The retail funding myth – why the investment banks aren’t to blame February 4, 2013 BANKS used retail deposits to gamble on the investment banking casino!” That is the common perception of the cause behind the 2007-2008 financial crisis. The popular belief is that retail deposits, instead of being used to fund “safe” traditional retail lending like mortgages, were used to fund high-risk derivatives trading on the international capital markets. [...]
How we can reignite popular capitalism in Britain’s state-owned banks February 4, 2013 LORD Lawson, the former chancellor, has rightly asked the question of what to do about the ownership of RBS. But his suggestion – full nationalisation – has certainly raised eyebrows. While the yearly debate about bonuses causes political headaches, it is well-acknowledged that RBS’s current management is “defusing the biggest balance-sheet time-bomb in history”. Longer-term [...]
Whitehall amateurs should take lessons in business practice February 4, 2013 NON-executive directors (NED) are not a new phenomenon in the private sector. These men and women have been discussing the performance of directors, participating in committees, and setting the strategic direction of businesses for years. But Whitehall has come late to the party. NEDs have only sat on the boards of government departments since 2010. [...]
The Debate: As high costs force Centrica to pull out of new projects, can nuclear power ever be profitable? February 4, 2013 YES Tony Lodge Nuclear power stations can be built and operated without the need for government subsidies. The actual build of nuclear power stations is entirely financed by energy companies – not the government. However, the only way that you can get these companies to invest billions of pounds is by providing them with a [...]
Letters to the editor February 4, 2013 Austerity politics [Re: Recession and higher tax taking toll on Britain’s top earners, yesterday] This article makes it clear that we really are all in it together. But this fact creates a tricky electoral paradox for the Conservatives. First, it isn’t in the Tories’ best interest to point out that they are taking large amounts [...]
Avoid getting in a spin about the great rotation February 4, 2013 AS THE equity markets surge onwards, many are calling the beginning of the great rotation – the point when retail investors finally rotate out of the perceived safety of cash and bonds, and back into the stock market. Talk of the great rotation has occasionally made it into analyst notes over the last couple of [...]
BP’s difficulties may be behind it February 4, 2013 Chief Market Strategist, Cantor Index THE moment John Browne became chief executive of BP, the company’s fortunes went from strength to strength. Lord Browne, as he is today, orchestrated two very shrewd initiatives – the oil giant’s merger with Amoco in 1998, and its acquisition of ARCO (Atlantic Richfield Company) in 2000. The world was [...]
The Tipster | Bad reception at Vodafone February 4, 2013 TRADERS were rattled when Vodafone was downgraded by two brokers yesterday, over concerns about its revenues from Europe. And the telecoms giant may be in for an icy reception when it delivers its interim management statement on Thursday. Speculation is mounting that it may need to acquire other businesses to compensate for its shortcomings. GFT [...]
Banks cast off Eurozone insurance February 4, 2013 THE longer term refinancing operation (LTRO) – the European Central Bank’s (ECB) original miracle drug for the liquidity constraints dogging the Eurozone – has reached a crossroads. The banks that first took the pill now want to prove the dosage should be reduced, or stopped altogether. The hope is that reduced budget deficits, increased competitiveness, [...]
Analyst picks for 5 February 2013 February 4, 2013 CURRENCY STRATEGIST CHRIS VECCHIO My pick: Long dollar-yen and euro-yen Expertise: Fundamental and technical analysis Average time frame of trades: A few hours to a few days The euro is appreciating rapidly; the European Central Bank is the only major central bank that is reining in its balance sheet. The most noticeable divergence has been [...]
