Guardian – The total number of British jobs axed by RBS and Lloyds TSB, both of which were bailed out by the taxpayer and are still part owned by the government, reached almost 45,000 today. RBS announced that it was axing 3,500 back-office jobs as a result of the sale of 318 of its branches to Santander, a move demanded by EU regulators in return for the bank’s £54bn government bailout almost two years ago. That takes the total number of posts lost since Stephen Hester took over as chief executive two years ago to almost 27,000. Read Article
CNBC – September and October hold bad news for stock markets and banks remain overleveraged as we head into the second leg of the financial crisis according to Pedro De Noronha, the managing partner at Noster Capital in London. “We are seeing one of the most challenging years for investors ever,” De Noronha told CNBC Tuesday. “Major investors are simply leaving the market. When it looks like markets are about to fall off the cliff they rally and vice versa. Read Article
Wall Street Journal – A top shareholder in Afghanistan’s largest bank called on the U.S. to shore up the lender after depositors withdrew about a third of its cash reserves in two days, while the country sought to avert a destabilizing crisis at a crucial moment in the fight against the Taliban. Mahmood Karzai, brother of Afghanistan’s president and the third-largest shareholder in Kabul Bank, urged the U.S. to calm the situation, saying the lender could keep up with the pace of withdrawals for only a few more days. Read Article
Financial Times – Alistair Darling admitted on Wednesday that Britain’s controversial supertax on bankers’ bonuses had failed to change the industry’s behaviour over pay as “imaginative” financiers devised ways to avoid it. The former Labour chancellor of the exchequer, who introduced the levy last year amid an unprecedented outcry over bank pay, said he thought it was unlikely that the tax would be reinstated by the current Con-Lib coalition government. Read Article
Telegraph – Afghanistan’s authorities have ousted the managers of the country’s biggest bank to try and prevent a collapse due to toxic property investments and murky loans to politically powerful customers, it has been reported. Hamid Karzai personally approved the intervention to prevent a meltdown at Kabul Bank which could send shock waves through the Afghan economy. Sher Khan Farnood, the chairman, and his chief executive Khalilullah Frozi were replaced by staff from the Afghan central bank this week. Read Article
Forbes – Rumors have circulated in China that People’s Bank of China Gov. Zhou Xiaochuan has left the country. The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBOC, including Zhou. Read Article
USA Today – Off-balance-sheet liabilities. Bad mortgage loans. Uncertain growth prospects. These issues, which nearly toppled the U.S. banking industry and triggered the financial meltdown, are increasingly threatening the stability of Chinese banks. Last week, a slew of Chinese banks – including Industrial & Commercial Bank of China, Bank of China and Agricultural Bank of China – reported strong profits. Read Article
ABC – Australian shares have reversed some of yesterday’s gain, losing about 1 per cent after economic fears hit Wall Street overnight. The All Ordinaries index closed 44 points lower at 4,439, and the ASX 200 was down 49 points to 4,404. A steep fall in metal prices led the major miners lower, with BHP Billiton sliding 2.2 per cent to $37.05, and Rio Tinto down 1.3 per cent. The major banks also lost ground on economic fears, with Westpac posting the steepest decline of 2.8 per cent. Read Article
FOX – An all-out war has broken out between Citigroup CEO Vikram Pandit and a prominent securities analyst who is saying that the big bank may be cooking the books by inflating its earnings through an accounting gimmick, FOX Business Network has learned. The analyst, Mike Mayo, of the securities firm CLSA, has been telling investors that Citigroup (C: 3.67 ,-0.08 ,-2.13%) should take a writedown, or a loss on some $50 billion of “deferred-tax assets,” or DTAs. That is a tax credit the firm has on its financial statement that Mayo says is inflating profits at the big bank by as much as $10 billion. Read Article
ABC – The Bank of Japan has responded to government pressure to counter a strong yen by extending a multi-billion-dollar loan program, but the move has been viewed with disappointment by markets. The decision came after an emergency meeting was called in response to government pressure to try to curb the yen’s rise and support an economy mired in deflation after the unit hit a 15-year high against the US dollar last week. Fears for the health of the global economy have increased in recent weeks, and US Federal Reserve chief Ben Bernanke on Friday vowed to act if “unexpected developments” further threaten the shaky US recovery. Read Article
Daily Mail – A company set up by Tony Blair can now act as an investment bank after registering with the Financial Services Authority. His Mayfair-based company Firerush could provide the former Prime Minister with further opportunities to boost his fortune, estimated to be in excess of £20million. Firerush is understood to be one of a number of firms Mr Blair set up to manage the finances of his consultancy firm, Tony Blair Associates (TBA). Read Article
Wall Street Journal – The Bill and Melinda Gates Foundation took advantage of sagging stock prices in the second quarter to add Goldman Sachs Group Inc. (GS), one of the most storied names in finance, to its portfolio, according to a 13F regulatory filing. Read Article
Huffington Post – Monsanto in Gates’ Clothing? The Emperor’s New GMO’s – If you had any doubts about where the Bill and Melinda Gates Foundation is really placing its bets, AGRA Watch’s recent announcement of the Foundation’s investment of $23.1 million in 500,000 shares of Monsanto stock should put them to rest. Genetic engineering: full speed ahead. Read Article
Financial Times – A number of the world’s biggest banks have launched international roadshows promoting the use of the renminbi to corporate customers instead of the dollar for trade deals with China. HSBC, which recently moved its chief executive from London to Hong Kong, and Standard Chartered, are offering discounted transaction fees and other financial incentives to companies that choose to settle trade in the Chinese currency. “We’re now capable of doing renminbi settlement in many parts of the world,” said Chris Lewis, HSBC’s head of trade for greater China. “All the other major international banks are frantically trying to do the same thing.” Read Article
AFP – Iraq’s privately-owned banks have called for the country’s state-owned lenders to be privatised to break up a near monopoly in lending by politicians whose actions remain stuck in the Saddam-era. Although foreign cash has flowed in since the US-led invasion of 2003, ministers still opt to use government banks to do business and are failing to use private rivals, which is hampering economic growth, bankers argue. Read Article
Our recent editorial on the real moral debate that is not being discussed around the theory of Anthropogenic Climate Change has been re-published on Australia’s premier e-journal, Online Opinion.
CLICK HERE to read the article and also please do leave comments (hopefully positive) on the comments forum too
NY Times – It’s one of the toughest lessons an investor has to learn: while the value of assets can plummet posthaste, it takes forever to shrink the debt that was used to buy them. Last week, this harsh truth was made clear yet again, in a report on consumers’ financial well-being by the Federal Reserve Bank of New York. The first of a Fed series to be published quarterly on household debt and credit, the 38-page report shows just how tapped out the consumer remains three years after the borrowing bubble burst. Read Article
Bloomberg – An expansion in Australia’s economy, now in its 20th year of growth as a mining investment boom intensifies, will boost inflation pressures in coming years, central bank Deputy Governor Ric Battellino said. “History tells us that inflation can be a problem during resources booms, and while there are grounds for thinking it will be less of a problem this time than in the past, we need to remain alert to the risks,” Battellino said in Brisbane today. Read Article
Gulf – Several tons of gold imported into the UAE by traders and investors turned out to be fake on closer inspection, resulting in millions of dirhams in losses and high levels of stress to the victims. Speaking to Emirates 24|7, Mohamad Shakarchi,, Managing Director of Emirates Gold, said: “A lot of people in the UAE who tried to import gold at lower prices or through dubious overseas companies have been cheated. Read Article
BBC – UK inflation eased to 3.1% in July from 3.2% in June, the third month in a row that prices have risen more slowly. However, the Consumer Prices Index (CPI) is still well above the Bank of England’s 2% target rate. The Retail Prices Index (RPI) slowed to 4.8% from 5% in June, the Office for National Statistics (ONS) said. The governor of the Bank of England has written to the chancellor of the exchequer explaining why inflation is still above target. Read Article
BBC – Barclays Bank is to pay $298m (£190m) to settle criminal charges that it violated US sanctions in dealings with Cuba, Iran, Libya, Sudan and Burma. The bank was charged with breaching the International Emergency Economic Powers Act and the Trading with the Enemy Act in dealings between 1995 and 2006. The settlement was detailed in US court documents filed on Monday. According to the documents, Barclays voluntarily disclosed some of the transactions, and co-operated fully. Read Article
Reuters – Japan’s government will mull fresh stimulus steps ahead of an expected meeting between Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa, as persistent gains in the yen threaten a faltering recovery. But any stimulus is expected to be relatively minor and is likely to involve re-allocating funds rather than new spending. The Nikkei newspaper said the government’s stimulus steps may include extending the year-end deadline on subsidies for household purchases of energy-efficient consumer electronics. Read Article
Financial Times – The Dodd-Frank financial reform bill has opened a 90-day window for banks to buy back $118bn (€92bn) in high-cost securities, a move that would enable them to replace the instruments with cheaper capital but is likely to cause tensions with regulators and investors. Wall Street executives and lawyers say several banks are considering redeeming “trust preferred securities” (Trups) – a hybrid of debt and equity – by taking advantage of a clause triggered by the new rules. Read Article
Irish Central – Zombie bank Anglo Irish may cost the Irish taxpayer far more than the $30 billion so far set aside. Anglo Irish Bank formerly run by now bankrupt Sean FitzPatrick was at the center of the property collapse leaving billions in bad loans in its wake. The new crisis has emerged despite assurances by the government that the Anglo bill would not come to more than the $30 billion figure. Read Article
Bloomberg – A judge ordered Wells Fargo & Co. to stop manipulating debit-card transactions without consumers’ knowledge to increase revenue from overdraft fees while ruling the bank should pay about $203 million to customers because of the practice. U.S. District Judge William Alsup in San Francisco sided with three customers who sued in 2007 on behalf of thousands of Californians charged overdraft fees. In a ruling yesterday, he agreed that the practice was unfair, deceptive and fraudulent. Read Article
Telegraph – The banking system could be on the brink of another crisis, according to one hedge fund manager who has taken a series of short positions against some of Europe’s largest financial institutions. London-based fund Noster Capital is betting against five major European banks, including Barclays in the UK, Spain’s BBVA, and Switzerland’s UBS. Pedro Noronha, chief executive of Noster Capital, said he thought many people still failed to understand the extent of the problems facing many banks and were “complacent” about the risks the industry faces. Read Article
