| | Tuesday 11 December 2012 THOUGHT FOR THE DAY  The Italian Jobless Hello Crazy Gang,
I was expecting the Footsie to rise like a shot this week. But I did not count on the Italian boss wanting to give up his job. And if the old Big Cheese of Italy gets his old top post back, I expect the Italian stock market to fall even further than it did at the start of this week.
It does seem that Italy has a bit of a death wish. The world was beginning to trust Italy to stay on the right track under its present leadership. Local share prices were up and its loans were attracting a lower rate of interest. Now interest rates have spiked again.
Speaking as a British share holder, I am highly relieved that UK shares were not knocked back like the Italian ones. As it is, the Footsie was trailing for most of a day, but then perked up at the close.
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Paper Round Mario Monti, HSBC, Mervyn King
Mario Monti is in talks with centrist groups urging him to stand in Italy's elections early next year it emerged on Monday as pressure mounted on the technocrat prime minister from the financial markets, fellow European leaders and the Church to stay in politics to safeguard his reforms. Italy's government borrowing costs rose and its stock market fell sharply after his surprise decision over the weekend to stand down earlier than expected rekindled uncertainty over one of the eurozone's more vulnerable economies. [Financial Times]
Europe's biggest bank, HSBC, will pay £1.2 billion to settle a money-laundering probe by US authorities, sources revealed last night. The bank will pay £777 million in forfeiture and £407m in civil penalties, an American law-enforcement official said. The forfeiture is the largest forfeiture ever in a case involving a bank. The fine comes as another London bank, Standard Chartered agreed to pay a further £203m to settle allegations that it breached US sanctions with Iran.[The Scotsman]
Sir Mervyn King, the governor of the Bank of England, has criticised world leaders for not working hard enough to rebalance the global economy since the financial crisis. The imbalance between countries such as the UK and the US which relied on consumer spending to fuel growth before 2008, and those including Germany and China that relied on exports, is seen by many economists as a key cause of the financial crisis. Since agreeing a global stimulus plan in London in 2009 in the wake of the crisis, G20 leaders "have gone backward since then and there's been no agreement on rebalancing the world economy," Sir Mervyn told an audience in New York yesterday. [The Telegraph]
Sir Richard Branson pledged to keep control of his airline after his arch-rival, BA chief Willie Walsh, said that Singapore Airlines' sale of its stake in Virgin Atlantic would lead to the demise of the brand. Singapore Airlines is finalising the sale of its 49 per cent stake in Virgin Atlantic to Delta, the US carrier, in a deal expected to be valued at between $300m (£186m) and $500m. Barring last-minute hitches, Virgin Atlantic is set to announce a transatlantic joint venture with Delta in a related agreement that would be announced alongside, or shortly after, the sale of Singapore Airlines' stake. As the parties hammered out the details of the deals yesterday, Sir Richard rejected rumours that he was in talks to sell part of his controlling 51 per cent stake in Virgin Atlantic. [The Independent]
Opel is to shut down its plant at Bochum in Germany in 2016 when the GM-owned manufacturer stops making its Zafira model. The long expected closure, confirmed on Monday, is the first in decades in Germany's car industry. The plant employs 3,000 of Opel's 20,000 workers. Ferdinand Dudenhöffer, an expert for the Centre for Automotive Research at the University of Duisburg-Essen, said: "GM has done almost everything wrong. They had endless discussions with the unions - but the outcome was clear from the beginning." [The Guardian]
Boris Johnson has hired one of the City's most senior economists to bolster his policy team as London's status is challenged by emerging markets. Gerard Lyons, who stepped down as Standard Chartered's chief economist this month, will take up the position of chief economic adviser to the Mayor from January 2. The role will carry a salary of £127,200 and Mr Lyons will work for 29 hours a week. The appointment of such a heavyweight City figure will be regarded a coup for Mr Johnson and serves to underscore his political ambition. [The Times]
Pizza Hut is hoping to take a larger slice of the lucrative British fast food market, with a multimillion-pound investment that could create up to 2,000 jobs. Pizza Hut Delivery - which currently has around 300 shops in England, Wales and Scotland - has said it wants to expand its base to 700 stores. The move is a bid to cash in on the growing market for takeaway in the UK, as cash-strapped Britons opt to eat in rather than splash out on restaurant meals. [The Guardian]
Barack Obama warned that leaders needed to do more than the "bare minimum" to support the economy ahead of the year-end fiscal cliff deadline as the White House and the top Republican leader traded accusations of intransigence in the negotiations. Both sides have been guarded about the precise state of talks to avert the automatic tax increases and spending cuts that could drive the US into a recession following a meeting between Mr Obama and Speaker John Boehner on Sunday, except to say that lines of communication were open. [Financial Times]
An extra 200,000 people in Britain may be without a job by this time next year, according to the thinktank IPPR, and youth unemployment may again rise above a million. Although unemployment has been falling - the latest official figures may show another drop on Wednesday - IPPR analysis of Office for Budget Responsibility forecasts this week shows there may be worse to come next year. Unemployment will not peak until 2014, says the OBR, and might not get back to where it is now until the end of 2015. [The Guardian]
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