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News review
Updated May 9 2008
Europe and US unite on stronger dollar
Policymakers welcome the recent rebound in the dollar, which at one point on rallied to a six-week high against the euro. They are concerned that the currency markets have been paying too much attention to short-term economic weakness and market stress in the US, and not enough to the medium-term prospects for the US and Europe, a senior US official said.
Russia’s Medvedev takes power
Russia’s new president Dmitry Medvedev held out the prospect of a thaw after the democratic restrictions of the Putin era, pledging to develop civil and economic freedoms during a stately Kremlin inauguration ceremony.
Labour sees worst poll defeat in four decades
Labour suffered its worst result at the ballot box for four decades after voters staged a mass local election protest against Gordon Brown’s government and the worsening economic situation.
New push to ease strains in global markets
Central banks in the US and Europe launched a fresh co-ordinated assault to ease strains in financial markets, as a fall in unemployment raised questions as to whether the US really is in recession.
Eurozone economies diverge
Sharply diverging performances by the eurozone’s main economies have added to the European Central Bank’s discomfort ahead of the interest rate setting meeting in Athens.
US warns on blocks to foreign takeovers
Rich countries risk stoking protectionism by blocking foreign takeovers on grounds other than national security, a senior White House official has warned.
Labour loses London in local election rout
Boris Johnson swept to power for the Conservatives in the London mayoral race, ending Ken Livingstone’s eight-year reign in City Hall.
Mixed response to holding interest rate
The Bank of England’s decision to hold interest rates at 5 per cent disappointed industry groups hoping for a boost to the flagging housing market, but other business leaders accepted the need to keep inflation in check.
Russia agrees 40% rise in energy prices
Russia signed off on a series of steep price rises for domestic gas, power and railway services for the next four years on the eve of Dmitry Medvedev’s inauguration as the country’s new president.
Video: Gulf investors finding opportunities
Roula Khalaf interviews Dr Omar Bin Sulaiman of the Dubai International Financial centre.
Top UBS banker detained by US
One of the most senior private bankers at UBS, the world’s leading wealth manager, has been detained by authorities in the US investigating whether the Swiss bank helped its American clients evade tax.
UBS to shed a further 2,600 bankers
The latest cuts are part of a package to reduce the group’s total workforce by 5,500 by mid-2008, followed an initial 1,500 job cuts in investment banking after the Swiss group emerged as the biggest European casualty of the credit market turmoil.
BlackRock to buy UBS debt
Blackrock’s deal to pay UBS $15bn for a portfolio of subprime mortgage debt, represents one of the more significant examples of a growing number of contrarian bets by leading financial firms, indicating that the worst is over in the credit markets
Buffett loses $1.6bn on derivatives
The surprise investment loss, announced on the eve of Berkshire’s annual meeting in Mr Buffett’s native Omaha, caused a 64 per cent plunge in first quarter profits to $940m, from $2.6bn in the same period last year.
Barclays reformer quits amid rift claims
Paul Idzik, chief operating officer and one of the key lieutenants in efforts by John Varley, chief executive, to overhaul the bank’s culture and management, has decided to leave the UK’s third-biggest bank.
Merrill, Citi chiefs tap former employers
Recently installed chief executives at Merrill Lynch and Citigroup are reaching deeply into the ranks of their former employers, Goldman Sachs and Morgan Stanley, as they seek to transform the culture and management of banks that faltered badly during the credit crisis.
Buffett hosts ‘gloriously capitalist weekend’
Berkshire Hathaway’s annual meeting held at Omaha’s Qwest Centre, had more than 31,000 followers present to hear the company’s legendary boss, Warren Buffett.
HSBC thwarts attempted £70.5m fraud
City of London police said they have charged Jagmeet Channa, a 25-year old from Ilford in Essex, with conspiracy to defraud, money laundering and abusing a position of trust.
EasyJet losses widen as fuel price jumps
EasyJet’s first-half losses more than tripled under the impact of the surge in its fuel bill and costs arising from its recent takeover of GB Airways.
Buffett trumps bond insurers
Berkshire Hathaway’s fledging bond insurer generated $400m in premiums during the first quarter, outstripping all the established, but troubled, operators in the so-called US monoline insurance market.
Oil surges above $122 a barrel
Oil hit a new peak above $122 a barrel, leading gains for agricultural commodities and base metals.
London edges up after rate decision
Kazakhmys stormed to the top of the FTSE 100 leaderboard and closed at a record high amid rumours of an imminent bid approach from rival Kazakh miner Eurasian Natural Resources Corporation.
Oil moves above $120 mark
Oil prices hit a record of more than $120 a barrel, driven by fresh supply disruptions in Nigeria and a growing sense of optimism that the US economy might escape recession.
Pound higher as Bank leaves rates on hold
The pound pulled higher from a 10-week low against the dollar after the Bank of England left UK interest rates on hold following its monetary policy committee meeting.
China eases HK rules for fund managers
Beijing has made it easier for mainland China’s fund management companies to do business directly in Hong Kong and expand their operations in the territory.
Insight: Triple A prices are out of sync
Why have the prices of triple A mortgage-linked securities slumped so dramatically this year? That question has recently caused anguished debate in the banking world.
Optimism over US economy lifts equities
A fresh burst of optimism that the US economy was weathering the global financial storm better than had been feared helped fuel another strong advance for equity markets this week.
Wall Street stocks lower as Yahoo slides
Wall Street stocks slipped from recent highs, as oil broke through $120 a barrel and Yahoo tumbled after Microsoft withdrew its improved $46.5bn bid for the internet search company.
Corn shoots higher on US planting gloom
US corn prices hit record levels amid expectations that the update from the US Department of Agriculture would include downward revisions to production forecasts this year as planting in the Midwest has been hampered by bad weather.
View of the day: Copper conundrum
The copper market is a strange place at the moment, says John Reade, head of metals strategy at UBS, who notes that available stocks of the red metal have fallen sharply this year.
