Friday, 30 September 2011

Police warn they may not be able to afford Tesco's £3m riot compensation bill

 

In total, the retailer has asked for nearly £3m in compensation from police forces around the country, following the riots that tore through some high streets in August. It is likely that this is the biggest request from a single retailer. The company is claiming under the Riot Damages Act, a piece of Victorian legislation that allows businesses and individuals affected by riot damage to claim directly from the police, rather than their own insurer. In the immediate aftermath of the civil disturbances, the British Retail Consortium urged small retailers to put in their claims to make sure their businesses were not harmed. However, the Greater Manchester Police Authority, which has been hit with 280 claims totalling £4.4m, has criticised Tesco for using the Act, saying there was no guarantee the police force would be able to afford all of the compensation. The force faces £134m budget cuts in the next five years. It added that J Sainsbury was one of a number of large companies that had chosen not to submit any compensation claims. Tesco has submitted more than 20 claims for compensation to Manchester police, including one for £40-worth of looted stock.

Brussels threatens to sue Britain to let in 'benefit tourists'

 

Ministers fear the move could leave taxpayers handing out as much as £2.5  billion to EU nationals, including out-of-work “benefit tourists”, a new cost that could wreck Coalition plans for welfare reform. The commission’s threat, on the eve of the Conservative Party conference, has raised the political temperature on Europe still further. In an outspoken attack today, Iain Duncan Smith, the Work and Pensions Secretary, says the commission’s move is part of a “wider movement” by the “unelected and unaccountable” European authorities to extend their power over the UK. “This kind of land grab from the EU has the potential to cause mayhem to nation states, and we will fight it,” he writes in The Daily Telegraph. The commission is objecting to Britain’s rules on welfare, claiming they discriminate unfairly against foreigners. To claim benefits in Britain, EU nationals must pass a “right to reside” test. The commission says the test is too tough, and wants Britain to apply more generous EU-wide rules.

Legal warning to UK over benefits for EU nationals

 

The European Commission has threatened legal action against the UK, saying a test of eligibility for benefits discriminates against foreigners. It says it is easier for UK citizens to prove their "right to reside" - a test imposed by the UK for certain benefits - than EU nationals. The commission says it may refer the case to the European Court of Justice. Ministers say it is a "fundamental challenge" to the UK's right to decide its own social security arrangements. The Commission says it has been in talks with the UK for several years over the issue and is responding to a "huge number" of complaints from EU citizens living in the UK. Residence tests On Thursday it announced that it was giving the UK two months to explain how it was going to bring its legislation into line with EU law - prompting UK Work and Pensions Secretary Iain Duncan Smith to accuse it of a "land grab" and to pledge to fight it. A range of entitlements - including child benefit, child tax credit, state pension credit, jobseekers' allowance and employment and support allowance - are given only to those with a "right to reside" in the UK. Continue reading the main story WHAT BENEFITS ARE INVOLVED Child benefit Child tax credit State pension credit Jobseekers' allowance The Commission says there are already an EU-wide "habitual residence" rules which are strict enough and the UK is imposing an additional test, which indirectly discriminates against non-UK EU nationals. While UK nationals can easily prove their "right to reside" based on their UK citizenship, other EU nationals have their applications heard on a case-by-case basis, which it says breaches EU social security co-ordination rules giving all citizens equal rights. The Commission gives the example of a woman who moved to the UK and worked from April 2007 to April 2009 when she was made redundant. It says she had paid taxes and National Insurance but was refused claims for jobseekers' allowance. 'Very sound' It says UK citizens in other EU states do not have to meet similar tests and get non-contributory benefits. Laszlo Andor, Commissioner for Employment and Social Affairs, said the EU's legal position was "very sound". Continue reading the main story “ Start Quote We are talking here.. about people who are inactive, people who are looking to come to the UK who are not going to work here” Chris Grayling Employment minister "The EU insists on the right of mobile workers to move from one country to another and, in certain places, they are entitled to benefits," he told the BBC. "We want to protect the rights of all EU citizens." Most people moving abroad already had offers of work or were looking for it, he said, rather than primarily wanting to take advantage of more generous benefits. "It may happen that some of them do not a find a job immediately. It is very important that, in these cases, the rights should be respected." He added that some people might choose to move to a country where benefits were higher but "since we have a European Labour market we have to accept this as a fact". But UK ministers fear taxpayers could be forced into handing out more than £2bn to EU nationals - including so-called "benefits tourists" - if the UK has to comply. 'Difference of opinion' Employment minister Chris Grayling, who met EU officials this week to discuss the issue, said there was a "very definite difference of opinion" between the UK and the Commission. "We are talking here, not about active citizens, not about people who are working but people who are inactive, people who are looking to come to the UK who are not going to work here." He said European law was "all over the place at the moment" and the UK had separately been told by the European courts to make disability benefit payments to a British citizen living in Spain. He said 13 EU states had proposed a "comprehensive review" of policy in the area in June and talks were continuing. Nigel Farage, leader of the UK Independence Party, which campaigns for Britain's exit from the EU, said: "It is not discrimination but simply a system to ensure that benefits are only paid to those who are entitled to them."

Thursday, 29 September 2011

UK pressure group set up to help Spanish property victims

 

While there are similar groups already in existence in Spain, this group is the first of its kind in the UK and aims to raise awareness and pressure the UK Government and MEPs into taking action. Many thousands of Britons are believed to have bought property in Spain and through the actions of various levels of Spanish government, property developers and banks, find themselves unable to enjoy the rights to these properties. The Protection of Property Purchased in Europe (POPPIE) is run by husband and wife team Chris and Angela Beattie, who have first hand experience of the issues that surround buying in Spain. In 2004 they spent €150,000 on an off-plan Andalucian villa that was supposed to back onto a golf course, hotel and villa complex. After a building delay of two years, the house was finally built, although the surrounding complex was not. Due to the developer not having planning permission to build their home, they remain unconnected to mains water and electricity supply and are unable to sell the property.

Monday, 26 September 2011

Treasure hunters eye huge shipwreck haul

 

When the SS Gairsoppa was torpedoed by a German U-boat, it took its huge silver cargo to a watery grave. Seventy years later, US divers said they are working to recover what may well be the biggest shipwreck haul ever. Florida-based Odyssey Marine Exploration on Monday confirmed the identity and location of the Gairsoppa and cited official documents indicating the ship was carrying some 219 tons of silver coins and bullion when it sank in 1941 in the North Atlantic some 490km off the Irish coast. That's worth about $200m today, which would make it history's largest recovery of precious metals lost at sea, Odyssey said. "We've accomplished the first phase of this project -- the location and identification of the target shipwreck - and now we're hard at work planning for the recovery phase," Odyssey senior project manager Andrew Craig said in a statement. "Given the orientation and condition of the shipwreck, we are extremely confident that our planned salvage operation will be well suited for the recovery of this silver cargo." Recovery is expected to begin next spring. After a tender process the British government awarded Odyssey an exclusive salvage contract for the cargo, and under the agreement Odyssey will retain 80% of the silver bullion salvaged from the wreck. The 125m Gairsoppa had been sailing from India back to Britain in February 1941, and was in a convoy of ships when a storm hit. Running low on fuel, the Gairsoppa broke off from the convoy and set a course for Galway, Ireland. It never made it, succumbing to a U-boat's torpedo in the contested waters of the North Atlantic. Of the 85 people on board, only one survived. The Gairsoppa came to rest nearly 4 700m below the surface, but Odyssey is insisting that won't prevent a full cargo recovery. "We were fortunate to find the shipwreck sitting upright, with the holds open and easily accessible," Odyssey chief executive Greg Stemm said. "This should enable us to unload cargo through the hatches as would happen with a floating ship alongside a cargo terminal." Odyssey, a world leader in deep-ocean exploration, recently conducted remotely operated vehicles from its main ship, the Odyssey Explorer, to inspect the shipwreck. It said it acquired still and video imagery from the site which were used to confirm the identify and evaluate the condition of the Gairsoppa.

Sunday, 25 September 2011

The Teewave AR.1 uses Toray carbon fiber for its chassis, crash structures, body, and interior.

Teewave AR.1 concept

This concept sports car was built, from initial sketches to working prototype, in just nine months.

(Credit: Gordon Murray Design)

 

Creating a new car can take years of development, but Gordon Murray Design put together a running prototype electric sports car in just nine months. The Teewave AR.1 was commissioned by Toray Industries to show off its carbon fiber production.

Toray says that its process can make carbon fiber components in just 10 minutes. The Teewave AR.1 uses Toray carbon fiber for its chassis, crash structures, body, and interior. Other Toray materials make up interior surfaces and components of the car.

 

Teewave AR.1 concept

Gordon Murray Design opted for a modest electric powertrain in the Teewave AR.1, meaning sluggish acceleration.

(Credit: Gordon Murray Design)

 

Those light carbon fiber elements make the overall weight of the Teewave AR.1 just 1,874 pounds. The lithium ion battery pack for the car makes up 530 pounds of that weight.

Gordon Murray Design did not specify the supplier of the electric power train, but its specifications are fairly standard for new electric cars hitting the market. Range is listed as 116 miles using the New European Driving Cycle test procedure, and charging time is 6 hours.

The Teewave AR.1 does not push the boundaries of electric car performance. Its electric motor, driving the rear wheels, only produces 63 horsepower and 132 pound-feet of torque. That means acceleration of 11.4 seconds to 62 mph.

You won't be able to buy a Teewave AR.1 anytime soon. The car will be used by Toray to demonstrate its carbon fiber capabilities. But Toray says its carbon fiber components will scale from a car as small as the Teewave AR.1 to any other size of vehicle.

What this concept also demonstrates is how quickly a new car can, from sketches to a working prototype, can be built. Components such as the electric drive train and suspension are modular, while the carbon fiber can be formed from molds rather than the more time-consuming stamping process for steel, which involves more tooling.




MINI COUPE

It was quite a good idea for Mini to make a coupe version as the fifth body derivative in the model line-up because the earlier variations basically covered the widest customer expectations possible.

If you loved the Mini for what it has always been, you'd easily go for the classic Hatch. Want more fun and there's the Convertible. Need to be a little pseudo and the Clubman awaits you. Crave for family practicality and the Countryman's yours.

But if you needn't any of those values but want a genuinely good looking and driving Mini for yourself, the Coupe is the perfect choice.

The removal of the compartment for rear passengers has allowed Mini to put in place a three-box profile to give the Coupe a nice coupe profile. Adding more fun is a helmet-style roof distinctively coloured from the body.

But that's just about it when it comes to the cosmetic test because the rest of the Coupe is plainly a Mini.

There's no differentiation when it comes to the lights or front grille. Simply, it's the roof that holds the key to your liking of the Coupe.

The fascia is just like in any other Mini: fun but flawed to use.

Despite the booted appearance, the Coupe's boot lid opens in a hatch manner (together with the rear windscreen) which, in essence, makes the Coupe more of a liftback.

No rear perches means that the Coupe has that kind of boot space rarely seen in any Mini. Mini has also taken the opportunity to design the interior boot cover with stylish twin cowls. In functionality terms, the Coupe is all what two people at most would ever need.

And turning to aesthetics again, the interior reaches the same dead end as the exterior in which distinction is only confined to the rear bit. The front seats, steering wheel and fascia are like in other Minis, with the latest aspect being fun in appearance but flawed in ergonomic terms.

But you really can't blame Mini for the vast similarities the Coupe bears to its other siblings.

It's a diversification of a specific model, in the first place, and not entirely all-new on its own. Hence, the need to share as many parts as possible.

The pop-up spoiler has both visual and dynamic benefits.

So if you're expecting the Coupe to feel distinctively special on the move, prepare to frown because it doesn't. However, that can never be considered a bad thing since Minis have always been known to be cars that are great to drive.

The running gear of the Coupe is predictable enough: the engines and transmissions are the ones you have seen around since the Mini's facelift in second-gen form with no changes in power and torque outputs.

The one highlighted here for the Coupe test drive in Germany this month is the range-topping 211hp 1.6-litre petrol-turbo and six-speed manual gearbox for the so-called John Cooper Works guise.

The chassis setup is basically just like in other Minis including a sporty tuning. Absence of rear seats has also allowed engineers to place a cross-member in their place to further increase body rigidity for even better handling.

With this in mind, the Coupe drives very much like the Hatch. Performance is brisk in a straight line and impressive when picking up from low engine revs and when exiting corners.

There's no doubting the Coupe's handling, too. This is as sporty as a car of this small size gets, and the way it grips at high speeds when slamming down the autobahn to its top speed is quite amazing. Special thanks go to a new rear spoiler that pops up at over 80kph (and disappearing again when dipping below 60kph).

Ah, that spoiler, the item much talked-about in the Coupe which many critics have described as more a cosmetic gimmick rather than one for dynamic reasons. But as things turned out during the international driving trials, there seems to also be much weight leaning towards the latter factor.

The Coupe also goes around into corners with the same conviction as the Hatch: superbly agile, finely balanced and virtually free of understeer. It's equally as capable as a rear-drive sports car like the Mazda MX-5, unless your idea of looking out from the car is through the side windows.

There’s some stow space behind the front seats... and more of it in the boot.

Speaking of the driving view, the Coupe does feel different from the Hatch in the sense that the front windscreen is more slanted and not as upright as in the Hatch or Clubman. And the Coupe's rear view is limited, although the view of the spoiler (and the stripes painted on it) looks cool.

A more serious downside (in terms of marketing and not engineering) is the unavailability of an automatic gearbox. Mini still insists that JCW cars must be manual. This means that Thais won't be getting this powerful JCW, unless they order it.

Instead, the Cooper S and Cooper variants will come at the year-end with six-speed slushers, the prior spec having steering-mounted paddle-shifters. There wasn't the chance to sample the Cooper S, but it's fair to say _ based on previous driving experiences of other Minis _ that the Coupe with this power treatment will still be a fast car to drive.

You need not have suspicions about the Coupe's ride: the underlying firmness of the chassis makes for a stiff ride, even on the slightest of potholes on German roads. We'd easily say that the ride on Bangkok streets would be terrifyingly hard.

Tony Blair is unaccountable over business interests, adviser says

 

More questions have been raised over Tony Blair's lucrative business activities after an adviser in his role as a Middle East peace envoy said the former Prime Minister continued to operate outside a defined code of conduct. Channel 4's Dispatches, due to be broadcast tonight, claims that Mr Blair is not required publicly to disclose his commercial interests as he would if he were an MP. Mr Blair combines a £2m-a-year consultancy with the US investment bank JP Morgan with his unpaid post in Jerusalem, where he is heading international efforts in preparation for a future Palestinian state. He also advises the insurance group Zurich Financial, while his company Tony Blair Associates signed a reported £27m-deal advising the Kuwaiti government. They are among a string of globetrotting business interests that have seen him build an estimated personal fortune of £20m since leaving office in 2007. But a senior French diplomat Anis Nacrour, who advised Mr Blair on security for three years, has fuelled doubts over the former Labour leader's public accountability.

Settling in Britain is a privilege not a right

 

THE following is the summary of a speech delivered on September 15, 2011, by Britain’s Immigration Minister Damian Green at the Centre for Policy Studies [see full speech]. The speech is an indicator of the possible policy changes that will come out of the consultation currently underway into the reform of family migration. The consultation opened on July 13, 2011, and will close on October 6, 2011. It is important that as migrants to this country, we take time out to respond to this consultation as judging from Green’s speech it will have far reaching consequences for immigrants . Some of the proposals on the table include the following: # Whilst recognising that marriage is a personal decision, it is argued that it has implications on the wider society and therefore the spouse seeking settlement will be expected to demonstrate that they have integrated into British society. It is proposed to increase the probationary period for a non-EEA spouse or partner to apply for settlement from two to five years. It is argued that, this will allow additional time to integrate into British life and give authorities a longer period in which to test the genuineness of the relationship before permanent residence in the UK is granted on the basis of it. Ministers also believe this will also make the route less attractive to those whose sole purpose is to gain settlement in Britain. It is also argued that extending the probationary period will reduce the burden to the taxpayer by postponing access to non-contributory benefits like income support. # Immediate settlement for adult dependents will be stopped. Currently under paragraph 317 of the immigration rules, a sponsor who is settled in the UK can sponsor adult dependents in certain circumstances. Instead, a probationary period of five years will be introduced before they can apply for settlement. As a result, their in-country application for settlement will be subject to meeting the English language skills requirement. # In fact the English language test is to be extended to all adult family migrants under 65 as well as dependents aged 16 and 17. The justification Green uses for this is the rather shock data that in one year, 2009-10, the Department of Work and Pensions spent £2.6 million on telephone interpreting services and nearly £400,000 on document translation. # The outcome of the consultation is likely to come up with a minimum maintenance threshold. Presently, it has been safe to argue that if the income meets the income support threshold then it demonstrates sufficiently that they can be accommodated and maintained without recourse to public funds. The Migration Advisory Committee has been tasked to come up with a new minimum income threshold for sponsors of dependents for maintenance and accommodation. The new threshold will take into account the number and age of the dependents sponsored. # It looks like third party support is on its way out except in compelling and compassionate circumstances. Presently, it has been possible to show that a third party will assist with the maintenance requirements. But Green argues that it is not easy for the UK Border Agency to verify this. # The dependents of points-based migrants are to face a probationary period increase of two to five years before settlement. # For some time now, there has been an expression of dissatisfaction by the UK Border Agency about the right of appeal in family visit visa matters. It will come as a surprise given what appears to be routine refusals from the Pretoria entry clearance team that a staggering 73% of the family visits applications are granted. Green argues that the tax payer has to foot the bill for the right of appeal where people produce better evidence than they could have produced at the initial application stage. His argument is reinforced by the statics that family visit appeals made up 40% of all immigration appeals and that it cost the taxpayer around £40 million a year. About 63% of the family visits matters are allowed on appeal. The consultation proposes to end the right of appeal and argues that one can submit a new application instead. As I stated above, it is a good idea to read the consultation and respond to it. At first blush, the 77-page consultation document can appear daunting but it does provide a useful insight into where this government intends to take its immigration policy

Saturday, 24 September 2011

UBS CEO Gruebel resigns over rogue trading loss

 

UBS chief executive Oswald Gruebel has resigned over a $2.3 billion loss caused by rogue trading at its investment division, which is to be restructured now to prevent similar incidents in future, the Swiss bank said Saturday. Gruebel, who had come under heavy pressure from shareholders over the scandal, said he hoped his resignation would allow the bank to restore its reputation in the eyes of clients and investors. Article Controls EMAIL REPRINT NEWSLETTER SHARE "As CEO, I bear full responsibility for what occurs at UBS ( UBS - news - people )," he said in a memo to staff. "From my first day on the job I placed the reputation of the bank above all else. That is why I want to and must act according to my convictions." UBS Europe chief Sergio P. Ermotti will take over immediately as interim chief executive until Gruebel's replacement is appointed. Gruebel's departure caps 10 days of speculation over his future following the bank's announcement that a single London-based trader had evaded internal control systems and gambled away $2.3 billion. The trader, 31-year-old Kweku Adoboli, was arrested Sept. 15 and charged with fraud and false accounting. A judge ordered him Thursday to be held in jail until a hearing next month.

Friday, 23 September 2011

Palestinian leader Mahmoud Abbas makes UN statehood bid

 

Palestinian leader Mahmoud Abbas has submitted his bid to the UN for recognition of a Palestinian state. To rapturous applause in the General Assembly, he urged the Security Council to back a state with pre-1967 borders. He said the Palestinians had entered negotiations with Israel with sincere intentions, but blamed the building of Jewish settlements for their failure. Israeli PM Benjamin Netanyahu said he was reaching out to Palestinians and blamed them for refusing to negotiate. "I continue to hope that President Abbas will be my partner in peace," he said in his speech in New York. "Let's meet here today in the United Nations. Who's there to stop us?" Mr Netanyahu added that the core of the conflict was not settlements but the refusal of the Palestinians to recognise Israel as a Jewish state. Hours after receiving it, UN Secretary-General Ban Ki-moon transmitted the Palestinian request to the Security Council. Israel and the US say a Palestinian state can only be achieved through talks with Israel - not through UN resolutions. 'Come to peace' President Barack Obama told Mr Abbas on Thursday that the US would use its UN Security Council veto to block the move. Continue reading the main story Analysis Jeremy Bowen BBC Middle East editor, New York Some delegations here at the UN in New York gave Palestinian Authority leader Mahmoud Abbas a standing ovation - they were clapping and even whistling in support. That is significant because if it comes to a vote in the Security Council - and if the Americans veto it - Palestinians have a Plan B. That Plan B is to go to the General Assembly - where there are no vetoes - and get enhanced status, not full membership but something better than they have now. The Palestinians say they want to negotiate but not in the way they have negotiated before - there has to be clear parameters and a timetable. The Palestinian point is that since 18 years of negotiation has not worked, let's try something new. "I call upon the distinguished members of the Security Council to vote in favour of our full membership," he told the General Assembly, in what was for him an unusually impassioned speech. He added that he hoped for swift backing. Many delegates gave him a standing ovation. "I also appeal to the states that have not yet recognised the State of Palestine to do so." "The time has come for my courageous and proud people, after decades of displacement and colonial occupation and ceaseless suffering, to live like other peoples of the earth, free in a sovereign and independent homeland," he said. He urged Israel to "come to peace". And he said the building of Jewish settlements was "the primary cause for the failure of the peace process". A spokesman for the Islamist movement Hamas, which controls the Gaza Strip, criticised the speech. Salah Bardawil said Mr Abbas had deviated from the aspirations of the Palestinian people by accepting the 1967 borders, which he said left 80% of Palestinian land inside Israel. 'Future and destiny' Meanwhile in the West Bank, crowds roared their approval as Mr Abbas demanded UN acceptance of a Palestinian state within pre-1967 borders. Continue reading the main story Middle East viewpoints Analyst Yezid Sayigh argues that US and Israeli policies have forced the Palestinians to resort to requesting full UN membership. Israeli commentator Yossi Klein Halevi argues that the Palestinians need to convince the Israelis that any state would not be a threat. "With our souls, with our blood, we will defend Palestine," they said. Mr Abbas had called for peaceful marches in support of his initiative, but some clashes were reported: One Palestinian was shot dead by Israeli troops during clashes in the village of Qusra, south of Nablus, Palestinian sources say At the Qalandiya checkpoint, Israeli troops fired tear gas on stone-throwing Palestinian youths In the village of Nabi Saleh, protesters burned Israeli flags and pictures of President Obama The process began with Mr Abbas presenting a written request for a State of Palestine to be admitted as a full UN member state to the UN secretary general. The BBC's Kim Ghattas at the UN says that until the last minute Western diplomats tried and failed to stop the Palestinians making the request. Even now, efforts are under way to restart direct talks between the Israelis and Palestinians in an attempt to defuse tensions, our correspondent says. The Security Council will examine it and vote on the request. In order to pass, it would need the backing of nine out of 15 council members, with no vetoes from the permanent members. A Security Council vote could take weeks to come about and the US may not even need to exercise its veto - Washington and Israel have been lobbying council members to either vote against the Palestinian plan or abstain. Continue reading the main story Palestinian UN membership bid Palestinians currently have permanent observer entity status at the UN They are represented by the Palestine Liberation Organisation (PLO) Officials now want an upgrade so a state of Palestine has full member status at the UN They seek recognition on 1967 borders - in the West Bank, including East Jerusalem, and Gaza Enhanced observer member status could be an interim option Q&A: Palestinians' UN statehood plans Why Obama has turned towards Israel French President Nicolas Sarkozy has urged a compromise, suggesting the General Assembly give the Palestinians enhanced status as a non-member state to allow a clear timeline for talks - a month to start negotiations, six months to deal with borders and security and a year to finalise a "definitive agreement". A vote on enhanced status - enjoyed by others such as the Vatican - would not require a Security Council recommendation but a simple majority in the General Assembly, where no veto is possible. Currently the Palestinians have observer status at the UN. The "Quartet" of US, European, Russian and UN mediators has been working on reaching a framework agreement to restart talks, based on Mr Obama's vision of borders fashioned from Israel's pre-1967 boundary, with agreed land swaps.

Dowler lawyer pursues US legal action against News Corp

 

The solicitor who represented the family of Milly Dowler in their phone-hacking claims against News Corporation on Friday announced he has teamed up with US lawyers with a view to initiating proceedings targetting Rupert Murdoch and his son James. Mark Lewis of Taylor Hampton has instructed Norman Siegel, a New York-based lawyer who represents 20 9/11 families to seek witness statements from News Corp and directors including the Murdochs in relation to allegations that News of the World staff may have bribed police. He says he intends to assess whether he can launch a class action against News Corp using American foreign corruption laws, which make it illegal for US companies to pay bribes to government officials abroad. "There is a provision within US law, before you start an action to seek depositions from individuals, in this case, such as James Murdoch and Rupert Murdoch and other directors of News Corp," said Lewis. He added Siegel would examine allegations of not just police bribery but also phone hacking and "foreign malpractices." The move will be a fresh setback for News Corp which has been trying to insulate itself against contagion from the UK phone-hacking scandal that has engulfed its British publishing empire. Separately, it emerged that this week US prosecutors at the Department of Justice have written to Murdoch's News Corporation requesting information on alleged payments made to the British police by the News of the World. The DoJ is looking into whether the company may have violated the Foreign Corrupt Practices Act (FCPA). Under FCPA laws, American companies are banned from paying representatives of a foreign government to gain a commercial advantage. The decision to co-ordinate legal efforts on both sides of the Atlantic comes just days after News International confirmed it was in settlement talks with the parents of the murdered 13-year-old schoolgirl. News International is discussing a total package of around £3m including a personal donation from Rupert Murdoch of £1m to a charity of the Dowler's choice. News Corp declined to comment but it is understood that senior executives question whether there is any basis for Lewis's actions.

Thursday, 22 September 2011

Spain’s central bank reported this week that things were getting worse for that country’s banks

 

Spain’s central bank reported this week that things were getting worse for that country’s banks — but not because they held a lot of Greek debt or bonds issued by other troubled European economies. The problem, instead, is the same old one. With Spain’s economy weak and home prices falling, bad loans are growing. And the central bank thinks things are getting worse. In a surprisingly frank presentation to investors in London on Tuesday, José María Roldán, the Bank of Spain’s director general of banking regulation, said that Spanish land prices had fallen about 30 percent from the 2007 peak, adjusted for inflation, and that home prices were off about 22 percent. “In both cases, we expect further corrections in the years to come,” he said. For land prices, he said, the bank’s “baseline scenario” was that prices would fall to little more than half of the peak level. The “adverse scenario” indicated that the decline could be significantly worse. That was a significant change from a presentation he made in February. Then, with home prices down about 18 percent from the peak, he argued that the decline was similar to past cyclical downturns and that prices were likely to begin rising soon. Remarkably enough, collapsing home prices have not left Spanish banks holding large amounts of bad mortgage loans, thanks largely to the fact the Spanish mortgage market operated during the boom in far different ways than the American market. But if lending to home buyers was conducted in a far more prudent manner than it was in the United States, lending to real estate developers and construction companies was, if anything, more irresponsible. The higher land prices went, the more eager the banks were to push out loans. The story of how Spain’s banks got into the mess — and the way its mess differs from that of American banks — show that it is impossible for banks to walk away from a collapsing bubble in real estate. It also shows that the structure of mortgage markets can make a major difference in how a collapse plays out. The figures released by the central bank this week showed that by the middle of this year, 17 percent of Spanish bank loans to construction companies and real estate developers were troubled — or “doubtful,” the term favored by the central bank. That figure has been rising rapidly, reflecting the deterioration in real estate values. When the financial crisis first broke out, in 2008 and 2009, it appeared that Spanish banks were in a better position than most, in part because of regulation that had kept the big banks from making some of the mistakes others made. But it turned out that smaller Spanish savings banks were heavily exposed to a real estate market that had outpaced even the United States’ market for a time during the first decade of this century. That market continued to rise after the American housing market stopped climbing. The Bank of Spain has created a program to force mergers of the smaller banks and to bring in better management. It has put about 11 billion euros into the banks to recapitalize them, and is putting in another 15 billion euros in a process that is supposed to be completed by the end of this month, said Antonio Garcia Pascual, the chief Southern European economist for Barclays Capital. But, he added, “our estimate is that the overall number needed is closer to 50 billion euros.” The banks are bleeding from loans secured by raw real estate, and from loans for construction. The pain is made worse because such lending soared during the property boom. It is those loans that are now devastating bank balance sheets, as developers who borrowed to build offices, stores and neighborhoods saw demand dry up and now cannot pay the banks back. Other corporate loans are also showing weakness, as would be expected when unemployment is above 20 percent and not expected to improve for at least two years, but less than 5 percent of those loans are said to be doubtful. There are also signs of trouble in car loans and other loans to individuals.

European banks head towards another meltdown

 

Shares in some of Europe's largest banks fell by 10pc as the cost of insuring European lenders' senior bonds rose to record levels, according to credit default swap prices. The Markit iTraxx Financial Index of contracts on the senior debt of 25 banks and insurers climbed to an all-time high 315.5 basis points. The last banking crisis was regarded by most eurozone members as an Anglo-Saxon phenomenon caused by lax lending controls that resulted in major UK and US institutions either collapsing or having to take costly state-funded bail-outs. To offset the threat of another crisis spreading across the eurozone, European regulators ordered their banks to increase their liquidity buffers. Government bonds were generally viewed as the most liquid and least risky assets to hold. However, this policy has come back to haunt them, leaving many lenders across the region seriously exposed to the eurozone sovereign debt crisis. French banking giants BNP Paribas and Société Générale are among the hardest hit. Recent estimates suggest BNP has eurozone sovereign debt exposure of about €75bn (£65bn), amounting to roughly 6pc of total assets, including €14bn of Greek debt and €21bn of Italian government bonds. The other two major French banks, SocGen and Credit Agricole, each have exposures of a similar size. Between them, France's banks have about €56bn of Greek sovereign bonds alone, and have so far taken 20pc writedowns on this.

signs of an institutional run on French banks

 

Christine Lagarde, the managing director of the International Monetary Fund, urged Europe's leaders to bail out their fragile banks, as the boss of the eurozone's biggest bank, BNP Paribas, rejected fears that the financial sector was "in peril". Addressing journalists in Washington at the opening of the IMF's annual meeting, Lagarde said that Europe must tackle "this twin problem of sovereign debt and the need to strengthen capital buffers". She said: "It is critical that to fuel growth, banks be in a position to finance the economy, to finance enterprises, to finance households, to finance local governments. To do that they need to have the balance sheet that will actually support credit to the economy." Despite the recent stress tests carried out by the European Banking Authority, which suggested that most of the banks were well-placed to cope with the sovereign debt crisis, the IMF estimates that banks have taken a €300bn (£260bn) hit in the past year as a result of the growing risk of default by Greece and other vulnerable eurozone countries. Lagarde's call came as Baudouin Prot, BNP's chief executive, emphatically denied reports that it was in talks with Middle Eastern investors about securing a capital injection. "I formally deny this," he said. "We have no particular contact because we don't need a capital increase." But French bank shares – which have lost 50% of their value in three months – continued to fall as markets endured one of their worst trading days since 2009. BNP was off more than 5% and close rival Société Générale fell almost 10%. In the UK, bailed-out Lloyds Banking Group was down more than 10%, bearing the brunt of anxiety about a slowdown in economic growth. The FTSE 100 closed down 4.7% with large falls from mining companies, which make up a large part of the index and whose fortunes are closely tied to global economic prospects. Out of the 100 stocks, only technology company Autonomy – supported by a bid from Hewlett-Packard – fell by less than 1%. A survey from the crucial manufacturing sector, which chancellor George Osborne had hoped would lead an economic recovery, exacerbated the nervous mood by suggesting industry had been hit hard by the collapse of confidence around the world. The CBI's monthly industrial trades survey showed declining orders, both at home and abroad, and a rising backlog of finished goods, in the latest evidence that the recovery has stalled. Minutes from the latest meeting of the Bank of England's monetary policy committee revealed on Wednesday policymakers were preparing a new round of quantitative easing to respond to the worsening outlook. The gloom was echoed in the eurozone, where the early, "flash estimates" from the closely watched purchasing managers surveys signalled a sharp downturn in both manufacturing and services growth, adding to fears that Europe could be heading for a new recession. The Greek government announced new austerity measures this week to persuade investors that it is committed to tackling its debts. But investors are still fretting about the potentially devastating impact of a default on the region's banks. BNP insisted on Thursday that it could maintain a core tier one ratio – an important measure of financial strength – of 9% by January 2013 even if it sustained losses through the eurozone crisis. But Mohamed El-Erian, boss of the world's biggest bond investor Pimco, warned in a blog on the FT's website that there were "signs of an institutional run on French banks".

Scottish supermarkets face extra tax on selling alcohol

 

Plans to hike business rates for major retailers of alcohol and tobacco in Scotland could see supermarkets pay around £110 million in tax over the next three years.   Finance Secretary John Swinney announced the new levy yesterday, as part of the Scottish government’s Spending Review.   Swinney said the review contained “tough choices, because of the cuts from Westminster that go too far, too fast”.   “We have had to restrict pay costs, reluctantly implement pensions increases on public sector staff, and maximise the income gained from asset sales,” he said.   He outlined that part of the extra revenue brought in would come from a tax on major retailers who sell alcohol and tobacco.   The measure was a surprise announcement, as during the last parliament a proposal to introduce a “Tesco tax” was voted down and it was not included the SNP’s manifesto.   Scottish Retail Consortium director Ian Shearer said: “This new tax is a blatant fund-raising exercise which is illogical and discriminatory. It targets a part of the retail sector which funds Drinkaware, rigorously prevents under-age sales with Challenge 25 and has led the way on clear alcohol labelling, giving it an exemplary record on the sale of alcohol and tobacco.   “Supermarket margins are already cut to the bone as stores compete to offer the best deals to cash-strapped consumers. The UK already has some of the highest alcohol taxes in Europe. This tax would make it harder for food retailers to keep prices down for customers, and makes Scotland a less attractive place to do business, invest and create jobs.”   The WSTA's Jeremy Beadles said he was "disappointed" the meaure had been announced with no consultation.   "The tax on large retailers will place an additional burden on Scottish businesses and push the price up for all consumers regardless of whether they consume alcohol at all,” he added.   “At a time of financial constraint, when many businesses in Scotland are already feeling the pinch and paying increase rates, we do not believe that punishing responsible consumers in Scotland with another tax is either fair or justified.”     Minimum alcohol unit pricing could become as reality north of the border by next summer, although the price has not yet been set. The Scottish government claims it is the “most effective and efficient way” of reducing consumption and alcohol related harm.

Bloody Sunday family rejects payout

 

Relatives of one of the Bloody Sunday victims have firmly rejected any offer of Government compensation. Sisters Linda and Kate Nash, whose teenage brother William was among 14 men who died after paratroopers opened fire on civil rights protesters in Londonderry in January 1972, said: "I find it repulsive." The Ministry of Defence has confirmed that moves are under way to compensate the families following representation from solicitors acting on behalf of some of the relatives. The Nash sisters said they would not take money for personal financial gain: "Not under any circumstances will I ever accept money for the loss of my brother. "I find it repulsive, taking anything from the MoD. If the MoD wants to set up bursaries they can, but not in my brother's name," Ms Nash said. Prime Minister David Cameron has already apologised to victims and said the shootings were wrong. An MOD spokesman said: "We acknowledge the pain felt by these families for nearly 40 years, and that members of the armed forces acted wrongly. For that, the Government is deeply sorry. We are in contact with the families' solicitors and where there is a legal liability to pay compensation, we will do so." Lord Saville drew up a landmark report last year which criticised the Army over the killings. His panel ruled that the Army fired first and without provocation. It found that all 14 who died and the others who were injured almost four decades ago were unarmed and completely innocent. The MoD's move followed a letter sent to the Prime Minister by solicitors for the families, asking what he was going to do about Bloody Sunday. He described the killings as unjustified and unjustifiable. Defining who would be eligible for compensation could be complicated as many immediate family members are already dead. Relatives received a small payment worth a few hundred pounds from the MOD, without admitting liability, shortly after the event.

Wednesday, 21 September 2011

Spain Examines Long Hidden Swiss Account

 

Emilio Botín is a billionaire Spanish banker renowned for running a tight ship. He asks that his top credit officers at Santander — one of Europe’s largest banks — make a trek to his vacation home each summer to report on loan exposures. And he queries the head of his charitable foundation, euro for euro, on its smallest donations. Enlarge This Image Daniel Ochoa De Olza/Associated Press A Spanish court is investigating whether the family of Emilio Botín, the head of Banco Santander, paid too little taxes. Add to Portfolio HSBC Holdings PLC Barclays PLC Go to your Portfolio » Enlarge This Image Nacho Cubero/Reuters Emilio Botín is head of Banco Santander, which is based in Madrid. Readers’ Comments Share your thoughts. Post a Comment » Read All Comments (30) » Yet, there is one not-so-small matter that Mr. Botín (pronounced bo-TEEN) has failed to keep tabs on: a Swiss bank account secretly opened long ago by his father that grew to such a size that when Spanish authorities discovered its existence last year, Mr. Botín and other family members paid 200 million euros (about $273 million currently) in taxes to avoid tax evasion charges. At the request of tax fraud inspectors, a Spanish national court is investigating whether the payment is enough, given the amount that was stashed abroad; tax experts in Spain say that the account could reach two billion euros. The court has also said that officials need more time to sift through the blizzard of documents that the family submitted and will consider whether a criminal charge of document fraud should be brought. A lawyer for the Botíns, Jesús Remón, said the family was cooperating with the investigation and was “fully in compliance with its tax obligations following their voluntary filing” last year. He added that no family member had been charged with wrongdoing. Mr. Botín’s tax problems come as debate intensifies over whether struggling governments should demand more tax revenue from the rich. On Monday, President Obama called to end some tax breaks for the wealthiest taxpayers in the United States. Last Friday, the Spanish government reintroduced a wealth tax that it had abolished three years earlier, hoping to collect an estimated 1.08 billion euros from taxpayers with more than 700,000 euros in declared assets. Spain’s wealthiest have so far not publicly endorsed calls for higher taxes, and Mr. Botín on Friday told reporters that “it seems to me very bad to reintroduce” the wealth tax. More so than in other European countries, where bankers are largely anonymous figures, Mr. Botín holds sway in Spain. Although he avoids social events and his public utterances are few, his influence is seen as wide-ranging. And he has been able to retain control of Santander despite his family’s controlling just 2 percent of its shares. Neither the judiciary nor the family has provided details about how much money the Swiss bank account contained or how the amount grew over time. Nor would Mr. Remón, the lawyer, comment on whether Mr. Botín had been aware of the account. What is known is that Mr. Botín’s father, also called Emilio, left Spain with part of his wealth in late 1936, after the start of the Spanish Civil War, fearing, like many other Spaniards, what might come. The elder Mr. Botín spent a few months in London before moving to Basel, Switzerland, and eventually returning to Spain to resume leadership of the bank that he had run since 1933. But while he returned to Spain, the money he salted away in Switzerland did not. The senior Botín died in 1993. Last year, the French government passed on to Spain data that it had obtained from Hervé Falciani, a former employee in HSBC’s Swiss subsidiary, naming almost 600 Spanish holders of secret bank accounts. Among those was one belonging to the estate of Mr. Botín’s father. In his opening summary, the judge in charge of the case, Fernando Andreu, highlighted “the complexity of the hereditary structures” of trusts, foundations and other companies set up to oversee the account. The closest he came to explaining what was in the account was to say that it also included a 12 percent stake in Bankinter, a midsize bank in which Jaime Botín, Emilio’s brother, is a leading shareholder. That holding, at current stock market value, would be worth about $310 million.

Manchester airport reopens after bomb scare

 

Manchester Airport’s main terminal has reopened after bomb disposal experts were called in to check a suspicious package on Wednesday, police said. A man was being questioned, although police said earlier reports that he was being held under the Terrorism Act were inaccurate. The package, a bag, was found to be safe. The airport’s operators had earlier said 11 flights leaving Terminal 1 would be affected. Incoming flights are operating normally and the airport’s two other terminals remained open. Manchester Airport is Britain’s fourth biggest and handles around 20 million passengers each year.

Monday, 19 September 2011

Six held in major anti-terror probe

 

Six men have been arrested in connection with one of the most significant intelligence-led counter-terrorism operations this year. The men were detained at or near their homes in Birmingham on suspicion of the commission, preparation or instigation of an act of terrorism in the UK following a joint investigation by both police and MI5. It is understood the investigation relates to suspected Islamist extremism, but it is not thought that an attack or threat was imminent. A seventh person, a 22-year-old woman, was arrested on suspicion of failing to disclose information contrary to the Terrorism Act 2000, police said. West Midlands Police said the "large-scale operation" had been running for some time and had been subject to regular review, adding that the action was necessary "in order to ensure public safety".

Dale Farm residents celebrate court victory

 

Dale Farm residents have won a last-gasp injunction restraining Basildon Council from clearing structures from the site pending a further hearing at London's High Court on Friday. Mr Justice Edwards-Stuart granted the order at London's High Court on the basis that there was a realistic apprehension that the measures to be taken - while genuinely believed in by the council - "may go further" than the terms of the enforcement notices. Travellers and their supporters had barricaded themselves behind newly built brick walls and chained themselves to fences as officials prepare to evict them from an illegal site in southeast England at the end of a decade-long battle. Supporter Jake Fulton said: "This is really great news but this isn't over yet. It makes us feel we have a really good shot at defending travellers in a way that has never happened before." The showdown between the bailiffs, travellers and a variety of protest groups who have joined their cause marks the climax of one of Britain's most contentious and bitter planning rows in recent years. Basildon Council said last-ditch talks had broken down on Monday morning after the travellers asked for the eviction to be delayed until November 22.

Spain finance chief admits odd quirk in wealth tax

 

One aspect of a plan to restore wealth tax in Spain makes no sense but there's nothing the government can do about it, the finance minister said Saturday. Elena Salgado spoke from Poland where she was attending a meeting of euro zone counterparts. The tax stems from the central, Socialist government but is collected by regional administrations. It was suspended in 2008 to stimulate growth as the global economic crisis started to bite in Spain. But the Madrid government has kept compensating regional governments for the lost revenue. Now, regions stand to get the money twice: once from high-earning taxpayers under a decree passed Friday and again from the central government because the compensation must continue under a separate law that has a higher status than a decree. Salgado said "this does not seem reasonable" but there's no way around it. "With a decree, there is nothing you can do to avoid it," she said. Her comments were the latest in a sea of confusing government statements about the wealth tax, which is levy on a person's net worth: assets minus debts. The flip-flops concerned the wealth level at which it will kick in and how much revenue it will raise. In the end, if passed by Parliament next week, the levy will apply to taxpayers' net worth above euro700,000 ($963,000), or an estimated 160,000 people, and raise euro2 billion in revenue. It is temporary, and will be in effect only in 2011 and 2012. The government says the tax is aimed at getting richer people to chip in more as Spain struggles with a 21 percent jobless rate, anemic growth and a high deficit. But it has been criticized by the conservative opposition as a populist nod to leftist voters angry over deficit-cutting austerity measures as Nov. 20 general elections approach. The ruling Socialists are projected to lose badly. Salgado's remarks seemed to contradict some made just Friday by government spokesman Jose Blanco, who said no region would get the wealth tax money twice. Salgado said Blanco really meant the same thing she did: that it seems unreasonable for regions to get the money doubly.

Spain to cover 20bn euros in potential bank losses

 

The Bank of Spain has promised to cover up to 20 billion euros ($27 billion) in losses at Caja Mediterraneo as it seeks to offload the troubled savings bank, a newspaper said Monday. The Bank of Spain took control of the bank in July and is now trying to sell it off. According to the daily El Mundo, the central bank let investors know it would cover up to 20 billion euros of losses, the estimated amount of property-related assets at risk in Caja Mediterraneo (CAM), if necessary. If confirmed, the central bank intervention would be "the costliest for the public treasury in Spanish financial sector history," the newspaper said, without identifying its source. The price tag could unnerve financial markets -- it is equal to a government estimate of the maximum cost of recapitalising Spain's entire banking sector. Contacted by AFP, Bank of Spain officials were unable to respond immediately to the report. The Bank of Spain injected 2.8 billion euros and opened a three-billion-euro line of credit for the CAM when it took control of the institution in July. But in early September CAM revealed a first-half loss of 1.136 billion euros and a high 19-percent ratio of bad loans, mostly property-related credits whose recovery was doubtful. The average bad loan ratio for the Spanish banking sector was 6.416 percent in June. According to El Mundo, the Bank of Spain is trying to complete the sale before general elections set for November 20. It said rival banks Santander, BBVA and CaixaBank, as well as a union of three Basque banks, were among candidates to buy the CAM, with Santander the favourite.

'Gazanging’ rises as home sellers get last-minute cold feet

 

54,000 buyers were “gazanged” in the first six months of this year – with buyers now more likely to be gazanged, where they are left hanging, than gazumped, where a rival buyer’s higher offer is accepted, or to gazunder, where they lower their offer having already had it accepted. A survey suggests one in four sellers changed their mind because they could not find a suitable property to move to, while others got cold feet because of concerns about the state of the housing market. The number of people pulling out has risen by 20 per cent since last year. One in six said they pulled out because they were fed up with legal complications. It means thousands of buyers who have spent money on surveys and solicitors’ fees are left out of pocket. Phil Spencer, a broadcaster and property expert, said: “Gazanging is something that’s on the up. The seller accepts an offer, but then decides to pull out and stay put, leaving a very unhappy buyer and a broken property chain. In such a volatile market, it’s not that surprising that many more sellers are changing their minds at the last minute, especially when there are so few suitable homes available. “There are lots of reasons why gazanging has started to happen. One of the biggest frustrations is the drawn out conveyancing process and in particular the bad service often experienced. Ask the vast majority of buyers what it was like and they will tell you conveyancing took longer than expected, cost more than they planned and that they felt confused. “There are far fewer houses on the market and this means that people are finding it more difficult to find their dream home, so much so that some sellers eventually decide to stay put.” More than a quarter of sellers who opted to stay put said they could not find a suitable property to buy. The overall number of transactions declined by a quarter in the past 12 months. Figures from the Land Registry and Council of Mortgage Lenders show sales fell from 62,705 in June 2010 to 46,700 in June this year. Spencer added: “Limited access to credit means that many more people struggle to secure a mortgage, leaving them high and dry when it comes to buying their next home. And uncertainty about what is happening with house prices can also make sellers reassess their plans.”

Saturday, 17 September 2011

Central control of Europe's borders proposed

 

The European Union's executive branch proposed Friday that national borders in Europe's visa-free travel zone be controlled by officials in Brussels, the EU capital, rather than by individual governments -- a plan already opposed by Germany, France and Spain. The proposal by the European Commission follows a call for stronger economic governance within the area that uses the euro currency, and reflects a push toward more centralized decision-making to protect the European Union's two proudest achievements, the free movement of both people and capital. It is unclear at this point whether either of those achievements will survive, said Paul de Grauwe, an economics professor and EU expert at the Catholic University of Leuven, in Belgium. "I would say we are at a road, and suddenly there is a bifurcation and we have to make choice," de Grauwe said. "One road is more integration to save the project, to save the Schengen zone and the monetary union. But there is a lot of opposition. It's also possible that we take the other road, no further integration, and then we risk the collapse of these two experiments." In June, EU leaders agreed to set up new rules underpinning the principle of free travel throughout much of the continent after Italy, Denmark and France all took action to roll back visa-free travel. Most of the details of the proposed centralized governance of the 25-country Schengen zone -- named for the town in Luxembourg where the visa-free treaty was negotiated in 1985 -- had already emerged. National governments would retain the right to re-institute border checks in unforeseen emergencies that threaten public order or internal security, but only for five days. Beyond that, approval of the European Commission and a committee of technical experts from the Schengen countries would be needed. And as a last resort, if a country failed persistently to adequately police the Schengen zone's external borders despite help from EU headquarters, the commission with the consent of the committee could impose checks along that country's borders with other Schengen countries. "It is a common European project," EU Home Affairs Commissioner Cecilia Malmstrom said of the visa-free zone. "We need to work jointly on joint projects to defend them." But there has long been a push and pull between officials who believe the European project can only work with greater integration and those opposed to the weakening of national sovereignty. Even before the Schengen proposal was unveiled Friday, it met with opposition from Germany, France and Spain, who said border control, public order and internal security were matters for national governments, not EU headquarters. Given that opposition, it is unclear whether the proposal in its current form will take effect. Meanwhile, plans to admit two more EU countries -- Romania and Bulgaria -- to the Schengen visa-free zone hit a snag Friday when Dutch Immigration Minister Gerd Leers said his country plans to block their entry. Approval of new Schengen countries must be unanimous. "The trust isn't there," said Leers' spokeswoman, Elaine de Boer. She said Leers "wants to see more work in the fight against corruption" in both countries. Bulgaria's President Georgi Parvanov insisted his country was being unfairly singled out despite meeting the criteria set out by the 17-member bloc for joining the visa-free zone. "I don't think it is right to use any other criteria in solving this matter," he said at a meeting with foreign ambassadors in the capital Sofia.

Thursday, 15 September 2011

UBS hit by $2bn rogue trade

 

Matthew Czepliewicz, an analyst at Collins Stewart, said the unauthorised loss cuts his 2011 earnings-per-share estimate for UBS by about 30pc - "a huge hit". He continued: "A loss of this magnitude will very likely have occurred in the FICC (Fixed Incomes, Currencies and Commodities) division, the very division UBS has been systematically rebuilding after shrinking it by 40pc during the credit crisis. That an unauthorised position of this size could have escaped oversight will renew pressure on management to radically scale back the FICC business, a volatile and capital-intensive business overall." He said that his upgrade of UBS to "buy" from "hold" on September 6 "now looks memorable, to say the least", but added: "As large and embarrassing as the loss is, it may in fact drive a positive strategic overhaul of the company. In the meantime, we await further detail on what went wrong and how management will respond." Andrew Lim, analyst at Espirito Santo, said the loss was manageable at group level at UBS. He added: "The $2 billion loss compares to our current estimate for the (third-quarter) group net earnings of 1.1 billion Swiss francs and (full-year estimated) net earnings of 5.1 billion Swiss francs. "The loss is therefore manageable at the group level, but is obviously not helpful for sentiment and confidence in the bank's risk management following the near-death experience of 2008/9." Fiona Swaffield, analyst at RBC, put the loss in context: "Assuming the loss is not revised at CHF1.7bn this is 3.4% of tangible book value end Q2 2011 and CHF0.35ps. Relative to target Basel III risk weighted assets of CHF300bn this is some 44bp. UBS on the most conservative measure has core T1 of 10% forecast end 2012 Basel III pre this and 13% with phased=in deductions. This would fall to 9.8% and 12.4%, respectively, so still respectable and above CS (8.8% on look through Basel III end 2012) but obviously hardly a positive as its strong capital base relative was an attraction." But she added the real issue over and above the financial impact is the reflection on risk management at UBS: "UBS was seen to have recovered significantly from the credit crisis and to have improved its risk management in the investment bank in spite of its struggle to improve returns. This obviously brings this very much into question." Goldman Sachs analysts Jernei Omahen and Peter Skoog wrote in a note: "This loss has the scope to have a material impact on the perception of UBS' private bank, impacting its future operating trends. "Today's announcement therefore adds to the long list of arguments (and pressure) for a substantially smaller investment bank." Louise Cooper, markets analyst at BGC Partners, said: "According to Bloomberg analysts were forecasting about a SFR 7bn or approx £5bn pre tax profit for UBS for the 2011, therefore a £1.3bn trading loss hits full year earnings by about a third." She added: "The jewel in the crown of UBS is its private banking business, producing consistent, quality earnings. An unexpected trading loss could do significant reputational damage to the bank especially given its track record during the crisis (massive recapitalisation and regulatory fines). Rich people tend not to want to do business with a bank where there are questions over risk control. UBS needs to do a good job in explaining what went wrong and assuring its clients that it will not affect them." Joshua Raymond, chief market strategist at City Index, commented: "Whilst the incredible volatility seen recently in the markets would have likely seen some traders lose and win big, the news that a rogue trader was allowed to stack up losses of $2bn will inevitably send nervous shockwaves through to those investors who have only just returned to the bank after a severe loss of confidence. "The Swiss firm has fought hard in the last few years to restore its credibility from having to be bailed out by the Swiss authorities, suffering a large fine for tax evasion and after it agreed to disclose the accounts of thousands of its clients to US tax authorities."

Tuesday, 13 September 2011

Euro zone banks in the grip of funding squeeze

 

Funding through interbank markets remained scarce and expensive for euro zone banks on Tuesday as concerns about a Greek default and rising pressure on Italian bonds increased the focus on heavily exposed French institutions. The cost of insuring senior French bank debt against default rose according to data from Markit, while a media article suggesting BNP Paribas had no access to dollar funding was cited by equity and currency market participants. Money market traders said that while access to dollar loans remained difficult for French banks -- under close scrutiny owing to their large holdings of peripheral government bonds -- the situation was not one of rapid deterioration. "The stress levels have always been there and they're certainly not getting any less... but there's no sense of panic from the banks as they can fund themselves through central bank cash," a trader said. Fiscal slippages have threatened to cut off Greek aid, raising the prospect of a default by year end, while a weak Italian debt auction showed investors remain reluctant to buy new debt from the heavily-indebted state. The cost of dollar funding, measured by three-month Libor interbank rates , edged higher to 0.34711 percent and access to dollars via cross currency basis markets was close to its most expensive levels since late 2008 at -111 basis points.

Europe's biggest shopping centre opens in London

 

Europe's biggest urban shopping centre opened on Tuesday in a deprived area of east London where it will act as the gateway to the 2012 Olympics. Westfield Stratford City, which has risen from derelict wasteland in one of the poorest areas in Britain, houses more than 300 shops, 70 restaurants, a 14-screen cinema, three hotels and Britain's largest casino. Hundreds of people queued outside the £1.45 billion mall before the doors even opened on and 100,000 people were expected to turn up on the first day. The Australian owners of the centre are confident they can defy the retail gloom as the British economy stutters. Westfield's sister site in Shepherd's Bush, west London -- previously the biggest shopping centre in Europe -- opened in the depths of a recession in 2009 yet attracted 23 million visitors in its first year. The giant Stratford site is a cornerstone of the Olympic Park and spectators arriving for next year's Games will have to walk through the shopping centre to reach the sports venues. A high-speed train will bring 25,000 Olympics spectators an hour to Stratford International station where they will be greeted by a row of shops and restaurants. Crucially for an area with unemployment levels far above the national average, the centre has created 10,000 new jobs. Local politicians believe it is another part in the jigsaw of regeneration which they hope will create a thriving community once the Olympic flame goes out. "Westfield represents more than just bricks, mortar and fabulous shops and restaurants, it has been instrumental in helping us to transform the lives of our residents by providing them with employment and jobs that they can turn into fulfilling and rewarding careers," said Robin Wales, the mayor of the borough of Newham. But the site's proximity to the Olympic park has required additional security precautions. The London Organising Committee of the Olympic Games (LOCOG) said it will be operating checks on vehicles entering the public car park at the shopping centre until the Games end in September 2012. Paul Deighton, LOCOG chief executive, said: "With Westfield so close to the Olympic Park and with vehicle access to it directly accessed from the park, it is an obvious and important part of our security plans. "We will make the checks as quick and unobtrusive as possible -- we are confident that shoppers will recognise the need for us to be vigilant and carry out these checks."

Monday, 12 September 2011

Madeleine Cops In Portugal

 

They may not have welcomed the order from Downing Street to launch an investigation into Madeleine McCann's disappearance, but at least Scotland Yard detectives have made a first visit to Portugual. I can't imagine they were given a warm welcome by their Portuguese colleagues whose work (failure to solve the mystery) the Met team is reviewing. Still, it's a step in the right direction and officially the two groups met "with very good co-operation and liaison will continue." There are 30 Met officers - the equivalent of a murder squad - working on the review and I'm told that a senior officer is having to give regular spending updates to the Home Office which is funding an operation that will cost several millions and last many months. It's four months since the review was launched with great fanfare by the Prime Minister after a plea from Kate and Gerry McCann. The couple had long felt abandoned by the British and Portuguese authorities to hunt alone for their missing daughter. But it's difficult to get much information about the operation from the cops, No 10 or the Home Office. A recent Freedom of Information request for answers to a dozen of so questions has been held up by the Yard's FOI man while he considers if the info sought is in the public interest.

Families flee crime and jobs horrors

 

MILLIONS of hacked-off Brits are fleeing the UK for a home in the sun. More than three million have emigrated since 1991, shock new figures reveal. That means around one in 20 of the population have fled in search of a better life. And the mass exodus has sparked more fears of a brain drain generation as Britain’s brightest hopes go. Many say they are being driven out by crime, a shattered economy and bungling Government ministers. Huge numbers are young workers desperate for jobs and pensioners searching for an easy sunshine life. A string of tax benefits is also tempting away Brits who had been forced to get two jobs to try to ride out the recession. Australia has been the most popular sunshine spot for migrating Brits since 1991. America and Canada remain “attractive destinations”, think tank MigrationWatch said yesterday. But the popularity of Spain and France has slumped over the Eurozone debt crisis. MigrationWatch, which released the figures, warned the move was inflicting a “brain drain” on Britain. Its report said: “The profile of those leaving is a concern. Sixty per cent of emigrants since 1997 have been of working age.

Friday, 9 September 2011

Gale-force wind warnings issued

 

Hurricane Katia could bring gale-force winds across the Atlantic to Scotland by Monday, forecasters have warned. The hurricane, which is moving from Bermuda, is expected to result in stormy weather and gusts of up to 75mph, although no official severe weather warnings have yet been issued. Forecasting provider Meteogroup said it is still too early to predict the effect the hurricane would have on the country's weather. Forecaster Andy Ratcliffe said: "By the time it gets across the Atlantic, it will be the remnants of Hurricane Katia. "We're still a little uncertain on the exact track of its path, although it looks like the centre of depression will be in the vicinity of Scotland." Meteogroup has forecast winds of 60mph, or possibly 75mph in some areas, accompanied by spells of heavy rain. Katia is the second major hurricane of the 2011 Atlantic hurricane season and was rated as a category four hurricane on the Saffir-Simpson hurricane scale at its peak. The scale rates hurricanes from one to five, with five being the strongest

Millions of Hotmail users cut off by Microsoft 'cloud' failure

 

As well as Hotmail, the outage affected Office 365 and the Skydrive online storage service. Microsoft said the cause appeared to be related to the Domain Name System, the computer network that ensures that web addresses are connected to websites. “Preliminary root cause suggests a DNS issue,” the firm said on its office 365 Twitter feed. The problems lasted for at least two-and-a-half hours, beginning at around 4AM British Summer Time. On a company blog, Microsoft said it had fixed the problem at 5.45AM, but the repairs took some time to “propagate” through the DNS network.  "We are working on propagating the DNS configuration changes and so it will take some time to restore service to everyone. Again we appreciate your patience," the firm said. For Office 365, Microsoft’s subscription-only competitor to Google Apps, which went live earlier this year, it was the second major technical failure in less than a month. Such incidents are likely to give pause to organisations considering migration to online “cloud” services, whereby software is delivered from vast data centres, over the internet.

Wednesday, 7 September 2011

24-Hour Film Challenge in Marbella

 

MARBELLA Film Festival has announced the launch of its annual 24-hour film challenge, as part of the 2011 festival which will be held from October 15 to 17. The event which is organised by Marbella International Film Festival, in association with New World Trust and with the support of “The Marbella Film Office”, offers a great opportunity for filmmakers to add to their credits and demonstrate their talent to world audiences. This year the Festival is aiming to increase the participation by offering a subsidised package for accommodation and accreditations to the festival, attracting film makers from all over the world, to make movies, and show off their talent. The Filmmaker with cast and crew is challenged to make a three to four minute short film on a given subject matter, the task is to write a script, direct the actors, shoot the film, edit, sound and music, and deliver the film in 24 hours. All films will be screened and judged as part of Marbella International Film Festival, and the best film will receive the prestigious Marbella 24 hour film challenge 2011 Award. The runners up will receive a certificate of recognition and all participants will receive a certificate of participation.

Monday, 5 September 2011

Ailing Spanish bank CAM posts massive first-half loss

 

Spain's struggling Caja Mediterraneo (CAM), under state control since in July, Monday posted first-half losses of 1.136 billion euros ($1.602 billion). It also reported a non-performing loan ratio of 19 percent, far above the average of 6.416 percent for the sector in June. The Bank of Spain announced on July 22 that it would take control of the CAM through an injection of 2.8 billion euros and the opening of a 3.0 billion euro line of credit. It now plans to sell-off the ailing savings bank. On Friday, the business daily Cinco Dias said the CAM may need about 1.0 billion euros in additional public funds. The CAM was one of five Spanish banks that failed new European stress tests on July 15 to see if they can survive a major crisis. Spain's lenders, especially its regional savings banks which account for about half of all lending in the country, have been heavily exposed to bad debt since the collapse of the property sector at the end of 2008. The government and Bank of Spain have forced a wave of consolidation in the sector this year and are requiring banks to quickly increase the proportion of core capital they hold to above international norms. CAM, based in the eastern coastal region of Alicante which was one of the worst hit by the bursting of the property bubble, had been set to merge with three other savings banks but the deal fell through earlier this year.

Bosses of banks saved by taxpayer earn more now than before crisis

 

The bosses of Britain’s bailed-out banks are paid more than they were before the credit crunch struck, a damning report reveals today. The chief executives of the country’s basket-case lenders earned an average basic salary of more than £1.1million last year before bonuses or other benefits. Shockingly, this figure is an increase on the £1million average from 2007 – the year that the financial crisis struck, crippling Britain and plunging the country into recession. Despite the fact that they have the job of salvaging the banks propped up with more than £65billion of taxpayers’ money, they are among the best-paid executives in this country. Their average wage is almost more than 40 times that of the country’s average of £26,000 and it dwarfs the £142,500-a-year salary earned by our Prime Minister. When bonuses and other perks are included bank chiefs enjoyed average total earnings of £3.7million last year – The damning findings by the country’s leading pay experts are likely to anger British taxpayers, who are sitting on losses of £34billion in RBS and Lloyds – or £1,300 per household.

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