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1 Money - At RBS -Capitalism rewards failure using our cash
Updated: 23 Feb 2012

RBS prepares to pay out £400m in bonuses

despite expected £2bn loss

 

Royal Bank of Scotland is expected to reveal a loss of £2bn after the eurozone crisis hit the performance of its investment bank

  • guardian.co.uk,
    •  
    Royal Bank of Scotland is expected to announce £400m in bonuses for staff.
     
    Royal Bank of Scotland risks igniting a row over City pay when it is expected to announce it is setting aside almost £400m for bonuses despite reporting its fourth consecutive year of losses.

    The Edinburgh-based bank, which is more than 80% owned by the taxpayer after a series of bailouts that began in October 2008, is expected to try to defuse any controversy by revealing that 10,000 of its top staff will have pay freezes after a year in which the bank is is expected to reveal a loss of £2bn.

    The eurozone crisis dented the performance of its investment bank while the retail arm will be hit by a £1bn provision for payment protection insurance (PPI) mis-selling.

    After the furore surrounding the award of a near-£1m bonus for chief executive Stephen Hester – - which he waived – he is still on course to be handed £600,000 in bonuses next month while close colleagues in the next few weeks could be handed up to £11m depending on the share price and their performance.

    David Hillman, a spokesman for the Robin Hood Tax campaign, on Wednesday:"It is incredible that while the rest of us suffer, a loss-making bank bailed out by the taxpayer is allowed to pay out hundreds of millions in bonuses.

    The British public is getting a raw deal from RBS and the wider financial sector: it is time they were made to pay their fair share rather than line their own pockets." TUC general secretary Brendan Barber added pay and bonuses were "out of control" in the City.

    Making reference to Hester's salary, Liberal Democrat peer Lord Oakeshott said that "every small business in Britain would love to have their bosses' pay frozen at £1.2m".

    The bonus pot, expected to be just under £400m, is more than half the £950m paid out in 2010 .

    The chief executive will on Thursday present a three-year report card to set out the progress the bank is making - despite the £21bn loss the taxpayer is currently incurring in its 82% stake - along the path to recovery following the near £24bn record-breaking loss he inherited in 2008.

    Hester will add further detail to the £38bn of costs that have already been incurred to clean-up the bank.

    Some £28bn relate to losses on loans which have turned sour and almost £3bn from restructuring charges as 33,000 roles have been shed since the financial crisis

    		 3
    2 Money - Makes the world go round (until its dizzy)
    Updated: 21 Feb 2012

    Man cannot live by printing money alone

    But when you consider UK and US Fiscal policy

    Greek indebtedness and credit cards

    90% mortgages and 10% unemployment

    Building motor cars nobody wants, fashions that disappear overnight

    And booze that is passes straight through you

    It makes one think

    Well perhaps we can

    		 5
    3 Money- The First principle of Capitalist Finance-"Cheat the customer with his own money"
    Updated: 18 Feb 2012

    Judge and jury

     

    Friday 17 February 2012
    by Tony Patey
    Global credit ratings agencies can give an aura of mythical leviathans hovering over a Terry Pratchett-esque economic landscape and breathing hot air.

    The only trouble is that they've got clout, but just how much and how much influence they should have is debatable.

    Putting the mockers on a country is vastly different to me or you trying to get a bank loan if we haven't got a good rating.

    When it comes to consumer credit agencies we have firms such as Experian but on the bigger scene there's Moody's, Standard and Poor's (known as S&P) and Fitch.

    These "top three" have a hold, rootless but nevertheless firm, over governments. They speak and the capital markets move.

    One might be forgiven for thinking this obscure power comes mainly from their ability to say they have the ability to say so.

    But they do have some justification through what are called the Basel II recommendations on banking laws enshrined in European Union law since 2008.

    These forced European banks - and the European Central Bank - to rely more on standardised assessments of credit risk by Moody's, S&P and Fitch.

    Roger Seifert, Professor of Industrial relations and human resources at University of Wolverhampton Business School, says that, given the current economic scene, it is "not surprising that international organs of finance capital, such as rating agencies, look nervously at Britain's situation with or without the doomsday scenario unfolding in the eurozone."

    He reckons the agencies tended to suffer from so-called "client capture" - customers of professional work actually calling the tunes about that work - before 2008.

    "The result was there was no serious check on the abuses of sovereign and finance debt and disorder.

    "More recently, in order to survive, they have become what they should be - impartial calculators of default risk of companies and nations, even if their underlying assumptions are based on conservative views of the ways in which capital should be regulated.

    "Nonetheless, the trend is for rating agencies to 'rate' correctly within their narrow world and therefore other decision-makers in the markets and governments have to take note."

    As a parting warning shot he said: "Even the IMF is starting to worry that EU policies in particular are spiralling out of control in a vicious circle of cuts in spending, confidence, and growth policies."

    However, this small happy band of agencies has been criticised in the past for being too cosy - forming what's called an oligopoly - and building up reputations by purely keeping themselves exclusive.

    Nevertheless, the agencies who set themselves up as judges of whole countries, let alone companies of all sizes, are not above having feet of clay themselves.

    Just last September, the US-based Securities and Exchange Commission (SEC) uncovered what it called "apparent failures" at no fewer than 10 credit rating agencies.

    It said it was concerned that the agencies - including S&P and Moody's - were getting stuck in the mire of conflicts of interest.

    The SEC did not directly point any fingers but it said that two of the "big three" did not have specific policies to deal with conflicts of interest - one of them was apparently not even correctly following rating methodologies.

    In other words, do the credit ratings agencies themselves deserve triple-A ratings?

     Let's take a look at the root cause of the recession which kicked off in 2007.

    That came from dodgy US mortgage debt resold around the world in endless circles - debt that was given top credit ratings by the agencies.

    They were accused of having conflicts of interest, because they were paid by the banks that actually sold the debt.

    Also, four days before US-based energy and services giant Enron went bust in 2001 the agencies were still giving it a rating of "investment grade."

    It later came out that they'd been aware of Enron's troubles months before.

    		 21
    4 Money- NHS Pension Scheme increases
    Updated: 17 Feb 2012

    NHS Pension Scheme

    Generally, Public Sector Pension Increases are based on the CPI as at the 12 months ending September.

    For 2012, we therefore anticipate that the full Pensions Increase for Public Sector pensions (including NHS pensions) will be 5.2% effective 9 April. 

    However, until the Pensions Increase Review Order is published, which is normally sometime between late January and mid February prior to the April increase, we cannot actually confirm this.

    		 14
    5 Money- The Obscene Banker's Bonus Culture-Tax em or Trash em
    Updated: 16 Feb 2012

    Tax 'em til the pips squeak

    Wednesday 15 February 2012
    There is a very simple way to deal with the bankers' "bonus culture" that nobody seems to be talking about.
     
    Tax it!

    In the 1970s, for taxable incomes over £20,000 (equivalent to around £170,000 now) we had a tax rate of 83 per cent.

    On "investment" income (that is from gambling on the capital markets) it was 98 per cent.

    If employers really think their executives are worth it, let them pay these obscene bonuses, but let us at least tax them so that the rest of us, upon whom their businesses depend, will get a cut in the form of more money for public services.

    Of course, there is no way that this government will take such a step, but that does not mean we should not talk about it.

    Of course, if we had a government that took such a measure there would be the usual cry that all these fantastic "experts" will migrate.

    Good riddance, I say. Nobody is indispensible.

    There will be always be people who can grow into the jobs that need to be done, who will not demand bonuses for the jobs that they are already being paid to do.

    Jerry Jones
    London SW19

    		 11
    6 Money - Barclays sacked 6000 in 2011 yet the Bosses collect huge bonuses
    Updated: 11 Feb 2012

     

    Barclays sacked 6,000 workers yet still collect bonuses, says Unite

    by - 10th February 2012, 7.31 GMT

    Unite has reacted angrily at this morning’s announcement from Barclays, saying they last year made £5.9bn profit.

    Although the profits fell 3%, and the bonus pool at its investment banking division was down 26%, it remains at £1.5bn.

    Unite national officer David Fleming said: “The announcement on bonuses today by Barclays is yet another illustration of the banking sector continuing to ignore the public outrage and disgust at their behaviour.

    Serious questions exist about the moral backbone of those running the financial service sector, while they find it acceptable to ignore the misery working people face with our economy in turmoil.

    “The strong results announced today reflect the hard work done by the thousands of low paid Barclays staff in bank branches, processing and call centres.

    However, there remains an unacceptable disparity between the huge pay awards to the select few at the top of the organisation and the majority of the workforce.

    “In 2011 alone Barclays cut 6,000 staff globally, yet its top bankers are today being remunerated with these enormous bonuses. Instead of awarding the bosses outrageous bonuses, the banking sector needs to give something back to our communities. Barclays must now realise that cash rich multi nationals need to plough something back into society, instead of simply rewarding one another with fat bonuses.”

     

     

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    7 Money- Pound to hit 1.60 against the dollar & 1.20 against the Euro ?
    Updated: 08 Feb 2012

    UK Forex 

     Dollar  

    The pound is higher against the USD this morning amid a fairly quiet last 24 hours in terms of risk events and economic data.  In fact the U.S. dollar has weakened across the board including vs. the euro as investors start to grow a bit more optimistic over on-going Greek talks.  This has also bolstered equity markets and supported an air of positive risk sentiment.  Meanwhile, Bernanke testified to the House Budget Committee yesterday but said nothing new.  It seems short positions in GBP/USD and EUR/USD are now getting trimmed as investors gear up for central bank interest rate decisions from the ECB and Bank of England tomorrow.  The BoE are expected to leave interest rates on hold but are likely to increase their quantitative easing programme from £275 billion to £325 billion.  After starting the day yesterday at 1.5800, cable opens this morning at 1.5920.

    Euro:

    As markets grow more optimistic over a deal for Greece the euro has pushed higher vs. the dollar and the pound.  EUR/USD traded to a high of 1.3285 overnight/early this morning.  It has been knocked slightly by a headline which has apparently emanated from a story in FT Deutschland that Germany is proposing postponing the majority of new Greek aid.  The headlines and rhetoric on Greece will no doubt rumble on and will continue to exert heavy influence over the direction of EUR/USD and general risk sentiment.  Following a few delays the Greek cabinet is however expected to approve austerity measures required for a second bailout by the end of today.  As the optimism gains pace the euro has strengthened against GBP and after trading to a high of 1.2060 yesterday GBP/EUR opens this morning at 1.1985.

    		 14
    8 Money -Mortgage price war
    Updated: 04 Feb 2012

    Mortgage price war sees rates hit record lows

    as banks try to kick-start housing market

    By Lauren Thompson

    Last updated at 11:14 AM on 1st February 2012

     Price war: Rates on five-year and ten-year fixes have plunged to the lowest ever level in the past week
    A mortgage price war has seen rates hit record lows as banks desperately try to kick-start Britain’s housing market.

    Rates on five-year and ten-year fixes have plunged to the lowest ever level in the past week.

    Yesterday, Chelsea BS launched a five-year fixed-rate mortgage at 3.19 per cent — the lowest since records began. Borrowers need 30 per cent equity and will need to pay a £1,495 fee.
     More...MORTGAGE TABLES: The cheapest deals

    Monthly repayments on a typical £150,000 mortgage would be £726.

    Last week, Norwich & Peterborough BS, part of Yorkshire BS, launched a  record-breaking ten-year fix at 3.99 per cent with a £295 fee and available to those with 25 per cent equity.

    Monthly repayments would be £791.
    The new deals come as figures released by the Land Registry reveal house prices fell by 1.3 per cent in 2011.

    Many economists expect prices to keep falling this year as cautious buyers are put off by a weak economy and rising unemployment.

    Michael Ossei, personal finance expert at comparison site uSwitch, says: ‘Although it may be a year or more before the Bank of England base rate rises, the only way for mortgage rates to go in the long term is up. Consumers can protect themselves by fixing now.’

    Those willing to take more of a gamble on interest rates can get a lifetime tracker with HSBC pegged at 1.99 per cent above the base rate, giving a current rate of 2.49 per cent.

    Monthly repayments today would be £672, but this would increase in line with the base rate


    Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2094548/Mortgage-price-war-sees-rates-hit-record-lows-banks-try-kick-start-housing-market.html#ixzz1lNos7nMH

    		 27
    9 Money- Shell profits for 2011 = $28.6 BILLION- while it slashes its local pension scheme
    Updated: 03 Feb 2012

    Unions seethe at Shell megaprofits

    Thursday 02 February 2012
     
    by Rory MacKinnon, Corporate Affairs Reporter
     
    Royal Dutch Shell posted profits roughly the size of Ethiopia's entire economy today - even as it moves to slash its local pension scheme.

    Union leaders rounded on the oil giant as it announced a $28.6 billion (£18.1bn) profit for 2011, less than a month after closing its final-salary pension scheme to new recruits here in Britain.

    The return - a 54 per cent increase on the previous year - is larger than many countries' entire nominal GDP.

    The resulting $10.5bn (£6.6bn) in dividends spurred CEO Peter Voser to promise investors "more to come from Shell."

    The company had ramped up production expecting near-term growth, while its improving financial position had created opportunities to increase both dividends and investment, he said.

    But Shell's megaprofits have only angered the union representing its local workforce.

    In January the company said it was shutting out all new recruits from its final-salary pension scheme, citing "market trends."

    From 2013 new workers will be offered a defined contribution plan instead of the higher-return final-salary scheme.

    Final-salary schemes guarantee a pension payout calculated on a set formula but defined-contribution schemes simply float the money on the stock market.

    Unite union general secretary Len McCluskey said the company was needlessly closing the scheme while posting "colossal profits.

    "This is predatory capitalism in action," he said.

    "Shell is one of the world's richest and most powerful corporations - it can afford to keep the final-salary scheme open to new entrants.

    "Rather than provide security to its future staff and still make a profit it has chosen greed.

    "Shell is not alone. Unilever is needlessly slashing its employees' pension benefits when there is no financial reason for doing so. Unions are the only force to stand in their way as governments do nothing to rein in their power."

    Shell's press office could not be reached for comment.

    rorym@peoples-press.com

    		 21
    10 Money - Banking Baddies - Where are they now ?
    Updated: 02 Feb 2012

    Banking baddies: where are they now?

    • 

    With Fred ‘the Shred’ Goodwin now stripped of his knighthood,

    we thought we'd look again at what the big bosses

    who led the banks into the financial crisis are currently up to..

     

    by Victoria Bischoff on Feb 01, 2012 at 11:40

    Citywire

     

    RBS: Fred Goodwin

     


    Fred ‘the Shred’ Goodwin hit the headlines this week after being stripped of his knighthood – an honour he received before he was all but run out of his role as chief executive of RBS in 2008 after it emerged the banking group had made a record loss of £24.1 billion and needed a £42.5 billion state bailout.

    In addition to the ‘debasement’ – which is usually reserved for cases of treason – Goodwin has also been heavily criticised over the size of the pension he received from RBS.

    Following several vandalism attacks on his home by protesters, it was eventually reduced from £703,000 to £342,500 a year (plus a lump sum of nearly £3 million).

     

    After leaving RBS Goodwin moved into a senior adviser role at an international architecture firm called RMJM – which later needed an £8 million bail-out from its lead investor.

    Goodwin has now left the position.

    Goodwin was also in the spotlight last year after taking out a superinjunction to prevent the media publishing a story about an alleged affair with a senior colleague while he was at RBS.

    The superinjunction was later lifted by the court allowing the media to identify Goodwin after he was named in a Lords debate under the protection of parliamentary privilege.

    The public want to know if the affair impacted Goodwin’s decision-making during the crisis, putting the Financial Services Authority (FSA) under increased pressure to publish its investigation into the bank – which it finally did at the end of last year

    Northern Rock: Adam Applegarth

    Adam Applegarth resigned as chief executive of Northern Rock in November 2007 shortly after the government was forced to step in and bail out the failing mortgage giant – though not before witnessing the first run on a British Bank in over a century.

    After maintaining a low profile for a short while (and spending his £760,000 golden handshake no doubt), Applegarth eventually started work again in October 2009 as senior adviser for US private equity firm Apollo Management. Ironically the company specialises in buying distressed assets

    HBOS: Andy Hornby

    Just nine months after bidding a hasty farewell to HBOS following the bank’s emergency merger with Lloyds in 2008, former chief executive Andy Hornby scooted back to the retail sector to join the international pharmaceutical and healthcare group Alliance Boots in perhaps one of the speediest business comebacks ever seen.
    In March last year however Horny quit his role as chief executive claiming he was ‘too stressed’ to continue living the corporate life as Boots’ boss and needed a break.

    After what turned out to be a rather short recovery period, Hornby has since been appointed chief executive of the bookmaker Coral – part of Gala Coral Group

    HBOS: Peter Cummings

    Peter Cummings, head of corporate banking at HBOS, stepped down shortly after the merger with Lloyds TSB in 2008 after being told he would not be asked to join the board of the merged banking group.

    He then all but vanished from the public eye – some say he slinked off to Scotland where he was allegedly sighted not too long ago, others claimed he ran off to a £4 million villa on the Costa del Sol, no one knows for sure.

    However, Cummings was back making waves last year as he battles the FSA which wants to ban him from working in the City ever again. In exchange it promises to drop its investigation into his role in the financial crisis.

    Cummings however, who thinks he’s being hard done by, refuses to accept the deal and is currently in the process of trying to clear his name.

    Lehman Brothers: Dick Fuld

    Richard ‘Dick’ Fuld, Lehman Brother’s former chief executive and chairman, was forced to run for cover in 2008 when the investment bank went bust and filed for bankruptcy.

    Aside from several painful Congress committee appearances, Fuld then proceeded to keep his head firmly down.

    In 2009 however Fuld joined Matrix Advisers, a New York-based hedge fund. In 2010 Fuld then re-emerged at a small New York-based investment banking firm Legend Securities

    Bradford and Bingley: Steven Crawshaw

    Former chief executive of Bradford and Bingley Steven Crawshaw resigned just a couple of months before the mortgage bank’s demise for health reasons – and so while not at the helm when the bank collapsed he is still considered as the one to blame.

    Having been diagnosed with acute angina, post B&B Crawshaw simply took his generous pension of more than £105,000 a year and retired.

    Lloyds: Eric Daniels

    Former Lloyds chief executive Eric Daniels was the last of the big bank bosses in power during the credit crunch to leave his post.
    After leading the disastrous takeover of HBOS in 2008, a move which later saw Lloyds run to the government for a £17 billion bailout, Daniels waited until Lloyds finally returned to profit before retiring in March last year – taking home a £2million bonus and bumper pension pot.

    The banking giant is now, however, attempting to 'claw back' as much as half of his bonus after the bank’s profits took a £3.2 billion hit following the PPI mis-selling scandal. Daniels meanwhile has a new job as senior adviser for City firm StormHarbour, which specialises in restructuring debt

    Lloyds: Sir Victor Blank

     

    Sir Victor Blank was forced to step down as chairman of Lloyds Banking Group in May 2010 after losing the confidence of shareholders following the HBOS rescue.

    He’s renowned as the guy that agreed to take on HBOS’s toxic debt over cocktails with Gordon Brown – a deal which resulted in catastrophic losses for the banking group and its own near failure.

    After departing, Sir Victor kept very quiet about his time at Lloyds, but in an interview last year with the Telegraph however he let the banking world have it with both barrels, criticising culture and pay.

    He now works as a senior adviser to US private equity group TPG Capital and is chairman of the Industrial and Development Advisory Board created by Lord Mandelson.

     

    AIG: Martin Sullivan

    Once a rising star, British born Martin Sullivan’s fall from grace was swift.

    Forced to step down as chief executive of AIG, the world’s biggest insurance company, in June 2008 after the US government had to step in to provide the failing company with a $182 billion bailout.

    Sullivan has more recently been named as one of the worst CEOs of all time. He’s since had to testify before Congress, and has been brutally criticised in the press for ‘being asleep at the wheel’ when the crisis began to unfold – and for the millions he received in bonuses.

    In 2010 he returned to work at insurance company Willis Group Holdings PLC as deputy chairman and chairman and chief executive of a new business unit Willis Global Solutions, based in New York.

    Alistair Darling and Gordon Brown

    Finally, we move onto the former chancellor Alistair Darling and prime minister Gordon Brown.
    After being heavily criticised for not supervising the banking giants and being forced to sign off the bailouts, the Labour government was kicked out of power in the 2010 general election.

    Since then the new Tory government has launched an Independent Commission on Banking (ICB) to suggest ways in which the banking industry should be reformed – the FSA meanwhile will be replaced by the Financial Conduct Authority later this year.

    Brown, who is still an MP for Kirkcaldy & Cowdenbeath constituency, was thrown back into the spotlight last year amid claims his phone and son’s medical record were hacked into by employees at News of the World.

    He delivered a furious speech to MPs – his first since resigning as Prime Minister – demanding an inquiry.
    Darling similarly retired from front bench politics after Labour's defeat but continues to throw in his two cents worth from the sidelines while looking after his constituents in Edinburgh South West.

    Darling also recently put himself forward as a figurehead for the anti- independence campaign against Scottish leader Alex Salmond, and today expressed his unease at Goodwin being singled out.

    		 32
    11 Money- Decadent Banker Goodwin -One down - Now for the rest
    Updated: 01 Feb 2012

    Sir Fred Goodwin - Make corporate recklessness a crime

    Wednesday, 1 February, 2012 9:51

    From: "Peter Tatchell" <humanrights2@petertatchell.net 
     
     
    Sir Fred Goodwin - Make corporate recklessness a crime

    Threat of legal penalties would ensure greater economic responsibility

    Bosses must be held personally liable for negligent decisions

    London - 1 February 2012

    "Stripping Sir Fred Goodwin of his knighthood is a merely symbolic gesture. What's needed are criminal sanctions to ensure greater corporate responsibility," said human rights and social justice campaigner, Peter Tatchell.

    "Corporate negligence and recklessness should be made an explicit criminal offence, to reign in big business cowboys and ensure more responsible economic management. Bosses should be held personally liable for losses that result from imprudent, careless decisions.

    "If the medical profession can have disciplinary procedures for negligent actions, why not business?

    "Bankers and company bosses should not be able to wreck whole economies and squander with impunity people's jobs, pensions and savings. They ought to be personally accountable for irresponsible and damaging corporate decisions.

    "The spectre of legal penalties is likely to result in more prudent corporate governance.

    "Sir Fred Goodwin would not have gambled with RBS if he'd known that he could have ended up in jail and had to pay compensation for the harm he caused," said Mr Tatchell.

     
     
     

    		 24
    12 Money- Save Water - Save Money
    Updated: 31 Jan 2012

    = 1. SWITCH TO A WATER METER =

    Most people's bills are "rate-based", which means your bills are dependent on the size of your house rather than the amount of water you use. Small families and pensioners in big homes are likely to be better off having a meter installed.

    As a rule of thumb, if you have more bedrooms than occupants, a meter is likely to be cheaper. The water services regulation authority, Ofwat, estimates metering can reduce household water consumption by more than 20pc. On an average annual bill of £376 this would be a saving of £75.

    There is no charge for having a meter fitted and you can switch back to the unmetered charge at any time within 12 months if metering turns out to be more expensive unless you are in a universal water meter area. If a meter cannot be fitted, water companies can offer an alternative unmeasured tariff which may be lower than the current bill.

    If you use a lot of water because of a medical condition and you also receive benefits such as pension credit, you may be able to pay a lower water bill under the WaterSure scheme. Estimate your metered charge at www.tinyurl.com/35dmp36 or contact your water company for details.

    = 2. USE WATER-SAVING DEVICES =

    According to the Energy Saving Trust, the average person in Britain uses 150 litres of water every day and 33pc of this is running down the drain in the shower.

    If a family of four replace their inefficient shower head with a water-efficient one they could save around £72 off their gas bills and around £72 off their water bills each year an annual savings of nearly £150.

    New water-efficient shower heads are an easy way to save both water and energy. They are most effective on mixer showers with a high flow rate.

    However, bear in mind that most flow-restricting devices specifically say that they should not be used with a power shower. Before attaching any energy-saving device, it is vital that you read the small print, specifically the fitting and operational instructions.

    Fitting a shower with a flow-restricting shower head may also void any manufacturer's warranty or guarantee, so it is worth contacting the shower manufacturer directly to see what products may have designed specifically for use your model.

    = 3. TURN OF THE TAPS =

    A running tap wastes more than six litres of water a minute, so turn off the tap while brushing your teeth, shaving, or washing your face. Using a sink of water to wash up twice a day rather than having the hot tap running could save around £34 a year on your gas bill and around £25 on your water bill.

    = 4. DON'T BE A DRIP =

    Fixing a dripping tap can save as much as 75 litres per day or more than 5,500 litres of water a year, according to figures from Severn Trent Water, so make sure your taps are properly turned off and change washers promptly when taps start to drip.

    = 5. IN THE GARDEN =

    Use a watering can in the garden instead of a sprinkler or a hosepipe. A running garden hose can use as much as a thousand litres of water in an hour. If there are tasks that are not suitable for a watering can, use a hose trigger control. That way you can direct water specifically to the areas in the garden that need it and cut your outdoor water usage.

    If you have a garden and access to a drain you can save a significant amount of mains water by installing a water butt. Each year your roof collects around 85,000 litres of water enough to fill 450 water butts a year. Contact your water company to see if you are eligible for a free water butt or can get a discount.

    		 24
    13 Money-Pound - Dollar down - Euro Choppy
    Updated: 31 Jan 2012

    United States Dollar:

    UK FOREX

    Cable pushes higher this morning after reasonable gains yesterday. 

    It took until the US session yesterday before we saw any domestic data for the currency pair, so movement was based around development, or lack of, in Europe over the weekend. 

    Due to the lack of comfort from Europe and in particular Greece, cable started Monday on the back foot falling to a session low of 1.5660. 

    US releases showed that consumers are saving more and spending less, based on personal income and spending data. 

    This had little to no effect on the currency pair. 

    Late last night we saw the only UK release for Monday and it was good news with a rise in January consumer confidence. 

    This supported Sterling and it's gains from the lows versus the Greenback yesterday. 

    These gains have continues into this morning with month end signals being predominantly USD bearish.  GBP/USD opens this morning at 1.5760.

    Euro:

    Greece remains at the forefront of Europes concerns and continues to weigh in the single currency. 

    No deal seems to have been struck as of yet, despite ongoing chatter that a Greek debt swap deal is near to avoid a messy default. 

    Market optimisim is being seen this morning with 25 out of 27 EU states agreeing to a pact for stricter budget descipline yesterday. 

    This will be seen as a fiscal union and strengthen confidence in the EZ. 

    The two notable countries not entering into the pact being Britain and the Czech Republic. 

    As mentioned above, month end is seeing gains versus US Dollar across the board and has seen Euro break 1.3200 this morning. 

    We open slightly off this price with the currency pair sitting at 1.3198 currently.  GBP/EUR has been choppy in the past 24 hours, but within a 40 pip range. 

    The currency pair open at the lower end of the range at 1.1941 this morning.

    		 19
    14 Money- RBS Success - or just the beginning ?
    Updated: 30 Jan 2012

    RBS: success

    Monday, 30 January, 2012 14:18From: "Marie Campbell - 38 Degrees" <action@38degrees.org.uk> 
    Dear Friend,

    Late last night, RBS chief Stephen Hester said he would not take his £1 million bonus after all. [1]

    That's a huge turnaround – and we helped make it happen.

    When we launched the petition on Friday calling on Hester to refuse his giant bonus, it looked an uphill struggle. David Cameron and George Osborne were both claiming their hands were tied.

     Many thought it was a done deal.

    But in 48 hours over 80,000 38 Degrees members signed the petition.

    The public outcry grew in volume across the internet and in the press.

    More and more politicians started to join in.

    By the end of the weekend, we'd got Hester to back down.

    This latest breakthrough is yet more proof that people power matters.

    When enough of us speak up together, we can help change things for the better – even when politicians claim there is no alternative.

    Remember when the government said there was nothing they could do to stop Rupert Murdoch taking over BSkyB? Or that selling off England's forests was essential?

    Or that the NHS changes would be done and dusted by the middle of 2011?

     Time and again 38 Degrees members work together to prove there are alternatives.

    Is there more we could be doing together to tackle the scandal of bankers bonuses and skyrocketing executive pay?

    You can share your thoughts on this on our Facebook page: https://www.facebook.com/peoplepowerchange or on the 38 Degrees website: https://secure.38degrees.org.uk/join-the-conversation

    Here’s what some other 38 Degrees members are saying so far:

    Deborah: "Way to go! 82K people signed in 48 hours! Well done 38 Degrees!"

    Shaun: "This is great news, i like to think that our petition and facebook protest on here and on the RBS facebook page had a hand in making him change his mind on the bonus :)"

    John: "A small enough victory but I hope a significant one. On to chasing tax dodgers and saving our NHS :)"

    Anthony: "We need to remember this was not brought about by any pressure whatsoever by the government or the board. Both backed the bonus, the board siding with him and the government limp in their glaring lack of condemnation. The more we speak up the louder our voice."

    Wendy: "The arguments in favour of high salaries for bankers are as obscene as the salaries and bonuses themselves."

    Sylvia: "We pestered Hester - and he crumbled!"


    Thanks for being involved,

    Becky, Cian, Marie, David, Hannah, Johnny and the 38 Degrees team


    PS: Big corporations keep a close eye on social media to spot threats to their reputation. RBS won’t have been able to miss all that we did over the weekend, with over 12,000 shares of the petition on Facebook, and 2,000 messages on Twitter. Well done to everyone who spread the word!

    NOTES:
    [1] The Telegraph: Stephen Hester bonus: 'real change and new rules needed at Britain's banks" http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9048900/Stephen-Hester-bonus-real-change-and-new-rules-needed-at-Britains-banks.html
    [2] Mirror: David Cameron sparks outrage as he nods through RBS chief Stephen Hester's £1m bonus http://www.mirror.co.uk/news/politics/2012/01/28/david-cameron-sparks-outrage-as-he-nods-through-rbs-chief-stephen-hester-s-1m-bonus-115875-23723572
    [3] 38 Degrees petition http://www.38degrees.org.uk/page/s/rbs-chief-don-t-accept-your-1-million-bonus
    [4] Citywire reports that a source close to Stephen Hester says he feared "becoming a 'pariah' if the controversy continued" http://citywire.co.uk/money/hester-gave-up-1m-bonus-to-avoid-pariah-status/a562076
    [5] Read more on the 38 Degrees website about the Murdoch campaign http://blog.38degrees.org.uk/2011/07/13/victory-murdoch-withdraws-bskyb-bid/ - the NHS campaign http://blog.38degrees.org.uk/2011/10/13/nhs-what-weve-done-together-so-far/ - and forests campaign http://blog.38degrees.org.uk/2011/02/17/victory-government-to-scrap-plans-to-sell-our-forests/


     

    		 24
    15 Money- The Wealth Gap-Inequalities in Numbers
    Updated: 30 Jan 2012

    The Wealth Gap - Inequality in Numbers

    By Michael Robinson BBC World Service

    Protests have highlighted the inequality debate

    Until protestors took to the streets last year, first in New York and then in financial centres across the world, inequality had been a low-key issue.

    Not any more.

    With the political temperature rising, a stream of new analysis is revealing how sharply inequality has been growing.

    In October, the US Congressional Budget Office (CBO) caused a storm by revealing how big a slice of income gains since the late 1970s had gone to the richest 1% of households.

    The message was dramatic.

    Over the 28 years covered by the CBO study, US incomes had increased overall by 62%, allowing for tax and inflation.

    But the lowest paid fifth of Americans had got only a small share of that: their incomes had grown by a modest 18%.

    Growth in real after-tax income, 1979-2007

    Income Groups

    0-20%

    21-80%

    81-99%

    Top 1%

    Source: US Congressional Budget Office, Oct 2011

    Income increase

    18%

    37%

    65%

    275%

    Middle income households were also well below the overall average with gains of just 37%.

    And even the majority of America's richest households saw gains of barely above the overall average at 67%.

    How does that make sense?

    Because the CBO found most of the income gains over the past 30 years had gone to the top 1% of US households. Their incomes had almost quadrupled with rises of 275%.

    In Britain, Danny Dorling, professor of human geography at Sheffield University, has looked back even further into history.

    He's charted the share of national income going to the richest 1% since 1918, the end of World War I.

    After falling for more than half a century, Prof Dorling says, the share of Britain's richest 1% started rising sharply and inequality is now on course to return to what it was in 1918.

    Even within the richest 1%, inequalities are now enormous.

    At the lower end of this tiny group of high earners, Prof Dorling says you find people earning £120,000 a year.

    But the richest thousand individuals leave them far behind.

    They saw their wealth increase on average in 2010 alone by £60m. That was a 20% gain, following 25% the previous year.

    In November, the revelation of the size of the increases enjoyed by chief executives of the 100 largest companies on the London Stock Exchange triggered the most political anger.

    The High Pay Commission reported that these executives' total pay had risen by 49% during the previous year alone, compared with average increases of less than 3% for their employees.

    The rise left the chief executives with average pay of £4.2m. That was 145 times the average pay of their employees and 162 times the British average wage.

    Responding to the High Pay Commission report, Prime Minister David Cameron this month promised government moves against undeserved high pay awards.

    Internationally, vastly more information on incomes is now readily available.

    Last year, the Paris School of Economics launched an ambitious project: the World Top Incomes Database, providing resources online to allow anyone to examine income inequality.

    For The Wealth Gap series, we used that data to examine pay at the very top of the British income scale between 1997 and 2007. We then compared that with the average income of the vast majority - represented by the bottom 90%.

    This simple analysis reveals striking differences between the rich and most of the rest of the population.

    In 1997, the entire bottom 90% had average income of just over £10,500. The top 1% had incomes 18 times bigger.

    At the very top - the top 10th of one percent - the multiple was far higher. In 1997, their income was more than 60 times the average of the bottom 90%.

    Ten years later, that gap had widened significantly.

    By 2007 the average income of the bottom 90% was just under £12,500 a year, but the income of the top tenth of a percent was now 95 times as large, averaging well over £1m a year.

    The squeeze on British middle income earners is now regularly analysed by a new independent think tank: the Resolution Foundation.

    The Institute for Fiscal Studies offers an online tool that allows people in Britain to estimate where they fit on the inequality scale.

    It's not just inequality that is now being studied; so are its potential consequences.

    In what has become a policymaker's must-read, epidemiologists Richard Wilkinson and Kate Pickett claim to have discovered that, across developed countries, the greater the income inequality in any country, the worse the health and social outcomes for everyone: rich and poor.

    A widely-watched online lecture on TED Talks is spreading this message internationally.

    Such analysis has triggered a wide-ranging debate about the broader social and economic consequences of greater income inequality.

    Some now argue that it's a cause of financial instability as the international super-rich shift their wealth around the world, increasing volatility in the price of gold, equities, government debt or basic commodities such as copper and grain.

    In Britain, the estate agency Savills has charted the inflow of money from the international super-rich into prime London property.

    Savills believes this inflow is the key reason why London property prices have gone on rising while the market in much of the rest of Britain is stagnant or falling.

    And it's not only the top-of-the-market property that is affected.

    As price rises at the top of the market ripple across the rest of the city, even first-time buyers earning well above average incomes have found themselves priced out of the market.

    Awareness of inequality and its consequences has triggered increased political debate in Britain and elsewhere.

    But politicians and policymakers may not find it easy to reverse the trend of the past 30 years.

    The first episode of The Wealth Gap was broadcast on BBC World Service on Tuesday 17 January 2012

    		 16
    16 Money- UK's Richest People-The Top 100
    Updated: 30 Jan 2012

    UK's Richest People > The Top 100

    Sunday 29th January 2012
        

    The Top 100 Richest people in the UK

    Rank   Name   Worth   Rise/Fall   Source of wealth

     
    1 (1)  Lakshmi Mittal and family
    £17,514m   £4,936m  Steel

    2 (6)  Alisher Usmanov
    £12,400m   £7,700m  Steel

    3 (2)  Roman Abramovich
    £10,300m   £2,900m  Oil, Industry

    4 (3)  Duke of Westminster
    £7,000m   £250m
    Property

    5 (4)  Ernesto and Kirsty Bertarelli
    £6,870m   £920m
    Pharmaceuticals

    6 (15)  Leonard Blavatnik
    £6,237m   £3,237m  Industry

    7 (16)  John Fredriksen and family
    £6,200m   £3,450m  Shipping

    8 (5)  David and Simon Reuben
    £6,176m   £644m
    Property, Internet

    9= (new)  Gopi and Sri Hinduja  £6,000m   New
    Industry, Finance

    9= (7)  Galen and George Weston and family  £6,000m   £1,500m  Retailing

    11 (8)  Charlene and Michel de Carvalho  £5,400m   £1,000m  Inheritance, Brewing, Banking

    12 (new)  Ravi Ruia  £4,900m   New
    Energy

    13= (9)  Sir Philip and Lady Green  £4,200m   £95m
    Retailing

    13= (11)  Hans Rausing and family  £4,200m   £200m
    Packaging

    15 (12)  Joseph Lau  £3,937m   £112m
    Property

    16 (13)  Kirsten and Jorn Rausing  £3,900m   £400m
    Inheritance, Investment

    17 (10)  Anil Agarwal  £3,810m   £290m
    Mining

    18 (14)  Vladimir Kim  £3,500m   £340m
    Mining

    19 (18)  Sir Richard Branson  £3,085m   £485m
    Internet, Mobile phones, Transport

    20 (31=)  Nicky Oppenheimer  £2,900m   £1,400m  Mining, Diamonds

    21 (19)  Earl Cadogan and family  £2,850m   £550m
    Property

    22 (17)  Joe Lewis  £2,800m   £100m
    Investment, Foreign exchange

    23 (38)  Bernie Ecclestone  £2,500m   £1,125m  Motor racing

    24 (24)  Bruno Schroder and family  £2,460m   £790m
    Finance

    25 (20)  Alan Parker  £2,290m   £216m
    Duty-free shopping

    26 (22)  Sir David and Sir Frederick Barclay  £2,200m   £400m
    Property, Media

    27 (23)  Jean Claude Gandur  £2,105m   £327m
    Oil, Gas

    28 (50)  John Whittaker  £2,075m   £1,015m  Property

    29 (21)  Eddie and Sol Zakay  £2,050m   £150m
    Property

    30 (45=)  Laurence Graff  £2,000m   £800m
    Diamonds
    31 (27=)  Richard Elman and family  £1,940m   £390m
    Commodities

    32 (34)  Antonio Luiz Seabra  £1,875m   £415m
    Cosmetics

    33 (35=)  Baroness Howard de Walden and family  £1,820m   £420m
    Property

    34 (new)  Alexander Mamut  £1,815m   New
    Finance, Internet

    35 (39)  Simon Keswick and family  £1,775m   £420m
    Finance

    36 (57=)  Sir Anthony Bamford and family  £1,650m   £700m
    Construction equipment

    37 (26)  Mark Pears and family  £1,600m   -
    Property

    38= (31=)  Mahdi al-Tajir  £1,550m   £50m
    Oil, Metals, Water

    38= (27=)  The Fleming family  £1,550m   -
    Finance

    40= (35=)  John Caudwell  £1,500m   £100m
    Mobile phones

    40= (43=)  Eddie and Malcolm Healey  £1,500m   £250m
    Property, Kitchens

    40= (31=)  Poju Zabludowicz  £1,500m   -
    Property, Hotels

    43 (61=)  Sir James Dyson and family  £1,450m   £530m
    Household goods

    44= (115=)  Sri Prakash Lohia  £1,310m   £760m
    Textiles, Plastics

    44= (35=)  The Swire family  £1,310m   £90m
    Property, Transport, Industry

    46= (94=)  Mohamed al-Fayed and family  £1,300m   £650m
    Retailing

    46= (43=)  Lord Ashcroft  £1,300m   £50m
    Business services

    46= (41=)  Clive Calder  £1,300m   -
    Music

    46= (45=)  Alki David and the Leventis family  £1,300m   £100m
    Industry

    46= (51)  John Hargreaves and family  £1,300m   £280m
    Fashion

    51 (27=)  Ian and Richard Livingstone  £1,290m   £260m
    Property

    52 (65)  Mike Ashley  £1,268m   £378m
    Sports equipment

    53= (57=)  Mark Coombs  £1,200m   £250m
    Finance

    53= (45=)  Lord Grantchester and the Moores family  £1,200m   -
    Retailing, Football pools

    53= (52=)  Viscount Portman and family  £1,200m   £200m
    Property

    56= (61=)  Bernard Lewis and family  £1,150m   £230m
    Property, Fashion

    56= (73=)  Douglas and Dame Mary Perkins and family  £1,150m   £340m
    Opticians

    58 (new)  Ajay Kalsi and family  £1,140m   New
    Gas

    59 (56)  Sir Ian Wood and family  £1,119m   £157m
    Oil services, Fishing

    60 (54)  Michael Moritz  £1,100m   £123m
    Internet

    61 (new)  Xiuli Hawken  £1,066m   New
    Property

    62 (70)  Ayman Asfari and family  £1,053m   £227m
    Oil services

    63 (55)  Sir Terry Matthews  £1,043m   £68m
    Computers

    64 (30)  Sir Ken Morrison and family  £1,034m   £506m
    Supermarkets

    65 (111)  Peter Hargreaves  £1,020m   £450m
    Finance

    66 (68)  Viscount Cowdray and the Pearson family  £1,015m   £165m
    Media

    67= (45=)  Nadhmi Auchi  £1,000m   £200m
    Finance

    67= (102)  Charles Dunstone  £1,000m   £396m
    Mobile phones

    67= (158=)  Lord Kirkham and family  £1,000m   £570m
    Furniture

    67= (57=)  Robert Miller  £1,000m   £50m
    Finance, Duty-free shopping

    67= (204=)  Nat Rothschild  £1,000m   £670m
    Finance

    67= (52=)  Wafic Said  £1,000m   -
    Finance

    67= (75)  Eugene Shvidler  £1,000m   £198m
    Oil, Gas, Investment

    74 (66=)  Alan Howard  £975m   £100m
    Finance

    75 (63=)  Lord Sainsbury and family  £960m   £60m
    Supermarkets

    76= (57=)  Richard Desmond  £950m   -
    Property, Media

    76= (63=)  The Grant and Gordon family  £950m   £50m
    Spirits

    78 (82)  Benzion Freshwater and family  £895m   £151m
    Property

    79 (92=)  Jon Hunt  £875m   £215m
    Property, Estate agency

    80= (71=)  The Earl of Iveagh and the Guinness family  £850m   £30m
    Property, Brewing

    80= (115=)  Lord Paul and family  £850m   £300m
    Industry

    82 (354=)  Alastair Salvesen and family  £840m   £660m
    Transport, Plant hire

    83 (214=)  Peter Smedvig and family  £837m   £517m
    Oil, Shipping, Gas services

    84 (78)  Eduard Shifrin  £829m   £49m
    Industry

    85 (83)  Urs Schwarzenbach  £820m   £80m
    Finance

    86 (88)  Alexander Knaster  £812m   £93m
    Finance

    87= (76=)  Roger and Peter De Haan  £800m   -
    Leisure

    87= (76=)  Gerald Hines  £800m   -
    Property

    89 (85=)  Lord Sugar  £770m   £40m

    Electrical goods
    90= (132=)  Peter and Denise Coates  £750m   £250m
    Gambling

    90= (73=)  Peter Cruddas and family  £750m   £60m
    Finance

    90= (150)  Steve Lansdown  £750m   £298m
    Finance

    90= (79)  Lily Safra  £750m   £14m
    Inheritance

    90= (80=)  Lord Vestey and family  £750m   -
    Meat

    95 (85=)  Lord Laidlaw  £745m   £15m
    Conferences

    96 (84)  Slavica Ecclestone  £734m   -
    Divorce

    97 (69)  Ruth Parasol and Russ DeLeon  £733m   £99m
    Gambling

    98 (100)  Viscount Rothermere and family  £730m   £122m
    Media

    99 (94=)  Peter Green and family  £725m   £75m
    Inheritance, Mining

    100 (90)  Peter Jones and family  £707m   £34m
    Property

    		 37
    17 Money- When will the UK Base Rates rise ?
    Updated: 26 Jan 2012

    Interest rates predictions:

    When will the UK bank rate rise again?

    By Andrew Oxlade

    Last updated at 2:20 PM on 26th January 2012

    We wish we could give an exact forecast on the future of the UK base rate, but we can't.

    We CAN, however, arm you with the right information and views from those in the know so you can make your own call (this round-up is updated every few days).

    Commentary from This is Money Editor Andrew Oxlade:

    The MPC voted to 'hold' again in January [read about their decision] and a rise looks a long way off - the mainstream predictions for the first increase ranges from 2013 to 2016.

    Among recent forecasts was one from the Centre for Economic & Business Research, which has previously been marginally ahead of the curve in getting that low rates were with us for the long-term.

    On 16 January, it said interest rates would remain on hold until 2016.

    The grim new forecasts for the economy in November's mini-Budget made rate rises even less likely.

     And the worsening state of the eurozone crisis - which will damage the UK economy - has continued since then to push out predictions of the first UK bank rate rise.

    #There was a particularly sharp move in mid-December as markets appeared to all but give up hope of a rate rise before the middle of the decade.

    The forecast has since remained fairly static, predicting the first rise in late 2015.

    The prospect of low rates for years exists despite inflation remaining painfully high - it hit a peak of 5.2% (11 October) but is slowly easing back, down to 4.2% in the latest figures (17 January).

    Policymakers are adamant it will fall back further next year, and be under the 2% target by 2013.

    The committee has dismissed inflation concerns and is more focused on heading off a double-dip recession.

    At its October meeting, it opted to restart its quantitative easing programme - an electronic form of money printing.

    The vote was 9-0 in in favour of holding rates in December - the fifth month in a row of unanimity.

    Members had been locked at a 7-2 vote for two months before that and it was 6-3 earlier this year when a rate rise looked a possibility.
     

    View from the Editor

    That shift in voting reflects the remarkable and rapid movement in forecasts for rates last summer, with predictions for the first rise, week by week, taking huge strides into the future:
    -
    In March/April, a rise was seen as imminent;
    -
    In June, the forecast was for a hike in July/August 2012;
    -
    By early August, futures markets earmarked early 2013 for the first increase;
    -
    By October, the market priced early 2014 for a rate rise.
    -
    By November, it priced early 2015 for a rate rise.
    -
    By mid-December, it suggested late 2015.
    -
    By mid-January, it suggested February 2016.


    Market predictions

    So when will the MPC make the first move? Interest rate futures shifted dramatically in 2011.

    At the extremes, they pointed to an immediate rise in spring, but by the end of the year indicated 2015 for the first increase.

    January has started in a similar vein. Markets initially pointed to February 2016 at one point but that has moved back to July 2015 today (26 January).

    But these forecasts are wildly volatile - as we've constantly warned - and should be treated with caution.
    Important note: Markets, economists and other experts haven't had a great record of making the right calls in recent years: 2010 predictions | 2008 predictions.

    This is Money has always advocated caution with predictions, including our own!

    There's no guarantee that those who have made correct calls in the past will make them in the future. 

     Regular readers of this page will know we've warned for several years that rates would remain low for a very long spell - and that readers should beware of false dawns on rising rates; we've seen many (see below).
    We stand by that position.

    The prospects for the economy remain so poor [Why we face a decade of trouble] that the MPC will be nervous about raising rates in 2012 and 2013, even if inflation remains high (and it probably won't).

    The one signal that the MPC may not be able to resist is a rash of pay rises.

    If such a trend gathers pace, it would spark more price pressure and possibly begin an inflationary spiral.

    This is unlikely but worth watching out for.

    For now, there's no indication that pay demands are on the rise. Vocalink's pay study - reliable data based on take home wages paid into bank accounts - has been steady for three months at around 2.6%.

    Historically, pay rises start with manufacturers and spread out to the wider economy but Vocalink's index showed a fall for the sector in December, from 4.1% down to 3.6%.

    One other thing to watch is inflation expectations.

    A BoE index for August showed them on the rise (15 September) but it fell in the latest index publication, in December.

    If expectations become embedded, workers will start to demand bigger pay rises.

    For now, rate rises remain a dim and distant prospect


    Read more: http://www.thisismoney.co.uk/money/news/article-160

    		 43
    18 Money- Dollar falls against pound sterling
    Updated: 26 Jan 2012

    United States Dollar:

    UKForex

    The US Dollar falls from recent gain against the Pound on FED pledge.  Yesterday morning saw no surprises from the MPC meeting minutes with an expected unanimous vote towards keeping interest rates at its current level as well as QE was met with exactly that.  Further QE chatter did the rounds however after the prelim UK growth figures were released, showing that the UK edges towards recession.  The GDP release saw the figure came in at -0.2 %.  Cable saw little movement on the release as most market eyes remained firmly on the US FED announcement.  It was justified; with a grim outlook for the US economy painted of recent the FED now expect not to raise interest rates in the US until late 2014.  The votes were scattered from the 17 members, but 6 members predicted the late 2014 date.  The news saw large US Dollar selling and on the back of this Sterling jumped against the world reserve currency.  These gains took cable back above 1.5600 and we have since made a push to break 1.5700 at the start of the UK session today.  The currency pair opens this morning at 1.5682.

    Euro:

    The single currency gains on the back of the US announcement.  Euro started yesterday’s session off with positive data from Germany as business sentiment rose for a third month in a row in January.  The positivity was short lived as once again the dark clouds gathered over Greece.  Comments from each of Germany's weekly Die Zeit, IMF's Legarde, Merkel and Soros all pointing to a lack of resolution in Greece and in turn saw the Euro remain low.  The US session saw the Euro jump.  As you have probably guessed, this was on the back of the FED news to keep interest rate low for an extended period and on discussions on further QE.  The Greenback was dumped and Euro shot back above 1.3000.  After a quite Asian session, we have seen the Euro continue to rise and it sits at 1.3138 versus the US Dollar.  Sterling has lost ground against the single currency.  The currency pair was sitting above 1.2000 during the UK session yesterday, but we fell as low as 1.1935 after the US news.  We aren't far from the price this morning as GBP/EUR opens at 1.1941.

    		 20
    19 Money - Christmas Club funds - Pick the bones out of that -but the cupboard was bare !
    Updated: 23 Jan 2012

    207 Farepak victims die without payout

    Sunday 22 January 2012
    by Will Stone
    Over 200 victims left hundreds of pounds short by Christmas hamper firm Farepak's £38 million collapse have died without compensation - while insolvency firms have raked in millions, it was revealed on Sunday.

    The Wiltshire-based company, in which cash-strapped people paid in monthly sums to receive food hampers over Christmas, collapsed in October 2006 leaving around 122,000 customers losing an average of £400 each.

    SNP's Westminster spokesman for consumer affairs Mike Weir said that liquidators BDO Stay Hayward had reported that 207 people affected by the collapse have since died without ever getting their money back.

    Payments worth a total of £240,000 were sent in 2009 to 5,900 customers whose money was put into a trust by the firm just before it went into administration.

    The compensation was paid after a court was asked to rule whether the trust, which was not set up properly, actually existed and who should be reimbursed.

    Those who placed their orders before the cut-off date were unaffected by the court's ruling and victims were told to expect just 5p for every pound spent.

    Mr Weir said: "It is sad and unacceptable that five years after Farepak collapsed more than 200 customers have died waiting to receive any of their money back.

    "There is something seriously wrong when liquidations can take years to finalise and people are actually dying before the insolvency gravy train comes to a halt.

    "Savers are likely to recover just 5p in the pound, while the final bill for the administrators and their legal advisers has already exceeded £8 million."

    He blamed the self-regulation of insolvency that sees work being handled by licensed practitioners, most of whom work for accountancy firms.

    "The practitioners are in turn regulated by accountancy and law professional bodies, which have no independence from the firms they regulate," Mr Weir added.

    He has called on the government to intervene and speed up the compensation process for Farepak families, many of whom are on a low income.

    The Angus MP said that about 20,000 of those affected were from Scotland

    		 22
    20 Money- Just how low will the Euro sink to in 2012 ?
    Updated: 17 Jan 2012

    Euro: investors just waiting for a reason to sell

    The euro will 'bring up the rear' in the 2012 race of the currencies.

    by John Freeme on Jan 17, 2012 at 05:01

    Concrete action, not resolutions and promises, is what's needed to reassure eurozone investors, writes John Freeme of HiFX.

    Back to you, Merkozy

    The European Central Bank (ECB) left its base lending rate unchanged at 1% on Thursday as predicted.

    This shifts the focus back onto the Merkozys of the world, who face renewed pressure to do something to end the European sovereign debt crisis.

    The ECB, led by Mario Draghi, decided against cutting rates in favour of holding back to review the effectiveness of the existing plans, which were implemented in late 2011.

    The ECB cut rates in November and December, and increased the funding available to banks to try to subdue concerns that one of the European banks could be the next Lehman Brothers.

    The move left the single currency largely unchanged against both the US dollar and British pound.

    Arguably, traders were waiting for another excuse to sell the euro and continue to drive the European currency towards key levels, which they did not get.

    Draghi has acknowledged that the European Union is in a very tough situation, with substantial downside risks to the European economy, and has said that the situation may get a lot worse before it starts getting better.

    The concern remains that the vast majority of European economies are still paying far too much to service their debt.

    This is coupled with the fact that they are being strong-armed into implementing significant austerity programmes.

    One of the main factors behind the euro's recent decline to its lowest rate in 16 months against the US dollar and British pound is that investors are getting increasingly frustrated with the lack of unified and swift action.

    This sense of urgency has helped the euro off its lower levels and back below the psychological 1.20 level against the pound.

    Euro to stay low

    Undoubtedly, the euro is still out of favour, and I cannot see that changing in the short term. There are countless promised resolutions and agreements, but very rarely do we get anything concrete implemented. The end of January will be the next important event as leaders are put back in the lime light to sign off the agreements formed in late 2011.

    Therefore, our outlook is for the euro to ‘bring up the rear’ in a race of the major currencies over the short to medium term, with sterling/euro around 1.25 and euro/dollar around the 1.28 region

    		 26
    21 Money- Citibank and a deceased customer
    Updated: 17 Jan 2012

    Cancel your credit card before you die. 

     Be sure and cancel your credit cards before you die!

    This is so priceless, and so easy to see happening, customer service being what it is today.

    A lady died this past January, and Citibank billed her for February and March for their annual service charges on her credit card, and added late fees and interest on the monthly charge.

    The balance had been $0.00 when she died, but now somewhere around $60.00.

    A family member placed a call to Citibank.

    Here is the exchange :

    Family Member:   'I am calling to tell you she died back in January.'

    Citibank :   ' The account was never closed and the late fees and charges still apply.'

    Family Member: 'Maybe you should turn it over to collections.'

    Citibank : 'Since it is two months past due, it already has been.'

    Family Member: So, what will they do when they find out she is dead?'

    Citibank : 'Either report her account to frauds division or report her to the credit bureau, maybe both!'

    Family Member: 'Do you think God will be mad at her?'
    Citibank : 'Excuse me?'
    Family Member: 'Did you just get what I was telling you - the part about her being dead?'

    Citibank : 'Sir, you'll have to speak to my supervisor.'

    Supervisor gets on the phone:

    Family Member: 'I'm calling to tell you, she died back in January with a $0 balance.'

    Citibank : ' The account was never closed and late fees and charges still apply.' 

    Family Member: 'You mean you want to collect from her estate?'

    Citibank : (Stammer) 'Are you her lawyer?'

    Family Member: 'No, I'm her great nephew.' (Lawyer info was given) 

    Citibank: 'Could you fax us a certificate of death?'

    Family Member: 'Sure.' (Fax number was given)

    After they get the fax :

    Citibank: 'Our system just isn't setup for death. I don't know what more I can do to help.'

    Family Member: 'Well, if you figure it out, great! If not, you could just keep billing her. She won't care.'

    Citibank: 'Well, the late fees and charges will still apply.'

    (What is wrong with these people?!?)

    Family Member: 'Would you like her new billing address?'

    Citibank : 'That might help....'

    Family Member:  '  Odessa  Memorial  Cemetery , Highway 129, Plot Number 69.'

    Citibank : 'Sir, that's a cemetery!'

    Family Member: 'And what do you do with dead people on your planet???'

    (Priceless!!)
      And you wondered why Citibank needed help from the Feds? 
     
     
     
     
     

    		 28
    22 Money-Tesco hits the buffers- Ha Ha said the Clown but "Every little helps"
    Updated: 14 Jan 2012

    Tesco executive sold shares before profit warning

    A senior member of Tesco's management team sold 50,000 shares just a week before the supermarket group announced the biggest profit warning in 20 years, sending its shares down 16pc.

    Tesco said that though Mr Robbins may have been aware that UK trading was disappointing he knew nothing about the impending profits warning. 
     
    Noel "Bob" Robbins, the UK chief operating officer, sold 50,000 shares on January 4, at 404.51p, netting around £202,000.

    By selling last week, rather than today – when the shares had fallen to 316.8p – Mr Robbins was £44,000 better off.

    The company insisted that it and Mr Robbins have broken no rules. However, one shareholder watchdog described the sale as troubling.

    "It doesn't look very good, especially in this case, when you are head of UK operations," said Simon Wong, a partner at corporate governance watchdog Governance4Owners.

    UK listing rules, governed by the Financial Services Authority, say directors should not buy or sell shares in their company while in possession of unpublished, price-sensitive information.

    Tesco said that though Mr Robbins may have been aware that UK trading was disappointing he knew nothing about the company's admission that profits for next year would be lower than expected, nor did he know that Philip Clarke, the chief executive, would announce that Tesco needed to invest "hundreds of millions" of pounds investing in the stores.

    A spokesman said: "We are confident that Bob was not in possession of any price-sensitive information at the time that the sale was approved.

    "In fact, the significant movement in the share price on Thursday was, we believe, primarily due to the announcement on profit guidance and UK investment plans for 2012/13.

    Bob was not party to discussions around the profit guidance or the investment plans at the time he made his sale."

    The sale, which was signed off by Mr Clarke, was for "necessary family expenditure", said Tesco, but the company would not elaborate on why the share sale could not have waited until after the Christmas trading statement.

    City brokers continued to downgrade Tesco's profit forecasts today, as fears mounted over how much it needed to spend to improve its UK shops.

    The last major share sales by Tesco directors came ahead of the interim management statement on December 8.

    Andrew Higginson, group strategy director, sold £1.41m of shares in November at 403.34p, while finance director Laurie McIlwee sold £545,000-worth in October at 411.51p.


    		 30
    23 Money- The Market downgrades half the Eurozone including France
    Updated: 14 Jan 2012

    .S&P hammers euro zone politicians with downgrades

    Reuters – 25 minutes ago 
    ......
    By Walter Brandimarte and Steven C. Johnson

    NEW YORK (Reuters) - Standard & Poor's hit the euro zone with a downgrade of half the countries in the single currency area, including formerly AAA-rated France, and it questioned the strategy of its political leaders for dealing with their two-year old debt crisis.

    Germany, the bloc's largest economy, was spared.

    In downgrading nine of the euro zones 17 members, S&P said policymakers had not done enough to address the crisis and were even overlooking a key cause of the problem: sharp differences in economic competitiveness among countries that use the euro.

    "As such, we believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers' rising concerns about job security and disposable incomes, eroding national tax revenues," the agency said.

    While S&P gave higher grades to the European Central Bank for sustaining market confidence through emergency lending to euro zone banks, it said political initiatives thus far "may be insufficient" to address the crisis.

    The mass downgrade follows S&P's decision last August to strip the United States of its top credit rating, a move it also chalked up, at least partly, to political stalemate -- namely, lawmakers' inability to agree on ways to cut the budget deficit.

    European leaders, including Germany's Angela Merkel, have urged countries to tighten their belts with higher taxes and deep spending cuts to rein in massive budget deficits.

    But that has heightened market concern about their ability to grow their way back to health, pushing borrowing costs even higher for heavily indebted governments.

    "In our view, it is increasingly likely that refinancing costs for certain countries may remain elevated, that credit availability and economic growth may further decelerate and that pressure on financing conditions may persist," S&P said.

    European leaders are set to meet at a summit later this month to discuss how to boost growth and jobs.

    At a summit on December 9, EU leaders secured agreement on drafting a new treaty for deeper economic integration in the euro zone, but the chances for more decisive measures to stem the debt crisis remain uncertain.

    France and Austria both saw their top AAA ratings cut one notch to AAA, while Malta, Slovakia and Slovenia also suffered one-notch downgrades.

    S&P dropped the credit ratings of Italy, Portugal, Spain and Cyprus by two notches.

    The agency reaffirmed the ratings on seven other euro zone countries, including Germany.

    But it said that of the 16 countries reviewed, all save Germany and Slovakia have negative outlooks, meaning more downgrades are possible in the next couple of years.

    "Europe is going to continue to struggle and we're going to see further downgrades and higher yields until European leaders feel that they have the political support to decide whether or not the euro zone is going to be a political union going forward or merely an economic union," said BNY Mellon currency strategist Michael Woolfolk.

    French Finance Minister Francois Baroin played down the impact of the move, saying it was "not a catastrophe."

    Friday's decision may add to the debt problems as it is likely to increase euro zone borrowing costs across the board.

    The move could trigger a series of downgrades of large European banks, companies and government entities.

    This could include the European Financial Stability Facility, or EFSF, the fund created to rescue troubled euro zone countries, and the European Union.

    A downgrade of the EFSF could increase its borrowing costs, reducing its ability to protect the currency bloc's weaker members.

    In an interview with Reuters, John Chambers, chairman of S&P's sovereign rating committee, said it would take further increased commitment from the remaining AAA-rated guarantors, including Germany, for the EFSF fund to retain its AAA status.

    The main risks to Germany's AAA ratings are a deterioration of its fiscal situation or problems in its financial sector, Chambers, told CNBC-TV on Friday.

    (Additional reporting by Daniel Bases and Luciana Lopez; Editing by James Dalgleish, Chizu Nomiyama and Carol Bishopric)

    ..

    		 23
    24 Money- Saving Private - Income -A New Years Resolution
    Updated: 10 Jan 2012

    Saving Private Income  - 10 New Year resolutions


    Telegraph article


    Smoking £12,000

    Sell your car £3500

    Walking or Cycling £1840

    Ditching Takeaways £1040

    Avoiding the daily Coffee shop £767

    Impulse Shopping £600

    Unused Club Membership £600

    Grow your own food £500

    Giving up Chocolate £365

    Radicals 10

    Drive slower –use less fuel – I drive at 60mph max

    Change Utility Company – Compare costs we did to save £250

    Turn the heating down – 1.C helps – Put a jersey on too

    Buy a freezer – buy meat/fish in bulk We bought fish from Grimsby,A whole lamb and Hind Quarter of beef – 3 turkeys for under £20 at New Year sell off.

    Use own brands- Smart price etc..Check the incredients

    Holiday in the UK – Off peak – Self Catering in January ?

    Use electric at night – Econ 7 we make the bread coffee and do the washing ?

    Give the wife less housekeeping

    Drink less alcohol

    Take in a Lodger

    		 26
    25 Money- Euro down in the dumps
    Updated: 09 Jan 2012

    Euro:

    The market continued to look for any reason the sell the single currency on Friday as EUR/USD dropped below 1.2700 for the first time since September 2010 and consequently, despite sterling trading weakly on the day, GBP/EUR traded to a high of 1.2163.

    European economic data was light on the ground on Friday, although German industrial orders for November came in well below expectations and the stronger US jobs data gave the market the excuse it needed to send the EUR lower amidst wider concerns of economic underperformance from the 17-nation union.

    German Chancellor Merkel and French President Sarkozy are due to meet in Berlin today in a bid to flesh out plans for greater fiscal discipline between the euro area countries and the market will be paying close attention to the press conference after the meeting.

    There will also be some attention paid to German industrial production data due for release this morning, with a softer number pointing to further economic slowdown in Europe. GBP/EUR opens this morning at 1.2101

    		 29
    26 Money- "Fancy Corporate Lawyers"- By Appointment to the Rich over Tax Evasion
    Updated: 06 Jan 2012

    PM's tax tinkering 'doesn't scratch the surface'

     

    Thursday 05 January 2012
    by Tony Patey
     
    Britain's Con-Dem government bosses went tilting at windmills today when they tried to sound tough over tax dodging - but fell flat on their faces.

    Quixotic millionaire duo David Cameron and his Sancho Panza deputy Nick Clegg drew their paper swords against tax abuse and stabbed nothing but air.

    The Prime Minister called for a tougher approach to large companies who use "fancy corporate lawyers" to "endlessly reduce" their tax bills.

    He said the government was considering introducing a new power to prevent tax avoidance by big firms and the wealthiest individuals.

    Earlier in the day Mr Clegg indicated he would be urging Chancellor George Osborne to introduce anti-avoidance measures in this year's Budget.

    Mr Clegg said on BBC Radio 4 that the Liberal Democrats intended to "remain" at the forefront of the battle against excessive executive pay and wanted the Budget to contain measures to clamp down on tax avoidance.

    He wanted to target the "wealthy elite or large businesses that can pay an army of tax accountants to get out of paying their fair share of tax," leaving millions of hard-working families angry.

    Mr Cameron told a business group at Maidenhead that HM Revenue and Customs had to collect tax in "a fair and business-friendly way."

    He said: "They have got to be thinking about being business-friendly to small businesses.

    "With the large companies that have the fancy corporate lawyers I think we need a tougher approach."

    But Richard Murphy of the Tax Justice Network laughed it off as not even scratching the surface of the big problem.

    "They are simply misleading the public at large, picking the smallest part of the whole problem and making a big fuss about it.

    "But they are going nowhere near solving the whole problem.

    They are cherry picking."

    He said the country needed a "whole new army" of tax inspectors to tackle the tax gap problem which involves tens of billions of pounds - not just over avoidance, which is legal, but evasion, which is illegal.

    tonyp@peoples-press.com

    		 30
    27 Money-Thousands protest over Tax dodgers
    Updated: 05 Jan 2012

    Thousands protest over tax dodgers

    4 January 2012

    More than 31,000 people have written to Revenue and Customs to demand that big businesses are chased for all the tax they owe.

    The action has been co-ordinated by the 38 Degrees online campaign group.
    PCS has been leading calls for HMRC to crack down on the £120 billion of tax which is avoided, evaded, or uncollected each year.

    The most high profile case has been Vodafone which was allowed to write off a £6 billion tax bill after negotiations with government officials.

    Each tax enforcement officer collects more than £600,000 per annum – but rather than employ more the government has cut tens of thousands of jobs in Revenue and Customs.

    PCS is urging members and supporters to back the 38 Degrees tax protest but to edit the model letter so the last-but-one sentence says: “Please stop the job cuts and take on more tax enforcement workers and support staff, to make sure this never happens again.”

    38 Degrees protest page – it only takes a few seconds

    PCS in Revenue and Customs

    Strike against tax privatisation

    There is an alternative – how to use the missing tax to stimulate the economy

    It’s time to take sides – join PCS

    		 33
    28 Money- 90bn wiped off the value of the FTSE in 2011
    Updated: 30 Dec 2011

    .FTSE loses £90bn over year but eurozone fares worse

    Telegraph – 24 minutes ago
    ....

    ......
    The FTSE 100 has ended 2011 down after a turbulent year that has seen around £90bn wiped off the value of the index, but despite the fall shares in London have fared much better than those in Frankfurt and Paris.

    The index of leading shares rose 5.5 points - or 0.1pc - on Friday to close at 5572.28 in thin trading - a fall of 327.66 points, or 5.55pc, over the year.

    This is its seventh worst annual performance since 1984 and its worst since a 31pc fall in 2008 when the Lehman collapse brought the global financial system to the brink of collapse.

     The index rose 22pc in 2009 and 9pc last year.

    Large market falls in 2011 were driven by a series of dramatic events, including Japan (EUREX: FMJP.EX - news) 's devastating earthquake; prolonged political stalemate in the US over attempts to raise the nation's debt ceiling; and the ongoing eurozone sovereign debt crisis.

    The FTSE clawed back some gains at the end of the year after hitting a year-low of 4944.4 in October when the escalating eurozone debt crisis triggered a global stock market sell-off, but economic uncertainty continues.

    Banking shares were the biggest losers of 2011, closing down more than 4pc on the FTSE 100 (Euronext: VFTSE.NX - news) , while the oil and gas sector made the biggest gains, rising almost 2pc.

    However, the FTSE 100 has outperformed rival eurozone indices this year, with Germany's DAX (Xetra: ^GDAXI - news) dropping 15pc, France's CAC 40 (Paris: ^FCHI - news) losing 17.6pc, Italy's MIB slumping 26pc, Spain's Ibex shedding 13.7pc and Greece's ASE (KOSDAQ: 058370.KQ - news) 20 tumbling 61pc.

    "Market movements have been dominated by the ongoing European sovereign debt crisis during a year that has probably seen more summits than anyone can care to remember," said Angus Campbell, head of sales at Capital Spreads.

    "With so much continued uncertainty investors will probably be spending most of 2012 walking a tightrope."

    Asian markets also suffered in 2011 as the eurozone crisis damaged global growth, hitting the export-led economies of Japan, China and South Korea.

    Japan's Nikkei (Osaka: ^N225 - news) -225 index ended the year at its lowest year-end level since 1982, despite rising on the day due to upbeat US data on Thursday.

    The index closed up 0.7pc at 8,455.35 to end 2011 down 17.34pc. In 1982, it finished the year at 8,016.67.

    Hong Kong's Hang Seng (HKSE: ^HSI - news) index has dropped 20pc this year, China's Shanghai Composite is down 22pc, South Korea's Kospi has shed 11pc and Australia's S&P/ASX (Other OTC: ATKEF.PK - news) 200 has lost 14.5pc.

    India's stock market recorded its first annual fall in three years, with the Sensex index closing down 24.6pc in 2011.

    Of the major global stock markets, only America's Dow Jones (DJI: ^DJI - news) and S&P 500 are on course to end the year up.

    The Dow Jones industrial average has risen 6.13pc so far. However, the broader S&P 500 (SNP: ^GSPC - news) , which reflects the nation's domestic economy, is only up 0.4pc.

    The technology-rich Nasdaq Composite (Nasdaq: ^IXIC - news) is down 1.5pc.

    In London, benchmark 10-year gilt yields finished the year at a record low of 1.97pc, where the lower the yield, the greater the demand for UK Government debt. It was 47pc lower compared with its 2010 close.

    The pound ended 2011 down 1.2pc against the dollar at $1.5461, but was up 2.4pc against the euro at €1.1950.

    Gold gained for an 11th consecutive year, closing up 10.7pc on the year at $1,569 an ounce.

    Brent crude oil ended the year up 15.2pc at $106.74 a barrel, while copper closed down for the first time in three years, falling 22.4pc to $7,553 a tonne.

    Nationwide reported that house prices rose by 1pc in 2011, following a 0.2pc fall in December. The average price of a home in Britain is now £163,822.

    ..

    		 29
    29 Money- Asian Markets will recover -Europe to remain in Structural Slump
    Updated: 29 Dec 2011

    Asian Markets: Watch the Second Half of 2012  
     
     Written by EnzioVon Pfeil   
    FRIDAY, 23 DECEMBER 2011 
      
     Our Economic Time tells us Europe and the US sink, China will recover

    What do we see as the major market events of 2012?

    First, we expect China’s economy to improve during the second half of the year.

    This will shock many, who perhaps have forgotten that Asia is in a cyclical slump while the industrialized democracies of Japan, the United States and the European Union are in structural slumps.

    In a cyclical slump, the government always creates an excess supply of money in an effort to rekindle the flames of growth.

    Indeed this cyclical succession is the basis of our Economic Clock framework, in which we take key economic indicators and filter them down to concise, commercially applicable information for investors of all sizes.

    In a structural slump, only structural measures will help to re-kindle failing economies.

    The major investment implication of this is that Hong Kong's stock market will shine as of June: we are, after all, the water skier behind the Chinese speed boat

    On the other side of the earth, Europe's problems cannot be solved. It appears to be that many non-Continental people expect the European problem to be solved "suddenly", i.e. in one fell swoop.

    My many years living in Germany suggest that there is no instant, one and for all "solution" to the European problem.

    This is because Europe's problems are of structural nature.

    Trying to solve this problem with a cyclical bazooka is really like chasing an elephant with a pop gun

    Besides, even one-nation America (as in: Capitol Hill) cannot solve her fiscal problems.

    How, then, can one expect 17 - 27 EU nations to all agree on the same "solution"?

    The major investment implication of this has to be that European stocks will underperform Asia strongly, especially as of the second half of next year.

    A steepening US dollar yield curve thwarts a solid recovery in US housing.

    In America, short-term rates stay low, courtesy of the US Federal Reserve's easing policy continuing.

    However, long bond corporate yields will rise because there will be increased supply of bonds being issued.

    When supply rises, the price goes down so the yield goes up, as we all know.

    This rise in corporate yields, in turn, thwarts a recovery in the US mortgage market, so housing will continue stuck in a soggy marsh.

    The major investment implication of this has to be that American stocks will underperform Asian markets especially as of the second half of 2012.

    		 29
    30 Money- Over Spent ? - New Year Debt ? "Christmas can damage your wealth"
    Updated: 29 Dec 2011

    British shoppers set for new year debt crisis

     after record £4.3billion is spent over the last two days in sales

    • Debt advice organisations are bracing for a huge upsurge in calls

    • £2.5bn passed through tills yesterday, on top of £1.8m on Boxing Day

    • Cash-strapped shoppers will cut £1bn spending on non-essentials in 2012

    By Graham Smith, Emily Andrews and Paul Bentley

    Last updated at 9:44 PM on 28th December 2011

    The nationwide Christmas shopping spree has renewed fears of an alarming increase in personal debt as Britons get carried out with the euphoria of bargain hunting.

    Debt advice organisations are today bracing themselves for a huge upsurge in consumers admitting to money problems after drastically overspending their festive budget.

    Some £2.5billion passed through the tills yesterday on top of an estimated £1.8billion on Boxing Day.

    Retail analysts believe the combined final total will be the highest ever spend for December 26 and December 27.
     
    Bargain hunters flock to Swansea city centre today as the post-Christmas sales boom continues.

    Debt advice organisations are bracing themselves for an upsurge in consumers admitting to money problems
     
    No end in sight: Some £2.5billion passed through tills yesterday on top of an estimated £1.8billion on Boxing Day

    HOW CHRISTMAS SPENDING CAN LEAD TO AN AVALANCHE OF DEBT

    Financial analysts today warned that the Christmas buying experience can easily get out of hand as people spend huge sums of money.
     

    Over 60 per cent of people are struggling to pay for Christmas this year and over a quarter will end up with debts because of Christmas spending, according to uSwitch.com.

    On average the festive financial hangover will last almost 6 months as people strive to pay off their Christmas bills, but almost one in ten will still be clearing their debts next Christmas.

    In order to put presents under the tree and food on the table, more than half will dip into their savings while over a third of savvy consumers will use up hard-earned shopping vouchers or reward points.

    Of particular concern though is that over 40 per cent will have Christmas on credit this year, with 4 per cent taking out new credit especially to fund Christmas.

    A further 16 per cent will sell possessions in order to get the Christmas cash they need and 3 per cent will borrow from friends and family (although with personal finances under pressure, many friends will not be in a position to lend money even if they want to).

    Michael Ossei, personal finance expert at uSwitch.com, said: 'If you're struggling with your festive finances, and are thinking of turning to credit, I would urge you to use credit cards sensibly.

    'Putting your spending on a card with 0 per cent on purchases could give you some breathing space. '

    But the mass spending has been greeted with gloom by debt experts who fear that many people have gone back on their pledge not to use their credit cards to snap up sales bargains.

    There are growing concerns that large numbers of Britons will go into 2012 burdened by mountains of extra debts that they have no realistic chance of repaying.

    Not only are some risking being in debt next Christmas, they are still in debt from last Christmas.
     
    Cash-strapped shoppers will slash nearly £1billion from spending on non-essential goods such as electrical items, furniture and carpets next year.

    Retail sales are expected to grow by just 1.2 per cent to £295.3billion in 2012 - their third slowest year of growth in the past four decades - spelling more pain for the sector, according to a report by leading retail research firm

    Verdict.

    Sales of groceries will grow by 3.3 per cent as consumers eat more meals at home to save money, but spending on non-food items is set to shrink by about 0.5 per cent as the change in attitudes - from extravagant to austere - continues.

    That would mean retail non-food sales will have fallen by £9.5billion since the recession of 2008.
    Electricals, furniture, floor coverings, DIY and gardening goods will be hardest hit, with sales down by about £900million, and are unlikely to improve until mid-2013.

    Clothing and footwear will grow by just 2.4 per cent, or £14 extra per person, as a result of higher prices, but the rise in youth unemployment will hit fashion retailers.

    The report, compiled in conjunction with business analysis firm SAS, will add to fears that major retailers are in danger of collapsing in coming weeks amid unprecedented levels of price reductions.

    Among the most vulnerable are lingerie chain La Senza, Blacks Leisure and Millets.
    Stores across the country saw scenes reminiscent of those before the economic downturn as thousands of people flocked to the sales.
     
       
    Crowded: Consumers all over the UK have flocked to shopping centres, such as Bullring in Birmingham

    They were taking an average of at least £4.6million a minute, or £77,000 a second.
    Experts said the predicted £10billion plus spend for the whole of this week will be 2011's most lucrative for retailers, beating the pre-Christmas rush.

    Consumers are expected to have spent at least £22.8billion by the third week of January - £338million more than in the equivalent post-Christmas period last year.

    Anita Manan, an analyst at Experian, said: 'It's good to see so many people visiting stores and the milder weather has helped.

    With retailers' quarterly rent due, the difficulty is that they are selling a lot of stock at very low prices.
    'What remains to be seen is if this quarter's takings are enough to see them through this difficult period to the next quarter.'

    The peak weeks of Christmas trading are crucial to retailers as this period accounts for nearly one-fifth of the UK retail industry's annual sales, making stores fight harder than ever to tempt shoppers through their doors.

    The beleaguered retail sector has suffered from poor footfall figures during the course of the year.

    High street takings were down by around £200million a week in November versus October.

    Many retail managers have complained once-thriving shopping centres have come to resemble ghost towns.
     
    Shoppers crowd the Harrods doorway yesterday morning as the London store opened its Christmas sale
     
    Bargain hunters: Shoppers at the Harrods winter sale search for big discounts
    Christmas sales were brought forward in many stores with discounts increasing on a daily basis.

    Many stores are now offering 70 per cent or more off items.

    Tom Nathan, manager of London's Brent Cross shopping centre, said Boxing Day had been the busiest ever – following on from a record breaking December 23 and Christmas Eve.

    He said: 'We have broken three records in three days in terms of numbers, with each of the last three days being the biggest ever for the time of year.'

    Industry insiders, however, say that despite the encouraging trading, some big-name players may not make it through the next few weeks, with many now due to pay their rent bills for the next quarter.

    La Senza, which has 146 stores and 18 concessions in the UK, has announced it plans to enter administration in coming days.

    And Blacks Leisure, which owns 98 Blacks outlets and 208 Millets stores, has fuelled speculation that it would go into administration in a move that would allow rivals to cherry-pick its best assets.
     
    People rummage through handbags at Harrods yesterday as thousands descended on the Knightsbridge department store

    Last week chocolate-maker Thorntons said annual profits would miss estimates, while music chain HMV said weak sales may cast 'significant doubt' on its future.

    Up to 12million shoppers – one in four of the population aged over ten – were thought to have crammed into high streets and malls yesterday.

    John Lewis, Harrods and Ikea all joined the retail frenzy, launching in-store sales on top of those already started online.

    High shopper numbers and busy traffic were reported at centres across Britain, including Bluewater in Kent, the Trafford Centre in Manchester and the MetroCentre in Gateshead.

    Professor Joshua Bamfield, director of the Centre for Retail Research, said: 'I don't think we're stretching it to say the 26th and 27th of December combined have been the best ever, certainly if we include online sales. I'd have thought it could be a record two-day takings.

    'People have definitely been waiting for the sales.

    Many decided to play a waiting game with retailers in anticipation of deep sales cuts.

    Because of the way Christmas has fallen and the fact that many people have taken the whole week off that has prompted a huge boost in spending.'


    		 38
    31 Money- Treasury plans for Euro failure
    Updated: 27 Dec 2011

    Treasury plans for euro failure

    The Government is considering plans to restrict the flow of money in and out of Britain to protect the economy in the event of a full-blown euro break-up.

    A break up of the euro would have a devastating impact on the UK.
     
    HSBC economists have warned that it could trigger a global depression. 

    By , Economics editor

    10:00PM GMT 26 Dec 2011

    The Treasury is working on contingency plans for the disintegration of the single currency that include capital controls.

    The preparations are being made only for a worst-case scenario and would run alongside similar limited capital controls across Europe, imposed to reduce the economic fall-out of a break-up and to ease the transition to new currencies.

    Officials fear that if one member state left the euro, investors in both that country and other vulnerable eurozone nations would transfer their funds to safe havens abroad.

    Capital flight from weak euro nations to countries such as the UK would drive up sterling, dealing a devastating blow to the Government’s plans to rebalance the economy towards exports.

    Earlier this year, Switzerland was forced to peg its currency to the euro to protect the economy after a massive appreciation in the Swiss franc due to spiralling fears over Europe.

    The plans emerged as Spain’s new finance minister Luis de Guindos warned the country’s economy was set for negative growth in the last quarter.

    Britain’s response to the possible break up of the euro would reflect measures taken by Argentina when it dropped the dollar peg in 2002, according to sources.

    In addition to the risk of an appreciating currency, dealing with potential UK corporate exposures to the euro poses a considerable challenge for the Treasury.

    Britain’s top four banks have about £170bn of exposure to the troubled periphery of Greece, Ireland, Italy, Portugal and Spain through loans to companies, households, rival banks and holdings of sovereign debt.

    For Barclays and Royal Bank of Scotland, the loans equate to more than their entire equity capital buffer.

    Under European Union rules, capital controls can only be used in an emergency to impose “quantitative restrictions” on inflows, which would require agreement of the majority of EU members.

    Controls can only be put in place for six months, at which point an application would have to be made to renew them.

    Capital controls form just one part of a broader response to a euro break-up, however.

    Borders are expected to be closed and the Foreign Office is preparing to evacuate thousands of British expatriates and holidaymakers from stricken countries.

    The Ministry of Defence has been consulted about organising a mass evacuation if Britons are trapped in countries which close their borders, prevent bank withdrawals and ground flights.

    Treasury officials would not comment on the specifics of any plans but said the Government always had contingency plans that cover a full range of eventualities.

    A break up of the euro would have a devastating impact on the UK. HSBC economists have warned that it could trigger a global depression and forecasters at the Centre for Economic & Business Research reckon it would knock about a percentage point off UK growth – plunging the country into a full-blown recession in 2012.

    The scale of economic problems alongside the existing debt burden would leave the Government with little in its armoury to combat the collapse, making capital controls one of the few viable options.

    There is a glimmer of good news for the global economy with upbeat figures expected today from the US.

    Reports from America suggested US consumer confidence figures out today could rise to a five month high as house prices stabilise.


    		 27
    32 Money- Pensions suffer from traders hidden charges
    Updated: 26 Dec 2011

    Revealed: how City fees are eating into our (Private) pensions

    Traders' hidden charges leaving pensioners and savers worse off, Treasury warned

    • Daniel Boffey, policy editor
    • guardian.co.uk, Saturday 17 December 2011 21.30 GMT
     
    Warning over hidden charges by traders have raised new questions about David Cameron’s decision to veto EU treaty to protect the City's financial services.

     

    Highly paid City traders are depriving pensioners and savers of thousands of pounds through high management fees that are often hidden, according to leaked advice provided by consultants to the Treasury.

    The charges are spreading and are so steep that savers may find they get less back in retirement than they invested in savings accounts and pensions over their lifetimes.

    If the size of the charges were to become widely known, the UK's "fragile savings culture may be permanently damaged", according to the warning presented to the Treasury last month.

    The damning findings come at a time of growing anxiety that millions of Britons will not have enough money for their old age.

    They will also raise new questions about the prime minister's decision to veto a new EU treaty over his demands for greater protection for the City.

    David Cameron has insisted that the financial sector is a vital national interest, yet the consultants brought into the Treasury claimed that the often unnecessary charges built up by traders are damaging potential economic growth.

    A source who has seen the presentation told the Observer that the conclusion was fund managers had "lost sight" of their customers and that the government needed to act.

    The presentation suggested that the country's pensions black hole – unfunded public and private pension commitments – could be wiped out over time if costs could be reduced, a source said.

    "They are so high that the industry is actually destroying value for the UK investor at least as fast as the stock market can create it," the source said.

    "The government's message is that you have to save for your retirement, but with the amount you will make it hardly makes it worthwhile if these costs are being taken out.

    And the highest cost of all are personnel costs, wages and bonuses."

    Even publicly disclosed costs reveal that UK funds are in most cases more expensive to invest in than funds in France, Germany and the US, it is claimed.

    Michelle Mitchell, charity director at Age UK, said the revelation was evidence that the government must urgently enhance protection for people who followed ministers' appeals to save for their retirement.

    She said: "Some parts of the pensions industry very clearly have a case to answer. In these challenging economic times it's essential that charges are as low and as transparent as possible."

    The presentation revealed how savings and pension pots were being chipped away as they were moved around by traders.

    A simple stocks and shares Isa can be top-sliced up to 16 times as it is traded around, it was claimed.

    And while this practice and the costs were not noticeable when the market was on the up, the economic downturn was highlighting how much was being taken.

    The average equity fund manager makes explicit that they are charging about 1.5% a year of the sum invested for their services, but additional hidden expenses average 0.3% a year and trading costs cut a further 1.4% off an investment.

    And the situation is getting worse, according to the analysis, which found that charges had increased by 9% in the last decade.

    The presentation added: "If the trend of diminishing returns and increasing costs continues we could soon expect negative returns on average."

    During the presentation, which was later shared with the Department for Work and Pensions, the point was illustrated by the example of a saver who made £70,000 in contributions between 1994 and 2009, only to see the £46,000 in profit from the rise in the value of the FTSE 100 being consumed in its entirety by the financial services industry.

    The experts behind the advice, Dr Christopher Sier, a former consultant to investment managers, and David Norman, formerly chief executive of Credit Suisse Asset Management (UK), revealed that the £2.1 trillion assets under management in the UK attract a cost of £67.2bn a year – or the equivalent of 3.2% – with the greatest cost being wages and bonuses for traders and fund managers.

    The 14-slide power-point presentation concluded that the industry needs to be more transparent so that savers could effectively shop around and the government should act to make it safe and wise to save.

    Sier declined to comment on his conversations with the government when he was approached last week.

    "What the Treasury said to me and what I said to the Treasury I will leave to the presentation, because you have got hold of that," he said.

    Gareth Thomas, the Labour MP for Harrow West, said he feared that the government was reluctant to clamp down on the City's extravagant charges and practices.

    He said: "Dithering, out-of-touch ministers don't seem to understand how high the stakes are, or have the will to act.

    If pension charges were brought down by even a small percentage millions even billions more would end up in people's pension pots helping the next generation of pensioners and the communities they live in to have a safer, more secure future."

    Tomorrow George Osborne, the chancellor of the exchequer, will give his formal response to the Vickers report on future regulation of the banks.

    He is expected to welcome its findings, including the recommendation of ring-fencing high street banking from investment banking services, but with the latest consultation and the preparation of a white paper expected to take several months, bankers are likely to launch fresh attempts to get the government to change some of the recommendations

    		 36
    33 Money- Sterling remains Flat ! Euro lower against the pound
    Updated: 23 Dec 2011

     

    United States Dollar

    Uk Forex:

    A narrow range has been seen for cable in the past 24 hours. 

     A mixed bag of data kicked off UK trade yesterday, with domestic growth and current account figures being released. 

    UK growth was revised up to 0.6 % between July and September, which was above the estimated 0.5 %. 

    This news had little to no play on Sterling advances however as third quarter balance of payments showed a current account deficit of 15.2 billion pounds - each of the releases nullifying each other. 

    US data yesterday was similar as US growth was revised down to 1.8 % for the third quarter. 

    The actual figure came in 0.2 % lower than estimated and 0.7 % on first estimates. 

    This release was counter balanced however by an unexpected fall in unemployment claims and an improvement in consumer sentiment. 

     As markets open and digest the US releases, we are seeing risk favoured. 

     GBP/USD is sitting at the higher end of its 65 pip range yesterday and opens at 1.5692.

    Euro:

    The single currency sits higher against the Greenback despite domestic woes continuing. 

    Thursday was all about the US data as the better than expected releases, as mentioned above, encouraged a modest year-end rally in riskier assets. 

    This has seen the Euro advance and sees it back up at 1.3067 versus the US Dollar. 

    European development may have been slightly overshadowed by signs that the US economy is strengthening, but this will unlikely last long. 

    Even though the Italian austerity package got passed yesterday, concerns still surround the nation’s debt auction next week as well as its sovereign rating. 

    Italy isn't the only European country with sovereign worries as each of the EZ economic power houses are all under review for a downgrade. 

    This is the reason we still see Sterling sitting high against the 17-nation currency. 

    GBP/EUR opens this morning at 1.1997.

    		 28
    34 Money- Multinationals getting into a Double Bed with the Taxman
    Updated: 23 Dec 2011

    Tuesday, 20 December 2011

    HMRC has a cosy relationship with the tax avoidance industry


    MPs have criticised the agency but remained silent on its links with the big accounting firms that help companies avoid tax

    Prem Sikka

    The public accounts committee report on the operations of Her Majesty's Revenue and Customs (HMRC) is a damning indictment of the Treasury and tax officials.
     
    Some £25.5bn remains uncollected from disputes with 2,700 companies.
     
    The amounts are bigger than the budget for the secondary education or transport.

    HMRC has entered into sweetheart deals that let multinational corporations off the hook, but there is little public accountability. Two deals have made newspaper headlines.
     
    The tax dispute with Vodafone was rumoured to be for around £6bn. HMRC and Vodafone denied this amount, but the committee noted that the company's accounts set aside around £2.2bn to meet its liability. It eventually settled for about £1.25bn. The second deal with Goldman Sachs related to unpaid tax on complex transactions and the company was not required to pay interest which had been expected to amount between £8m and £20m.

    A major problem is that all deals are shrouded in secrecy, and therefore it is difficult to judge the efficiency and effectiveness of HMRC. The committee draws attention to numerous potential conflicts of interests and lunch/dinner meetings between the HMRC officials and corporate advisers to agree deals. Many of these meetings were not minuted, and where the minutes existed they were often not available. In the face of persistent questions from the committee, HMRC officials often sought refuge in confidentiality. The committee concluded that "there is a question about whether HMRC acted within the law and within its protocols" and that the government procedures lack the independence and transparency needed to provide sufficient assurance to parliament. Despite, this the National Audit Office has generally given a good write-up to HMRC.

    The committee's report raises three broad questions. First, in common with other parliamentary hearings, the public accounts committee hearings made good theatre, but were not really effective. Leading witnesses, often briefed by lawyers, declined to provide the requisite information. This should be countered by forcing witnesses to provide evidence on oath. Rather than relying on goodwill the committee should insist on the evidence.

    Second, the committee's report is short on meaningful reforms. Instead of the so-called independent review of sweetheart deals, or bureaucrats reviewing the work of other bureaucrats, it should have empowered the people. Thus the tax returns of all companies and related correspondence should be made publicly available. The disclosures will enable the people to make their judgment on complex avoidance schemes and secret deals reached with tax officials. Norway, Sweden and Finland already publish corporate tax returns in various forms and the same should be adopted by the UK too.

    Third, the committee laments HMRC's cosy relationship with large companies, but is silent on the cosiness with the tax avoidance industry. It notes that HMRC officials attended numerous lunches, dinners and receptions organised by PricewaterhouseCoopers (PwC), KPMG, Deloitte and Ernst & Young. The lavish hospitality is organised to promote private interests rather than enhance HMRC accountability.

    Many former ministers act as advisers to big accounting firms. For example, Labour grandee Lord Peter Mandelson has been an adviser to Ernst & Young. Former ministers Lord Digby Jones and Lord Norman Warner of Brockley have been advisers to Deloitte. Former Labour home secretary Jacqui Smith is a consultant for KPMG. Former Conservative minister Sir Malcolm Rifkind has been an adviser to PwC. Do such political links skew the relationship between government departments and the private sector?

    The links between the big accountancy firms and the Treasury attract no comments from the committee. For example, former PwC staffer Mark Hoban is the current financial secretary to the Treasury. Sir Nicholas Montagu, one-time chief of the Inland Revenue, joined PricewaterhouseCoopers in 2004 before moving on to other lucrative commercial appointments. PwC partner Richard Abadie has been the head of private finance initiative policy at the Treasury. In June 2009, former PwC partner Amyas Morse was appointed UK comptroller and auditor general and became responsible for directing the National Audit Office. Former PwC tax partner John Whiting is the director of the newly established Office of Tax Simplification, advising the government on simplification of tax laws. Chris Tailby, one-time tax partner at PricewaterhouseCoopers became head (until 2009) of anti-avoidance at HMRC. In July 2010, partners from KPMG, Ernst & Young, Grant Thornton and BDO became members of the government appointed Tax Professionals Forum and help shape the UK tax laws.

    Unsurprisingly, little progress is made on curtailing tax avoidance. The revolving doors must raise questions about the cosiness with the tax avoidance industry and HMRC's willingness to do secretive deals. Yet the committee raises no questions.

    		 38
    35 Money-Complaints against Banks
    Updated: 23 Dec 2011

    How to complain about your bank

    Fed up with poor financial services? You're not the only one. We explain how to put matters right.

    The lion's share of complaints was with the big banks 

    By Emma Simon

    1:18PM GMT 02 Mar 2010

    Customers are not only fed up with the service they receive from their banks, but are also prepared to take action against them. Figures released by the Financial Ombudsman Service (FOS) last week showed that there was a record number of complaints against financial services companies in the last six months of last year.

    Not surprisingly, the lion's share of these gripes and grumbles was with the big banks.

    In total the FOS received more than 80,000 complaints from July 1 to December 31 last year, an increase of almost 20 per cent on the previous six months.

    The Lloyds Banking Group was the most complained-about company, by a wide margin, notching up 20,190 complaints. These include complaints against the various banks it owns – Lloyds TSB, Halifax and Bank of Scotland – as well as its insurance and specialist lending divisions.

    A spokesman for Lloyds Banking Group says: "We take all customer complaints very seriously and are committed to working with the industry and regulators to ensure that complaints are dealt with fairly, quickly and consistently.

    "With over 30 million customers, the group has the largest customer base in the UK. The vast majority are happy with the service we provide and this is reflected in the low number of complaints we receive in relation to the high number of accounts we hold."

    Next in this roll of shame was Barclays, which recently announced record profits for last year. However, this didn't stop 10,892 of its customers complaining to the FOS.

    Next came Royal Bank of Scotland, which owns NatWest and Direct Line insurance, with 7,098 complaints. Santander, which owns Abbey, Alliance & Leicester and Bradford & Bingley, had 4,918 complaints; HSBC received 3,881.

    Emma Parker, a spokesman for the FOS, said that the ombudsman upheld the consumers' complaints in the majority of cases. In total, 54 per cent of cases were ruled in the consumers' favour, and the rest were rejected. "Historically this is still quite high," she says. "We used to find in the consumers' favour only in about a third of all cases – so clearly financial firms still have a lot to do to improve their complaints-handling procedures."

    But she points out that the FOS has seen a big increase in the number of companies where the ombudsman, in the majority of cases, has ruled in the consumers' favour. "Previously there were just eight firms where we upheld more than 85 per cent of all cases. But this has risen to 14 different companies."

    These include Black Horse (a lending subsidiary owned by the Lloyds Banking Group), the credit card provider MBNA Europe, the loan companies Firstplus Financial (owned by Barclays), loans.co.uk (also owned by MBNA), Ocean Finance & Mortgage, and Freedom Finance. Egg, a household name, has had 82 per cent of complaints upheld in the customers' favour.

    Ms Parker said: "These figures are really not good enough and we would like to see far fewer firms with such high uphold rates."

    Many of the complaints concern either the mis-selling of payment protection insurance (typically sold alongside loans or credit cards). There has also been an upturn in the number of "banking and credit" complaints. Typically, these are from borrowers who have seen rates on credit cards or loans increased, or further penalties imposed, when they are struggling with monthly payments.

    It is hoped the publication of these figures will cause banks to improve their service standards. Until then, consumers can improve their chances of getting redress by complaining more effectively.

    Ms Parker adds: "People can feel defensive or embarrassed about complaining. But they should remember they have a right to pursue a complaint if there is a problem with any financial product sold. Many customers with perfectly valid complaints fail to make headway because they get upset and distressed and often fail to lodge the complaint properly.''

    Follow these tips to ensure that your complaint is acted on.

    Decide what you want

    Be clear about the nature of your complaint and what action you require. Write out the key points and important information, such as account or policy numbers, when the account was opened, and on what date the problem occurred.

    Talk to your provider

    In most cases your first point of contact will be a call centre or local branch. Ask for a copy of the company's complaints procedure.

    Follow up complaints in writing

    If the issue cannot be solved by a phone call, send a letter. Set out the facts logically. State when you spoke to the organisation, and to whom. Enclose photocopies – not originals – of relevant documents.

    Keep calm

    Negotiating the maze of automated telephone menus can test anybody's patience. Be courteous and polite to get the best results.

    Stick to the point

    Don't deviate from the terms of your complaint. If you are being fobbed off, it's easy to slip into the "and another thing...'' argument. The more straightforward a complaint, the easier to resolve.

    Keep a record

    At every stage take a note of whom you talk to, the time and the response.

    State how you would like the matter to be resolved

    Are you looking for a refund, an apology or compensation? Tell the financial provider what you want. Be realistic, though: don't pluck a large figure from the air to be negotiated down. This is likely to make your claim look less credible.

    Call in the regulators

    Make it clear that if this issue is not resolved you will take the matter to the ombudsman. After eight weeks the company has to provide a "final response'' letter. If you feel this is unsatisfactory, you can take your complaint to the ombudsman.

    The FOS deals with complaints about banks, building societies, mortgage companies, insurers, credit card companies, fund managers, financial advisers and pension providers (but not company pensions). This is an independent arbitration service and free for consumers; although companies pay £500 for every complaint, regardless of outcome.

    Be patient

    The FOS will make an initial assessment over whether you have grounds for complaint. It won't accept, for example, complaints about investment performance, unless you are claiming the product was mis-sold and the risk to capital was never explained. If the complaint is accepted, it can take between six and nine months to reach a ruling. Providers can appeal initial rulings, although few do. A final ruling is binding on the providers, though not on the consumer.

    Know when to give up

    If the ombudsman rejects your complaint you can appeal against the decision through the ombudsman's independent assessor (details are on the FOS website, www.financial-ombudsman.org.uk). Customers are still free to take legal action against their provider, for example through the small claims court, but this will cost money and the judge is likely to take into account the ombudsman's verdict and reasoning.

    		 51
    36 Money- Tax-i to the High Court for HMRC
    Updated: 22 Dec 2011

    UK Uncut will drag top HMRC officials to court

    Wednesday 21 December 2011
    by Rory MacKinnon
    Five determined tax activists are set to begin a landmark legal bid tomorrow that will drag the nation's top tax officials to court.

    Lawyers for UK Uncut Legal Action will lodge a high court application seeking the release of top-secret documents on the department's 2010 tax settlement with investment banking giant Goldman Sachs.

    Campaigner Anna Walker told the Morning Star today it had been "a rollercoaster year."

    "This time last year I wouldn't have expected myself or UK Uncut to be so successful - it's caught the public mood in such a unique way."

    Others had worked on the issue of tax avoidance for years, she said, naming Private Eye reporter Richard Brooks and the Tax Justice Network's Richard Murphy.

    The group "could not have done it without them" - but the UK Uncut movement had grown as people connected the loss of revenue with the Con-Dems' budget cuts, she added.

    "We saw reports Vodafone owed £6 billion in tax, then a few days later George Osborne announced benefit cuts of £7bn.

    "It's just simple math," she said.

    Today's action would hopefully spark similar lawsuits in future, she added.

    The claim centres on HMRC boss Dave Hartnett's controversial decision to let Goldman Sachs off at least £10 million in owed tax, accrued over half a decade while trying to duck its National Insurance contributions - with one whistleblower alleging the total value could have been as high as £20m.

    Mr Hartnett later told MPs he had thought the case unwinnable, but admitted he had sealed the deal without legal advice from HMRC's own lawyers - and had chosen not to reopen it despite later advice that the deal was not legally binding.

    rorym@peoples-press.com

    		 29
    37 Money - Doom and Gloom for the Euro ?
    Updated: 19 Dec 2011

    Euro:

    UKForex

    Talks early this morning of possible credit rating downgrades of several European countries is weighing heavy on the single currency. 

     Euro losses were minimal Friday despite ongoing uncertainty in the continent, with the single currency remaining above 1.3000 versus the US dollar and numerously pushed Sterling back below 1.1900. 

    These levels are likely to be tested today however as it is believed that a Fitch downgrade of France and six other European countries is likely. 

    These rumours did the rounds on Friday and as you can see, don't seem to be going away. 

    France tries to sell 7 billion worth of bills today and Spain will auction government securities tomorrow, but these could be hindered by any actual downgrades. 

    To add to Euro woes this morning, risk aversion creeps back into the market after the death of Kim Jong Il and sees safe haven interest from investors. 

    EUR/USD opens this morning at 1.3021 and GBP/EUR starts the week at 1.1901.

    		 37
    38 Money- "Can Citizen banking neuter the Fat Cats"
    Updated: 14 Dec 2011

    Bank says no? Ditch the bank – borrow from the crowd

  • 12 December 2011 by MacGregor Campbell

    • Traditional banks have failed us. Will online peer-to-peer lending rescue our personal finances?

    Editorial: "Can citizen banking neuter the fat cats?"

    IN JANUARY of 2008, Pamela Slea decided to buy a home.

    The process initially looked straightforward - a bank had already pre-approved her mortgage, which would require a down payment that was the exact sum of her life savings.

    She did notice one odd clause in the contract: if no bank would approve her loan, she would lose her down payment entirely.

    But Slea wasn't worried, she had a six-figure salary and an impeccable credit history.

    She signed.

    Then the recession hit and the rules changed.

    Her broker told her that unless she doubled the down payment, no bank would approve her.

    Slea's life savings were on the line.

    She had no choice: she signed up for credit cards with shockingly high interest rates and took the maximum cash advance, larding even more fees onto the already exorbitant rates.

    She borrowed money from a friend.

    None of it was quite enough, so after Slea left work every night, she babysat to squeeze out those extra few dollars.

    She managed to get the mortgage, but at a steep price.

    Her credit rating had been tarnished.

     When Slea tried to consolidate her huge debts into a better loan, she found out quickly that to banks, she was now radioactive.

    Stories like Slea's are fuelling the fires of the Occupy Wall Street movement.

     Banks - supposedly dependable matchmakers that connect people with money to spend to people who need to borrow it - have stopped holding up their end of the bargain.

    Bankers rode high on the financial bubble until its collapse sank us all.

    Now, despite being bailed out by ta

    xpayers, banks are at it again, eating up our savings accounts with fees and pitiful interest rates.

    And if you need a loan, forget it.

    When other institutions tested the goodwill of their customers, technology-based alternatives emerged to provide a better option.

    Napster, for example, forced the music industry to redraw its entire model to adapt to the new realities of the digital world.

    Blogs, YouTube and Twitter are forcing newspapers to evolve to keep up with the seismic shifts in the way we communicate with each other.

    What you might not know is that there are technology solutions for banking every bit as powerful as social media such as Facebook that can step into the gap, making it possible, this very minute, for you to borrow or lend money safely online, completely independent of an actual bank.

    They're called peer-to-peer (P2P) lending services, and they have been around for years.

    This kind of "citizen banking" should be reshaping the business of borrowing and lending, and shaking the foundations of the financial industry in a way no amount of Occupy Wall Street protesting could accomplish. So what's the hold up?

    P2P lending started in the mid-2000s, when sites like Zopa in the UK, Prosper and Lending Club in the US, Smava in Germany, were founded on an obvious yet daring principle: that in the connected, high-tech 21st century, it should be possible for ordinary people to take the place of banks.

    The idea is simple. Lenders meet borrowers through a website that is something of a mash-up between eBay and a social network. To borrow money through Prosper, for example, you set up a profile and apply.

    The website assesses your creditworthiness, then assigns you a grade and an interest rate.

    Lenders can then weigh up these criteria to decide whether to finance your loan.

    They review borrowers' profiles much as one might review profiles on a dating site, and can finance anything from $25 of a requested loan to the whole thing.

    Your monthly payment goes directly into the lender's bank account, including interest.

    Every part of the process takes place online.

    It was an attractive gambit: people were more likely to get loans, it was all very convenient, and lenders could get a better interest rate. It should have worked beautifully.

    But the whole thing was derailed by an early, crucial mistake. Galvanised by the crowd-sourced success of efforts like Wikipedia, Prosper CEO Chris Larsen believed that his role was simply to provide the technological infrastructure to match lenders and borrowers.

    Instead of providing guidelines for borrower risk - such as interest rates and credit scores - he thought Prosper should be a "libertarian open marketplace" that relied entirely on the wisdom of the crowd.

    "That was probably asking too much of the crowd," he admits.

    The fallout was harsh.

     Two years after it formed, Prosper was being ruined by defaulters: up to 20 per cent of borrowers were walking away with no repercussions.

    That ratio was staggering compared with the single digits banks report, and unlike a traditional bank, Prosper had no insurance to repay jilted investors.

    After an investigation in 2008, the US Securities and Exchange Commission, the country's primary financial regulator, forced the company to shut its doors.

    The experiment had failed. Even P2P lenders who hadn't used the risky crowd-sourcing model felt the sting of Prosper's problems.

    But by 2009, though Prosper managed to relaunch, bank loans had dried up.

    Banks, after all, had similarly extended bad loans to people with no ability to pay them back, only on a much bigger scale.

    In reaction, banks tightened the net, applying the broadest, most conservative criteria to prospective borrowers to ensure no defaulters could slip through.

    As a result, even creditworthy borrowers like Pamela Slea were out.

    "There's no question that people who would normally easily get a loan from a bank are failing," says Giles Andrews, CEO of London-based Zopa.

    Though the recession technically ended in 2009, skittish lenders have still not loosened their purse strings. US banks have lopped a ruinous 12 per cent off the $8 trillion they were lending in 2008.

    The trend is similar in the UK and Europe, and the picture looks no rosier for those with money to lend.

    With savings accounts paying far less than 1 per cent on average, they have few good options.

    Against this backdrop, P2P lending slowly began to rise again (see graph).

    People who lend money through Prosper and Lending Club can now expect interest returns between 8 and 10 per cent.

    Borrowers, too, fare better with P2P lenders, getting interest rates between 6 and 20 per cent, slightly lower than typical bank rates.

    Despite these better numbers, however, P2P lenders still represent only a tiny fraction of all loans.

    Even Zopa, which never made the mistakes that have plagued its competitors, only has around 2 per cent of the overall UK consumer debt market, a minuscule sliver that nonetheless represents the highest percentage of any P2P service in any country in the world.

    The problem, ironically, is that P2P lenders adopted a few too many tactics from banks. Despite Prosper's relaunch, laissez-faire libertarianism was out.

    Now, instead of simply matching borrowers and lenders and letting them sort out among themselves how to price their loans, Prosper - like Lending Club, Zopa, and banks themselves - relied on data from official sources like credit bureaux.

    This strategy was supposed to engender trust among potential lenders, a tough nut to crack for any online service.

    Traditional banks have had centuries to hone their formula, says Amir Herzberg, a computer scientist at Bar-Ilan University in Ramat Gan, Israel, and it includes fancy buildings and people wearing expensive suits.

     "The reasoning goes 'if this person is wearing this very expensive suit, then it's not worthwhile for him to steal from me'," he says.

    Lenders want to know that P2P sites have an accurate way to help them assess credit risk, says Andrew Lo, an economist at the Massachusetts Institute of Technology.

    If you can't do that, you'll have no lenders.

    Risky business

    But that strategy came at a price: fewer borrowers.

    The trouble with relying on credit bureau figures is that they are slow to reflect the reality they claim to portray.

    Typical consumer credit ratings don't change very often - once a quarter or once a year - so they can take a while to register changes to an person's ability to pay back a loan.

    That means P2P lenders are not necessarily approving the borrowers they're meant to be serving - the ones who might look bad on paper but have every indication of paying back their loans.

    And so it is not necessarily easier for a borrower to get a P2P loan than one with a bank.

    The problem seems intractable: to gain the trust of lenders, you must use the best available metrics to assure them that their money will be safe.

    But that bars the very borrowers you want to serve.

    Lo thinks there's a better way to work out credit risks: use state-of-the-art data mining techniques to tap deep into a borrower's financial data, such as ATM transactions, credit card statements, and direct debits.

    In 2009, Lo and his colleagues analysed four years of consumer financial transaction data from a major commercial bank.

    They found that certain indicators, such as changes in the number of times a person ate out at restaurants, or the sudden stoppage of deposits into their bank account, were good predictors of that person's likelihood of defaulting on a loan.

    "These indicators could tell you a lot about the likelihood of becoming delinquent," says Lo. Their method successfully predicted 85 per cent of defaulters, a better result than most banks can claim (Journal of Banking and Finance, vol 34, p 2767).

    The bank Lo's team studied has since adopted the techniques for use on its own customers.

    That's just the beginning.

    There are also far more radical ways to assess creditworthiness, using non-traditional sources of data such as social information.

    Prosper is correlating delinquency rates with how many lenders were part of a person's loan, or if that person belongs to a specific alumni association.

    Still, both of these new techniques come with a serious caveat, in that the information they deal with is extremely sensitive.

    heir use could bring unpleasant consequences.

    "Say you buy a book on Alzheimer's and then all of sudden you can't get credit," says Larsen.

    Here too, though, recent computing advances can come to the rescue.

    New encryption techniques could allow companies to compute all the minutely sensitive factors that determine your creditworthiness without ever revealing the underlying information.

    In 2009, mathematician Craig Gentry developed a method called "fully homomorphic encryption", which made it possible, for the first time, to perform computations on encrypted data without ever having to decrypt it (Proceedings of the 41st Annual ACM Symposium on Theory of Computing, p 169).

    This would let borrowers divulge even their most sensitive information without the fear that it could be misused, because the recipients could never access it to begin with.

    This still won't solve all citizen banking's problems. Herzberg points out that P2P lending sites are just as vulnerable as other websites to denial of service attacks and other cyber-threats.

     It is one thing if your gmail account is frozen for a day, but quite another if you lose an interest payment. Social borrowing may also be more prone to "herd" behaviour, in which loan decisions are influenced more by who other people are lending to rather than what makes sense on paper.

    This can lead to bubbles amplified by the "viral" nature of online life.

    And yet, despite all these concerns, in a financial climate with few good options, P2P lending has gone through the roof, according to Ken Lemke, who runs the independent website lendstats.com.

    He started the project after some early bad experiences with Prosper, and his site is now the leading source for independent verification and analysis of the numbers hawked by P2P lending sites.

    Lemke's analysis shows that Prosper's total loan volume has grown over 30 per cent in the past year, while that of Lending Club has nearly doubled, recently topping $400 million.

    Both companies are seeing increased interest from start-ups and small businesses looking for working capital. "The returns are great," Lemke says.

    "There's nowhere else you can borrow something like that right now," he says.

    How much further can it go? Lending Club CEO Renaud LaPlanche says that if his company sustains its current growth rate, then within seven years it will be bigger than Citibank, one of the largest banks in the US.

    The American Bankers Association, perhaps predictably, dismissed this idea, saying P2P sites will likely remain niche services.

    To go much further, P2P lenders will need to contend with something technology can't change: regulations. If citizen banking takes off, P2P lenders could find themselves facing off against the banks themselves, which aren't likely to cede their positions of power to these upstarts.

    And indeed, some regulations appear to be in place chiefly to suppress start-up competitors, such as a US rule that stipulates that a company must get the permission of another bank in order to become a bank.

    Not all such regulations are designed to block start-ups.

    Many are designed to protect investors.

     The US Securities and Exchange Commission, for example, is required to vet each new loan individually. And in Germany, a bank must have €5 million in equity before it can operate.

    Actually, there's probably plenty of room for traditional and citizen banking to operate side by side. Even if people turn away from traditional banks en masse, these have little to fear, says Rainer Lenz, a former banker with what is now DZ Bank in Germany.

    Large banks typically rely on consumer loan interest for only around a third of their income, he says.

    The real effect of successful citizen banking on traditional banks could be both more subtle and more powerful, says Lo. The more enlightened banks will see an opportunity.

    After all, isn't a bank already a kind of social network?

    By playing a more transparent role in matching their customers with money to lend to customers who wish to borrow, banks may adapt and even thrive in a financial system dominated by P2P transactions.

    You might say that if Facebook becomes like a bank, banks will become more like Facebook.

    And never mind the banks. If citizen banking takes off, it could change people's day-to-day reality in the fundamental ways that the now-global Occupy movement is clamouring for.

    With interest payments going directly to the masses, rather than to banker bonuses and skyscrapers, P2P lending could cause more money to circulate in the real economy.

    It also naturally distributes risk among many individuals in a potentially more transparent way, rather than concentrating it in large, "too big to fail" institutions.

    Slea certainly agrees. in 2010, she got a loan with Lending Club which is now allowing her to rebuild her credit rating.

    With a growing movement protesting the old system, perhaps the "99 per cent" can start to do things themselves.

     "We think this is kind of a magic moment," says Larsen.

    MacGregor Campbell is a consultant for New Scientist based in Portland, Oregon

    		 46
    39 Money- Financiers say Euro Zone banks are on the edge of collapse
    Updated: 10 Dec 2011

    Euro zone banking system on the edge of collapse
     

    { Harry Wilson, 22:14, Friday 9 December 2011

    The eurozone banking system is on the edge of collapse as major lenders begin to run out of the assets they need to keep vital funding lines open.

    Senior (Xetra: 852271 - news) analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.

    The European Central Bank admitted it had held meetings about providing emergency funding to the region's struggling banks, however City figures said a "collateral crunch" was looming.

    "If anyone thinks things are getting better then they simply don't understand how severe the problems are.

    I think a major bank could fail within weeks," said one London-based executive at a major global bank.

    Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.

    "The system is creaking.

    There is a large amount of stress," said Anthony Peters, a strategist at Swissinvest, pointing to soaring interbank lending rates.

    CreditSights' weekly funding report said the ECB had effectively become the central clearer for the region's banks as lenders are increasingly distrustful about funding one another.

    Bank deposits with the ECB now stand at their highest level since June 2010 at €905bn (£772bn) as lenders withdraw deposits held with their peers and put them into the central bank.

    At the same time, banks in major eurozone countries such as France and Italy have become increasingly reliant on central bank funding.

    This follows the trend seen in smaller countries like Ireland (Xetra: A0Q8L3 - news) where lenders have effectively becomes taxpayer-funded "zombie" banks.

    Alastair Ryan, a banks analyst at UBS (NYSEArca: DJCI - news) , said there would be "no Lehman moment" or single catastrophic event for the European banking sytem, but added that without a full backstop of bank liabilities by governments the system would "struggle to finance itself in the next year in a durable way".

    "The system at the moment hasn't got funding of a duration that allows it to function, so it's failing," he said.

    Others think the eurozone banks are heading for a catastrophe and the worry is growing that a major bank could collapse within weeks.

    The results of the fourth round of European Banking Authority (EBA) stress tests conducted in just under 18 months pointed to a €115bn capital shortfall in the eurozone financial system, with German banks showing the most notable deterioration in their core capital ratios.

    Moody's on Friday downgraded France's three largest banks, BNP Paribas (Other OTC: BNPQF.PK - news) , Credit Agricole and Societe Generale (Paris: FR0000130809 - news) in light of what the US rating agency said were "liquidity and funding constraints".

    The banks' downgrade came despite Moody's acknowledging the three lenders could depend on a higher level of French taxpayer support in future.

    Two weeks ago, rumours abounded that it was the near failure of a major French lender that had been the trigger for a massive co-ordinated intervention by the world's largest central banks to shore up the banking system.

    The fear is the European authorities do not have the financial firepower to deal with the banks' problems.

    Analysts at BarCap say that even if the European rescue funds were able to raise €1 trillion of funding this would only meet the needs of the Italian and Spanish government and banks.

    The European banking sector's problems are being exacerbated by a wave of asset sales as lenders look to dramatically shrink their balance sheets. UBS (NYSEArca: SPGH - news) estimates eurozone banks could sell off between €3.7 trillion and €4.5 trillion of assets in the next three years.

    		 70
    40 Money- Sterling Up and Down-Euro In and Out
    Updated: 09 Dec 2011

     

    United States Dollar:

    UKForex report

    As expected the BoE made no policy changes yesterday, keeping the asset purchase target at £275 billion and the bank rate at 0.5%.

    GBP/USD rallied to a daily high of 1.5770 on the news but the gains were short lived with the pair tumbling back down to 1.5610 as risk negative news from Europe began hitting the wires.

    The USD made some good gains across the board on Thursday, a top performer along with the JPY, as FX markets took a more “risk off” stance in the aftermath of the ECB press conference as ECB president Draghi insisted that the central bank would not be the lender of last resort to stricken European governments, shifting even more focus on the EU leaders currently in Brussels in the hope that they can reach a swift resolution.

    The greenback was also helped by better than expected initial jobless claims figures. Economic releases from the UK and US are light on the ground today but the market focus remains on events in Brussels and because of this we can expect another volatile session. GBP/USD opens this morning at 1.5622.

    Euro:

    With the market completely preoccupied with start the EU leaders summit in Belgium on Thursday, the ECB rate decision was almost a formality with a 25 bps rate cut widely expected.

    Sure enough benchmark rates were cut to 1% as expected, which was initially taken as a positive, although euro negativity started to seep in when no reference was made that the ECB was looking to increase their SMP (bond buying) program, ECB president Draghi confirming ECB adherence to the Maastricht Treaty with reference to lending to European governments, and headlines that Angela Merkel said there will no “big bang” solution to the European debt crisis.

    For the rest of the day the 17-nation currency came under the hammer, in particular GBP/EUR rallied to a high of 1.1767, its highest level since November 10. Going into the second day of the EU leaders summit in Brussels today markets remain unimpressed and a lack of positive news amongst the usual headline lottery could mean further downside for the single currency. GBP/EUR opens this morning at 1.1717

    		 38
    41 Money- BOE -Gets Printers cramp ? but -"Please can I have some more,Sir"
    Updated: 08 Dec 2011

    Bank leaves QE steady at £275 billion


    12:40, Thursday 8 December 2011

    LONDON (Reuters) -

    The Bank of England voted on Thursday to stick to its four-month programme to pump an extra 75 billion pounds of quantitative easing into the rapidly slowing economy.

    The Bank's Monetary Policy Committee also kept interest rates at a record low 0.5 percent -- where they have been since March 2009 -- as it eyes the outcome of a critical European Union summit aimed at tackling the euro zone debt crisis.

    The European Central Bank, which announces the results of its own policy meeting at 12:45 p.m., is widely expected to lower rates ahead of the EU summit.

    Economists polled by Reuters last week were unanimous that the Bank would keep its target for quantitative easing asset purchases at 275 billion pounds, which it raised it to in October, and leave interest rates unchanged.

    Bank policymakers have been clear over the past month that they see little merit in fine-tuning the level of existing gilt purchases, and that the 75 billion pounds the bank is purchasing from October to February is close to the maximum the market can easily supply.

    However, most economists expect a further 75 billion pound extension to the QE programme in February.

    The Bank and Britain's independent government forecaster have both slashed their growth forecasts over the past month, and the OECD think tank believes Britain's economy has already entered a mild recession.

    British inflation remains close to a three-year high at 5 percent, but the Bank forecasts it will tumble next year to below its 2 percent target because of economic weakness and fading one-off effects that have pushed up prices over the past year.

    (Reporting by David Milliken)

    		 36
    42 Money- Christmas Bonus 2011
    Updated: 05 Dec 2011

    Christmas Bonus

    You may be able to get Christmas Bonus, the one-off tax-free £10 payment made before Christmas.

    This is normally paid automatically to those customers getting a qualifying benefit in the qualifying week and who meet the residency conditions.

    Who is eligible?

    To get a Christmas Bonus you must be a resident in the UK, Channel Islands, Isle of Man, Gibraltar, any EEA country, or Switzerland.

    You must also be entitled to at least one of the following benefits in the qualifying week (normally the first full week of December):

    •Attendance Allowance
    •Carer's Allowance
    •Constant Attendance Allowance (paid under Industrial Injuries or War Pensions schemes)
    •Contribution-based Employment and Support Allowance (once the main phase of the benefit is entered after the first 13 weeks of claim)
    •Disability Living Allowance
    •Incapacity Benefit at the long-term rate
    •Industrial Death Benefit (for widows or widowers)
    •Mobility Supplement
    •Pension Credit - the guarantee element
    •State Pension (including Graduated Retirement Benefit)
    •Severe Disablement Allowance (transitionally protected)
    •Unemployability Supplement or Allowance (paid under Industrial Injuries or War Pensions schemes)
    •War Disablement Pension if over State Pension age
    •War Widow's Pension
    •Widowed Mother's Allowance
    •Widowed Parent's Allowance
    •Widow's Pension
    Please note, you will not qualify for the Christmas Bonus on the basis of State Pension entitlement if you are deferring your State Pension claim.

    Attendance AllowanceConstant Attendance AllowanceDisability Living AllowanceHow much do you get?
    Christmas Bonus is normally a one-off payment of £10.

    If you're part of a married or unmarried couple or civil partnership and both of you are entitled to one of the qualifying benefits you'll each get a Christmas Bonus payment.

    Your partner or civil partner will also get payments if both the following apply:

    •you're both over State Pension age by the start of the qualifying week
    •your partner or civil partner was also resident in the UK, Channel Islands, Isle of Man, Gibraltar, EEA country or Switzerland at the start of the qualifying week
    and either:

    •you're entitled to an increase of a qualifying benefit for your partner or civil partner
    •the only qualifying benefit you're getting is Pension Credit
    Pension CreditHow it's paid
    Christmas Bonus is usually paid directly into your bank, building society, Post Office® or National Savings account that accepts Direct Payment.

    If you're registered blind or need someone who cares for you to collect your money, you'll be sent a cheque to be cashed at the Post Office®.
    Effect on benefits
    The Christmas Bonus payment will not affect other benefits you may be getting.
    How to claim
    You don't need to claim Christmas Bonus - you should get it automatically. If you think you qualify for the payment but haven't got it, speak to the Jobcentre Plus or pension centre that deals with your payments

    		 288
    43 Money- Fuel Poverty results in killing off the Consumer
    Updated: 03 Dec 2011

    One in four suffering in fuel poverty

    Friday 02 December 2011
    by Will Stone

    More than one in four people across the country now live in fuel poverty as a result of repeated price rises by greedy energy privateers.

    Price comparison website uSwitch.com revealed today that Wales had become the fuel poverty capital of Britain with almost a third of households qualifying.

    East England is not far behind with 31 per cent in fuel poverty, followed by 26 per cent in the north and 25 per cent in Scotland.

    Campaigners have argued that fuel poverty - where households spend more than 10 per cent of their income on utility bills - has been made worse by energy companies whacking year-on-year increases in gas and electricity by as much as 20 per cent.

    Welsh elderly charity Age Cymru spokeswoman Victoria Lloyd warned that rising fuel prices are causing elderly deaths as many cut down on essential heating for fear of racking up huge debts.

    "The number of excess winter deaths is a disgrace," she said. "In Wales, there are still over 12 excess deaths of people aged 65 and over per day - a figure that should make us all ashamed.

    "We know that behind these shocking figures lie deep-seated social issues. The latest estimates show there are over 332,000 households in fuel poverty in Wales."

    She called on the governments in Cardiff Bay and Westminster to do more to tackle the crisis by raising incomes, controlling energy prices and assisting with the installation of effective housing insulation to cope with freezing winter temperatures.

    uSwitch.com consumer policy director Ann Robinson said: "There is now real urgency for the government to deliver on fuel poverty and to act quickly to alleviate the misery being faced by those who cannot afford to heat their homes."

    Britain's average household energy bill for gas and electricity is now at £1,293 a year, rising to £1,312 for those who live in Wales.

    The study of 2,323 households said energy bills have rocketed by £633 or 96 per cent in just over five years and an estimated 6.9 million or 27 per cent of households are fuel poor.

    Separate figures from Consumer Focus shows more than five million households are now in fuel poverty in England and Wales.

    Energy regulator Ofgem has also introduced plans to increase transparency in the sector by simplifying tariffs so that customers will be able to work out the cheapest deal.

    The plans will force firms to feature just the unit price for energy used and the standing charge to make them easier for consumers to understand and create more competition in the market.

    Which? consumer magazine executive director Richard Lloyd said that energy suppliers should act now to make these changes without waiting for the regulator to force them.

    He added: "With widespread anger about price hikes and bad customer service, a much bigger shake-up is needed to guarantee that fair and affordable energy is available to all."

    		 40
    44 Money- RPI /CPI- Shifty Shuffling of the Cards in Court to Cut Our Cash
    Updated: 03 Dec 2011

    Inflation rate switch to face union court action

    Friday 02 December 2011
     
    by Louise Nousratpour Equalities Reporter
    Several unions vowed today to challenge a High Court ruling that has upheld government changes to the way annual public-sector pension increases are calculated.

    The switch from the retail price index (RPI) to the traditionally lower consumer price index (CPI) to uprate pensions and benefits represents a total spending cut of almost £6 billion a year by 2014.

    Individual workers and unions challenge this decision in the High Court, saying the change was unlawful and that ministers had put cost-cutting before people’s well-being.

    But judges in London ruled in favour of the government yesterday by a majority of 2-1, even as they accepted that the “immediate driving force” behind the change was “the need to secure cuts in the welfare budget.”

    Two judges Lord Justice Elias and Mr Justice Sales ruled that ministers were entitled to consider cost implications when deciding which index to adopt.

    They agreed that, in any event, the government chose CPI because it considered that it provided a better measure of price inflation than RPI.

    But the third panel member Mr Justice McCombe said he would have quashed the decision because “potential savings to the public purse” were an “irrelevant consideration” that had been allowed to dominate the decision-making process.

    Public-sector union Unison general secretary Dave Prentis, who vowed to challenge the ruling, warned the sudden switch from RPI to CPI was costing pensioners thousands of pounds a year and could push millions into old-age poverty.

    Teaching union NASUWT general secretary Chris Keates added: “One of the judges did believe that the government had acted unlawfully.

    On this basis we have instructed our legal representatives to lodge an immediate appeal.”

    louise@peoples-press.com

    		 49
    45 Money- Can ever really be "happy" about a Bank making a profit and a mug out of you ?
    Updated: 01 Dec 2011

    Clydesdale slips below Santander to bottom of the bank happiness league

     as First Direct dominates

    Radical says Switching- is fraught with problems -

    Adding a nominated account to a Post Office Savings Account is a no no.

    The Radical is moving to the  Coop from Cahoot.

    Cahoot closed his account without authority and transferred all his money to another bank he has no account with.

    Cannot say more until the culprits cough up

    But on a score out of ten Cahoot and the Post Office get -5 

    By Dan Hyde

    Last updated at 3:08 PM on 28th November 2011>

    First Direct, Co-op and Nationwide are Britain's three favourite banks, according to a major new poll, but Clydesdale Bank has slipped below pantomime villain Santander at foot of the rankings.

    HSBC-owned First Direct, which consistently tops customer satisfaction surveys, can now decorate its mantelpiece with another gong from research specialists JD Power, complementing the 'best bank' prize it garnered from Which? magazine in October.

    The top three is completed by ethical bank The Co-operative and building society Nationwide and mirrors the results in JD Powers' 2010 survey.

    This time around, First Direct scored 77%, the Co-op 73% and Nationwide 72% for satisfaction among the 3,899 person-strong survey.

    Happiness counts: A new bank survey has put First Direct, Co-op and Nationwide as the best for customer service and Clydesdale as the worst

    But it's painful news for Clydesdale Bank at the other end of the league table. The Scottish-based bank, owned by National Australia Bank, was third-bottom in 2010 but has crashed below Santander to foot the table this time around.

    Clydesdale clocked up a score of 659 out of a possible 1,000 points, compared to 663 last year.

    The bank defended its low score. A spokesman said: 'We take all feedback seriously and have a continual focus on customer satisfaction as part of our strong support for customers.

    'It is disappointing to learn of instances where customers are unhappy with our service. However, our own independently validated analysis of almost 2,500 customers consistently places us ahead of market average. This demonstrates our ongoing commitment to providing the best possible customer service.'

     Rising off the bottom of an important league table is the first sign – albeit merely a token at this stage – of green shoots of recovery for giant Spanish bank Santander.

    It has been tainted by scandal since early 2010 when it botched Isa transfers by the bucketload and then struggled with technical issues in moving Alliance & Leicester customers to its own platform.

    Chief executive Ana Botin, who replaced Lloyds-bound Antonio Hora-Osorio in April, has repeatedly insisted Santander is on the path to putting things right.

    She has admitted the bank tried to squeeze too much profit from customers at the expense of service last year, and has sought to rectify it. Santander has brought its call centres back to the UK from India and has upped staff numbers and improved training. 

    How the banks rate: Click to expand for top/bottom of JD Power's rankings

    Santander scored (an ominous-sounding) 666 points, compared to just 648 last year, perhaps helped by a positive vibes from its new slogan: 'Driven to do better'.

    Third from bottom was state-backed Bank of Scotland, which has been part of Halifax and latterly Lloyds since the 2008 financial crisis.

    Yorkshire Bank, which is part of the Australian-owned Clydesdale brand, came fourth-bottom. All lag behind the industry average of around 70% satisfaction, according to JD Power.

    Banks improve in 2011 – but ingrained ineptitude remains

    The industry average has jumped to 698 points out of 1,000 from 683 in 2010. This has been driven by branch improvements, Stuart Crawford-Browne of JD Power and Associates says.

    But Crawford-Browne banks are still performing poorly in three key areas: excessive fees, below-par products and poor problem resolving skills.

    Revolutionary? Sir Richard Branson is aiming to make a splash after Virgin bought Northern Rock

    He says: 'Customers tend to be especially dissatisfied with overdraft fees and monthly service charges, particularly the amount of these fees.

    With just one in twenty customers moving current accounts every year, banks face little threat of losing a large portion of their customer base, though. This, according to the Independent Commission on Banking is helping foster a lackadaisical attitude towards customer satisfaction.

    The government-backed commission, headed by Sir John Vickers, wants fiercer competition between banks to be the driver for better standards across the industry.

    A small step forwards was taken when Sir Richard Branson's Virgin bought Northern Rock this month with the aim of creating a new High Street challenger brand.

    Virgin has consistently told This is Money that it will not be offering best buy products, but focusing on an all-round 'good value' offering, with service high on the agenda.

    But the latest JD Power study found that just one in four customers complaining of a problem said they 'definitely will' or 'probably will' switch banks in the coming twelve months.

    Just 8 per cent of customers who hadn't had a problem intend on switching accounts



    Read more: http://www.thisismoney.co.uk/money/saving/article-2067183/Clydesdale-best-bank-league-Santander-First-Direct-dominates.html#ixzz1fI0aMd7T

    		 58
    46 Money- Breaking News- BOE Member-we might need to print more money as Economy goes down the drain
    Updated: 27 Nov 2011

    Bank's Fisher says more QE may be needed - paper

    LONDON | Sun Nov 27, 2011 1:57am GMT

    LONDON (Reuters) - Bank of England policymaker Paul Fisher said the central bank's latest 75 billion pound cash injection into the economy was the minimum it needed to do and he thought it may need to add to it.

    "I still think we might need to do some more," Fisher, the central bank's executive director for markets, told the Sunday Times newspaper in an interview.

    Most economists say the Bank will pump a further 50 billion pounds into the economy in February when the current programme of purchases of government debt, announced in October, comes to a close.

    The central bank sharply downgraded its expectations for growth and inflation for 2012 in its latest projections this month, signalling it may further expand its 275 billion pound asset purchase programme.

    Fisher said he had supported the October decision to restart quantitative easing because he had been concerned about the worsening state of the economy since a marked slowdown at the end of 2010.

    "I was trying to keep it on the table throughout the year because I was conscious of this deteriorating picture," he said.

    "For me it was a timing thing. I voted for 75 billion pounds because I thought it was the smallest amount I was absolutely sure we needed to do."

    For the moment the Bank's policymakers see no case for increasing monetary stimulus before February, according to minutes of their November 9-10 rate setting meeting, despite a rising chance of a worst-case outcome for the euro zone crisis.

    But looking ahead, the minutes said they were split on the likelihood of a further increase when its asset purchases were completed by the time of February's meeting.

    Fellow Bank policymaker Martin Weale last week said he backed further quantitative easing in February unless the economy improved.

    Fisher indicated that he saw a limit to the potential size of the asset purchase programme.

    "We're buying at the right sort of rate the market can supply," he said. "Suppose we went to the extreme and doubled to 400 billion pounds. If we had done that and it still wasn't working, I think we would want to stop and try something else."

    He backed chancellor George Osborne's deficit-cutting austerity programme, which has ensured the confidence of international markets during the euro zone crisis but bars the government from boosting the economy with additional spending.

    "It is important ... that we are seen to have a grip on our domestic fiscal position," Fisher said. "It is important that we have a fiscal consolidation programme that convinces the markets."

    But he said global economic conditions were serious and the outlook was unclear.

    "It is more uncertain than at any time I can remember in terms of what is going to happen and how the world is going to look," he said.

    For Britain's economy, he added, "things aren't falling off a cliff - it is quite evenly balanced - but we are quite vulnerable to a shock."

    (Reporting by Tim Castle)

    		 47
    47 Money-Reckless Futures Trading in World Food Commodites sends prices & profits rocketing
    Updated: 27 Nov 2011

    The Rich Get Richer Off the Backs of the Poor
    Written by John Berthelsen   
    Friday, 25 November 2011
     
    The boys in the suspenders figure out a new way to manufacture money

    The world appears to have come through another harrowing episode of skyrocketing commodities prices.

    Analysts are forecasting that at least in the short run, they are likely to moderate if not actually fall, which should be a relief – some, but not much -- to the hundreds of millions of the world’s starving.

    “The long-term commodity rally is losing steam, indeed it may already have peaked though we do not rule out last hurrahs,” according to a report last week by Research-Works, a Shanghai-based research firm that specializes in commodities.

     ”What we can say is that annual commodity prices look much closer to their tops than to their averages.”

    Behind the story is a series of disparate elements including long-term decisions in the Eurozone and the US to produce biofuels as well as food from corn, driving grains prices to skyrocketing levels; climate change, which is cutting into some annual harvest yields while increasing them elsewhere; and finally the Malthusian proposition that population appears to be increasing faster than available food supplies.

    But in discussions of the factors that drive prices, consultants and others largely don’t mention a relatively new one.

    That is “financialization,” an unwieldy word for the discovery by the boys in yellow suspenders -- investment bankers, hedge fund and money market managers -- of the profit to be made in commodities trading.

    Over the past decade a flood of speculative money has overwhelmed the quantity of goods for sale, with the result that prices have gyrated.

    As the world downturn has continued, however, and the need to cover financial problems has escalated in Greece, Spain, Italy and other parts of the world, the speculative money has begun to wash back out.

    Research-Works notes that "funds invested in commodities fell by 22 percent from April to the end of September after having risen 195 percent from the fourth quarter of 2001 to their 2011 peak, thus acting as a catalyst for commodity prices rising to record levels, investment in futures could well be the needle that pops the commodity balloon.

     Whether it has happened for this long-term cycle is not clear as uncertainty about liquidity, debt, quantitative easing, inflation or industrial output will determine the short to medium trend.”

    A new book and disturbing book, “Endless Appetites: How the Commodities Casino creates Hunger and Unrest,” by Alan Bjerga, a prize-winning Bloomberg News Service reporter, tells part of the story.

    It began in Chicago at the Commodities Futures Trading Commission during the administration of George H W Bush, when free-market acolytes including CFTC Chairwoman Wendy Lee Gramm, the wife of US Sen. Phil Gramm, argued to keep over-the-counter trading exempt from regulation.

    Prior to that point, futures trading was the province of people in the industry who were actually active in the buying, selling and delivery of commodities like wheat or corn, etc.

    But in 1991, according to Bjerga, “Goldman Sachs had an idea that changed commodity trading forever.

     A Goldman trader got the idea to do a swap with a pension fund to add commodities to its portfolio.

     Eventually, Goldman created an index to track prices on selected commodities, allowing index fund buyers a way to speculate on them.”

    But it wasn’t until 2000, when Bill Clinton signed a measure largely exempting over-the-counter derivatives from regulation as he was leaving office, followed by George W. Bush, that things began to take off.

    “For free market advocates, the creative power of modern markets would be unleashed – just as crops, energy and metals were about to look better than ever as an investment,.”

    That kicked off Bjerga’s commodities casino.

    “Unburdened by regulations and with a motivation to move money elsewhere, index funds created by Goldman, Deutsche Bank, Pacific Investment Management Co. (PIMCO) Prudential Bache Commodities and others began pouring money into energy, metal, food and fiber,” Bjerga writes. “Assets handled by money management firms, hedge funds, or other financial services companies started the decade at US$6 billion in value.

    They jumped to US$10 billion in 2001, fell back with the recession, then started to rocket once the economy recovered: more than $25 billion in 2003, $54 billion in 2004, S145 billion by 2006.”

    With a flood of money behind them, the big banks got into commodities ownership in a big way.

    Goldman, Bjerga noted, created a global network of warehouses to hold aluminum.

    Morgan Stanley began chartering more oil tankers than Chevron Oil.

    JP Morgan hired a supertanker to store heating oil off Malta.

    Ultimately, investment in the indexes tied to commodity prices -- energy, food and metals -- by early 2011were 55 times larger than in 2000, directly connecting rich-world investors to volatile food costs, Bjerga continued.

    While certainly there are other factors at work, this chart clearly shows the influence of the index funds.


    The effect on poor-nation consumers and the farmers struggling to feed them was devastating.
     
    From the middle of 2007 to mid 2008, when the World Bank, the United Nations Food and Agriculture Association and other world bodies began to be concerned, world food prices rose by 46 percent, then plunged 34 percent in the second half of that year, Bjerga writes, bottoming out in February 2009.
    Then they took off again in June 2010 to 2011, rising another 39 percent.

    Then, nearly 8,000 km. across the world from Chicago, on Dec. 17 a vegetable seller name d Mohammed Bouazizi, discouraged by a variety of problems, poured a can of fuel over his head and lit himself afire. He died on Jan. 4, having set off a revolution.

    “Mohammad Bouazizi’s self immolation alerted the world that a new crisis, fueled by food, had begun,” Bjerga writes. That, of course, turned into the Arab Spring.

    “Demand by developing countries is unlikely to have put additional pressure on the prices of food commodities, although it may have created such pressure indirectly through energy prices,” authors John Baffes and Tassos Haniotis wrote in a July 2010 report for the World Bank.
     
    “We also conclude that the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by investment funds may have been partly responsible for the 2007/08 spike.”

    Today, according to Research-Works, analyzing US investments in individual commodities paints a clearer picture of what has happened.
    Investments in 14 of them fell during the second and third quarters of this year, were flat in one, and up in just one – gold.

    “Even copper, which we consider to be one of the strongest commodities fundamentally, has fallen out of favour with the values of index holdings falling 35.9% to $5 billion.
     
    The fall in value of cotton indices was the most severe, almost halving from $5.9 billion in Q1 2011 to $3.1bn in Q3.
    West Texas Intermediate, wheat, soyabean oil and silver also saw values fall sharply.
     
    Livestock commodities, however, outperformed other sectors, with index values in hogs and live down just 12.5% and 7.2% respectively.”

    Futures trading, which began hundreds of years ago as a method to smooth out price swings, has thus come into favor as a speculative tool by people whose only connection to food or energy is at the dinner table or the petrol pump.
     
    Instead of acting as a hedge against volatility, as Bjerga writes, futures trading has become a way to add fuel to the fire.

    “The effects of commodities trading on food prices is controversial,” he continues.
     
     “Regardless of cause, the price swings of global crop and energy markets have turned a quarter century of stable food costs into a marketplace casino where demand pushes prices higher – and drought drives them higher still -- while a cooling economy or an unexpected gain in supplies cascades them down faster than any changes in how much people actually eat.”

    		48
    48 Money-The Euro & Dollar stronger,the Pound weaker,Trade deficit & Economic mismanagement responsible
    Updated: 22 Nov 2011

    Why is the pound falling against the euro?

    With Europe gasping for air amid the worsening sovereign debt crisis,

    why is the pound worth less against the euro than this time last year?

    by John Freeme on Nov 22, 2011 at 11:51

    Negative sentiment about Europe, a weak domestic economy and exposure to eurozone debt have seen the pound lose ground against the euro, writes John Freeme of HiFX.

    Currency comparison

    One of the most commonly asked currency questions right now with Europe beset by the deepening financial crisis is why the pound-to-euro rate is still lower than it was this time last year.

    Surely a sovereign debt crisis of this magnitude should have affected the euro much more?

    How does the rate compare with this time last year?

    Euro to dollar: 1.3450 on 22 November 2010 and 1.3455 on 21 November 2011.
    Pound to euro: 1.1810 on 22 November 2010 and 1.1660 on 21 November 2011.
    Pound to dollar: 1.5950 on 22 November 2010 and 1.5700 on 21 November 2011.

    So, no difference against the dollar for the euro from this time last year, and the euro is stronger against  the

    pound than it was this time last year.

    Not a bad performance for a crisis-stricken currency.

    However, the pound is weaker against the dollar than it was this time last year.

    Let’s delve a little deeper into the above figures and reveal the clear impact that European instability is having on the UK and its currency.

    Sentiment contagion

    Despite the fact that the UK negotiated to opt out of the euro, as we are still part of the union we are often tarred with the same brush as Europe.

    This was a good thing in the boom years, when growth on the continent was strong, helping the UK grow in parallel.

    Unfortunately, we have to take the bad with the good, and right now we are being rocked by the negative sentiment that has engulfed Europe, and there seems to be no end in sight.

    Europe is the UK’s biggest trading partner, and accounts for around 50% of our exports.

    Therefore, as the crisis in Europe intensifies, demand from Europe drops and the UK’s trade deficit gets worse.

    The UK trade deficit widened to just shy of £10 billion in October, dashing all hopes that the government had of an export-led recovery for the ailing domestic economy.

    The European Commission has recently dropped the 2012 growth forecast from 1.8% to a meagre 0.5%.

    This can only equate to a slowing in the UK's growth rate and potential for the UK to drop back into recession.

    A weak economy cannot have a strong currency.

    UK exposure to European debt

    Lack of demand for the pound has been another factor that has seen the currency fail to rise in the wake of the euro crisis.

    The fact that the UK banks are heavily exposed to European banking debt means that investors are hesitant to hold sterling in case the worst happens and the banks need to write off 100% of their debts.

    This would add up into the billions.

    All of this adds up to poor sentiment around the pound, an economy that is barely growing, and a high risk of losses due to debt write-offs as a result of European banking losses.

    Clearly, as much as the pound is its own currency, it is still significantly affected by what happens in the rest of Europe.

    So where do we go from here?

    With sterling against the euro, we remain range bound between 1.13 and 1.172 on the market price.

    We would need to see the market break above the 1.172 mark and close above this level for a few days to convince us it has enough momentum to reach the year's highs of 1.2.

    We see the dollar retaining its safe-haven status for the short term, and therefore expect a pound-to-dollar rate around 1.55 to 1.58.

    		 52
    49 Money- Breaking News - FTSE Sinks as Spain Suffers
    Updated: 21 Nov 2011

    FTSE sinks as global debt fears stoke markets sell-off

    Index loses 140 points as Spain's borrowing costs near euro-era high

    and US efforts to agree deficit-cutting measures look set to fail.

     FTSE 100

    down -140.34 to 5223  -2.62%

    by Max Julius on Nov 21, 2011 at 17:08

    Global stock markets began the week deeply in the red on Monday, with Britain’s FTSE 100 sinking below the 5,300 mark as fears over debt crises in Europe and the US spurred a sell-off in equities.

    The UK index of blue-chip shares slid 2.62%, or 140 points, to 5,222 – a six-week low – and the All Share index faded 2.61%, or 72 points, to 2,692.

    Moody’s earlier warned an increase in France’s borrowing costs would amplify its challenges amid a dimmer growth outlook, and could have ‘negative credit implications’, heightening anxiety that the eurozone’s debt woes will engulf its second-largest economy.

    The spread between the yield, or implied interest rate, on French and German debt subsequently widened. Meanwhile, the yield on benchmark 10-year Spanish government bonds climbed 11 basis points to 6.56%, close to a euro-era high, despite the election on Sunday in SPAIN of a government with a clear mandate to implement more austerity measures.

    ‘What is becoming glaringly apparent is that policy makers do not have any easy answers to the intractable problem of too much debt (and too little growth),’ said Louise Cooper, markets analyst at BCG Partners, in a note.

    Other stock markets in Europe also fell sharply:Germany’s DAX index plummeted 3.35% to 5,606, France's CAC 40 index lost 3.41% to 2,895, and the FTSEurofirst 300 index of top European shares weakened 3.11% to 921.

    Wall Street fared almost as badly ahead of an expected admission by the congressional ‘supercommittee’ that it had failed to agree on measures to reduce the US deficit.

    The panel had been charged with finding $1.2 trillion (£767 billion) in savings to avoid automatic spending cuts, but the negotiations between Democrats and Republicans were widely reported to have collapsed.

    The Dow Jones Industrial Average lost 2.71% to 11,477, the Standard & Poor's 500 index gave up 2.28% to 1,188, and the Nasdaq Composite index tanked 2.58% to 2,506.

    ‘There are no easy solutions to the mess we are in and so we are seeing the democratically elected governments of indebted nationals failing,’ added BCG’s Cooper. ‘Either they are being chucked out of office in elections (Spain), being shoved aside for technocrats (Italy and Greece) or just failing to come up with any solutionsAmerica).’

    Commodities prices were also hit in the markets rout, with gold falling 2.4% to $1,687 an ounce and Brent crude oil for delivery in December softening 2.38% to $106.08 per barrel.

    Miners were among the biggest fallers on the FTSE 100, as metals prices slipped. Fresnillo (FRES.L) slumped 118p to £15.93, Kazakhmys (KAZ.L) tumbled 55p to 808p and Antofagasta (ANTO.L) dropped 67p to £10.09.

    Lloyds (LLOY.L) was another standout loser, shedding 1.8p to 23.42p, after the state-backed lender unveiled plans to replace its chief executive, Antonio Horta-Osorio, in the event he does not return from sick leave before the year end.

    But Resolution (RSL.L) topped the loser board, sinking 19p to 230p, in the wake of a failed bid for life insurer Phoenix Group (PHNX.L). Phoenix’s shares shot up 33p to 525p after the FTSE 250 firm said it was considering a potential offer from buyout firm CVC.

    Defensive stocks were the day’s outperformers, with drugmaker Shire (SHP.L) inching up 3p to £20.08 and sweetener and starches maker Tate & Lyle (TATE.L) only easing 1p to 682p.

    Elsewhere, sterling slumped 0.93% versus the dollar to $1.564 as investors sought the safety of the greenback

    		 45
    50 Money-UK Growth forecast poor so Sterling down against the Dollar & Euro
    Updated: 18 Nov 2011

    United States Dollar:

    UKFOREX

    Risk remains off this morning and the USD is firmer as a result. 

    GBP/USD slipped below 1.5700 whilst the pound was also pressured lower by a dovish UK Inflation Report released yesterday. 

    In it the Bank of England lowered its 2012 growth forecasts for the UK economy and stated that inflation levels would fall sharply over the next few years towards and below the 2% target. 

     Unemployment figures, also released yesterday, didn't help either; the rate rose in the three months through September and is now at a 15-year high of 8.3%. 

    GBP/USD traded to a low of 1.5693 overnight as negative global and local news weighed on the currency.  Meanwhile yesterday US inflation data was also released. 

    The CPI came in bang on expectations at 0.1%, having declined slightly from 0.3% in the previous month. 

    Other US data, including Industrial Production was generally positive. 

    Industrial output rebounded to 0.7% last month, this after falling by 0.1% in September. 

     It wasn't enough to lift risk sentiment though and GBP/USD remained on the back foot. 

    Markets will now look to UK Retail Sales data due this morning and will continue to monitor the situation in Europe.
       
    Euro:

    EUR/USD climbed higher through 1.3500 yesterday and to a high of 1.3550 as the ECB was heard to be buying Italian government bonds through the Securities Market Programme. 

     It couldn't hang on though and EUR/USD was soon sold as Fitch, the ratings agency, stated that U.S. banks "could be greatly affected if contagion continues to spread beyond the stressed European markets". 

     Moody's, another rating agency also downgraded senior debt and ratings of twelve public-sector German banks stating that there is a lower chance that the government will bail them out now if any of them were to fail.  EUR/USD slumped back below 1.3500 on the news and fell to a low of 1.3423 overnight. 

    It opens this morning at 1.3475.  GBP/EUR has traded just shy of the 1.1700 level over the last 24 hours.  It trades at 1.1680 at the moment.

    		 43
    51 Money- UK Inflation fell 0.2% only if you were an airline passenger !
    Updated: 16 Nov 2011

    Inflation slowdown 'no comfort to workers'

    Tuesday 15 November 2011
    by Rory MacKinnon
    Inflation fell to 5 per cent today - but prices are still rising twice as fast as wages.

    The latest figures from the government's Consumer Price Index showed inflation in October dip slightly from a three-year high of 5.2 per cent the month before.

    The Retail Price Index, which factors in living costs such as council tax and mortgage payments, showed inflation at 5.2 per cent, down from its 20-year high of 5.4 per cent in September.

    Boffins at the Office of National Statistics put the drop down to a supermarket price war coupled with bumper crops for some domestic growers, fuelling the biggest fall in food prices for the quarter since 1996.

    The new rate is still over twice the government's inflation target of 2 per cent and double the 2.5 per cent rise in average earnings.

    Bank of England governor Sir Mervyn King appeared unmoved, saying he expected the rate to fall more sharply "in the next six months or so."

    But Unison general secretary Dave Prentis said the fall offered only slight relief to families struggling to cope with the rising cost of living.

    "While inflation has been consistently above target for many months, public-sector workers have been stuck on a pay freeze, stretching to two years for some.

    "We know our members are already cutting back on basic essentials and are worried about heating their homes and putting food on the table this winter."

    Mr Prentis said that the pressure on family budgets had become unsustainable, especially as public-sector workers now faced the prospect of losing a larger chunk of their wage to pension contributions.

    The higher contributions planned by the government were "nothing more than a tax on public-sector workers to pay down the country's deficit," he said, arguing that a fairer government would tackle the bankers who caused the financial crisis instead.

    The talk follows reports earlier this month that Chancellor George Osborne had sought advice on scrapping the "uprating" system that increases benefit payments in line with inflation.

    The government is expected to announce any change to the scheme early next month.

    rorym@peoples-press.com

    		 42
    52 Money- An Asian solution to dismantling the Euro and win the Woolfson prize
    Updated: 15 Nov 2011

    An Asian Solution for Dismantling the Euro
    Written by Michael Taylor   
    Monday, 14 November 2011

    And it doesn’t involve blowing up Europe

    Could the Eurozone be dismantled in such a way as to deal with the immediate problems, while preserving as many of the benefits as possible?

    The answer may lie in Asia, where government officials in Hong Kong confronted a crisis nearly 30 years ago that may contain the seeds of the solution.

    First, it must be stressed that although the potential benefits of the Eurozone are currently dwarfed by the imminence of its catastrophic failure, the euro project wasn't begotten purely to cause financial mayhem, or to further the sinister Europa-building fantasies of the EU's visionaries.

    There is much to be said not just for a single market, but also for stable and predictable currencies within that single market.

    More, there is a great deal to be said for a conservatively German view of banking and central banking (though, in extremis, even some quite eminent German economists plainly don't understand the day-to-day back-office mechanics of what a central bank does).

    And there is also plainly merit in ensuring democratically elected governments are not cocooned from the discipline of the markets.

    What little work to have been done on a breakup of the Eurozone assumes that all these benefits must be lost or foregone throughout the whole of Europe if the Eurozone breaks up.

    The locus classicus so far is a research paper by published in September by UBS, which warned that the consequences of a weak country leaving the euro would include sovereign default, corporate default, collapse of the banking system and collapse of international trade.

    The paper estimated a weak euro country leaving the common currency would incur a cost of €9,500-11,500 per person during the first year, with a further €3,000-4,000 per person per year over subsequent years.

    Mind you, it would be no picnic for the Germans, either, if they left the Eurozone: €6,000-8,000 for every German adult and child in the first year, and a range of €3,500 to 4,500 per person per year thereafter.

    That's the equivalent of 20-25 percent of gross domestic product lost in the first year!

    I have three comments to make on this.

     First, we're in 'spurious accuracy,' or 'magical realism' territory as far as the forecasts are concerned.

     Second, since the paper was unable to envisage how – short of a sort of confetti-producing monetary free-for-all – an exit might be achieved, the authors were free to color in their favorite shade of lurid in all possible ways, economic, financial and political.

    Third, and notwithstanding these shortcomings, UBS is at least to be congratulated on having the balls to broach the subject at all – even if in the end it did little more than scaremonger.

    The key to finding a solution is to understand very clearly what the underlying problem is.

     Italy's case makes this absolutely crystal clear: Berlusconi may not be your cup of espresso, but it is simply not true that he ran a regime of exceptional fiscal indulgence.

     During 2001-2007, Italy's fiscal deficit averaged 3.2 percent of GDP, which is hardly deeply differentiated from France's 2.9 percent average, or even Germany's 2.7 percent.

    Since 2008, Italy's deficit has averaged 4.9 percent of GDP, which is frankly conservative compared to France's 7.3 percent (though Germany confined itself to 3.8 percent).

    If moralizing of all sorts can be temporarily adjourned, it's plainly not Italy's current fiscal policies the market cannot stomach.

    Nor is it the debt burden, which, at around 120 percent, is only slightly higher than the average since 1995 of 111 percent.

    What really kills is the absolutely correct perception that whilst it has the euro as a currency, Italy will never be able to grow sufficiently fast to contain its debt burden.

    So what we are looking for is a way to ensure that when a country exits the Eurozone, it will both be in a position to grow, while at the same time retaining the financial and fiscal disciplines encouraged membership of the Eurozone.

    And, quite obviously, whatever exit route is achieved, it must also be built to re-win financial stability and confidence at the earliest possible opportunity.

    Put in these terms, the solution is obvious. Currencies can and should exit the euro by first redenominating all domestic assets and liabilities of the banking system in the new currency, and also redenominating all external government debt in the new currency, while at the same time committing to fully servicing the debt in the new currency.

    But second, and crucially, it should at the same time announce a currency-board arrangement which pegs the new currency to the euro, and dissolve the national central bank at the same time.

    For those who've spent time in Hong Kong, this solution will seem obvious.

    But, strangely, I've never heard it mentioned as a possibility.

    In 1983, with its currency plummeting in the face of the realization that the Communists would take the colony back from the British in 1997, the Hong Kong Monetary Authority, the territory’s de facto central bank, pegged the Hong Kong dollar to the US dollar and established a currency board to ensure that the then-British colony’s entire monetary base was backed with US dollars at the linked exchange rate. It remains a highly successful move.

    Today, the Hong Kong dollar is the eight-most-widely traded currency in the world.

    A currency board is simplicity itself. Its founding principal is that for every unit of the new currency to be issued (let's call it the New Lira), the note-issuing institution must deposit the full stated amount of the currency to which it is pegged, with the currency board.

    If the New Lira currency board is declared at 60 Eurocents, if the note-issuing body is a private bank (and why not?), it is obliged to lodge 60 Eurocents with the currency board.

    The currency board accumulates the interest on that deposit, while the bank makes its money from the New Lira financial asset it subsequently creates/sells.

    Crucially, there is no central bank to intervene in money markets, which means that banks must carefully monitor the daily net clearing balance of the banking system.

    If the net clearing balance is negative, the rise in interest rates would persuade a bank somehow to scrape together the euros needed to print more money in order to rectify the imbalance.

    Conversely, if the net clearing balance is positive, one would expect interest rates to shrink, at which point banks may (or may not) find it profitable to redeem the New Lira for euros.

    Clearly a currency board subcontracts the monetary policy of the country to the monetary policy of the Eurozone, and so also patrols the fiscal possibilities of that country to the underlying cash flows (and eventually capital flows) of the private economy operating within that monetary policy.

    Sometimes, such as in Hong Kong, this is seen as introducing a degree of monetary arbitrariness: at the fringes of the Eurozone, however, such linkage is entirely justifiable, and desirable on both sides of the monetary border.

    In other words, establishing a currency board allows the absolutely necessary currency re-set as a precondition for renewed growth, while reinforcing the medium and long-term financial disciplines which the Eurozone's architects and current members profess to value.

    And what of those left holding suddenly devalued New Lira government bonds?

    Well, here the news is actually rather good: assuming that at the time of the declaration of the currency board, the euro-denominated government bonds are trading at a deep discount to face value, the instantaneous re-establishment not only of monetary discipline but also the new prospect of renewed growth in the medium to longer term will surely result in the yields on those bonds falling in the short-to-medium term.

    (Since, after all, lack of growth was the problem, and constant monetary indiscipline the fear.)

    In those circumstances, one might expect to find buyers even of Greek debt at 25 percent.

    In short, what a bank lost immediately on the currency could be expected to be made up in the short-to-medium term on capital gains as bond yields return to 'normal'. Even French banks might survive.

    At what level should the currency boards be declared?

     Without doing detailed work, plainly the depreciation needs to be sufficient to give an assurance that growth is possible. In the end, one should avoid spurious accuracy.

    The legend is that John Greenwood, who when devising the (highly successful) Hong Kong currency board in 1983, carefully worked out that the correct value should be eight HK$ to one 1 US$.

     His calculations were rejected out of hand by Sir Edward Youde, the governor, as quite implausibly lucky (or so I am told), since 8 is the luckiest number in Cantonese numerology.

    The Cantonese would simply never believe it.

    So he altered the valuation to 7.8 where it has stayed.

    Lord Woolfson has offered a prize of £250,000 for anyone explaining how to dismantle the Eurozone painlessly.

     Feel free to forward this to him.

    Michael Taylor is the head of the UK-based Coldwater Economics and a longtime Asia expert

    		39
    53 Money- Pensioners - The CON DEMS CON TRICK coming near you ?
    Updated: 11 Nov 2011

    Pensioners and those on benefits

    beware the Government's inflation con trick

     

    By James Coney

    Last updated at 8:59 AM on 9th November 2011

     

    Money Mail is sending out a warning to all pensioners and those who claim benefits, about a dastardly sleight-of-hand being planned by the Government.

    In a cunning trick, which involves a technical change to the way the cost of living is measured, the Government may be about to deprive millions of increases worth nearly £3.5 billion next year.

    If the Chancellor were to press ahead with this idea it would be the second time in a year he has made what, to most, may look like a minor change to the way the cost of living is measured . . . but actually has a devastating effect on all our incomes.

    Cunning trick: Government plans may be about to deprive millions of £3.5 billion

    This is because of the way the Treasury normally increases pensions and benefits in line with rises in prices. It traditionally does this every April by using the inflation figure from the previous September.

    However, inflation for September 2011 was 5.2 per cent, matching the highest consumer prices index (CPI) figure on record.

    That would leave the Treasury needing to find an estimated £1.8 billion more than it had planned for.

    Fears the September figure may not be used were originally fuelled by the Prime Minister’s official spokesman who said an ‘actual decision’ will not be made until later this year.

    To get round the problem, sources say the Government is planning to find a new way of measuring inflation for 2011.

    One option under consideration would be to use an average figure.

     
    On the face of it the difference to pensioners would seem small.
     
    For example, if the basic state pension of £102.15 a week were to be increased in line with September’s inflation figure it would rise to £107.45 a week.
     
    But if the average for 2011 were used, currently 4.4 per cent, then the basic state pension would rise to £106.64.

    This could save the Coalition an estimated £1.5 billion.

    Officials know this reduction is so small that most pensioners would be unaware of the loss.

    Their pension would still be rising by more than £4 a week.

    Also, the change would be so technical — and likely to be buried in the Government’s spending review on November 29 — that most people would fail to register its significance.

    But the Treasury would save billions as this would be just the tip of the iceberg.

    It would also pay out less on benefits such as housing allowance, tax-free allowances, child benefit (already frozen for another two years), and child tax credits.

    And for every year after the change pensioners would become worse and worse off, as the initial underpayment was compounded by years of lower increases.

    Pensioners are already worse off

    Pensioners are already worse off before this change.

    For starters they suffer far higher inflation than ordinary households because a bigger proportion of their income is taken up on items which have seen huge price increases in the past year, such as heating and food.

    Between June and September this year inflation, as measured by the retail prices index (RPI), for a two-pensioner household was 7 per cent.

    A devastating report, published by the insurance giant Standard Life, dramatically illustrates how inflation is hurting the elderly.

    It takes the example of a 90-year-old man who retired at the age of 60 in 1981 with a pension income of £10,000 a year, which does not rise with inflation.

    The ‘purchasing power’ of his annual income is just £3,207 a year today, according to Standard Life.

    Petrol, for instance, was 35p a litre in 1981 but it is around £1.34 a litre today. 

    A Department for Work and Pensions spokesman says: ‘An announcement will be made later this year.’

    The switch from RPI to CPI

    The Chancellor has already tinkered with inflation — switching from traditionally higher RPI, including housing costs, to CPI.

    Currently CPI is 5.2 per cent, and RPI 5.6 per cent.

    So by one measure of inflation £10 of goods last year is now worth £10.52, and by another it is worth £10.56.

    This switch has already saved the Treasury more than £100 billion.

    It will save £30 billion by linking benefits, taxes and allowances to CPI, and figures from the Department for Work and Pensions show the value of future pay-outs will decrease by £83 billion over 15 years.

    The compound effect of these changes is huge.

    Every year that benefits and pensions increase at a rate lower than the real cost of living, the Government saves more and more money.

    For example, after one year of the switch from RPI to CPI on benefits, tax credits and public sector pensions, the Government saves £1.5 billion.

    After two years it saves £3 billion, £5 billion after three, and £11 billion after five.

    Commenting on the move from RPI to CPI, detailed right,Ros Altmann, director-general of over 50s group Saga, says: ‘I don’t think any of us really understand the full impact of this inflation change.

    ‘I’d equate it to the change Gordon Brown made when he raided our pension funds.

    It seemed like a small technical alteration but it is only now we realise its impact.

    ‘Changing the inflation figure just because it suits them is cynical and stealthy. And it is depriving those who have suffered the most from climbing inflation of the vital rises in income they need.’

    ‘Please help safeguard my pension’

    Struggle: Aviva Thwaites survives on a small pension from her late husband

    Aviva Thwaites, 86, from Stockton-on-Tees, already struggles to get by on her state pension and urges the Government to protect the annual increase.

    Mrs Thwaites, pictured with her great-granddaughter Mia, aged two, survives on a small pension from her late husband, who worked in the steel industry, and her state pension of £114 a week. 

    Unfortunately, she is just over the threshold for means-tested benefits, so is not eligible for pension credit or council tax benefit.

    Mrs Thwaites, a retired bus driver, says: ‘Bills are a constant worry, especially gas and electricity which always seems to be going up.

    'I often don’t put the heating on to save money.’

    She now pays £75 a month for the energy in her two-bedroom bungalow, and £72 a month council tax and adds: ‘Every penny counts.



    Read more: http://www.thisismoney.co.uk/money/pensions/article-2059134/Pensioners-benefits-claimants-beware-Government-inflation-trick.html#ixzz1dNybU3Q5

    		 48
    54 Money -BOE keep interest rates low but continue to print money
    Updated: 11 Nov 2011

    Bank of England stands still despite recession fears

    Thursday 10 November 2011

    The Bank of England resisted further emergency action today despite fears that the economy will go into reverse by the end of the year.

    The bank's monetary policy committee kept interest rates at their record low of 0.5 per cent and maintained its quantitative easing programme at £275 billion after October's shock increase.

    The committee pumped an extra £75 billion into the economy last month amid signs that the recovery was faltering.

    While the picture in Britain and eurozone has worsened, economists do not expect further action until early next year.

    Bank governor Sir Mervyn King warned at the time that Britain could be facing "the most serious financial crisis" it has ever seen.

    Today's decision followed the European Commission's decision to slash its growth forecast for Britain this year to 0.7 per cent from 1.1 per cent.

    And as EU leaders' attempt to salvage the eurozone decended into chaos, Prime Minister David Cameron insisted it was not in Britain's "interests for the eurozone to break up."

    		 42
    55 Money- Running for home against the Euro's demise
    Updated: 10 Nov 2011

    United States Dollar:

    UKforex report

    Cable falls as risk is again switched off.  The USD saw safe haven investor interest yesterday as developments from Europe scared markets.  The currency pair has been as high as 1.6130 in the past 48 hours, but opened yesterday on the back foot as Britain’s goods trade deficit widened to 9.814 billion pounds in September.  Cable then continued its fall into the US and Asian sessions as Italian news (mentioned in more detail below) spurred fears of a split in the Euro-zone.  GBP/USD is back below 1.6000 and has briefly fallen below 1.5900 in the past few hours.  The currency pair opens at 1.5911 this morning.  Domestic data is seen on both sides of the pond today and eyes will be on whether the UK asset purchase facility is increased as well as how the US unemployment figures come in.  This will be monitored with one eye remaining on European updates.

    Euro:

    The single currency has seen large losses versus the Pound and Greenback.  Continual news from Italy has only spooked the markets, as yesterday saw Italy's 10 year bond yields shoot above 7 %.  This was despite the European central bank (ECB) intervening and buying the nations bonds.  This percentage is widely deemed unsustainable and was the level that saw each of Greece, Ireland and Portugal seek bailouts.  The ECB now seem reluctant to buy further and with Italy being the Euro-zone's third largest economy, there are doubts on whether the current bailout funding will be enough for the country.  This all has sparked new rumours of whether the 17-nation currency can continue.  This has seen the Euro spiral downwards against the US Dollar and the pair opens up this morning at 1.3603.  Sterling has been as high as 1.1780 versus the single currency in the past few hours, but has fallen back off and is at 1.1703 currently

    		 45
    56 Money- Sainsbury's Profit Margin up 6.6% to £354million for 6 months
    Updated: 10 Nov 2011

    Supermarket posts fat profit

    Greed: Sainsbury's reported a £354 million profit for the six months to October 1 - a 6.6 per cent rise.

    It put the increase down to its tactic of undercutting rivals on prices.

    		 39
    57 Money- A Crash Course in Banksters and Bedfellows Control of the Country
    Updated: 10 Nov 2011

    Osborne supports City over Robin Hood tax

    Wednesday 09 November 2011
    by Will Stone
    Chancellor George Osborne was accused of protecting his banker bedfellows yesterday after calling on EU finance ministers to reject a tiny tax on bank transactions.

    In a meeting in Brussels on Tuesday the Chancellor bluntly dismissed the European Commission's Financial Transaction Tax, otherwise known as the Robin Hood tax, claiming that banks would not pay and would simply move elsewhere.

    It was the first debate on the tax since European Commission president Jose Barroso proposed it in September.

    The tax would take just 0.05 per cent of banks' financial transactions, but estimates show that it would raise hundreds of billions of pounds every year.

    GMB European Officer Kathleen Walker-Shaw said: "At these council meetings national ministers are supposed to represent and speak on behalf of the interests of their country.

    "The Chancellor's obession with saving the skins of his banker friends at the expense of the British public knows no end. He has conveniently forgotten that he is at these EU meetings to represent the interests of everyone in Britain, not the interests of the City.

    "Osborne is happy to clobber hard-working people in the public and private sector who had no part in the causing the crisis. It's time Osborne and the government drop their 'business as usual' attitude to the financial sector and change the British, European and global financial sector and economy for the better."

    Unison also criticised Mr Osborne's dismissal of the tax when he is trying to convince the nation that his brutal cuts to services and jobs are necessary as "we are all in this together."

    A spokeswoman for the union added: "At a time when mass redundancies, pay freezes and cuts to pensions are being driven through it's an insult that Mr Osborne has simply dismissed the Robin Hood tax and it's proof that his persistent 'we are all in this together' mantra rings hollow.

    "The very small tax would take some of the pain away from all the cuts being imposed in services up and down the country and to those who have lost their jobs, but clearly Mr Osborne is not willing to compromise one jot if it leaves bankers with a dent in their bonuses."

    		 39
    58 Money-The "BANKSTERS"- Blockade on Wikileaks means Banks cannot be trusted with money or free speech
    Updated: 10 Nov 2011

    You can't bank on free speech 
     
    An extrajudicial banking blockade imposed on WikiLeaks has caused a 95 per cent loss in revenue for the organisation.

    Kristinn Hrafnsson Last Modified: 09 Nov 2011 17:03 
     
    Companies including VISA and MasterCard have imposed "an historic act of censorship" on WikiLeaks  

    The banks, payment and credit card companies support extremist organisations by authorising transfers and donations to them.

    You can use VISA and MasterCard to donate to the Ku Klux Klan and the English Defence League.

    You can donate to Aryan Nations, a white supremacist organisation, despite being designated a "terrorist threat" by the FBI.

    VISA and MasterCard do not mind if you decide to use your cards to buy pornography on the internet or a rifle identical to the one used by the right-wing extremist Andreas Breivik to murder 69 people in Norway.

    To justify such associations the banks erect a facade of political neutrality.

    But there is one conspicuous exception where the finance companies show their true face.

    The extrajudicial banking blockade imposed upon WikiLeaks by VISA, MasterCard, Bank of America, Western Union and PayPal is unique and has been in place for almost a year.

    This is an attempt against the very survival of the organisation as WikiLeaks depends entirely upon donations for its operations.

    Already this blockade has stripped away 95 per cent of its revenues.

    This is an historic act of censorship. Never before has an organisation dedicated to the fght for justice and basic rights; transparency, freedom of information, freedom of the internet and freedom of expression been hit with such a vicious attack.

    There is more at stake here than simply the survival of WikiLeaks.

    When financial institutions decide to make it very difficult or almost impossible for you to make a donation they are infringing upon your basic human rights.

    They are stopping you from expressing your support for a cause.

    "The banking blockade of WikiLeaks might be a first but it will not be the last if it goes unchallenged."
     

    The banking blockade of WikiLeaks might be a first but it will not be the last if it goes unchallenged.

    Will the banks decide to block donations to Amnesty International, Greenpeace or Reporters Without Borders? Will they decide to stop processing transaction to media organisations that sell content on the internet?

    Or even more serious; will the threat of such a blockade stop any organisation, relying on donations, from being critical of the financial powers?

    With some notable exception, there has been an absence of mass critical reporting on this blockade in the mainstream media. VISA, MasterCard, Bank of America, Western Union and Paypal get away with declining to comment or by making vague references to illegality by WikiLeaks.

    'Banksters'

    This is easily refuted as WikiLeaks has not been convicted or charged with any wrongdoing in any jurisdiction.

    Even the Danish sub-contractor of VISA in Europe found nearly a year ago that nothing in WikiLeaks operations contravened laws or VISA regulations.

    Moreover, despite political pressure, Timothy Geithner, the US Secretary of the Treasury, found in January 2011 that there were no lawful grounds to blacklist WikiLeaks and its publishing is protected by the 1st Amendment.

    And yet, the banking giants of this world continue to impose this unlawful and unethical blockade.

    Fighting the blockade is a matter of priority for WikiLeaks but the outcome goes far beyond the interest of the publishing organisation.

    The first legal step in the fight has already been taken by asking for the intervention of the competition department of the European Commission. It is primarily aimed at VISA and MasterCard, the American companies who together process 97 per cent of European card transactions. Further steps are being prepared.

    I am no stranger to the devastating effect of the banks. My home country Iceland is still suffering from the aftermath of the total collapse of the banking sector in October 2008.

    Although the Icelandic bankers claim to have been victims of outside forces, secret documents revealed by WikiLeaks show a different story.

    WikiLeaks has published hundreds of documents exposing corruption and illegality within the banks.

    Initially bank secrecy had the aim to protect the privacy of costumers.

    Now it has become a tool to hide the wrong doing of the banks themselves at the expense of their account holders and as we have seen recently, the population at large.

    Corrupt bankers (or "banksters", as they are called in Iceland) have an interest in silencing WikiLeaks as is evident in the unprecedented illegal steps taken by VISA, MasterCard, PayPal, WesternUnion and Bank of America.

    We call upon everyone to assist us in this important fight.

    We have seen clearly what bankers' greed can do to our economies. We cannot allow them to directly infringe on our basic human rights.

    Kristinn Hrafnsson is the spokesman for WikiLeaks.

    The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.
     
     
    Source: Al Jazeera

    		 48
    59 Money - UK -How are we doing against the Dollar and Euro ?
    Updated: 09 Nov 2011

    United States Dollar:

    UKforex

    Sterling pushes higher against the Greenback as investor interest in risk returns - slightly.  The only domestic data releases came from the UK yesterday as we saw manufacturing production rise for the first time in four months in September and GDP growth of 0.5 % was seen in the three months to the end of October.  This was Pound positive data, but the majority of Cables gains were seen during the US and Asian sessions.  This again falls down to European developments.  News that Italian prime minister Berlusconi would step down after being stripped of his majority in parliament, raised hopes that the debt-ridden country would proceed reforms to keep Europe's debt crises from spreading.  This along with the easing of inflation in China has seen the safe haven USD fall as some investors seek riskier assets.  GBP/USD rose to a high of 1.6130 on the back of this news.  Cable however begins the day slightly off these highs and back within its recent range at 1.6040.

    Euro:

    Euro gains are short lived.  Italy, Europe's third largest country, kept headlines Tuesday as all eyes turned to the nation’s parliamentary confidence vote.  The vote saw Berlusconi become the biggest political casualty of Europe's debt crisis so far as he is to resign as prime minister after parliament approves a budget law that includes reforms demanded by Europe.  Despite the initial gains for the Euro on the news, I believe the bigger picture is now coming into focus.  There is still uncertainty in the Euro as a change in leadership doesn't guarantee Italy's fiscal situation will improve.  The single currency's advances have been reversed for this morning’s start and opens back within recent ranges versus the GBP and USD.  EUR/USD opens this morning at 1.3708 and GBP/EUR currently sits at 1.1678

    		 44
    60 Money- Sterling Dollar Euro Report
    Updated: 08 Nov 2011

     

    UK FOREX Report 

    06/11/11

    Sterling/ Dollar

    Sterling continues to mirror recent movement versus the Greenback. 

     Cable traded either side of 1.6000 Friday as eyes remained firmly on European developments and US data. 

    Employment figures from the US saw the number of employed people increase less than the forecast figure. 

    The unemployment rate however came in better than expected, but only just. 

    This saw the US Dollar gain against the Pound as safe haven interest in the currency was seen after the releases. 

    This safe haven interest did ease up overnight though as European developments has seen Greece form a unity government over the weekend and it seems they are intent on avoiding imminent debt default. 

    Market interest in what seems a never ending story from Europe, now moves onto Italy and its list of worries. 

     Risk is back off.  GBP/USD sits lower this morning after reaching overnight highs of 1.6070 and opens today’s session at 1.5990.

    Euro:

    Euro sits lower despite Greece situation heading in the right direction. 

    Greece has gained the majority of the headlines in the past week as a default looked likely after a referendum was called on the 130 billion Euro bailout package. 

    The referendum was cancelled at the latter end of last week however as future aid for the nation and its membership to the Euro-zone became under jeopardy. 

     The weekend has seen progression in Greece with a unity government has formed and a strong will for it to avoid debt default has been seen already. 

    This news has been a drop in the ocean though, as markets now turn their attentions to Italy. 

    Political instability is now putting the Euro-zones third largest economy under pressure and at the top of news headlines. 

     Italy is likely to capture headlines throughout this week, similarly to Greece did, and weigh heavy on the 17-nation currency. 

     EUR/USD opens this morning at 1.3730 and GBP/EUR currently sits at 1.1657

    		 48
    61 Money- How ridiculously obscene-a UK Court-Two Russian Bear Multi- Millionaires fight
    Updated: 07 Nov 2011

    Berezovsky v Abramovich

    A little local difficulty

    An oligarchs’ dispute is a feast for lawyers—and for Russia-watchers

    Oct 8th 2011 | from the print edition

    PRIVACY from prying eyes is one reason so many of Russia’s wealthiest men enjoy life in London.

    But the £3.2 billion ($5 billion) lawsuit between Boris Berezovsky  Russia’s best-known political exile, and Roman Abramovich , a confidant of Vladimir Putin and owner of Chelsea football club, is exposing a world normally guarded by libel lawyers, bodyguards and high fences around imposing mansions.

     In 1990s Russia, the two were associates: just how close is one of the many wrangles in the case.

    Their enmity now is undisputed.

    The High Court case, which opened on October 3rd, dates back to 2000 when Mr Berezovsky rowed with Mr Putin and fled to London, losing much of his energy, media and mining empire in Russia in the process.

    He is thought now to be worth only a few hundred million pounds, whereas Mr Abramovich’s fortune is in the billions.

    In 2007 police detained and deported a man officials say was sent to shoot Mr Berezovsky, whom Russia wants to extradite to face fraud charges that he says are trumped-up.

    The lawsuit itself started four years ago, when Mr Berezovsky was finally able to serve a writ on his adversary, pouncing on him in the Hermès shop in Sloane Street (a retail district popular with plutocrats), reportedly saying: “I’ve got a present for you.”

    The legal wrangles have been complex—and lucrative for lawyers—already involving numerous appeals and consuming a great deal of court time.

    But the case turns on a simple question: did Mr Abramovich force Mr Berezovsky to sell his Russian assets at a low price?

    Before resolving that, the court will have to decide what if any were the terms of the two men’s business relationship. Even the initial arguments are giving an eye-popping insight into Russia’s business climate.

    According to Jonathan Sumption QC, Mr Abramovich’s barrister (who is fighting probably his last case before becoming a top judge), his client paid Mr Berezovsky $2 billion between 1995 and 2002 for his role as a “political godfather”.

    This included picking up the bill for personal expenditure on an “exuberant scale”, such as “palaces in France; private yachts and aircraft, jewels for his girlfriend, valuable paintings at Sotheby’s and so on”.

    Mr Sumption advised the judge, Mrs Justice Gloster, to consult Shakespeare as a guide to that era.

    “There was no rule of law,” he said. “Police were corrupt.

    The courts were unpredictable at best …Nobody could go into business without access to political power.

    If you didn’t have political power yourself, you needed access to a godfather who did.”

    Another interesting sidelight—on Russian tycoons’ relationship with Western banks—came in Mr Sumption’s account of how a $1.3 billion payment was made through a company controlled by an Arab princeling: an “artificial transaction” designed to satisfy money-laundering regulations, Mr Sumption said.

    Mr Berezovsky claims the payment was for his stake in Sibneft, an oil company; Mr Abramovich denies this.

    Mr Berezovsky also alleges that, at a meeting in Cap d’Antibes, Mr Abramovich threatened that if he did not sell his stake in ORT, Russia’s main television channel, it would be confiscated; Mr Sumption said that meeting never happened.

     Mr Berezovsky also says an oral agreement was struck in London’s Dorchester Hotel to put some other assets into a trust.

    That may be hard to prove. But as in a nasty divorce, the parties seem willing to accept embarrassing disclosures about their own conduct in the hope of humiliating the other side more.

    The case also highlights the big role of the English legal system in settling Russian commercial disputes.

    This includes arbitration cases in Stockholm, which are typically heard under English law and fought by English lawyers.

    Heidi Smith of Russian Paralegals, a start-up that supplies extra staff for law firms engaged in such cases, says that expertise and incorruptibility are two big draws. Oddly, the high cost may be an attraction of sorts too.

    Mr Abramovich reputedly has the largest yacht in the world. He may also boast one of the costliest lawyers. The case continues

    		 51
    62 Money- New EU Commissioner to get tough on UK Bank Bonuses
    Updated: 07 Nov 2011

    EU: we'll make UK cut bank bonuses

    Independent Exclusive:

    Europe threatens to crack down on City's excessive pay

    Oliver Wright  Saturday 05 November 2011

     
    The European Commission is considering tough new proposals to
    curb the pay and bonuses that banks can hand out to staff working
    across the European Union.

    The plans, which are likely to go further than those proposed so far in the UK, would meet significant opposition from the City of London, which claims that cutting benefit packages would result in an exodus of talent to Asia and America.

    But the new restrictions could not be blocked by the Government if a majority of other European countries vote in favour of them.

    The proposal by Michel Barnier – the EU Commissioner in charge of financial services – emerged as G20 leaders meeting in Cannes failed to produce concrete plans to tackle the eurozone's sovereign debt crisis.

    In a dramatic day, the key developments included:

    *The Greek Prime Minister, George Papandreou, last night survived a tense confidence vote in parliament, although subsequent demands for national elections from opposition parties put the next vital bailout instalment of €8bn in jeopardy.

    *Markets fell sharply, as G20 leaders delayed until February a decision on refinancing the International Monetary Fund to help stricken countries.

    *Leading countries outside the eurozone, including China and Brazil, indicated that they would not be prepared to invest money in a European bailout fund.

    Germany refused calls for the European Central Bank to take responsibility for the bailout.

    *Nicolas Sarkozy reiterated calls for a Europe-wide financial transactions tax to be brought in by next year – despite opposition from Britain.

    Speaking to The Independent in London, Mr Barnier described the situation facing Europe as "grave". In a move which will delight protesters outside St Paul's, he suggested it was necessary to do more to ensure bankers contributed "in a just way" to the fiscal retrenchment.

    "After a couple of years of calming down, [banks] have gone back to pre-crisis levels of distributing pay and bonuses which are just not justified," he said, warning that, if they persisted, new regulations would be imposed.

    "I can't give you all the details now of what the next steps will be [but] we will be preparing the next framework so we can limit bonuses and pay further," he said.

    Asked if the European Commission would introduce the new rules if the banks did not act unilaterally, Mr Barnier replied: "Exactly."

    "It's not about penalising the banking sector," he added. "It's about asking that everyone play their role and make an effort to preserve the money available to finance the real economy."

    Mr Barnier said the move was necessary because bankers were "feeding the sentiments of injustice too much".

    He also announced he would be bringing forward new rules to regulate credit rating agencies – blamed by many countries for exacerbating the crisis.

    He said at present there were too few companies involved, they were not transparent in their methods and many had conflicts of interest.

    He also backed Mr Sarkozy's call for a "Tobin tax" to be imposed on all financial transactions across the EU.

    He acknowledged this was opposed by the UK and, unlike a curb on bonuses, could not be adopted without British support.

    But he added: "I believe such a tax would be financially productive and politically just.

    The British already have a financial transaction tax – it's called stamp duty."

    When Mr Barnier was named EU Commissioner for the internal market and services in 2010, there was widespread suspicion in London that the French would use him to push restrictive regulation on the UK's financial centre.

    But he argued: "I want to strengthen the City of London.

    The City was hit by the crisis. It needs solid foundations.

    That's why we are putting rules and transparency and supervision into place, where previously they had disappeared."

    		 53
    63 Money- Spooks Speculators & Sticking Plaster
    Updated: 05 Nov 2011

    EU dominos - who's next?

     


    The chart below (from the Bank of England's Charles Bean) shows the 10-year government bond spreads for selected EU nations: Portugal, Ireland, Italy and Spain, as well as France and the UK.


    Where is Greece in this 'who's next for disaster' chart?
     
    You might ask.
     
    Well, Greece is off the chart with its 10 year bond spreads currently attracting interest at somewhere north of 26%, according to Bloomberg.

    Off the chart and out of the game. It's debt is unrepayable.
     
    The question is if Greece defaults will that have a domino effect?
     
    The potential domino effect is twofold:
    1. German and French banks are most exposed (see Dexia already), but some debt is held by Spanish, Italian and Portuguese banks.
    1. A default or severe 'haircut' (partial write-off) of say 80% would have an impact.
    2. These nations would then be faced with a choice: a) let a bank fail; or b) bail-out the bank with more government debt, further worsening the sovereign debt crisis
    3. The second domino effect is on the bond markets, which would be spooked by a default and hike interest rates on riskier debtors - in the same way that high street banks have jacked up margins and became more cautious lenderdfollowing the credit crunch, restricting lending to businesses and damaging the economy.
    5. This could mean Portugal, Spain, Ireland and Italy paying more for their debt - exacerbating their debt crisis, and potentially sending them into a Greek-style death spiral.

    It's worth bearing in mind that if Italy, as the third largest eurozone economy, got in trouble the whole eurozone would be at risk.

     It currently has 2 trillion euros of debt.

    Since the Bank of England produced the above chart, Italy's bond interest rates have risen from around 4% to 6%.

    If that gets up to Portuguese levels, let alone Greek, then Italy is in serious risk of default.

    Even a 20 or 30% haircut would be deeply traumatic - crashing banks around the world, with serious domino effects.

    That's why the G20 meeting in Cannes is obsessed with this issue: finance capitalism is at risk!

    		 49
    64 Money- RBS Back in the Black and Sacking
    Updated: 05 Nov 2011

    £2bn profit RBS keeps on sacking

    Friday 04 November 2011
    by Rory MacKinnon
    Bailed-out bank Royal Bank of Scotland is back in the black and lending again - but still continues to sack their own workers.

    The 83 per cent state-owned bank posted third-quarter pre-tax profits of £2 billion today, following a £678 million loss earlier this year and a £1.6bn loss in 2010.

    The bank reported £8.1bn in lending to small and medium-sized enterprises (SMEs) - just shy of the £8.2bn target set out under the government's controversial Project Merlin deal last year.

    The news came within a week of government figures which showed that Britain's banks are turning down more than one in three applications for small business loans - ignoring a key part of the deal.

    The Office for National Statistics reported just 65 per cent of small business loans were approved in 2010, compared with 90 per cent in 2007.

    But it revealed that RBS was still the biggest fish in the small business pond, providing 40 per cent of SME loans in Britain compared with 35 per cent in 2010.

    The report brought RBS small business lending to £23.6bn so far this year - around 5 per cent short of the Project Merlin target.

    But economists savaged the bank today for persisting with mass lay-offs despite its multibillion bounce-back.

    The bank announced plans to axe more than 20,000 jobs in the wake of the 2008 bailout.

    And RBS chief executive Stephen Hester said yesterday the cuts would continue "to reduce the impact on customers and shareholders of the regulatory and market developments."

    Left Economics Advisory Panel co-ordinator Andrew Fisher blasted the banker's comments, saying that they showed the bailout had failed to change City culture.

    "It is sacking workers to generate dividends for shareholders on the back of taxpayer pounds, while continuing to make risky and bad investments through its Global Banking and Markets arm.

    "This is further evidence that the bailout was the privatisation of public money, not the public ownership of private banks.

    "What we need is the full public ownership and control of UK banking to end the culture that has led our economy to the precipice and to direct investment where it is socially useful," he said.

    rorym@peoples-press.com

    		 55
    65 Money- Bank fined $285million for selling "dogsh!t and sucking in bailouts"
    Updated: 04 Nov 2011

    Business as usual

    Thursday 03 November 2011
    by Solomon Hughes
    What do you call a bank that paid a $285 million fine because it misled investors into buying "a pile of dogsh!t."

    If you are a Tory minister, it looks like you call it a friend.

    Citibank was one of the main culprits behind the financial collapse. In 2007 alone it sold $20 billion of financial "instruments" made up of dodgy mortgages.

    These "collaterised debt obligations" (CDOs) - bundles of mortgages that low-income US citizens could never pay - promptly went down the plughole. And they sucked the world economy down with them.

    We are still paying.

     US taxpayers shelled out $45bn to keep Citibank afloat.

    The rest of us are suffering recession because the bubble pumped up with Citi's dodgy mortgages burst, tearing holes in the world economy.

    Now it turns out that Citi knew it investments were crap all along.

    US financial regulators from the Securities Exchange Commission (SEC) charged Citi with cheating.

    It took one sample CDO called Class V Funding III. Citi sold it for a billion dollars.

    But according to one trader's email quoted by the SEC, Citi knew it was "a pile of dogsh!t."

    The bank didn't tell investors that it had carefully selected the dogsh!t.

    A less sweary Citi manager said: "the portfolio is horrible."

    Nor did Citi tell investors they were actually betting that the investment would fail.

    Citi "shorted," or bet against, its own product. One Citi trader's email called it "possibly the best short EVER!"

    The bank's product failed, leaving investors stuffed and the market collapsing.

    But Citi made $160 million from fees and from its own bet on the failure of its "product."

    Four years later the SEC accused Citi of "misleading investors."

    It paid the $285m fine to settle the case although US judges are reluctant to rubber stamp the deal unless Citi admits guilt and pays more.

    But our Treasury Minister Mark Hoban was happy to speak for the "dogsh!t" salesman.

    Hoban addressed a meeting at the recent Tory conference paid for by Citigroup.

    The meeting, organised by Citi with Tory think tank Policy Exchange discussed "how can we build a safe and competitive banking system for the UK."

    Which is odd, as Citi is better qualified to discuss how to build a disastrous banking system selling "dogsh!t"

    and sucking in bailouts.

    Hoban spoke on Citi's platform in a room paid for by Citi with a buffet funded by the bailed-out bank.

    He was also joined on the platform by Citigroup Inc vice-chairman Lew Kaden.

    Kaden is a hate figure in his native US - he was in charge of Citi's hedge fund, Citi Alternative Investments (CAI), one of the bank's most disastrously performing funds in the crisis. Kaden also supervised Citi's build-up of subprime mortgage holdings, a toxic pile hidden from regulators with accounting tricks.

    He was central to the bank's collapse. And when the firm did start going down the tubes in 2008, he was given a $4m bonus.

    He is known in the US for arranging a $400m payment to the New York Mets baseball team. In return the Mets call their stadium the "Citi Field."

    This huge payment for advertising caused outrage in the US. It was seen as a perfect sign of Wall Street's outrageous excess when Citi was also pulling in $45bn of taxpayer bailout. Hoban's pal was the perfect representation of every bad thing in finance.

    The Tories are not alone. At the Lib Dem conference Vince Cable did his best banker-bashing talking about "rogue institutions exposing taxpayers to the risk of exploding financial weapons of mass destruction" and "casino banks." But around the conference Citigroup had plenty of friends.

    Foreign Office Minister Jeremy Brown, Scottish Secretary Michael Moore and Shirley Williams met at a Business for New Europe event.

    They all talked about the dangers of the euro crisis and sovereign debt. But they said nothing about banks like Citigroup and the damage they did. The whole event was paid for by - Citigroup.

    In another meeting, former Lib Dem Treasury minister David Laws spoke on "public service efficiency and reform."

    The event, organised by Lib Dem think tank CentreForum, was paid for by Citigroup.

    So the bankers paid for the minister to talk about public service "reform," when the issue of banking reform is so much more pressing.

    Laws was joined by Citigroup's European boss Maurice Thompson at the meeting, which was not even open to ordinary delegates.

    The breakfast meeting in the posh Hyatt hotel was "invitation only." Citi is one of CentreForum's "corporate partners" - so the bank buys time with the most influential Lib Dem think tank. Vince Cable and other top Lib Dems sit on the CentreForum board.

    Here is an open goal for Labour. The coalition has been caught with disgraced bankers.

    But it is a shot the party won't take. Because it is too busy playing with the "dogsh!t" salesmen.

    At Labour's Liverpool conference shadow Europe minister Wayne David and Baroness Royall, Labour leader in the Lords met to talk about the euro crisis at a "Business for New Europe" meeting. They talked about the need to recapitalise the banks - but not the responsibility of the banks. The event was sponsored by Citi.

    Labour leaders have a longstanding friendship with Citi.

    British banker Win Bischoff chaired Citigroup up to 2007 - the height of the crisis.

    Gordon Brown had already knighted Sir Win. And Citi's role in the crisis did not put Labour's leaders off the man.

    In 2009 Alistair Darling commissioned Sir Win to write a government report on the future of the City. Win's report for Darling says British banking is great, taxes for bankers must be low and the economy should not be "rebalanced."

    None of Labour's front bench has been to visit the anti-City protesters at St Pauls. But Labour shadow ministers do hang out with Citi's bankers. The party has a long way to run to catch up with popular disgust with "dogsh!t" economics.

    		 60
    66 Money- A Laurel and Hardly £50 note
    Updated: 03 Nov 2011

    Deeds speak gestures not

    Wednesday 02 November 2011

    The decision by the Bank of England to feature 18th century manufacturer Matthew Boulton and engineer James Watt on the new £50 note design has a dismal ring to it.

    It should be a celebration of Britain's determination to live up to its history as a great and innovative manufacturing nation.

    Instead, in the light of the coalition government's destructive policies regarding manufacturing, it almost seems like a wry and cynical comment on the state of a nation that's lost its way.

    Boulton and Watt lived and worked in a time of furious industrial and economic expansion, during which capitalism was a system driving forward and laying the basis for an industrial society which eventually provided work for millions and developed a working class which, by fighting and campaigning, steadily built a life worth living for its members.

    How different the situation is today.

    A senile and degenerate capitalism preserves itself with a permanent campaign of misdirection conducted by an institutionalised multibillion-pound media circus representing capitalism as the best that can be expected while covering up its intensifying systemic failure to meet the needs of a world population which reached seven billion just this week.

    In Britain, manufacturing, adding value to raw materials by their transformation into goods, has been replaced by financial market manipulation, passing money from hand to hand and skimming off the top in the process.

    But it's an illusion rather than a reality and it is doomed to fail because it adds value to nothing and produces nothing.

    In short, it's a scam.

    And what's happening to manufacturing?

    Well this government, while paying lip service to its importance, is continuing apace with its demolition.

    In its desperation to make working people pay for the bankers' crisis and in the process reverse all the advances made over centuries, this government is destroying the one thing that manufacturing needs above all else, a market for its products.

    Hundreds of thousands of civil and public servants removed from the ranks of the employed, attacks on the pensions of retired public-sector staff and severe limitation on the recruitment of new staff all have the effect of removing consumers from the market.

    The transfer of tens of thousands of jobs to a profit-driven private sector will also reduce demand substantially.

    The figures tell the story accurately.

    A growth figure of a derisory 0.5 per cent in the three months to September is in fact merely a slowdown in a rate of decline.

    National output is still 4 per cent lower than in 2008.

    Recent figures suggest not just contraction but the most drastic drop in 28 months.

    And the government's cuts are not expected to reach a peak until next year.

    Real examples spring to hand.

    Forgemasters receives £36 million in loans rather than the £80 million it had taken away in the first round of "austerity" cuts.

    Bombardier loses huge amounts of work because the government refuses to intervene in a procurement policy which virtually guaranteed the exclusion of British-based companies.

    And what is the government answer?

    Why, it's yet more quantitative easing, handing another huge tranche of taxpayers' cash to private banks to do with as they will.

    And we know what their will is.

    It's bigger bonuses and recapitalisation, not investment in manufacturing.

    For a future for this country's economy there must be a two-pronged attack.

    There is the fight for the public sector, its sevices and its terms and conditions.

    And there is the fight to rebuild Britain as a manufacturing nation, rather than a citadel for unproductive and parasitic speculators.

    		 39
    67 Money- Its all downhill from here for the Eurozone if the Greeks vote No !
    Updated: 01 Nov 2011

     

    Markets Plunge On Shock Greek Referendum Call

    (c) Sky News 2011, 13:46, Tuesday 1 November 2011

    Markets around the world have fallen following the news that Greece wants to stage a referendum on the bailout deal designed to rescue the eurozone.

    The FTSE 100 Index opened more than 2% lower, while Germany's Dax (Xetra: ^GDAXI - news) was 4.3% down and the Cac (Frankfurt: 924169 - news) -40 in France lost more than 3%.

    European stocks were down close to 3% overall and MSCI's all-country world stock index shed 1.7%.

    Meanwhile, the Greek markets shed more than 6% on their opening.

    Traders were reacting to Monday's announcement by Greek Prime Minister George Papandreou that he would put his country's bailout to a public vote.

    It immediately cast doubt on the eurozone's plan to hand Athens 130bn euros and arrange a 50% writedown on its huge debt.

    Manoj Ladwa, of ETX Capital, said: "The wheels look set to fall off the European bailout effort.

    "Equities are trading lower as the market begins to factor in an ever increasingly likelihood of a Greek default."

    Sluggish manufacturing data from China also hit markets, with a slowdown in the industrial giant dragging down mining stocks.

    Mr Papandreou said if the Greek people do not want the deal that is designed to slash the country's mountain of debt by nearly a third, it will not be adopted.

    He gave no date or other details on the proposed referendum, which would be the first in Greece since 1974.

    "This will be the referendum: the citizen will be called upon to say a big 'yes' or a big 'no' to the new loan arrangement," he told Socialist members of parliament.

    "This is a supreme act of democracy and of patriotism for the people to make their own decision... we have a duty to promote the role and the responsibility of the citizen."

    Greek opposition leader Antonis Samaras dismissed the calls for a referendum and suggested snap elections instead.

    Nobel prize-winning economist Professor Christopher Pissarides said the deal was the only solution to solve the debt crisis.

    "If it's rejected, it'll be a disaster for Greece," he told Sky's Jeff Randall Live. "It'll be bad enough for the European Union, and the eurozone in particular, but it'll be far worse for Greece."

    He said a 'no' vote would lead to Greece being declared bankrupt and being removed from the eurozone. Mr Papandreou would have to resign.

    European leaders finally agreed the elements of the debt deal early on Thursday morning following marathon talks in Brussels.

    It was decided that banks would have to accept the 50% writedown - higher than the 40% they had originally offered.

    It was also agreed that the 440bn euro (£386bn) bailout fund will be increased to around 1trn euro (£876bn).

    A day after the details of the bailout were revealed a survey showed that nearly 60% of Greeks viewed it as "negative" or "probably negative".

    On Wednesday, leaders of the world's 20 biggest economies gather in the south of France for the G20 summit

     

     

     

    		 47
    68 Money- Stocks are down - Sterling steady
    Updated: 01 Nov 2011

    UKForex article

    United States Dollar:

    Sterling sits lower against the safe haven Greenback. 

    We started yesterday’s session with risk slightly off, but this morning investors are risk averse. 

    The main reason for this is news, once again coming from Europe, that Greek prime minister called a referendum on the latest bailout deal. 

    This has once again sparked panic of a Greek default and fears of a new Euro-zone crisis, as a vote for a yes on bailout funding seems unlikely. 

    Japan also continued its intervention into the currency markets yesterday, which would have further fuelled investor’s flight for safe haven currencies such as the USD. 

    The doom and gloom also continued last night with news that China's factory activity slowed to a near three year low. 

    This has seen Europe shares tumble this morning, which follows on from Asian and US falls overnight. 

    Sterling has dipped below 1.6000 versus the US Dollar in the past couple of hours and as risk remains off, the USD is likely to remain strong. 

    Having said this, we are awaiting UK GDP figures this morning which many economists believe will come in better than expected. 

    GBP/USD starts the day at 1.5980.

    Euro:

    The single currency has fallen off from its recent gains against the Greenback. 

    The Euro has been rocked by the latest news coming from Greece as a local vote on whether to except further bailout funding has most believing the country will default. 

     It seems a strange move by Greek prime minister Papandreou's and has angered many, notably Germany, as it seems that Athens are trying to wriggle out of the deal. 

     This news comes ahead of this week’s G-20 meeting and the EZ's interest rate, which many economists believe will be cut by 25 basis points. 

     EUR/USD has seen a correction in the Euro's gains recently and opens at 1.3718 this morning. 

     GBP/EUR has pushed up closer to a 30 day high of 1.1700 and currently sits at 1.1656.

    		 41
    69 Money- Stocks are down and so is the exchange rate
    Updated: 31 Oct 2011

    UKForex report

    United States Dollar:

    Cable sits lower this morning as investors remain cautious on risk. 

    As predicted in our last commentary, it was a quieter session Friday after the ones we had endured earlier in the week. 

    A lot of chatter continued to circulate at the end of last week, again around Europe, but nothing worth any real mention for this currency pair. 

    The main data releases Friday came from the US, which saw consumer sentiment remain strong and personal spending coming in as expected. 

    However, employment cost and core pce price indexes both came in below forecast. 

    These releases remained overshadowed though by the EU news earlier in the week. 

    Risk appetite continued into the Asian session overnight. 

    Sterling does sit lower against the Greenback this morning as Japan sold the Yen, intervening on speculative moves that were hurting its economy. 

    This is the second intervention in three months. 

    News also that both China and Japan did not commit to enhancing Europe’s rescue fund would have hurt risk appetite. 

    GBP/USD fell 175 pips on the news, but has recovered enough to sit back above 1.6000 this morning. 

     GBP/USD is currently at 1.6005.

    Euro:

    The single currency has seen last week’s gains begin to fall. 

    Risk sentiment turned positive after last week’s EU summit as private investors accepted a 50 % loss on their investment and the European Financial Stability Fund (EFSF) will be increased to €1 trillion. 

    This helped take the Euro back up to 1.4250 versus the Greenback and bring Sterling back down to 1.1370. 

    These gains have been reversed however after negative press releases over the weekend dug into the recent EU summit not providing enough information about the recent rescue plan and also on news that both China and Japan are cautious on providing financial support to the EU rescue fund. 

    They will continue to purchase bonds however. 

    Risk has moved back into the red and the Euro sits lower this morning. 

    EUR/USD opens this morning at 1.3995 and GBP/EUR is currently sat at 1.1443

    		 43
    70 Money- Private Pension Schemes are a No No
    Updated: 29 Oct 2011

    Workers snub pension plans

    Friday 28 October 2011
    by Louise Nousratpour, Equalities Reporter
    The number of workers enrolled in occupational pension schemes is on a slide to levels not been seen for half a century, the Office for National Statistics (ONS) warned today.

    The highest number of active members was recorded in 1967, when 12.2 million people were in such a scheme.

    But by last year there were 8.3 million active members - the lowest level since the 1950s, the ONS said.

    Its occupational pension scheme survey for 2010 also found that since 2004 public-sector active membership had overtaken the private sector, which suffered a sharp drop in members.

    TUC general secretary Brendan Barber said: "The shocking decline in private-sector occupational pensions shows the folly of calls for public-sector pensions to be equalised with those in the private sector. "This would simply be a race to a very grim bottom."

    Public-sector union Unison general secretary Dave Prentis added: "Top bosses in the private sector award themselves generous pensions with low retirement ages, but shut their schemes to staff - leaving them facing poverty in their later years, with the only lifeline means-tested benefits.

    "Even though this will cost taxpayers billions, it is used to attack pensions rights in the public sector."

    Mr Prentis demanded a "decent pensions deal" for all workers.

    The ONS also released its latest Pension Trends report, which found that in September last year only 48 per cent of women pensioners received a full basic state pension, compared with 87 per cent of males.

    But it said that, under new laws that took effect in April, the number of women receving a full state pension will increase to 97 per cent by 2031.

    The Pension Act 2007 cut the number of years needed to qualify for the full state pension and relinked state pension increases to earnings.

    Last year, the government introduced the "triple lock" policy, guaranteeing that the state pension will be increased each year by average earnings growth, inflation or 2.5 per cent, whichever is higher.

    This means pensioners can expect a 5.2 per cent rise next April.

    However the National Pensioners Convention expressed concern that this may be reneged on after Pensions Minister Steve Webb said the rise would be "announced" next month.

    		 45
    71 Money- Tax Demand- Your right to complain
    Updated: 28 Oct 2011

    How to tackle your tax demand

     

    By Tony Hazell

    Last updated at 10:07 AM on 26th October 2011

    The Radical says :- Tax forms are not simple because tax is complicated. Its Government Policy to make it complicated. If you do your own tax assessment and you calculate your tax bill on the back of an envelope and you believe you are being over taxed - COMPLAIN. Stick to your guns and find out who is right and who is wrong.Sometimes you have forgotten to tick one box and this can cost. This happened to me. It took three years to sort it and I did. In the end I got the rebate I expected.

     
    Up to 1.2million taxpayers will see an unpleasant piece of post landing on their doormats over the next few weeks — a surprise bill from HM Revenue & Customs (HMRC) to balance its books.

    This tax grab, demanding an average £600, covers the year to April 5, 2011, but is crucially different to previous ones.

    This time, HMRC is chasing the money swiftly, so there will be fewer grounds for appeal.

    How has this happened?

    At the start of the tax year, adults are issued with tax codes that determine how much employers and pension companies collect.

     Surprise bill: Up to 1.2million taxpayers will soon receive see an unpleasant piece of post from HMRC
    This is based on what HMRC knows about you.

    But sometimes it doesn’t know soon enough about changes in your circumstances, such as a new job, a second job, extra perks such as health insurance or a change in savings income.

    So, once the tax year ends, it tallies its records — and begins to find mistakes.

    And with a huge 40 million people in PAYE, it is inevitable this ‘reconciliation’ will happen every year.

     More...Taxpayers beleaguered by HMRC's blunders

    It follows last week’s Money Mail revelation that the taxman hid its mistakes when dealing with appeals made by taxpayers against demands sent out last year for underpayment of tax.

    An internal memo uncovered by Money Mail found the taxman kept back key information from members of the public who spotted its errors and contacted it to try to make amends.
    Here is our Q&A on what to expect if you receive a letter demanding a tax repayment:

    WILL I BE AFFECTED?

    Those targeted usually have their tax deducted through the PAYE system by their employer or pension company — this includes 146,000 pensioners.

    However, there will be some households that have to pay a lot more than £600. The bills will start to go out over the next few months, but many will already be in the post.
    This summer, £680million was returned to 2.3 million people who had paid too much tax in the past tax year.

    CAN I CHECK IT?

    HMRC is sending out notices called P800s. These show details of what it thinks you owe — and why.

    You can check your annual salary on the P60 supplied by employers. Pensioners get statements from their pension companies.

    Perks such as private medical insurance will be shown on the P11D, which employers should have given you in the summer. Banks and building societies provide statements of the interest they have paid.

    Patricia Mock, tax director at accountant Deloitte, says: ‘One thing that could be wrong is savings income, because interest rates have fallen. They could be overstated on your Coding Notice.’

    Higher earners should make sure they have received higher rate tax relief on private pension contributions and charitable donations.

    Pension companies should have sent you an annual statement, but make sure HMRC knows about it.

    WHAT IF I CAN’T PAY?

    Any bill under £3,000 can be paid over the coming year simply by HMRC adjusting your tax code. This means you can repay it in smaller monthly sums rather than a one- off payment.
    For pensioners, the money will be collected over three years, starting from next April.

    However, you can make a case for hardship, even on higher bills. Mike Warburton, of accountant Grant Thornton, says: ‘You can ask for easy repayment terms. Call and ask for a time-to-pay arrangement.’

    Previously, HMRC was inclined to let off those who owed less than £300, but now, it will waive only £50 or less.

    WHAT IF I DON’T UNDERSTAND THE BILL?
    Pensioners on low incomes can contact the charity Tax Help For Older People on 0845 601 3321. Anyone on a higher income should consider contacting an accountant.

    CAN I APPEAL?
    Last year it was possible to apply for the tax to be written off thanks to something known as Extra Statutory Concession (ESC) A19, a clause tucked away in the taxman’s rulebook. This will not help now.

    The A19 applies only where HMRC failed to act on information in a reasonable time. This time it has acted quickly, just months after the end of the tax year in question.

    If something is wrong on your statement, call the phone number on it or write to HMRC setting out what you feel is incorrect.

    One possible ground for appeal is if your employer was given the right code but taxed you wrongly. It may then be liable for the tax, but this will depend on individual cases. If you think this is the case, you can write to your local tax office.

    ANY MORE SURPRISES?

    Yes, but pleasant ones. HMRC is trawling through records covering 2003/04 to 2007/08 and says it will be repaying £2.5billion to six million cases by Christmas 2012 — some may get more than one payment. Tax owed from this period is being written off.

    AND ONLY FOUR DAYS LEFT TO FILE YOUR SELF-ASSESSMENT TAX RETURN

    There are just four working days left to file your paper self-assessment tax return on time for the October 31 deadline, to avoid a big fine.

    Around 1.85 million people, out of the nine million in self-assessment, file a paper tax return each year.

    These are mainly pensioners, the self-employed and people with multiple incomes.

    But this year, HM Revenue & Customs has introduced a range of tough penalties for people who miss the deadline. Hand in a paper tax return on or after November 1 and you will be hammered with a £100 fine.

    Delay returning your assessment by three months and you will be fined £10 a day — up to a maximum £900.

    There are more fines after six months.

    You could end up forking out £1,600 if you delayed filing for a year.

    That’s even if there’s no tax to pay or the tax due is paid on time.

    If you fill in your tax return online, you’ll be given an extra three months — to January 31 — to send in your form.

    For advice, visit www.hmrc.gov. uk/sa or call the self-assessment helpline on 0845 9000 444.


     

    		 57
    72 Money- Con Artists and Cold Callers
    Updated: 28 Oct 2011

    'Death bonds', carbon credits and landbanking:

    Warning as market woes spark scams boom

    By Dan Hyde

    Last updated at 12:47 PM on 26th October 2011
     
    Con artists and greedy financial advisers are increasingly peddling dodgy deals to investors terrified by the stock market storm, This is Money has learned.

    Record low interest rates, wildly volatile share prices and inflation at 5.2 per cent have made sitting ducks out of desperate savers, industry sources say.

    Fraudsters are swooping in greater numbers: ‘landbanking’ scams, in which investors are sold worthless plots of land, have doubled in two years, according to Insolvency Service figures.
     

    Warning: Beware of cold-callers flogging weird investments like carbon credits

    The Financial Services Authority was flooded by a ten-fold increase in calls relating to carbon credits – the biggest new threat to unwitting investors - between July and September.

    Meanwhile, some unscrupulous financial advisers are flogging risky products like 'death bonds' in a vain attempt to boost client returns and net a juicy slice of commission, City sources warn.

    Temptation to gamble on left-field products has increased during the economic storm. In three months this summer, the FTSE 100 crashed from 6,054 to 4,944. It has since recovered to around 5,500 but all returns are being savaged by soaring inflation, which has hit 5.2 per cent a year on the consumer prices index.

    Cash investments also look pallid thanks to the Bank of England's record low 0.5 per cent base rate pushing interest rates to the floor. The best instant access account pays just 3.16 per cent.

    The City watchdog says some £500million a year is already lost to investment scams and has sounded the alarm as the 2011 market turmoil rumbles on. 
     

    More...Warning over 'landbanking' scams in which investors are sold worthless plots as number of cases double in two years
    The 0906 661 1911 number for an undelivered parcel and a scam that just won't die

    'Say no to cold-callers'

    A proliferation of boiler-room outfits pushing fake carbon credits on naïve victims is a serious concern.

    The FSA says smooth-talking 'boiler room' criminals, who cold-call the vulnerable and elderly to sell worthless or non-existent investments, are ditching shares in favour of CO2 emission tokens that can be traded for money.

    It can be difficult to tell a genuine landbanking or carbon credit investment from a scam. In the post, glossy marketing material often quotes serious-sounding experts, politicians and studies.

    The Insolvency Service uncovered 30 landbanking stitch-up jobs this year, up from 15 in 2009.

    Usually, undeveloped, greenfield land is divided into sub-plots and sold to individuals with the promise of huge returns when planning permission for development is granted.

    Many schemes are based on land where planning permission is never likely to be granted, though, or even imaginary plots.

    It is estimated that losses from all landbanking scams now exceed £200 million. 

     Just say no: Britons have been told to beware of 'landbanking' scams which see investors sold land that is worthless
    'Landbanking doesn't work'

    Consumer watchdog Which? says the landbanking model ‘can never work’ – the best advice is to avoid them altogether.

    It says: 'Dividing land into individually-owned plots makes it less likely to be built upon, as no developer would want to deal with hundreds of separate owners.’

    Jonathan Phelan, the head of unauthorised business at the FSA, says: 'Most of the money placed with these companies disappears and to make matters worse, as the firms are not authorised by the FSA, such investments are not covered by the Financial Services Compensation Scheme.

    'As landbanks often snare new investors by cold calling them, the lesson remains: if you are called out of the blue with the offer of land that is "guaranteed to rocket in price" - be very suspicious indeed.'
    Death bonds: beware the left-field ideas

    Stuart Fowler, founder of independent financial adviser Fowler Drew, says investors should be wary of straying into uncharted territory in the search for inflation-busting deals.

    Some advisers have resorted to high-risk schemes – death bonds being a prime example.

     Fowler says there is rarely treasure at the end of the rainbow and 'clients need to rein in their advisers'.
    'Sometimes product ideas turn out to be unsuitable even when promoted by serious people,' he says.

    Carbon credits 'new danger'

    Despite the rise in landbanking cases, the FSA is now concerned that carbon credits are emerging as the boiler room scam of choice. Fraudsters are exploiting a growing national willingness to jump on the 'eco-friendly bandwagon', it says.

     Warning: Jonathan Phelan told consumers to be wary of cold calls from companies offering land for sale

    A carbon credit is a permit to emit one tonne of CO2 and can be traded for money by companies and individuals.

    They were designed to cut greenhouse gas emissions worldwide.

    A boom in small, unauthorised start-up firms flogging these new-fangled investments prompted the regulator to issue a consumer alert in August. 

    This is Money readers have already raised the red flag over cold-callers. Jenny Morgan, from Chertsey, Surrey, received a cold call from Capital Carbon Credits in May.

    The company was offering a two-hectare share in 50,000 hectares of Sierra Leone and a '5 per cent return in two months'.

    The FSA says that while not all carbon credit trading schemes are a scam, investors must be very vigilant; even eking out a return from the genuine article requires knowledge and skill.

    On 21 October, two more carbon credit firms – Carbon Credit Specialists LLC and Carbon Advisory Council - were added to the FSA's long blacklist of unauthorised traders.
    -

     Read the FSA's top ten tips to avoid boiler room scams

    Beware the 'death bonds' trap

    The regulator has also issued warnings over 'major flaws' in life settlement investments.
    Nicknamed 'death bonds', these traded life insurance policies played a role in the collapse of Keydata in June 2009, which left 30,000 investors with £450million worth of losses.
    The whole life settlement industry is now unsafe for most investors – principally because its 'secondary' market has dried up.
    The bonds are now illiquid and over-priced.The danger is the equivalent of a run on a bank. A rush of ordinary investors cashing in their bonds would spell disaster for an issuing firm, which might struggle to pay out.

    This is because life settlements, on which the bonds are based, only convert into cash when the original life insurance policyholder dies. It's essentially a bet on a policyholder dying young. Sale on the secondary market instead would be difficult and incur big losses for firms, experts say, possibly sending them under.

    Despite the risks, some advisory firms continue to market death bond deals. Rockingham Retirement had its knuckles rapped in August for selling life settlement investments to pension savers using with misleading literature, which only acknowledged a 'small element of risk'.

    Widely-respected IFA Stuart Fowler says the trend of honest advisers searching for weird and wonderful ways to plug gaps in clients' portfolios - something he calls a 'fashion for stamp collecting' - is on the wane, though.
    'What's dawned on people is that the law of diminishing returns applies to new asset classes, too,' he says


    		 63
    73 Money-Marriage for Men is a money spinner for women-When will we ever learn ?
    Updated: 28 Oct 2011

    I'm getting divorced after 15 years, will my wife get a share of my whole pension?

    By Linda Mckay

    Last updated at 1:13 PM on 26th October 2011

     I am getting divorced after 15 years of marriage. Is my wife entitled to a share of my pension which I have paid into all my working life? DB, Devon
     

    Break-up: What happens to my pension savings in divorce?

    Linda Mckay of This is Money replies: When a couple separate, whether or not children are involved, they are advised by solicitors to complete a full and frank financial declaration so that matrimonial assets including property, pensions or any other form of savings may be divided.

    The proportion of division may well depend on custody and spousal maintenance if there are any children.
    I asked our legal experts to give some comment.

    Family law practitioner Robin Francis of Motley & Hope replies: Personal circumstances vary widely but it is not unusual for a pension to be a couple’s second largest asset after the matrimonial home and the divorce courts can take this into account when deciding how to organise the family finances after a split.

    The court may indeed include your pension as an asset to the matrimonial pot, especially if your wife has been out of the working environment bringing up children and therefore not able to contribute to her own pension.
    The way the matrimonial pot is divided between you and your wife will be decided by the court and will be based on factors such as the financial needs of each spouse and the children as well as the length of your marriage.

    Your age will be a factor to think about in decision-making. In order for your pension rights to remain yours and untouched to draw on later in life you may consider a process called ‘offsetting’ which would involve you transferring a proportionately larger share of your overall liquid assets to your wife now.

    Offsetting can be appropriate if a pension is inaccessible, if for example it is based abroad. If you have a large pension fund you are likely to require a significant sum to compensate your wife or you will need to negotiate higher terms on other settlements such as property.
     More...How to plan for a richer retirement: A guide for savers

    Pension sharing orders where introduced in December 2000, giving the court the ability to split the pension irrevocably at the time of divorce which would then form two separate pots with one being allocated to the former partner.

    This option specifies the percentage value to be transferred and can also apply to a pension that is already being drawn. But this can be a costly and complex process which requires actuarial calculation.

    Another option for the court is a pension attachment order, where a proportion of your pension is marked for your wife. When the pension becomes payable the pension trustee would then pay part of it and any lump sum available to your then ex-wife.

    This entitlement would terminate if your wife should die or remarry.
    The main advantage of a pension attachment order is that the payment is more likely to represent the value of the pension at the time it becomes payable but it does have a number of drawbacks.

    There is no clean break in terms of financial settlement and, after a divorce, a court cannot force the paying spouse to continue with contributions or work until a specific age.

    A pension value is also difficult to predict and there is the insecurity that if the paying spouse dies the order is terminated.

    Offsetting is the most popular remedy for what is already for many a difficult, emotional and stressful time.


     

    		 46
    74 Money- Pension Bribes exposes Government Minister
    Updated: 28 Oct 2011

    Pensions minister accused of hypocrisy over 'bribes',

    as delayed state pension lump sum is false economy

    By Dan Hyde

    Last updated at 11:51 AM on 27th October 2011

     Criticism:

    Pensions minister Steve Webb batted off suggestions that the DWP is acting hypocritically over pension 'bribes'

    Pensions minister Steve Webb stands accused of hypocrisy after a newspaper investigation found over 40,000 pensioners every year lose out because the Government 'bribes' them into sacrificing some of their state pension.

    Last week, Mr Webb made headlines for condemning private sector firms that lure pensioners into giving up generous benefits in 'dodgy deals' that provide an immediate cash boost.

    His speech to the National Association of Pension funds drew praise from journalists and industry professionals.

    But an investigation by The Times suggests the Department for Work and Pensions is playing the same game.

    The Government is on course to save billions of pounds by offering cash lump sums to retirees who delay taking their state pension, its report said.

    These cash bribes can be worth as little as a quarter of the value of the pension income forgone, yet a majority of people still choose the lump-sum option.

    The Times uncovered the data via a Freedom of Information request.

    It says the Government risks accusations of exploiting older people to make savings.
    Deferring your state pension and a false economy

    Each year 66,000 people defer their state pension.

    They have two options: a higher pension when they eventually claim or a lump sum.

    Pensioners can boost their weekly state pension – currently £102.15 a week - by 10.4 per cent for every year of deferral. The cash lump sum option is simply the total payments missed plus interest at 2 per cent above the Bank of England base rate (0.5 per cent).

    Some 42,000 a year take the lump sum - £8,000 on average - the Freedom of Information request showed.

    The Times says one pensioner deferring for two years was offered £10,400 or £25 a week extra income.

    But to buy £25 a week extra income from a pension on the open market would cost £44,000.

    Based on this, The Times calculated that the lump sum is worth just 25 per cent of the value of a higher annual payout over the course of a retirement.

     More...Delayed pension lump sum is 'false economy'

    Boots to bribe pensioners into sacrificing inflation-linked rises by giving them 35% more now
    Mis-selling warning on new plan for pensions as millions could be victims of Government-sponsored rip-off

    If you have average life expectancy you lose out

    For the terminally ill or those with a shorter life expectancy, the lump sum may well prove financially profitable.

    But anyone living the average life expectancy, which is reflected by the annuity rates used to calculate the £44,000 number above, is likely to lose out.

    This is shown by someone delaying their pension for five years.

     At just over £100 a week now, they'd miss out on £26,000 of income.

    After five years their lump sum figure would be £27,680.

    But they could also get £52 a week extra income until they die.

    While this appears a smaller number, it actually equates to £2,704 a year.

    The pensioner only needs to live for longer than ten years - until 75 for a man or 71 for a woman - to make the opting for the higher income financially beneficial.

    Andrew Ellson, personal finance editor of The Times, says the real problem is that the DWP doesn't make the sums clear; many don't realise what they're giving up unless they read a 64-page booklet.

    'The major problem is that the DWP presents the lump sum, which is usually thousands of pounds, against the weekly uplift in pension income, which is usually only a few quid extra,' Ellson says.

     Offer: Boots is trying to cut its liabilities by offering staff an immediate boost to their pension payouts - but experts warn that many could lose out

    'Most people casually looking at the two options will assume that the lump sum is the better deal.

    'The way the Government presents the choices is clearly in breach of the Pensions Regulator's code of conduct on cash inducements, a code that was introduced to stop companies from bribing employees in final salary schemes to give up valuable pension rights.

    'The irony is that the cash lump sums that private employers typically offer their employees are worth 60 per cent of the value of the rights given up, far better value than the deal offered by the Government.'

    The Times accused Mr Webb of being 'in denial' after the pensions minister attacked private sector schemes over deals that typically pay offer 60 per cent of future value and then claimed the state pension is a special case.

    The crackdown on pensions bribes

    Mr Webb announced a crackdown on firms bribing pensioners as they try to plug a collective £200billion black hole in final salary pension funding

    He said: 'These bribes, such as offering larger pensions upfront to give up valuable inflation indexing, or cash lump sums to transfer out of a more generous scheme are being hidden behind confusing language.

    'I am taking urgent legal advice and working with my colleagues across government on stopping these kinds of dodgy deals.'

    In response to The Times' allegations, Mr Webb said: 'State pension deferral is a good deal for many and our guidance makes clear the importance of considering all the implications.'

    Last week, a This is Money report exposed pharmacy giant Boots for trying to lure its pensioners onto a less generous deal and save £600million.
    Experts warn that up to 9,000 people could lose out if they accept the deal, which is only worth 60 per cent of the value of future increases to their payouts


    		 56
    75 Money- Mis- selling Bank Accounts
    Updated: 28 Oct 2011

    New bank mis-selling scandal as watchdog plans 'premium' account crackdown

    By James Salmon

    Last updated at 10:56 AM on 26th October 2011


    High Street banks face an imminent crackdown from the City watchdog over concerns that expensive fee-based current accounts costing up to £300 a year are being mis-sold to millions of customers.

    Packaged accounts are routinely sold to customers in branches, over the phone and online as an ‘upgraded’ version of their ordinary current accounts.

    They cost anything from £5 to £25 a month, which can sound like a small enough sum but, added up over a year, cost as much as £300.

     Valuable perk or waste of money?

     Which? rates the packaged current accounts

    What you get for your money will vary, but most tend to include a host of extras including travel insurance, breakdown recovery and mobile phone cover, as well as ‘perks’ such as commission-free travel money and free access to airport lounges.

    For example, the Barclays Additions Active costs £15 a month — £180 a year — and includes roadside recovery from RAC, worldwide travel insurance, extended warranty cover for domestic appliances and even a will-writing service.

     For £10 a month — £120 a year — the Santander Reward current account features mobile phone insurance, travel cover and  ‘key protection’ that pays out up to £1,500  for replacement locks and keys if yours are lost or stolen.

    The banks have been accused of mis-selling the accounts to customers who don’t qualify for the benefits.

    Typically, this might be an older customer in their 70s who is too old to claim on the travel insurance because it has a cut-off at 65 years of age or who has a pre-existing medical condition.

     Crackdown: The Financial Services Authority is worried banks are pushing expensive accounts on customers
    Customers have also been left worse off because parts of the packaged account have been of poorer quality than if bought separately, or they already have cover elsewhere — thus, needlessly, and expensively, doubling up on insurance.

    Last year, the Independent Banking Commission estimated that almost one in five of Britain’s 54 million current accounts are paid for.

    Research from consumer group Which? suggests that around a third of consumers don’t use the extras for which they are paying, wasting between £240 million and £320 million a year.

    Adam Phillips, who chairs the independent Financial Services Consumer Panel, says: ‘It is deeply disturbing that just as banks are being forced to come clean over mis-selling payment protection insurance, cases are emerging of the same sort of behaviour with packaged accounts.

    ‘But if sold appropriately to consumers who can make use of the benefits, they can represent good value for money.’

    The Financial Services Authority (FSA) launched its investigation more than a year ago after it became concerned at the way banks were targeting customers with these expensive products.

    In February, Money Mail revealed secret talks in which the regulator advised some banks to refund customers mis-sold accounts and change the terms of their insurance policies.

    For six months the regulator had  been secretly forcing banks to come clean over the way packaged accounts are sold.

    As part of its investigation, it demanded evidence about the way bank branch staff explain the perks on offer, the quality of insurance cover and whether customers actually use what they pay for.

    In some cases, banks were forced to change their accounts.

    For example, on its Reward and Premium Current accounts, Santander has improved its insurance policies for its keys, mobile phones and identity protection, because the original cover was worse than that available in the stand-alone policies bought through its branches.

     OPINION: Sam Dunn says fee-paying accounts are a 'conjuring trick'
    Now, in the face of increasing complaints, Money Mail can reveal that the way travel and mobile insurance are sold as part of the so-called ‘packaged’ bank accounts is set to change.

    We understand the FSA will reveal the results of its investigation into the sale of packaged accounts within the next few days. Campaigners are hoping the tougher rules will force sales staff to check customer suitability before they buy. 

    Packaged accounts have become a valuable source of much-needed income for banks after a clampdown on payment protection insurance and rip‑off overdraft fees dried up a lucrative cash flow.

    They have ratcheted up their charges, with the average cost rising from £127 a year in 2006 to £187 annually today, according to data analysts Defaqto.

    Though some offer good value, the regulator is increasingly concerned that staff — driven by relentless sales targets — are selling these expensive accounts to people whether they are suitable or not.

    Internal documents leaked to Money Mail revealed that last year, a Barclays salesman who managed to sell a Premier Life account — charging up to £25 a month — to a student would earn a ‘conquest value’ of 340 points towards his bonus target.

    This compares with just 25 points to sign up someone for the bank’s will-writing service and 100 points for getting someone to take out a credit card.

    James Daley, editor of Which? Money, says: ‘Sales staff are being incentivised to sell as many of these things as possible, even if it isn’t in the customer’s interests.

    ‘Often, vulnerable customers who can least afford it are wasting huge amounts of money on insurance they don’t want or need, or can’t even claim on.’

    Barclays says it changed its incentive scheme at the start of the year so salesmen don’t earn more to sell packaged accounts.
    'Disabled friend paid £1,200 for 'perks' he didn't need'

    Lindsay Carruthers was horrified to discover her close friend Ronnie Pearson, 71, had paid more than £1,200 in fees for a Lloyds TSB packaged account he neither needed nor used. 

    Mr Pearson, who lives in sheltered accommodation in Norwich, has been severely disabled since suffering a stroke in 1978. Housebound and barely able to walk or speak clearly, he relies on his family and friends.
     Lindsay Carruthers
    Just before last Christmas, he asked his friends from church, Lindsay and Steve Carruthers, to look through his finances. They discovered a monthly charge of £25 that Mr Pearson could not explain.

    It transpired this was for Lloyds TSB’s Premier Account. Benefits of this account include travel insurance, mobile phone cover, Airmiles, an airport ‘meet and greet’ service and airport lounge access.

    Mrs Carruthers found her friend had been upgraded to a Platinum Account in 2006, then upgraded again to a Premier Account several months later.

    Mrs Carruthers, 43, says: ‘Lloyds has treated Ronnie abominably. The salesman would have seen when Ronnie came into the branch that he was walking with a frame. If they’d asked the right questions, they would have found out he hasn’t driven since having a stroke or gone on holiday.’

    Earlier this year, Lloyds TSB agreed to pay compensation to cover Mr Pearson’s fees. A spokesman says: ‘We fully regret the poor customer service Mr Pearson has experienced.’


    		 75
    76 Money- Sterling work or not working
    Updated: 27 Oct 2011

     

     

    United States Dollar:

    Risk sentiment improved overnight as European leaders agreed that private bondholders of Greek debt should accept a 50% haircut (loss on their investment). 

    This will be based on a voluntary agreement with private creditors.  Furthermore the European Financial Stability Facility will be increased by approximately €1 trillion. 

    The statement said that this may be used for credit enhancement for sovereign bonds or to create special purpose vehicles, which would act to protect against any bankruptcy and to help isolate any financial risk. 

     After slipping to a low of 1.5890 yesterday in the run up to the meeting GBP/USD recovered following news of the Greek haircut and pushed back through 1.6000 to a high of 1.6040. 

     It remains fairly well supported this morning and opens at 1.6006, this despite some quite negative comments from BoE MPC member Fisher who has said that there is a significant chance of another recession in the UK.  These comments haven't come of any great surprise.  

    Today, markets look forward to the release of U.S. GDP whilst rhetoric out of Europe may continue to have an impact.        

    Euro:

    EUR/USD has climbed in line with improved risk sentiment over the last 24 hours. 

    This risk sentiment has improved on the back of the Greek haircut news.  In a statement following this, European Council President Van Rompuy said "in taking today's decisions, we lay the foundations for the future. 

    All members of the euro summit are determined to follow this path." 

     So officials are relatively pleased with developments and so far it seems markets are satisfied'ish. 

     It is clear that Italy and Spain will need to implement further austerity measures to stop the crisis deepening though and officials and investors alike will be keeping a close eye on the success of these measures in the near/medium term. 

    As equity markets react positively to the news EUR/USD has broken higher through 1.4000 in the last few hours and it opens the London session at this figure.  GBP/EUR remains unchanged in the meantime and trades at 1.1430 currently

    		 47
    77 Money- Beecroft-Fully Fledged "Speculator"
    Updated: 27 Oct 2011

    Lifting the lid on Beecroft

    Wednesday 26 October 2011

    Any psychologist might have something quite unflattering to say about an elderly gentleman of, say, 64 years who feels the need to own four Aston Martins.

    The word displacement springs inevitably to mind.

    However, we wouldn't dream of suggesting anything of the sort about Adrian Beecroft, despite his sports car collection.

    Mr Beecroft, of course, is the Tory donor and top speculator who has had the wizard wheeze of suggesting that the law be amended to allow companies to sack staff without explanation or justification.

    This, says Beecroft, would take rather a lot of strain off businesses which are terrified of dismissing unproductive staff for fear of tribunal claims and would allow the economy to develop without the inhibiting factor of companies' responsibility for their staff - although he didn't put it in quite those terms, of course.

    So let's have a look at this man who feels entitled to sit in judgement on an entire class and annul several hundred years of effort by working people to establish fairness in their employment conditions.

    Mr Beecroft amassed his not inconsiderable fortune - about £100 million - by shoving other people's money around, which must by any estimation make him one of the best-paid casino croupiers of all time.

    He is described in the annals of the City as a venture capitalist - a founder of private equity firm Apax Partners and now chairman of private equity set-up Dawn Capital.

    In 25 years at Apax he served as chief investment officer and senior managing partner before retiring in 2008.

    He then joined the Tories' "independent challenge group," with a brief to "think innovatively about the options for reducing public expenditure."

    The other business people on this dodgy group were, incidentally, HSBC finance director Douglas Flint, former head of the Goldman Sachs European private equity arm Richard Sharp and John Nash, a founder of the Sovereign Capital buy-out group.

    He must have done the dirty work the Tories required rather well because, earlier this year, Mr Beecroft was tasked by them with drawing up recommendations for David Cameron on what changes can be made to employment law within EU parameters.

    And look what he's come up with - a vicious attack on workers' rights.

    His knighthood can't be long in coming, at this rate.

    Now, Mr Beecroft isn't a stupid man and he certainly knows which side his bread's buttered.

    He graduated from Queen's College Oxford in 1968 with a degree in physics but, after five years working in the computer industry, jumped ship, went off to Harvard Business School and emerged in 1976 as a fully fledged speculator.

    But his brain didn't atrophy, it's clear. He just swapped a productive and useful job for a parasitic and much more profitable one.

    On his watch, Apax conducted the acquisition of publisher Emap in collaboration with the Guardian Media Group.

    Apax conducted its side of the deal via a complex network of Cayman Islands companies.

    Apax Nominees owned Eden Acquisition One which owned Eden Acquisition Two which in turn wholly owned Eden Bidco.

    The rate of corporation tax in the Cayman Islands is zero and this has made them a favoured haven for tax-avoiding companies.

    At last count, Apax owned 28 Cayman-registered companies.

    Now there's no suggestion that either Mr Beecroft or his company did anything illegal, but it's interesting that the Tories consider him a fit person to pontificate on what's in the national interest.

    And it's odd that his pontifications just hurt working people.

    Isn't it?

    		 45
    78 Money- Protest at HQ against the Jammy Tax Dodgers
    Updated: 25 Oct 2011

    Protesters: Tax boss must go

     

    Monday 24 October 2011
    by Rory MacKinnon, Corporate Affairs Reporter
    Anti-cuts activists in London demanded the head of tax office boss Dave Hartnett today in a show of public anger over a string of dodgy tax deals.

    Around two dozen police barred the doors of HM Revenue and Customs offices in Westminster as a crowd of more than 100 members of UK Uncut and Occupy London rallied outside accusing Mr Hartnett of a dereliction of duty.

    Organisers said it was time for Mr Hartnett to resign.

    "Whilst 25,000 rank-and-file staff at HMRC have been fired, leaving the organisation almost incapable of functioning, Hartnett has been carving out a career as the most wined and dined civil servant in Whitehall," they said - referring to a whopping 107 declarations of corporate hospitality since 2009.

    The protest comes less than a week after Mr Hartnett told a Commons committee he had made a "mistake" by personally approving an estimated £8 million write-off of accrued interest on tax withheld by investment banking giants Goldman Sachs.

    Mr Hartnett told the MPs he could not publicly explain the decision - because of Goldman's right to taxpayer confidentiality.

    He added that he had believed the case was unwinnable because of a technicality, but confirmed upon questioning that he had not sought legal advice from HMRC's own lawyers.

    HMRC minutes show that last December Mr Hartnett literally shook hands on the deal, which stems from a 2005 court ruling that Goldman's elaborate funnelling of employee bonuses through a trust in the Virgin Islands was an illegal tax dodge.

    The company continued to fight the ruling, with the original tax bill of £30.8m ballooning to around £40m at the time of Hartnett's write-off.

    In 2010 Mr Hartnett oversaw a controversial write-off of at least £1.25 billion in tax owed by Vodafone.

    Some experts speculate the real liability could have been as much as £6bn.

    An HMRC spokesman said tax-office staff were continuing with "business as usual."

    But Mr Hartnett had no intention of resigning "because there is no reason for him to resign."

    The spokesman said: "HMRC has made clear that it does not do 'sweetheart deals' with big business or anyone else."

    rorym@peoples-press.com

    		 61
    79 Money- Regulate & Abrogate -Time to take the Banks over- instead of bailing them out
    Updated: 24 Oct 2011

    The bankers' capital war 
     
    Banks need more capital in case of future financial crises,

     but financiers say this would slow economic growth.

    Howard Davies

    Last Modified: 23 Oct 2011 13:06

    Al Jazeera

    European officials want banks to increase the amount of capital they keep  in reserve

    Almost everyone nowadays agrees that banks need more capital.

    Christine Lagarde chose to make it her first campaign as Managing Director of the International Monetary Fund.

    And conventional analyses of the financial crisis focus on the weak capital base of many banks, which left them with insufficient reserves to absorb the losses they incurred when asset prices fell sharply in 2007-2008.

    Taxpayers, notably in the United States and the United Kingdom, were obliged to step in to fill that hole.

    The same disaster movie is now playing in the eurozone.

    We can only hope that the bankers are eventually rescued from the burning eurotower by Super-Sarkozy and Wonder-Frau Merkel - and that the Basel Committee of Banking Supervisors ensures that there will be no sequel.

    The Basel Committee has proposed strengthening considerably both the quantity and the quality of capital in the global banking system.

    This would mean much larger core equity capital for all banks and a range of additional reserves - a capital conservation buffer, a countercyclical buffer, and a surcharge for systemically vital institutions - to be added by local regulators as they see fit.

    Unfortunately, the final implementation date for these new obligations has been deferred until 2019 - by which point a few banks might still be left standing.

    In fact, the view that banks need more capital, while widespread, is not unanimous.

    Two notable holdouts are Jamie Dimon and Walter Bagehot.

    Dimon, the chairman and CEO of JP Morgan, has been making his contrarian views known to regulators, most recently almost coming to blows, according to eyewitnesses, in a spat with Governor of the Bank of Canada Mark Carney, who chairs a group that is designing parts of the new regime.

    Walter Bagehot is in no position to threaten Carney, or any other regulator.

    He died in 1877. But in his great work on finance, Lombard Street, published in 1873, he asserted that, "A well-run bank needs no capital.

    No amount of capital will rescue a badly run bank."

     I expect that Dimon, who has steered Morgan through the crisis without the need for public support, would say "amen".

    Of course, regulators cannot easily require all banks to be "well-run" in Bagehot's sense.

    So banks require capital as a backstop.

    It is not a bad substitute for perfect judgment, and at least it can be defined and measured.

    But how much capital is enough?

    A new regulatory standard

    Even if, at heart, they take the Bagehot view, all bankers recognise that market confidence requires them to demonstrate a more solid capital base to attract wholesale funding, as well as to satisfy the stricter demands of regulators.

    But a wide gap has opened up between the financial authorities and the banks on the costs and benefits of the much higher requirements now demanded by Basel.

    Basel 3, the Basel Committee's new global regulatory standard on banks' capital adequacy and liquidity, will more or less double the equity requirements, and will impose extra costs on banks deemed "too big to fail".

    The Committee's analysis of the economic consequences found that the impact on growth would be modest, perhaps reducing GDP by 0.33 per cent after five years - easily within the margin of forecast error.

    The OECD took a different view, putting the growth impact at about twice that level, and rather higher in Europe, where companies rely far more on bank financing than they do in the US.

     Counting the Cost: Financial firms back under scrutiny
     
    In sharp contrast, the Institute of International Finance, the leading trade association for the world's top banks, believes that the impact of higher capital requirements could be far stronger.

    The IIF believes that GDP could be fully 5 per cent lower after five years, with unemployment more than 7 per cent higher.

    The IIF's forecast may seem alarmist, but the competing estimates are based on some intriguing analytical differences.

    Regulators take the view that the impact of higher capital requirements on the cost of credit to borrowers will be modest, as the overall cost of funds to banks will not rise much.

    They rest their case on the famous Modigliani-Miller theorem, which implies that a company cannot alter its capital cost by changing the balance between equity and debt on its balance sheet.

    If there is more equity, then logically debt should be cheaper, as the company (or bank) is better insulated from default.

    Bankers accept that, in the long run, the theorem might hold, but argue that it will take time, especially given recent events, to persuade investors that banks are genuinely safer, and that their shares should be thought of as closer to utility stocks, yielding a lower return.

     Indeed, Franco Modigliani also argued that investors have a "preferred habitat", and that coaxing them out of it carries some cost.

    That does not bode well for banks, which have been a very poor investment in the last few years.

     Moreover, the banks assume that they will need to hold more capital than regulators ostensibly require in order to maintain a margin of safety.

    These assessments are unusually divergent.

    Though economists are notoriously disputatious, their estimates do not often differ by a factor of 10.

    It would be wise, before the rules are set in stone, to refer the issue to the World Institute for the Resolution of Economic Disputes in Baltimore, or "The Wire".

    Unfortunately, there is no such institute, in Baltimore or anywhere else.

    There is no one who can offer a timely and, above all, authoritative view on which forecast is the more compelling scenario.

    The stakes of not knowing are very high.

    Howard Davies, a former chairman of Britain's Financial Services Authority, Deputy Governor of the Bank of England, and Director of the London School of Economics, is a professor at Sciences Po in Paris.

     

    		 48
    80 Money- Cameron's fury at plans to curb rich backers
    Updated: 24 Oct 2011

    Cameron's fury at plan to curb rich backers

    By Andrew Grice, Political Editor

    i

    Saturday, 22 October 2011

    David Cameron has intervened directly in an independent inquiry into political funding to demand a more favourable outcome for the Conservatives and a severe clampdown on Labour's trade union donations.


    The Independent has learnt that the Committee on Standards in Public Life is to propose a £10,000 cap on donations to parties by individuals and organisations to "take the big money out of politics".


    Mr Cameron has made a last-minute appeal to the committee to revise its draft proposals. The Tories, who have more rich donors than other parties, favour a £50,000 cap.

    Mr Cameron's move has upset some members of the committee, which is chaired by Sir Christopher Kelly and is due to report next month after a 17-month inquiry. It includes a representative from each of the three main parties and six independent members.

    "Cameron has thrown his toys out of the pram," one independent source said. "We had a consensus and were ready to publish, and this has delayed it." Labour and the Tories have long disagreed over whether union money should count towards a cap. But the level of the ceiling could now prevent an agreement being reached between the parties.

    Lord (Andrew) Feldman of Elstree, the Tories' co-chairman and a friend of Mr Cameron, has sent a strongly worded letter to Sir Christopher, a copy of which has been obtained by The Independent.

    "The Prime Minister has asked me to write to you," Lord Feldman wrote. "The Prime Minister and I were very disappointed to learn that you believe that there should be a donations cap that applies to all Conservative and Liberal Democrat party funding, but that specifically excludes a major source of funding to the Labour Party.

    "There is a fundamental principle at stake here –the rules on donations should apply equally to all parties and should apply equally to individuals, companies and trade unions alike."

    Lord Feldman added: "The argument for introducing a cap on donations is to deal with the perception, accurate or not, that big-money donors buy influence over political parties in a way in which the public would not approve. The trade unions are the clearest example of a donor having policy influence as a result of their donation ... It would be perverse if a cap were to be introduced which did not address this most obvious issue."

    The Tories' co-chairman was "disappointed" to learn that the committee's draft report proposes a £10,000 donations cap, claiming that would be the "wrong level". He argued: "A cap of £10,000 would hugely inhibit the ability of political parties to engage with the electorate."

    Opposing more state funding for parties, Lord Feldman said: "It seems to me deeply unlikely that the public will accept handing over significant sums of taxpayers' money to political parties at a time when the Government is having to make tough decisions and cut public spending. There is a significant risk that this approach will further undermine the reputation of politics and politicians – in direct contrast to the aims of the process."

    He told Sir Christopher: "I appreciate you are advanced in your deliberations on this matter, but hope you will have time to reconsider before publication."

    Although the Kelly inquiry has consulted all the parties, the tone of the Feldman letter has angered some committee members. Labour fears that Nick Clegg will side with Mr Cameron when he draws up the Government's response to the proposals. The Liberal Democrats have also backed a £50,000 cap, while Labour told the inquiry a much lower one of £500 would be "more equitable, democratic and less susceptible to avoidance".

    However, a Liberal Democrat source said: "Nick Clegg will not take sides. He will do all he can to find a consensus, using the Kelly report as the basis."

    A Labour spokesman said last night: "In government, Labour always sought to pursue party funding reform through consensus and that has been our approach to the Kelly inquiry. It is deeply disappointing if the Conservative Party leadership is now intervening at a late stage with the work of an independent committee to secure narrow political advantage."

    Labour claimed the move was part of a "pattern of behaviour" in which the Tories were playing "fast and loose" with the political system, citing the shake-up of constituency boundaries and new rules bringing in individual rather than household voter registration.

    Sir Christopher said last month that his committee's report would provide a fresh, independent look at party funding to "deal with this issue before another funding scandal forces change."

    Reform Proposals

    A £10,000 cap on donations to parties by individuals and organisations.

    A range of options for increased taxpayer funding, which could be based on between £1 and £3 for every vote received.

    One-off trade union donations subject to the cap, but affiliation fees paid by members treated differently.

    Unions would have to make clear members have right to opt out of paying political levy and ensure those doing so pay a lower membership fee; unions could not "over-affiliate" by saying they have more members paying the levy than they do.

    		 50
    81 Money- Energy Prices- Rationalise,Nationalise and Chastise the top six companies
    Updated: 22 Oct 2011

    The Big Six energy companies are ripping us off and making billions in profits.

    It’s time to fight back, saysAndy Atkins, Executive Director of Friends of the Earth

     

     A lightning bolt of anger has shot through the British public over the last few days – and it’s not because of some kind of freak weather event.

    Families up and down the land are up in arms over soaring energy bills – now averaging an eye-watering £1300 a year – and the Government’s recent energy summit, where the Prime Minister summoned the Big Six energy companies with barely a slap on the wrist for hiking prices, will do nothing to sooth them.

    The public is angry with good reason: the Big Six energy companies – household names like British Gas, EDF and E.ON – are ripping us all off and making billions in profit. It’s an issue that truly affects us all, as they supply 99 per cent of households in the UK.

    So when they hike prices – to the tune of an average 12 per cent this year alone – there’s barely a soul in the land who isn’t affected. With profits soaring at the same time, and bosses picking up pay packets of over £1 million a year, it’s enough to send a shock of rage through any system.

    It’s a nightmare scenario – and one, without the Government acting, shows no signs of ending any time soon. Our energy bills are rocketing because our energy system is broken– it’s as simple as that.

    The Big Six energy companies are keeping us hooked on expensive imported gas, and it suits them pretty nicely to keep it that way – after all, any increases in the price they can just pass onto their customers: us.

    Recent Friends of the Earth research shows that every household in the UK faces extra costs of £300 a year by 2020 if the big energy companies invest in a new f