A report by Barclays Capital have created further turmoil in the money markets with a suggestion that the Irish economy is on the verge of collapse and the government may well need an injection of billions of pounds from the international community. There are also reports that the European Central Bank has been forced to buy Irish government bonds amid concerns that the budget deficit is running out of control.
Lord Turner, the chairman of the Financial Services Authority (FSA), has today issued his most direct warning yet to the European Union in relation to meddling within UK financial markets. He believes it is "vitally important" that the European financial supervisors did not intervene directly in the running of the UK financial markets or indeed the financial markets of any European countries.
Despite the fact that the UK economy would appear to be heading downwards the FTSE 100 has today reached a level not seen since April with investors apparently looking to increase their appetite for risk. This would seem to be totally at odds with the current direction of the UK economy which appears poised on the verge of a potential double dip recession and a very difficult couple of years. So why is the UK stock market pushing ahead?
Mervyn King, the governor of the Bank of England, yesterday hit back at the UK banking profession and admitted that UK regulators missed an opportunity to clamp down on excessive bonuses and remuneration packages during the depths of recession. As we covered in one of our earlier articles, Mervyn King was most certainly in apologetic mood yesterday and appeared to be attempting to curry favor with the unions.
A number of prominent bond holders in struggling lending group Cattles have today walked away from discussions which could have seen the assets of the company transferred to a new holding group for a nominal fee to allow the company's loan book to be wound down. For those who have followed the history of Cattles, this is one of the more prominent doorstop lenders of the past which has fallen on hard times resulting in a suspension of the shares back in the spring of 2009.
In what could become a very damaging and a very controversial battle, the unions have today issued a hit list of 71 of the country's most vulnerable MPs amid attempts to persuade those in small majority constituencies to vote against the proposed privatisation. The unions are hoping to mobilize not only union members in the UK but also the local public in areas of interest highlighting the fact that a sale of Royal Mail could lead to significant post office closures.
The price of gold has surged to a record $1273 an ounce as investors look for safe havens ahead of a possible worldwide economic downturn and a potential double dip recession. The gold futures markets hit an intraday high of $1273 which was a rise of $24.70 on the previous day. If the price of gold was to close at this particular level it will be the largest price increase for an active contract since February 16 2010.
In a sign of the times, Royal Bank of Scotland is returning to the securities backed investment market with the issue of £4.7 billion of securities backed by the company's mortgage book. This is the company's first venture back into the securitised investment market since the credit crunch began and is seen by many as a critical point in the overall recovery of the UK financial arena.
Despite the fact that there will be an almost tripling of the required capital backing for banks around the world as results of the Basel committee ruling it seems that many investors are relieved, with the situation not as bad as many had feared. Banking shares were up around the world which has helped to support worldwide stock markets in what is a very difficult period.
The Norwich and Peterborough building society is today facing potential legal claims on behalf of a number of customers who allege that they were mis-sold bonds provided by Keydata Investment Services. This is a company which collapsed in June 2009 and is under investigation by the Serious Fraud Office. A number of customers believe they were mis-sold various bonds associated with the company and look set to take their action to court.
