Oil rises on talk of auto bailout, stimulus

Oil rises on talk of auto bailout, stimulus

NEW YORK (CNNMoney.com) -- Oil prices rebounded from a nearly 4-year low Monday as U.S. automakers neared a deal that would keep them out of bankruptcy and President-elect Barack Obama pledged to stimulate the economy of the world's largest oil consumer.

U.S. crude for January delivery rose $2.23 to $43.04 a barrel after settling at $40.81 Friday, the lowest close since Dec. 10, 2004.

Congressional Democrats and the White House reached a tentative agreement late Friday that could keep troubled automakers out of bankruptcy court through March, and prevent the disintegration of a large section of the U.S. economy, according to congressional sources.

Government support for the auto industry could certainly help, but "it's a temporary Band-Aid," said Phil Flynn, senior market analyst with Alaron Trading in Chicago.

Oil prices will be hard pressed to turn significantly higher unless they can rise back above $45.90 a barrel, cautioned Flynn.

In total, the U.S. auto industry employs about 2 million people nationwide, according to the Center for Automotive Research, which includes workers at General Motors (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler, as well as dealers and parts manufacturers.

As the economy falters, consumers and businesses use less petroleum-based fuel, which drives down the price of oil.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., issued statements this weekend that they would call the lame duck Congress back to Washington to vote on backing the auto industry.

"The U.S. auto industry is a critical part of our economy and we are encouraged by Speaker Pelosi's statement that Congress is expected to act next week," said Ford in a statement.

Concern about the waning worldwide economy's effect on oil demand has driven prices down more than $100 a barrel since hitting a record $147.27 this summer.

U.S. stimulus: In the U.S., Obama said his administration would ramp up spending on infrastructure, energy programs and school construction projects to create jobs and stimulate the economy.

"We understand that we've got to provide a blood infusion to the patient right now to make sure that the patient is stabilized. And that means that we can't worry short term about the deficit," he said in an appearance on NBC's "Meet the Press."

The possibility of infrastructure spending in the U.S., along with a steep discount in crude futures, may set the stage for a possible turnaround in 2009, according to James Cordier, founder of brokerage OptionSellers.com.

"There's a bit of light shining through the cracks," said Cordier, who believes a fair price for crude is around $50 a barrel.

Global stimulus: India, one of the world's rapidly expanding economies, pledged Sunday to provide an additional $4 billion on infrastructure, tax cuts and other stimulus measures. more

Standard Chartered embarks on £1.78bn rights issue

Standard Chartered embarks on £1.78bn rights issue

Standard Chartered has announced plans to raise £1.78 billion in a rights issue.

Existing shareholders will be able to buy 30 shares for every 91 shares held at a price of 390 pence a share, representing a 48.7% discount on the company’s closing price on Friday 21st November.

According to the emerging markets bank, the fundraising will strengthen its position in the current economic uncertainty and allow it take advantage of opportunities that may present themselves in the global financial services sector.

The group, which is listed in London and Hong Kong, has reported that existing shareholder, Temasek, will be subscribing in full to the issue of new shares. The Singaporean sovereign wealth fund already holds a 19% stake in the business. more

Clinton Is Said to Accept Offer of Secretary of State Position

Clinton Is Said to Accept Offer of Secretary of State Position

By PETER BAKER and HELENE COOPER
Published: November 21, 2008
WASHINGTON — Hillary Rodham Clinton has decided to give up her Senate seat to become secretary of state in the Obama administration, making her the public face to the world for the man who dashed her own hopes for the presidency, confidants of Mrs. Clinton said Friday.


The accord between the two leading figures of the Democratic Party was the culmination of a weeklong drama that riveted the nation’s capital. President-elect Barack Obama and Mrs. Clinton fought perhaps the most polarizing nomination battle in decades, but in recruiting her for his cabinet, Mr. Obama chose to turn a rival into a partner, and she concluded she could have a greater impact by saying yes than by remaining in the Senate.

Her selection is still to be formalized and will not be announced until after Thanksgiving. It would be yet another direction in the unlikely journey of a onetime political spouse in Arkansas who went on to build a political base of her own and become a symbol of achievement to many women.

The role, though a supporting one, would make her one of the most influential players on the international stage, and it would represent at least one more act for one of the nation’s most prominent public families, as former President Bill Clinton would also become an ad hoc member of the Obama team.

The sometimes awkward dance between Mr. Obama and Mrs. Clinton in the eight days since he invited her to Chicago for a meeting culminated in a telephone call on Thursday. Before the call, Mrs. Clinton was skeptical about the prospect of joining the cabinet, said her confidants, who insisted on anonymity to discuss the situation. But Mr. Obama addressed her concerns about access, personnel and other issues, leading her to conclude she should take the job, they said.

“She’s ready,” one of Mrs. Clinton’s confidants said. The first meeting in Chicago “was so general” that she needed to have a better sense of how she would fit into Mr. Obama’s administration, and the call helped her “just getting comfortable” with the idea of working together, the confidant said.

Mr. Obama’s advisers said that although no offer had been formally accepted, her nomination was “on track” and would probably be announced after the holiday. Mrs. Clinton’s Senate office broke a week of silence to acknowledge the talks but cautioned that they had not been made final. more

Merkel's Opel Offer Slammed

Merkel's Opel Offer Slammed

The German government's offer to come to the rescue of carmaker Opel has come in for hefty criticism, particularly from within Chancellor Merkel's own party. Meanwhile Opel says it is reducing production for next year and cutting back to a 30-hour week in most plants.
hey say that if America sneezes, the world catches a cold. Now, it seems that if US auto giant General Motors has influenza then its European subsidiary Opel is going to straight to the German government for the aspirin.

On Monday Berlin agreed to consider extending loan guarantees to Opel so that it can insulate itself from the troubles at its parent company in Detroit. While Chancellor Angela Merkel was careful to insist that any such move would be a special case, the plans are already coming under fire. Some politicians from within her own party have attacked any hint of a bailout, with some arguing that German taxpayers should not be helping out what is essentially a US company.

Merkel met with Opel executives on Monday after they asked for a loan guarantees of around €1 billion ($1.26 billion) to ensure liquidity if Detroit-based GM files for bankruptcy. The entire US car industry is pleading for a government aid package of around $25 billion to weather the current problems wrought by the worst economic situation in decades.more

In Germany, where the auto industry is one of the biggest employers, some are concerned that any state aid to Opel could flow across the Atlantic to prop up its US parent company. Others worry that bailing out one company or one sector could have a snowball effect with troubled firms automatically turning to the state when the going gets tough.more

Deutsche Bank hires Mike Gelhard

Deutsche Bank hires Mike Gelhard

Story link: Deutsche Bank hires Mike Gelhard

Deutsche Bank, Germany’s largest bank, has announced the appointment of Mike Gelhard as the firm’s new MD and global co-head of Emerging Markets Corporate Credit and Special Situations.

He joins Deutsche Bank from investment bank UBS where he covered Latin America and Asia as head of High Yield and Distressed Credit Trading...

Oceanic Bank aims to enhance savings culture in Nigeria

Story link: Oceanic Bank aims to enhance savings culture in Nigeria

Oceanic Bank International plc is to try and bolster the savings culture in Nigeria with the introduction of Oceanic Save More And Win Big Promo, which could enrich customers by up to N100m.

The Central Bank of Nigeria has frequently complained of too much cash being outside the formal market, and as a result has encouraged banks to develop unique measures that would help promote small savers to deposit cash and thereby reduce the amount of money that exists outside the banking sector.

FSCS puts Icesave customers at risk of fraud

FSCS puts Icesave customers at risk of fraud

The Financial Services Compensation Scheme (FSCS) is being criticised for opening the door to fraudsters because of the way in which it is handling compensation claims of UK account holders with Icesave.

The 230,000 people who have deposited a combined £4.5 billion in the failed bank have been told they will receive two emails from the FSCS.

The first will explain the process by which their money will be repaid and the second will give instructions on how to log on to an existing Icesave account and transfer the cash.

Under the Banking Code, communication with customers by email is permitted but banks do not encourage this method of contact because criminals constantly produce fraudulent emails containing fraudulent website links.

Criminals could therefore already be working out ways to entrap Icesave customers and steal their cash by sending out emails directing them to a spurious link.

According to website security firm, First Cyber Security, research by APACS, the UK payments body, reveals that 18% of people are at risk of selecting a website address from an email and giving their personal information to a fraudster.

First Cyber director, David Holman, comments that it is easy to set up a copy of an authentic website and send out mass emails that consumers could believe to be authentic.

Formation of Lloyds Banking Group puts 30,000 jobs at risk

Formation of Lloyds Banking Group puts 30,000 jobs at risk


Lloyds TSB’s announcement today that it intends to make annual savings of £1.5 billion through its merger with HBOS has sparked an angry reaction from trade unions, fearful of large-scale redundancies.

The latest estimate of cost efficiencies is £500,000 above an earlier £1 billion target and analysts are predicting that up to 30,000 jobs could go through the closure of branches, call centres and the integration of IT systems.

According to a report in The Times, Lloyds TSB will make £790 million in savings from cuts in the merged banks’ retail operations and a further £235 million by folding together their insurance and investment businesses.

Costs in wholesale and international banking will be shaved by £430 million.

Shareholders of both banks have yet to vote on the deal and the possibility of a counter bid emerged this weekend, from an unnamed international financial firm.

However, both HBOS and Lloyds TSB are confident that the merger will go ahead and have pencilled in a completion date early in the New Year.

Last week, details of the new board were revealed, with only one HBOS executive included.

The name of the new group has been announced today and spells the ultimate demise of the Halifax and Bank of Scotland corporate colours. The new company will be known as Lloyds Banking Group.

Abbey and Deutsche Bank linked in Porterbrook sale

Abbey and Deutsche Bank linked in Porterbrook sale

Abbey is reported to be selling its train leasing business to Deutsche Bank, for £2 billion.

Porterbrook Leasing Company was acquired by the bank in 2000 from Stagecoach, for approximately $1.2 billion in cash.

The firm specialises in the leasing of all types of railway rolling stock and associated rail equipment.

The business is now valued at around £2 billion and according to a report in The Sunday Times, Abbey’s parent company, Santander, could be making the disposal to improve its capital position.

In June, Royal Bank of Scotland announced that it had sold its Angel Trains rolling stock leasing business to a consortium headed by Australian infrastructure group, Babcock & Brown, for £3.6 billion.

Other members of the consortium included Deutsche Bank and AMP Capital Investors.

It is understood that HSBC is also considering the sale of HSBC Rail, another train-leasing firm, also valued at around £2 billion.

Angel Trains, HSBC Rail and Porterbrook are the three leading rolling stock leasing companies in the UK, having been formed out of the privatisation of British Rail between 1994 and 1997.

Israel cuts interest rates by 25 basis points

Israel cuts interest rates by 25 basis points

The Bank of Israel has announced a cut of 25 basis points in interest rates for November, which will stand at 3.5%.

The rate cut was largely expected, as concerns regarding inflation declined and new economic activity stalled.

Therefore the central bank decided that the balance of benefits and risks favoured a lower interest rate to try and promote economic activity, particularly as inflationary pressures appear to have begun to ease.

Tax revenues, demand and activity have all declined over the last few weeks, prompting the bank to try and bolster the situation through lower rates.

As with many other nations, the share indices in Israel have fallen substantially in recent weeks, down about 20%.

This decision follows an unscheduled cut of 50 basis points made on 7 October, with a view to returning inflation to the target range of 1-3% over the course of the next year.

The Bank of Israel forecasts a lessening of inflation in the medium term, and intends the lower interest rate to ease the cost of borrowing and promote economic growth.

BoE report puts global toxic asset writedowns at £1,800bn

BoE report puts global toxic asset writedowns at £1,800bn

The Bank of England has published new estimates of the amount of so called toxic debt that has been written down by global financial institutions, in relation to the credit crisis.

In its Financial Stability Report, the Bank puts the figure at £1,800 billion, adding that the size of its estimate of the collective writedowns facing banks, insurers and hedge funds, has more than doubled since April.

In the case of the UK High Street banks, Barclays, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and Nationwide, the report estimates that losses from bad debt could reach a collective £130 billion over the next five years.

The estimate takes into account losses from toxic investments plus an allowance for bad debts on mortgages, credit cards and corporate loans, which are expected to rise.

According to the report, UK lenders have so far written down less than £20 billion in the credit crisis but latest calculations indicate that additional taxpayer support may be needed to shore up their balance sheets, over and above the £50 billion included in by the Government’s rescue package announced earlier this month.

Wachovia racks up massive $8.9 billion loss

Wachovia racks up massive $8.9 billion loss


The banking firm plans to shake up its mortgage unit, slash its dividend payout to shareholders, and cut thousands of jobs.

Chief executive Bob Steel, hired less than two weeks ago to bring the struggling bank back to its former glory, had hinted that he envisioned a smaller, leaner Wachovia.

Net loss for the quarter was $8.66 billion compared to a profit of $2.34 billion in the prior-year period. Net loss available to common stockholders was $8.86 billion, or $4.20 per share, compared to earnings of $2.34 billion, or $1.22 per share, a year ago. The company said that the current-year quarter included a noncash goodwill impairment charge of $6.1 billion in commercial-related subsegments, reflecting declining market valuations and asset values.

Excluding the goodwill impairment charge and net merger-related and restructuring expense of $128 million, second-quarter net loss available to common stockholders was $2.67 billion, or $1.27 per share. The company was expecting a loss, excluding goodwill impairment charges, in the range of $2.6 billion - $2.8 billion or $1.23-$1.33 per share.

Toronto Dominion To Purchase Hudson United

Toronto Dominion To Purchase Hudson United

Toronto-Dominion Bank has agreed to buy Hudson United Bancorp for $1.9 billion. The cash and stock offer is worth $42.78 per Hudson United share.

Hudson's acquisition by Canada's second largest lender, will increase its branch network in New England by about 50 percent, adding branches in New Jersey, Connecticut, Pennsylvania and more than 200 in the New York City area.

Hudson United is New Jersey's fourth biggest bank by assets. Last year the financial institution had approximately $9.1 billion in assets and a net income of $128 million.

Toronto-Dominion CEO, Edmund Clark, hopes U.S. expansion will offset slower earnings growth in Canada where bank mergers are prohibited.

Toronto Dominion will pay 51 percent of the offer in TD Banknorth shares, and 49 percent in cash. The cash portion will be financed through the sale of 29.6 million TD Banknorth shares to Toronto-Dominion at $31.79 a share.

The offer represents a 14 percent premium over yesterday's closing price for the U.S. bank.

The purchase will be TD Banknorth's largest takeover, after a $694 million acquisition of American Financial Holdings Inc. in August 2002.

What is the Dow Jones Industrial Average?

What is the Dow Jones Industrial Average?


What makes up the Dow?

The daily three-digit drops on the Dow Jones Industrial Average this week scream from headlines. But what are the components driving these drops? Here are the 30 stocks in the average, with company, ticker symbol, 52-week trading range (before close Friday) and Friday close:

3M Co. (MMM); $53.38-$96.49; +76 cents, $54.26

Alcoa Inc. (AA); $11.98-$44.77; +$8.06, $96.80

American Express Co. (AXP); $23.33-$63.63; -85 cents, $23.15

AT&T Inc. (T); $22.52-$42.79; -58 cents, $22.42

Bank of America Corp. (BAC); $18.44-$52.96; +$1.24, $20.87

Boeing Co. (BA); $44.41-$99.58; +$1.33, $14.25

Caterpillar Inc. (CAT); $44.26-$85.96; -$1.67, $43.13

Chevron Corp. (CVX); $64.00-$104.63; -$6.17, $57.83

Citigroup Inc. (C); $12.85-$48.95; +$1.18, $14.11

Coca-Cola Co. (KO); $43.30-$65.59; -$1.80, $41.50

E.I. DuPont de Nemours (DD); $33.76-$52.49; -36 cents, $33.40

Exxon Mobil Corp. (XOM); $67.47-$96.12; -$5.64, $62.36

General Electric Co. (GE); $19.00-$42.09; +$2.49, $21.50

General Motors Corp. (GM); $4.65-$43.20; +13 cents, $4.89

Hewlett-Packard Co. (HPQ); $37.14-$53.48; -$1.50, $37.00

Home Depot Inc. (HD); $19.71-$34.25; -18 cents, $19.75

Intel Corp. (INTC); $15.49-$27.99; -41 cents, $15.19

IBM Corp. (IBM); $88.23-$130.93; -$1.25, $87.75

Johnson & Johnson (JNJ); $57.58-$72.76; -$1.73, $55.85

JPMorgan Chase &Co. (JPM); $29.24-$50.63; +$4.96, $41.64

Kraft Foods Inc. CI A (KFT); $27.67-$35.29; -45 cents, $27.25

McDonald's Corp. (MCD); $49.36-$67.00; +$1.27, $53.35

Merck & Co. Inc. (MRK:NYSE); $25.53-$61.62; +2 cents, $26.23

Microsoft Corp. (MSFT); $22.07-$37.50; -80 cents, $21.50

Pfizer Inc. (PFE); $15.49-$25.64; -53 cents, $15.14

Procter & Gamble Co. (PG); $60.05-$75.18; -$1.32, $59.56

United Technologies Corp. (UTX); $46.33-$81.20; +$1.30, $47.63

Verizon Communications (VZ); $25.87-$46.24; +84 cents, $26.77

Wal-Mart Stores Inc. (WMT); $42.50-$63.85; -44 cents, $50.95

Walt Disney Co. (DIS); $23.75-$35.63; -76 cents, $23.04

Northern Rock directors and auditors escape legal action

Northern Rock directors and auditors escape legal action


The bank, which was nationalised in February, said earlier this year it was looking into whether there were legal grounds to sue Mr Applegarth and others for negligence.

The Newcastle-based lender said today it has also decided "no action is warranted" against the auditors.

The chancellor, Alistair Darling, revealed last week Northern Rock had repaid more than half of the Government's £27bn loan. The bank said today the net balance outstanding is £11.5bn.

Northern Rock's chief executive, Ron Sandler, said the repayment was due to the bank's aggressive mortgage redemptions, where it helps customers to access new products with alternative lenders.

Mr Sandler added that the redemption programme would continue. But he added: "The company anticipates it will be more challenging in the future to maintain 2008 redemption levels given the significant slowdown in the housing market and reduced availability of alternative mortgage financing."

At the same time as shrinking its mortgages, Northern Rock is trying to snap up deposits. The bank had to withdraw some of its savings products two weeks ago when savers rushed to put their money into the Government-owned institution at a time of severe turmoil elsewhere in the market.

Northern Rock agreed a "regulatory framework" in return for the Government's support. One condition is that it is not allowed to compete unfairly with rivals and must keep its share of the UK savings market at less than 1.5pc.

Northern Rock said it would "continue to monitor the situation and will take action as necessary to ensure that it remains compliant with the framework. No breach of the framework has occurred since its introduction at the end of March."

Northern Rock said it continued to attract new retail deposits in the third quarter. Total retail funding rose to £17.2bn at the end of September, a £3bn increase from the end of June. Retail deposits represent £15.5bn of that sum.

Reverse Reengineering of Risk

When credit-risk scoring came into usage in the 1970s, it ushered in an era of science-based decision making that was primed to end the judgmental and biased lending decisions of the past. As the recent mortgage crisis has exposed, the science of risk scoring needs some tweaking. The industry needs to add critical measures of financial soundness to scoring and re-embrace common-sense judgment. Doing this won't turn back the clock to the days of restrictive lending-or demonize creative lending products-but will lead to sounder lending practices that will help the housing market recovery more quickly.

The magnitude of the current crisis makes it abundantly clear that there is significant room-and need-for improvement in current credit-assessment approaches. There are two fundamental problems that contributed to the weakened underwriting standards and degraded loan quality. First, credit scoring has not done an adequate job of assessing risk in the subprime mortgage market. Most subprime mortgage underwriting systems were not, in fact, capturing the full range of risk factors in the market. This was particularly true when their conventional risk models were applied to non-conventional loan products, which are associated with different payment terms and behavior. Lenders who depend on these credit-scoring systems were measuring credit risk inaccurately and incompletely. Second, there is a blind spot in today's underwriting practices. Current practices rely too heavily on quantitative models and automated underwriting systems. Technology has a vital role to play in boosting efficiency and helping measure and monitor credit risk, and the models have their place and role to play. However, institutions must control the models instead of the other way around. Loans need first to be properly classified, and then risk rated. Today's process has that backward.

ADOPTING A MORE COMPREHENSIVE APPROACH

As the accuracy and power of the FICO score continue to be debated, what's needed are new and improved ways of addressing limitations of credit-scoring systems and better evaluating of credit risk. Simply recalibrating existing models and throwing technology at the problem will not fix it. A comprehensive new credit-risk framework is needed-a hybrid approach that combines the best that technology can offer with expert human judgment. Such an approach can help deal with the current crisis and may lessen the extent of, or even prevent, the next one. This approach is the comprehensive credit assessment framework (CCAF). The CCAF uses advanced computing technology and a sound, safe model development and validation process. The robust and flexible CCAF approach naturally affords a sustainable and sensible segmentation based on all primary credit factors and then offers a systematic means for taking appropriate actions relative to those identified segments. It also provides ongoing monitoring of the impact of those actions in a comprehensive and efficient manner.

CCAF accomplishes this by first expanding the boundaries of information. Our risk models need to include income and secondary examples of good payment behavior, like utility payment history. The industry also needs to factor in borrowers' capital. And it needs to stop dunning people for getting a better-paying job by putting them in the credit "penalty box" if they've held the job for less than two years.

Second, CCAF appropriately segments loan applicants based on primary factors. A client with a lot of debt-and a lot of capital-should be in a different segment than a customer with the same debt load but little capital. The argument from the 1970s that income isn't a good indicator due to inflation no longer holds water.

Next, CCAF will layer in needed secondary qualification factors. Research has shown that people who operate on a cash basis-they pay with cash and they save-don't get the best terms as compared to those who carry installment debt. Yet "cash basis" borrowers will often be better risks. Bank balances and a history of automatically deposited savings need to be added considerations in modeling risk.

Fourth, CCAF assigns actions for each identified segment. In the recent past, lenders have focused on finding the loan with the monthly payment that a borrower could afford. Instead, lenders need to focus on matching the borrower to a loan product that the borrower will be most successful at paying off.

Fifth, CCAF puts in place an adaptable policy mechanism that is responsive to the evolving economic climate. Lenders need a model that has a feedback mechanism. It should factor in what segments are defaulting with what loan products and bring current economic conditions-interest rates, local unemployment rates and local housing price escalation or de-escalation-to bear in deciding who qualifies and under what conditions.

Finally, CCAF models future scenarios to determine whether the borrower can tolerate actions like interest rate resets. Credit scoring looks at the past. CCAF looks at the best case, worst case and most likely scenarios for different types of loan products. For instance, a lender can model the "worst-case" scenario for an interest rate increase, reset for an ARM and determine-based on the home's value and the borrower's assets today-whether the borrower could tolerate the reset. This could help lender and borrower avoid a loan that has a stronger potential for creating hardship and foreclosure.

Stocks stage recovery

Stocks staged a huge turnaround Friday morning, with the Dow erasing most of a 700-point slide as fears of a global recession were countered by a willingness of some traders to step in at five-year lows.

The Dow Jones industrial average was down 40 points in the early going after having fallen nearly 700 points. The Standard & Poor's 500 index was down modestly and the Nasdaq composite rose.

U.S. markets took a beating Thursday, with the Dow industrials plunging nearly 700 points to a five-year low, as panicked investors dumped stocks.

On Friday, General Electric reported third-quarter financial results that were in line with estimates. The company posted a 10% drop in earnings from continuing operations and an 11% gain in revenue, meeting analyst expectations.

The company is considered a stock market bellwether, so its financial results are closely watched. The company had previously lowered its guidance, citing the financial crisis. GE reaffirmed that outlook and also said its financial services arm, which has been hard hit by the crisis, reported a 30% drop in profit that met forecasts. GE shares rose 1% Friday morning.

Investors have been pulling money out of stock mutual funds as the crisis has deepened. A full $43.3 billion was taken out during the week ended Oct. 8. That's on top of the $7.2 billion investors hoarded during the previous week.

President Bush is slated to speak about the economy shortly after 10 a.m. ET, hoping to calm panicked investors.

Also, finance officials from the Group of Seven industrialized nations are meeting in Washington Friday to address the financial meltdown.

Economic news: Two government economic reports came out Friday morning.

The Commerce Department reported that the U.S. trade deficit, which measures the difference between the nation's output and demand, declined in August to $59.1 billion. The trade gap was smaller than in July, when the deficit was revised to $61.3 billion.

The deficit in August was slightly larger than the $59 billion that economists polled by Briefing.com had forecast.

The Labor Department reported that its Import Price Index decreased 3% in September, led by a decrease in petroleum prices. In addition, prices for overall exports decreased 1.0% for the month.

Oil and the dollar: Crude prices, which have been under pressure amid fears over weakening demand, was down $3.66 to $82.93 and had tumbled as much as $7.98 a barrel to $78.61.

Worries that the global crisis will undercut world demand prompted OPEC to announce plans for an emergency meeting Nov. 18 to address the issue. Prices have plunged some 80% from the record $147.27 a barrel set on July 11.

Meanwhile, the U.S. dollar has whipsawed as nervous investors jump in and out of the greenback. The dollar dipped lower versus the British pound and the euro but edged higher versus the Japanese yen.

Bank Wikipedia

Bank
From Wikipedia, the free encyclopedia

A banker or bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money.

The first modern bank was founded in Italy in Genoa in 1406, its name was Banco di San Giorgio (Bank of St. George).

Many other financial activities were added over time. For example banks are important players in financial markets and offer financial services such as investment funds. In some countries such as Germany, banks are the primary owners of industrial corporations while in other countries such as the United States banks are prohibited from owning non-financial companies. In Japan, banks are usually the nexus of cross share holding entity known as zaibatsu. In France "Bancassurance" is highly present, as most banks offer insurance services (and now real estate services) to their clients.

Icelandic banks in latest restructuring

Icelandic banks in latest restructuring


The development in Iceland's troubled banking sector comes just days after the Government was forced to buy a 75 per cent stake worth 600 million euros in Glitnir, Landsbanki's smaller rival, to prevent it going bankrupt. Yesterday Glitnir issued a profit warning.

The deal yesterday will lead to Straumur taking control of the bulk of Landsbanki's overseas corporate finance and securities brokerage operations. That includes full ownership of Landsbanki Securities, which includes the UK brokers Teather & Greenwood and Bridgewell Securities. Landsbanki bought Teather & Greenwood in 2006 and Bridgewell last year.

The deal, which requires regulatory approval, also includes Landsbanki's 84 per cent holding in Merrion Landsbanki, the Ireland-based stock broker and corporate finance firm and full ownership of Landsbanki Kepler, the bank's European and US securities arm. The combined revenues of the three aquired Landsbanki companies, which employ 680 people, amounted to 232 million euros last year and had a combined profit before tax of 30 million euros, according to Straumur.

Iceland's banking system has been under intense scrutiny this year as it struggles with soaring inflation and the fallout from an overheated economy and collapsing currency. In an effort to check runaway wage and price inflation, the central bank has raised interest rates to 15.5 per cent, causing pain for Icelandic households. High interest rates severely curbed the ability of Iceland's banks to fund their businesses and the global liquidity squeeze has made matters worse.

This week Standard & Poor's cut Iceland's long-term foreign currency sovereign credit rating, citing the Government's decision to buy 75 per cent of Glitnir. "The required capital injection underlines our often-stated concerns about the high external leverage of the Icelandic financial system, and the contingent liabilities this poses to the sovereign," S&P said. Moody's and Fitch put the country's credit ratings on review for possible downgrade.

Iceland's big banks - Glitnir, Kaupthing and Landsbanki - had expanded rapdily and have accumulated assets of almost 100 billion euros. That figure is about ten times the size of the Icelandic economy. Landsbanki said that yesterday's sale would result in no material loss or gain for the company and would strengthen its tier-one capital ratio. Strategically it will allow the bank to refocus its model on core banking operations.

"Following this transaction, Landsbanki will consolidate its corporate and commercial banking operations in Europe through its overseas banks and branch network," the bank said. Straumur said that it would pay for the aquisition in cash, a subordinated debt issue and a sale of loans. Its bank capital position would continue to be extremely strong. it said.

William Fall, Straumur's chief executive, said: "Straumur has been able to take advantage of this unique opportunity to become a substantially broader and more client-focused bank with a truly pan-European investment banking and securities platform."

Landsbanki's net income was 1.25 billion euros last year and it made a pretax profit of 520 million euros. Straumur made a pretax profit of 191 million euros on revenues of 330 million euros.

The cost of protecting Iceland's sovereign debt against default rose sharply yesterday on continued concerns about the Icelandic economy. Credit default swaps on Iceland's sovereign debt rose by 45 basis points to 635 basis points, or $635,000 to insure annually $10 million of debt over a five-year period, according to CMA Datavision.

Barclays news

Barclays news

Barclays is a global financial services provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services.

Barclays operates through six main business sectorss: UK Banking, Barclaycard, International Retail and Commercial Banking, Barclays Capital, Barclays Global Investors and Barclays Wealth.

Main Barclays products:

* Current accounts
* Personal investments (including ISA's)
* Loans
* Mortgages
* Home insurance
* Car insurance
* Travel insurance

Website: Barclays

HBOS news

HBOS news

HBOS is the holding company of the HBOS Group. It operates through five divisions: Retail, Corporate, Insurance & Investment, International and Treasury & Asset Management. The Company’s Retail range of products includes personal and business banking products and services to 23 million customers.

Website: HBOS

Abbey news

Abbey news

Abbey (Abbey National plc) is a mortgage and savings provider owned by Spanish bank Santander.

Abbey has more than 700 branches, 40 regional sites and five main offices.

Main Abbey products:

* current accounts
* credit cards
* loans
* mortgages
* investments
* pensions
* savings
* ISA's
* child trust funds

Website: Abbey

Barclays looks beyond Government to bolster balance sheet

Barclays looks beyond Government to bolster balance sheet

Barclays has responded to the Government’s £500 billion rescue package for the UK’s High Street banks by saying it plans to raise capital from the markets.

In return for the support speedily prepared by Ministers earlier this week, the UK’s leading banks have pledged to increase their Tier 1 ratios by a combined £25 billion.

The move is aimed at increasing confidence in the sector and ultimately easing interbank lending.

Banks that turn to the Government’s programme for support will arguably become part-nationalised as funds will be exchanged for preference shares.

This will inevitably mean that restrictions on dividends, executive pay and bonuses will be applied.

The required improvements to banks’ capital positions should be made by the end of 2008 and Barclays is hopeful that its existing investors will support a fundraising in the meantime.

The bank took a different direction to its rivals back in the summer when there was a round of rights issues involving HBOS, RBS and Bradford & Bingley.

At that time, Barclays bolstered its balance sheet by raising capital from foreign investors, notably Qatar Investment Authority and Sumitomo Mitsui Banking Corporation.