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Citywire Money, Tax and Property

  • Why Italy could bring Europe to its knees
    Thu, 18 Mar 2010 00:01:00 GMT
    Greece, Ireland Spain and Portugal's debt burdens have dominated the headlines but will Italy be the nation that brings Europe to its knees?
  • Bank clerk who stole £100k found hanged - reports
    Wed, 17 Mar 2010 15:52:49 GMT
    Bindi Dhanji, the bank clerk who fled court before she was due to be sentenced for stealing more than £100,000 from elderly clients, has hanged herself, according to The Times.

FT.com - Financial Markets News

  • Mid-caps stand out in flat FTSE 100
    Thu, 18 Mar 2010 08:55:39 GMT
    London markets take something of a sideways turn as investors prefer to take profits from the recently buoyant mining and bank sectors
  • Property shares drag down Nikkei
    Thu, 18 Mar 2010 08:51:38 GMT
    Stocks of real estate companies retreated following a brokerage downgrade and a fall in the euro accelerated profit-taking in the Japanese market

Citywire Investment News


Citywire News


FT.com - Equities

  • Mid-caps stand out FTSE 100 remains flat
    Thu, 18 Mar 2010 08:55:39 +0000
    London markets take something of a sideways turn as investors prefer to take profits from the recently buoyant mining and bank sectors
  • Dow rises for seventh day in a row
    Wed, 17 Mar 2010 21:04:55 +0000
    US stocks continued their rally, rising on a quiet news day as investors took comfort from a range of positive economic and corporate data

BBC News

  • No 'secret' Ashcroft deal - Hague
    Thu, 18 Mar 2010 09:19:02 GMT
    Ex-Tory leader William Hague denies there was a "secret" deal with Lord Ashcroft over his tax status.
  • Police hunt Claudia 'mystery' man
    Thu, 18 Mar 2010 09:04:17 GMT
    Police want to trace a "mystery boyfriend" with whom York chef Claudia Lawrence spent the night two days before she vanished.

Sky Business News


BBC Business News

  • Second-hand motor dealers shamed
    Thu, 18 Mar 2010 08:40:42 GMT
    A damning verdict on the UK's 24bn second-hand car market is published by the fair trading watchdog.
  • Australia warns China on Rio case
    Thu, 18 Mar 2010 08:27:59 GMT
    Australia's prime minister tells China the world will be watching the trial of Rio Tinto employees, which begins next week.

Times Online Top Stories

  • Nissan to safeguard British jobs with the Leaf
    Thu, 18 Mar 2010 09:00:29 GMT
    More than 2,000 jobs in the North East of England were secured today after Nissan decided to build a pioneering electric car at its Sunderland plant.img width='1' height='1' src='http://feeds.timesonline.co.uk/c/32313/f/440134/s/98e83b5/mf.gif' border='0'/br/br/a href="http://da.feedsportal.com/r/65750355638/u/0/f/440134/c/32313/s/160334773/kg/7-25/a2.htm"img src="http://da.feedsportal.com/r/65750355638/u/0/f/440134/c/32313/s/160334773/kg/7-25/a2.img" border="0"//a
  • Kidnapped British boy Sahil Saeed reunited with father
    Thu, 18 Mar 2010 06:23:16 GMT
    Sahil Saeed, the five year old British boy kidnapped in Pakistan, was reunited with his father at the British High Commission in Islamabad this morning and is expected to fly back home to Manchester today.img width='1' height='1' src='http://feeds.timesonline.co.uk/c/32313/f/440134/s/98df3fd/mf.gif' border='0'/br/br/a href="http://da.feedsportal.com/r/65750238015/u/0/f/440134/c/32313/s/160297981/kg/25/a2.htm"img src="http://da.feedsportal.com/r/65750238015/u/0/f/440134/c/32313/s/160297981/kg/25/a2.img" border="0"//a

BBC: Robert Peston

  • Hedge funds as heroes
    Wed, 17 Mar 2010 08:32:13 +0000

    In the autumn of 2008, during the worst global banking crisis since the 1930s, I was interviewed by French television and asked to explain the malevolent role of hedge funds in causing the mess we were in.

    When I said that hedge funds were really not at the heart of the matter, the interviewer was shocked and disappointed. She was in London on a mission to tell the truth to her viewers about the malignancy of hedge funds, and her script did not allow for a different version of events.

    Some would say that the European Union's determination to drive through a directive regulating hedge funds and private equity is a manifestation of the same blinkered vision.

    It's not that a bit of additional regulation might not be useful. More transparency about their activities, formal limits on the amount of debt or leverage they can take on, these could be sensible safety precautions, to limit their potential to wreak damage to the financial and economic system.

    But there is a strong argument that proponents of the new directive are missing the big and important points by a mile. Which means that the passionate and obsessive determination of some EU members to see the directive enacted can be seen as a bit silly (at best) - especially at a time when the real flaw in the financial system, the structure and regulation of banks, is a long way from being fixed.

    There are two important points.

    First, the actual harm that hedge funds and private equity may have wreaked in the creation and course of the credit crunch could probably be much better tackled not by regulating them directly, but by new restrictions on the banks that service them and take credit from them, and on the financial markets where they trade.

    There are five kinds of harm that hedge funds and private equity may have caused, all of which are fixable without a directive that imposes new direct constraints on hedge funds and private equity:

    1) Some financial institutions, such as Bear Stearns and Lehman Brothers, became dangerously dependent on short term credit provided by hedge funds. But that's fixable by imposing tough new requirements on such investment banks to raise much more longer-term finance that can't be withdrawn on a whim.

    2) Many believe that hedge funds have destabilised banks such as HBOS and even entire economies, such as Greece, disproportionately to the fundamental weakness of such banks and economies, by their ruthless financial speculation that such banks and economies were heading for the knackers. Now, to be clear, that hypothesis is by no means proven. Some would say that in such cases hedge funds are the public-spirited early warning system (please don't shoot your computer). But if you think that it's wrong to allow the mafia to take out an insurance policy on your house that delivers the mob a profit when your house burns down, which is how some would see naked CDS shorts on bank debt or government bonds, then ban those insurance policies, prohibit naked CDS shorts. But that's product regulation, not regulation of institutions such as hedge funds.

    3) Hedge funds have provided a market for some of the newfangled financial products, such as CDO squareds and cubeds, that decimated the balance sheets of banks. But if you don't like the toxic new products, regulate their development or the extent to which banks can load up their balance sheets with them.

    4) Banks have suffered big losses on their loans to businesses acquired by private equity firms. But that is eminently sortable by constraining banks' ability to lend to over-indebted companies and institutions.

    5) Finally, the massive rewards earned by the partners in some hedge funds and private equity firms helped to encourage the spread of a pernicious short-term bonus culture in banks. But let's be clear about this. First of all most hedge fund and private-equity partners are at least putting some of their own money at risk (although some would say nowhere near enough), which almost never happens in banks. More germanely, hedge funds and private equity surely can't be held accountable for the abuse of their remuneration system by other institutions.

    And then there's the humungous final point, which is the one that the proponents of the EU directive in the French and German governments simply don't wish to acknowledge. Which is that there is a powerful argument - if you believe in capitalism - that hedge funds are in one overwhelmingly important respect a model for how the banking system should be reformed, and absolutely not a financial tumour that needs cutting out.

    The fact is that hundreds of hedge funds went bust over the past couple of years. And there wasn't a single one, for all the billions of dollars of investors' money they controlled, which needed to be bailed out by taxpayers.

    Why was that?

    Well it was probably not because of brilliant regulation by the likes of the Financial Services Authority.

    The much more compelling explanation is that they were subject to the direct engaged oversight of their investors and creditors, which limited hedge funds' ability to take unaffordable risks. It never occurred to those providing finance to hedge funds and private equity firms that the state might provide them with a safety net. So those creditors and investors made sure that those hedge funds and private equity firms only speculated what they could afford to lose.

    This is the important big contrast with banks, where investors and creditors knew that if everything went wrong, taxpayers would be there to pick up the bill. Which meant that those investors and creditors had less of an incentive to prevent banks from betting not only the farm but the entire landscape.

    On that view, we would want banks to become more like hedge funds, not regulate hedge funds out of existence. Or to be more precise, the investment banking bits of the likes of Barclays, Deutsche Bank or BNP Paribas should perhaps be hived off and shrunk, so that there would be no reason for taxpayers to bail any of them out if they ran into difficulties.

    Some would therefore argue that if the French and German governments really want to make the financial system safe, they would start by dismantling their enormous complex universal banks. The consolidating power of these sprawling banking conglomerates may pose much more of a threat to future financial stability than hedge funds.


  • Independent: It is, are the new owners?
    Tue, 16 Mar 2010 06:49:33 +0000

    Something remarkable may well happen on Wednesday or Thursday, which is the announcement that a former KGB officer worth $2bn (according to Forbes) is buying a pillar of Britain's free press, the Independent.

    Alexander LebedevActually to say that Alexander Lebedev and his son Evgeny are buying the Indy doesn't quite convey what's happening.

    Ownership of the paper (launched in 1986 under the slogan "It is, are you?") and its £10m-per-year losses would transfer to them, but naturally they would not actually have to hand over any cash to take on this expensive responsibility.

    The deal has been expected for weeks; on-off negotiations have been going on for well over a year. And those close to the Lebedevs say they hope to unveil their plans tomorrow or the day after.

    That said, it wouldn't be a great surprise if there was another delay. Last week agreement was held up over what Trinity Mirror might demand if a Lebedev-owned Indy decided to remove distribution from the Mirror publisher.

    My strong sense is that momentum to complete the deal is now unstoppable - although, to resort to cliché, no deal is done till it's done.

    So if the Indy completes its almost 25-year metamorphosis from a bold initiative by journalists to control their own destiny into just another's plutocrat's bijou, what does that portend?

    Well, as I said in an earlier note, in mundane commercial terms it could mean that there will be no charge for some or all of the Indy's circulation: the Lebedevs already give away the Evening Standard in London, and are pleased with how that has increased the reach of the paper and has helped to push up advertising revenues.

    However, abolishing the cover price would not be cheap for them: the Indy's current annual revenue from circulation is about £30m, which is a lot of money to sacrifice on a hunch that over time advertising income will rise enough to compensate.

    That said, the Lebedevs will not buy the Indy and be content that it remains the smallest of the so-called quality papers.

    They will want to put oomph behind circulation.

    Nor are they taking a conventional view of who should run the Indy. They've approached Greg Dyke, the former director general of a rather bigger organisation, the BBC, to be the new editor: he hasn't said no (although that doesn't mean he'll ultimately say yes).

    So the scale of the Lebedevs' ambition is unsettling other newspaper proprietors and managers.

    The Russians will be braced for fearless investigative journalism from competitor titles, examining the origins of their fortune, whether their purse really is bottomless, whether Alexander Lebedev's relationship with another famous former intelligence officer, Vladimir Putin, is as fractious as it seems (fractious would be good, according to the conventional view) and whether they are committed to free expression.

    Having met them, they talk an impressive talk about their access to cash and their passionate commitment to an independent press.

    But I haven't conducted banker-style due diligence on them.

    Whether such due diligence is strictly necessary, given that the choice for the Indy is probably their underwriting or a lingering death, is moot.



FT.com - Your Investments

  • Privatisation shares up 419% since 1980s
    Fri, 12 Mar 2010 18:54:14 +0000
    Investors who bought into popular privatisations in the 1980s and held their shares for the long term have achieved double the returns of the UK stock market
  • Advisers blamed for funds bias
    Fri, 12 Mar 2010 18:38:24 +0000
    Investment trusts "comfortably outperformed" open-ended funds in the decade to the end of 2009, according to an analysis of the sector

FT.com - Your Pension

  • Pension industry speeds up transfers
    Wed, 17 Mar 2010 17:34:23 +0000
    Growing numbers of pension providers are signing up to an industry initiative which has seen processing times for pension and annuity transfers drop by a third.

FT.com - Your Tax

  • Tax-efficient charity credit card
    Fri, 12 Mar 2010 18:08:40 +0000
    Virgin Charity Credit Card makes donations worth 1.02 per cent of a customer's spending to a charity of their choice

FT.com - Your Property

  • Home repossessions continue to fall
    Tue, 16 Mar 2010 13:36:29 +0000
    The number of British homeowners falling behind in their mortgage payments or losing their homes to repossession dropped in the last three months of 2009, says the Financial Services Authority
  • Rents rise as property supply falls
    Tue, 16 Mar 2010 12:44:57 +0000
    The rental market is seeing signs of recovery with rising rents balancing falling rents in the three months to January 2010.

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