HEADLINES 28 Sept: The Financial Tsunami Update

Quick headlines from the Banking Mafia and other Parasitic organisations;

 

Eurozone

Germany slams ‘stupid’ U.S. plans to boost EU rescue fund: Germany and America were on a collision course on Tuesday night over the handling of Europe’s debt crisis after Berlin savaged plans to boost the EU rescue fund as a “stupid idea” and told the White House to sort out its own mess before giving gratuitous advice to others.

Markets shrug off mixed signals as hopes of Euro rescue deal spark rally: Stock markets bounced on hopes that European policymakers would finally tackle the debt crisis with decisive action, although the results of an Italian bond auction showed that nervousness continued to linger in the background.

Bank stands ready to flick switch on money printing: The prospect of a fresh round of money printing loomed larger when a top policymaker said that the Bank of England may have to take action to counter the darkening economic outlook. David Miles, an external member of the Bank’s Monetary Policy Committee, said that he was closer to voting in favour of a new blast of quantitative easing, under which the Bank purchases government bonds with newly created electronic money.

Stock markets race higher despite wrangling over latest plan for Eurozone: Stock markets raced higher despite wrangling over the latest plan to save the Eurozone from collapse. The FTSE 100 index leapt 204.68 points to 5294.05 – a rise of 4.02% on the best day of trading in the City of London since May last year. It added £53 billion to the value of blue-chip stocks.

Banking: The Organised Crime Syndicate

BofA was ‘let off lightly’ over sub-prime fiasco: Bank of America was treated too leniently in settlement talks over mortgage fraud at the company, robbing the U.S. taxpayer of billions of dollars of potential compensation, according to a damning report.

Lloyds Banking Group at 35.23p +1.085p: The economic backdrop is generally gloomy, the Independent Commission on Banking (ICB) only recently issued its report and bad loans are still present on lenders’ books.

Pay and Bonuses: Pigs at the Trough

Head of Lloyds Bank’s retail arm gets shares worth £2.3 million: Bailed out Lloyds Banking Group has handed the new head of its high street banking arm, Alison Brittain, more than 7.6 million shares – worth £2.3 million – to buy her out of performance related deals at Spanish bank Santander.

‘Spiralling pay levels’ worry ABI: Boardroom Bosses are being warned of shareholder concern about the ever-increasing size of their pay packets in an influential new code that requires bonuses to be “clawed back” in the event that performance targets are not met.

The clue was in the cup-size at Goldman: The bank is now considering expanding its cost-cutting drive in a move that could lead to further job losses, a source has confirmed. As analysts warn of a “very challenging” reporting season for banks, Goldman is revisiting plans announced in July to cut about 1,000 staff this year in an attempt to reduce pay and other expenses by $1.2 billion (£750 million) a year.

Commodities: … and Other Manipulated Ponzi Schemes

Silver: metal loses hedge appeal: For those late to the precious metals party, the “poor man’s gold” was seen as a way to ride the barbarous relic’s coat-tails while gaining the same ability to sleep like a baby amid market turmoil. Waking several times a night is probably not what silver investors quite had in mind, however. There is nothing necessarily wrong with a long-term store of value exhibiting some short-term volatility – particularly if the direction is up. But the recent roller-coaster ride has been unnerving. The U.S.-listed iShares Silver Trust, the largest vehicle for retail speculation in the metal, slumped some 30% over six stormy sessions before rebounding as much as 18% on Tuesday from its Monday low. That choppiness is on a par with the months after Lehman’s demise, and is even reminiscent of the white-knuckle ride three decades ago when the Hunt Brothers’ attempt to corner the market collapsed in spectacular fashion. It is back to a 50th of the price of gold, about the 20th century average. Some argue that its relative rarity should move it up to a sixth or so, but try to find a convincing fundamental value for gold.

Housing

U.S. house prices in fourth monthly rise: U.S. house prices managed a fourth consecutive month of gains, offering a glimmer of hope in one of the most important but depressed areas of the world economy. Prices were up 0.9% in July compared to June, according to the latest S&P Case-Shiller index of the 20 largest metropolitan areas, although they remained 4.1% below July 2010.

The bright side of housing and confidence: August data showed that the mood of American consumers was largely unchanged versus the month before and remains weak. Meanwhile, the headline Case-Shiller index for July is about 4% lower than where house prices were a year ago. But step closer and consider the consumer confidence numbers first. Such low readings from the monthly Conference Board survey of 3,000 households are normally consistent with markedly lower spending. But this is not happening. The Johnson Redbook survey of retail sales is expected to be up again in September and month-to-date sales are 4% higher than last year. As High Frequency Economics notes, confidence may be affecting the stock market these days (and vice versa), but it does not seem to stop people from popping to the shops. Likewise, the housing market looks pretty horrible in isolation. But homeowners should cease thinking about their property as a red hot investment and rather as an OK store of value. The average U.S. home across America’s 20 main cities is now worth 14% less than in 2008. But so are the stock prices of boring old Walmart and PepsiCo.

Markets, Regulators & Other Parasites

LSE wins battle for LCH.Clearnet: The London Stock Exchange has succeeded in its attempt to take over LCH.Clearnet after the clearer’s board favoured the U.K. bourse over Markit, the rival bidder. The deal, which must still be approved by LCH’s 98 shareholders, marks a coup for Xavier Rolet, the Chief Executive of the LSE who took over from Dame Clara Furse in 2009.

FSA says no to calls for it to pre-approve products: The Financial Services Authority has ruled out introducing product pre-approval as part of its proposed stronger regulatory regime which will see its powers handed over to the new Consumer Protection and Markets Authority.

Private equity hopes to get deals turning: When it emerged that Axa Private Equity had been put up for sale by the eponymous French insurer last week, it spurred hopes that the consolidation carousel in the private equity sector would finally start to spin.

Airlines fear unfair competition: Airlines are calling on the government to ensure they are not put at a competitive disadvantage by the European Union’s planned scheme under which the aviation industry will pay for its pollution.

‘Predator’ attack angers industry: Ed Miliband’s attack on “predator” companies on Tuesday left industry doubting whether the Labour leader was truly a “pro-business” politician. John Cridland, Director-General of the CBI employers’ organisation, said he was “scratching his head” after Mr Miliband suggested there were swaths of “asset strippers” in Britain that needed to be dealt with.

Accountants wary of EU plans: The Institute of Chartered Accountants of Scotland has warned that mandatory rotation of accountancy firms could reduce audit quality. It emerged that the “big four” face being forced to split off their lucrative auditing businesses or forgo up to £1 billion in fees under radical proposals from European regulators.

 
 

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