| | Friday 30 November 2012 THOUGHT FOR THE DAY  All Eyes on the USA Hello Share People,
Spain and Greece are off the agenda - for the time being. They have been put on a financial footing - again, for the time being.
Now all eyes turn across the Pond. The USA is facing a fiscal cliff. The American politicians are trying to sort out a deal. If they don't, shares - including British ones, of course - could be in a bit of trouble.
However, it's not likely that the politicians will risk a big financial problem for their country if they can get out of it. A certain amount of sabre rattling will go on - for the sake of the voters. But I think a solution will be found.
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Paper Round Direct Line, British banks, The Independent takeover
Direct Line has announced another 236 jobs cuts as the newly-floated insurance giant moves towards slicing costs by 100 million pounds by the end of 2014. The fresh round of streamlining comes on top of previously-announced plans to shed 970 jobs across the group's UK operations, which employed about 15,000 prior to the cost-saving drive. However, spokeswoman Jennifer Thomas said this latest phase would have a "very minimal impact" in Glasgow, where Direct Line has nearly 1,000 people working mainly in call centre activities. [The Scotsman]
British banks will have to raise £20bn-£50bn of new capital or dramatically restructure their businesses after the Bank of England made it clear it did not trust the way they value their books. The BoE's new Financial Policy Committee yesterday said banks must report capital ratios which reflect a "proper valuation" of their assets and a "realistic assessment" of the cost of recent scandals, such as the manipulation of Libor and mis-selling of insurance products. [Financial Times]
Millionaire businessman David Rowland is in the running to take over The Independent and The Independent on Sunday, it has emerged. The Tory party donor is understood to have held talks with current owners, the Lebedev family, about a £10m to £15m deal for the loss-making newspapers. Any deal could separate the titles from their sister publication, The Evening Standard. News of the bid follows increasing speculation about the future of the struggling titles and comes a day after Alexander Lebedev admitted he was looking for investment to support the papers. [The Telegraph]
Not content with dominating the e-book market, Amazon is planning to muscle in on the physical book publishing industry in Europe by releasing original works under its own imprint. The online retailer is to launch a European publishing wing which will pitch it against the might of Bloomsbury, Random House and HarperCollins, owned by News Corporation, parent company of The Times. In a letter to literary agents, Amazon said that the new division was part of its European expansion and would be based in Luxembourg. It will include a team of editors and marketers. [The TImes]
The EU's general court has blocked an attempt to force the European Central Bank to release files showing how Greece used derivatives to hide its debt in the run-up to the financial crisis. The case was brought by Bloomberg News under the EU's freedom of information rules in August 2010 but was thrown out on Thursday by the court in Luxembourg. "Disclosure of those documents would have undermined the protection of the public interest so far as concerns the economic policy of the EU and Greece," the EU's general court said. [The Guardian]
Coventry Building Society has become the latest High Street lender to pull the plug on borrowers who want to take out an interest-only mortgage. It announced today that it will no longer offer these once popular loans to new borrowers. It follows hot on the heels of Royal Bank of Scotland, NatWest, Nationwide and Co-operative Bank, which have already pulled out of interest-only lending. Other lenders have tightened the screw on borrowers by making it much more difficult to take out these loans. Woolwich, the mortgage arm of Barclays, now offer loans on this basis only if the amount is £300,000 or more, and Santander will only lend up to 50 per cent of the property's value. [The TImes]
Accounting giant Ernst & Young is to be sued over the collapse of Anglo Irish Bank in 2009. In what is the first time an Irish bank has taken legal action against its ex-auditor, the firm is being taken to court by the state-owned Irish Bank Resolution Corporation (IBRC), which took over the running of the collapsed Anglo three years ago. While full details of the case have not been revealed, it is believed the accountant will be accused of failing to spot Anglo's massive exposure to the Irish property bubble, which led to it being nationalised. [The Independent]
Hong Kong Exchanges & Clearing raised $1bn from equity markets on Thursday, after receiving clearance from the UK's Financial Services Authority for its $2.2bn acquisition of the London Metal Exchange. The blessing of the UK regulator for the deal clears the way for the closure of the transaction after a court hearing to confirm capital reduction plans on December 5, after which the deal will become unconditional. [Financial Times]
The United Nations has laid the finger of blame for food price rises on trading in agricultural commodities, but says it is the trade in futures contracts - an agreement to buy at a set price sometime in the future - rather than the actual food stocks that causes the most damage. David Bicchetti, associate economic officer at UN conference on trade and development (UNCTAD), said "enormous, humongous" amounts of money are traded on commodities that don't actually exist. "Over $400bn [of paper money] is traded - that's 20-30 times the physical production of the commodity." [The Guardian]
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