarch to read it out.  It’s nice to see a bit of glitz and glamour with a bit of bling thrown in to make the rather boring list of bills more interesting…



So what are we going to cover this time?  Well as usual we already have a pretty good idea from the preview back in May but then again we didn’t know the mess we’d be sitting in now so of course there have been some moderations since then.  Top of the priority list: economy and the Banking Reform Bill – which includes fairer treatment for customers.  Banks will be required to give ample and specific warning to customers before making changes or withdrawals on credit.  There could even be a statutory code of lending introduced.  This bill is something many banks have pre-empted with some rather handily-timed reforms of their own: merging banks HBOS and Lloyds for example are suggesting new ways of treating smaller businesses – so those earning under £1m will benefit from having interest rates passed on to them.  Other banks are also set to introduce new codes of practise. 



The Queen’s appearance comes on the same day that hopes are increasing for yet more interest rate cuts from the European Central Bank – inflation has fallen further so the rate cuts would come as a welcome break.  They are even forecast to go down from their current position of 3.25% by up to a full percentage point.  The new falls in inflation are being partly blamed on lower fuel and food costs and also on unemployment which is reaching pretty steep levels in most European countries.  Worst hit is Spain which has jumped to 12.8% – least affected is Holland with a tiny fraction of Spain’s amount at only 2.5%. 


So a big day by all accounts – and while the Queen removes the makeup and reviews her performance backstage, we’ll all be looking to the government to put the plan to action.


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