| | Friday 29 June 2012 THOUGHT FOR THE DAY  Hello Share Folk
Still these huge swings back and forth for UK shares - and much of the rest of the world, too. What are we to make of it?
Well, it's a sure sign of uncertainty. And uncertainty, unless it is resolved, can only have a bad affect on share prices. The markets will become more sure of themselves when it's thought that most of the shocks have been removed from the system.
In other words, that all the bad news is out front and the problems of the financial world are all reflected in share prices. But nobody can be confident we are near that position yet, when on every other day, it seems there is more bad news coming in.
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Paper Round BSkyB, RBS, Eurozone
Dividing News Corporation into two companies will not result in a fresh bid for BSkyB because the company has "moved on", Rupert Murdoch said yesterday. The News Corp chairman and chief executive said that he would be an "active chairman" of both companies, one focusing on entertainment and the other on publishing newspapers, books and educational material. But in an interview with The Times, Mr Murdoch said that he could not be chief executive of both companies because of "public perception". Asked why he intended to be chairman and chief executive of the entertainment company but only chairman of the publishing company, he said: "There are only so many hours in the day. I will be a pretty active chairman, I'm sure. I think it would be difficult [for] public perception to name myself as chief executive of both companies. And we have very, very good people that I trust," The Times reports.
Royal Bank of Scotland is set to be fined about GBP150m for offences of market manipulation similar to those which inflicted huge damage on Barclays, The Times can reveal. As fraud investigators came under pressure to open a criminal investigation into Barclays and amid growing calls for the resignation of Bob Diamond, the bank's chief executive, it emerged that RBS has also been caught up in the rates-rigging scandal. The bank, which is 82% owned by the taxpayer, is preparing for a political firestorm over the affair because it believes that it has no power to claw back bonuses from the traders responsible. Instead, the expected fines would be borne by the shareholders — largely the Government.
Germany has today caved into demands made by Italy and Spain for immediate Eurozone aid to bring down their soaring borrowing costs. On Thursday night, Italy and Spain plunged an EU summit into disarray by threatening to block "everything" unless Germany and other Eurozone countries backed their demands for help. Mario Monti, the Italian Prime Minister, celebrated the agreement, reached in the early hours of Friday, as a "very important deal for the future of the EU and the Eurozone". He could not resist reminding Angela Merkel, the German Chancellor, that Italy had also won on the football pitch, by defeating Germany two goals to one for a place in the finals of the European Championship. "It is a double satisfaction for Italy," he said, The Telegraph reports.
Glencore's finance director has moved shares worth GBP200m into trusts, at least one of which is based in Cayman Islands, as the commodity giant's merger with Xstrata stands on the verge of unravelling. Disclosure of the transfer of more than 70m shares belonging to Steven Kalmin came as Glencore bought time to persuade the Qataris to back its planned merger. After the shock demand from Xstrata's second biggest shareholder, Qatar, for better terms for Xstrata shareholders, the miner and Glencore said they would push back respective shareholder meetings on the deal from July 11 and 12, The Telegraph reports.
HBOS could face regulatory sanction over its part in the collapse of Christmas saving club Farepak after the Financial Services Authority was asked to look at the case. Business Secretary Vince Cable has referred HBOS, now part of Lloyds Banking Group, to the FSA after his prosecution of the Farepak directors collapsed last week. In a statement Mr Cable also said he would also be contacting HBOS to establish how they would respond to calls for the bank to pay more into the Farepak creditors' compensation fund, The Telegraph says.
Homeowners hoping they can sue Barclays for distorting their mortgage rates through its Libor manipulation have been warned they would struggle to prove they lost out - but this may not prevent a wave of hopeful claims. Barclays' GBP290m fine for fiddling the benchmark interest rate, has led to borrowers to question whether they could claim compensation from the bank en masse, similar to the successful claims made in the multi-billion pound Payment Protection Insurance mis-selling scandal, The Daily Mail writes.
Families in the UK will have an average of GBP7,000 less to spend by 2015, as lower wages and high unemployment hits incomes, according to new figures. The economic crisis will continue to create a 'ferocious squeeze' on families, with rising energy, food and fuel costs also crippling families, the House of Commons analysis revealed. Last year, the average UK family was GBP800 out of pocket compared with 2010. But by 2015, this is set to more than double to GBP1,700 per year. Over the lifetime of this Parliament, the average family will have a total of GBP7,100 less to spend between 2011 and 2015, The Daily Mail reports.
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BOOK OF THE WEEK  By Detlev Schlichter
A book review by James Faulkner of WatsHot.com "The US government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many US dollars as it wishes at essentially no cost," observed Ben Bernanke during his time as an academic before he became chairman of the Federal Reserve. Although Bernanke was speaking with reference to the response of policymakers in the face of a deflationary environment, there was essentially nothing radical about his prescription; the Fed had already been steadily increasing the money supply for some time.
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