More than a million people with interest-only mortgages face a financial crunch when they have to pay them off, the regulator warns.
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Category : World News
Category : Business, World News
More than a million people with interest-only mortgages face a financial crunch when they have to pay them off, the regulator warns.
See original here: Shortfall fears for mortgage holders
Category : Business, World News
The world’s largest chemicals maker, BASF, says it will cut 500 jobs at its plastic additives and pigments divisions in the face of competition from Asia.
Read more: BASF to cut 500 jobs worldwide
Category : Business, World News
Goldman Sachs boss Lloyd Blankfein says the UK must stick with its austerity plan or face a negative reaction from global investors.
See original here: Goldman boss: UK must stick to plan
George Osborne also faces a jump in unemployment, another ratings downgrade and the IMF’s criticisms on austerity
George Osborne faces a fresh onslaught on his economic credibility this weekend, as the influential Treasury select committee publishes a damning report on his flagship budget housing policy, hours after Fitch became the latest credit ratings agency to strip the UK of its coveted AAA rating.
Capping a grim week for the chancellor, in which the International Monetary Fund urged him to rethink his austerity plans and the latest official figures showed a jump in unemployment, MPs accuse him of failing to answer 19 key questions about the Help to Buy scheme, aimed at helping first-time buyers.
“It is by no means clear that a scheme whose primary outcome may be to support house prices will ultimately be in the interests of first-time buyers,” the MPs say.
They warn that the chancellor’s package of measures to boost the property market could instead stoke a housing bubble and leave taxpayers exposed to a future downturn in prices.
Andrew Tyrie, the Tory MP who chairs the committee, said: “The government’s Help to Buy scheme is very much work in progress. It may have a number of unintended consequences.”
The committee’s report, published on Saturday, is a fresh blow for Osborne, after Fitch followed rival agency Moody’s in reducing the UK’s credit rating to AA+.
The chancellor had made retaining the coveted AAA badge a key gauge of his credibility, but Fitch said that its decision reflected sickly growth and the worse than expected state of the public finances.
“The downgrade of the UK’s sovereign ratings primarily reflects a weaker economic and fiscal outlook and hence the upward revision to Fitch’s medium-term projections for UK budget deficits and government debt,” it said.
Of the major ratings agencies, only Standard & Poors now describes the UK as an AAA country.
Speaking in Washington, the chancellor adopted a defiant tone, signalling his determination to face down calls from the IMF to soften his deficit reduction strategy and insisting that his approach to putting the public finances in order was both “credible and flexible”.
Asked whether he would accept the advice of the report that will be published by the IMF after a team visits the UK next month, Osborne said: “It depends whether I agree with the advice.”
The chancellor’s bold attempt to get the housing market moving, by offering interest-free loans worth up to 20% of the price of a property and taxpayer-backed mortgage guarantees, was the centrepiece of last month’s budget.
But Saturday’s report from the Treasury select committee cautions that the new measures give the Treasury “a financial interest in maintaining house prices to limit the losses to the taxpayer”, which could make the housing support measures permanent.
If mortgage lenders got tough on borrowers, the report adds, repossessions could rise, leading to a sharp fall in prices, so that “the Treasury could end up facing large losses on those mortgages it has guaranteed”.
The MPs’ strongly worded report will stir memories at the Treasury of last year’s “omnishambles” budget, when the chancellor was forced to reverse a series of key policies, including the controversial “pasty tax” and a cap on tax relief for charitable donations, after vocal public criticism.
Cathy Jamieson, the shadow Treasury minister, said: “At the end of a week when unemployment rose and the IMF warned Britain needs a plan B, this damning report is another damaging blow to George Osborne.
“We will only tackle the housing crisis and help first-time buyers if we have a major programme of affordable house building.”
The select committee finds there is no evidence that Osborne’s housing plans would help to boost the construction of much-needed new homes. “If the government’s priority was housing supply, its housing measures should have concentrated there,” the report says.
Several City economists have also expressed scepticism about the chancellor’s mortgage measures. Danny Gabay, of consultancy Fathom, accused the chancellor of encouraging households to take on even more debt, exposing them to the risk of a housing downturn.
“Square the circle: ‘excessive government debt, bad; excessive private sector debt, good,’” he said, calling Osborne’s policies “the most naked, cynical attempt to engender a housing-based boom, built on yet more debt”.
Asked whether his housing subsidies risked inflating a new bubble, the chancellor said: “I don’t agree. This is a period of real weakness in the housing market. The risks of a housing bubble are pretty nonexistent.”
He insisted he was trying to tackle the “abnormally high cost of mortgages and the very high deposits being asked of people”.
The chancellor said the Bank of England would have the power to end the scheme if it had concerns that it might create a housing boom.
“This is a time-limited scheme and I have given the key to its continued operation to the Bank of England financial policy committee. It can turn the key off in the next parliament,” he said.
But the select committee expressed concerns that exercising this power would be “a distraction or burdensome” for the fledgling body, which could face intense pressure from hard-pressed homebuyers to continue taxpayer support.
Instead, MPs argued, there was a strong case for the final decision on ending the scheme to rest with politicians.
Despite two years in which the economy has moved sideways, the chancellor said he did not feel under threat politically.
“I don’t see anybody coming up with a political alternative,” he said. “I remain focused on delivering what I said I
A ‘three-speed’ world is emerging, and the International Monetary Fund fears the consequences
As crisis-weary finance ministers and central bank governors from around the world kick back in Washington this week, on the sidelines of the twice-yearly International Monetary Fund meetings, they could be excused for feeling a tinge of optimism in the spring sunshine.
In the US, the bombed-out housing market is bouncing back; the stock market has hit fresh all-time highs; and there are hints that the Federal Reserve is starting to think about slowing the pace of its drastic quantitative easing programme. The latest data on consumer spending last week raised questions about how solid the recovery is – but there is hope.
Japan’s experiment with its radical new policy of Abenomics – the attack on deflation launched by new prime minister Shinzo Abe – may be in its early stages, but at least the country’s new policymakers have a plan. And even in the eurozone, where keeping the single currency afloat still demands relentless wrangling, the mood of imminent crisis has abated since the bailout with Cyprus was agreed.
But in a scene-setting speech in New York last week, IMF managing director Christine Lagarde stressed the deep divisions that remain in what she described as a “three-speed” global economy.
Lagarde placed emerging economies at the front of the pack, ahead of a middling group – including the US – that has begun to rebuild its battered economies; while Japan and Europe were trailing behind. She also warned that the world’s biggest banks remained a menace to financial stability, particularly in recession-hit Europe.
Some of these differences, between the leaders and the laggards, are likely to surface in the talks this week among the IMF’s 188 member countries, as central banks fret about their “exit strategy” from the emergency policies they have used to try to stimulate demand since the Great Recession.
A chapter of the IMF’s latest financial stability report, released to coincide with the build-up to the meetings, warns that long periods with ultra-low interest rates and so-called “unconventional” monetary policy, such as quantitative easing, can spawn serious long-term problems, even if they succeed in boosting short-term growth.
At home, “zombie” firms and households that would have gone bust can be propped up by super-cheap borrowing – only to face an even greater risk of collapse when interest rates finally go up.
Meanwhile, some of the cheap money created in the US, Japan and the UK will leak overseas, as investors seek better returns elsewhere. Emerging economies in Asia and Latin America are increasingly concerned about speculative investment flows pumping up their currencies and inflating asset bubbles.
“Despite their positive short-term effects for banks, these central bank policies are associated with risks that are likely to increase the longer the policies are maintained,” the IMF warned.
Depreciation is another welcome by-product of the hyperactive central banks’ policies, and there will also be a debate in Washington about the risks of a beggar-my-neighbour battle to create the cheapest currency.
Even before Japan’s dramatic expansion of its bond-buying programme, the sharp devaluation in the yen over the past six months had raised concerns in Europe that a strong euro will harm competitiveness.
Danny Gabay, of City consultancy Fathom, said an appreciating euro would drive Europe’s economies deeper into recession and put the region’s fragile banks at greater risk. “Do they think the banking system that is already under stress from high unemployment and non-performing loans can withstand a stronger euro too?”
Face-to-face talks, like those that take place at these IMF gatherings, can force policymakers to confront the consequences of their domestically motivated policies – but they are rarely persuaded to change their plans as a result. Sir Mervyn King, the outgoing Bank of England governor, is likely to repeat his frequently expressed fear that there remain deep, fundamental tensions in the world economy, between creditors and debtors, savers and spenders, which have never been tackled.
As he put it in a speech in New York in December: “The G20 in 2009 came together at the London Summit and agreed the easy part, which was stimulatory policies where every country could agree. But … since then … there has been no agreement on the need for working together to achieve some element of re-balancing the world economy.”
Instead of brokering such an agreement, which might involve creditor countries such as Germany and China agreeing to boost their demand, instead of relying solely on cutbacks in debtor countries to narrow the divide, the IMF has repeatedly been dragged into rubber-stamping botched bailouts and harsh austerity policies when tackling the eurozone sovereign debt crisis.
The IMF is due to reform its governance, including giving emerging economies such as China a stronger voice, but so far its board members have been unable to agree firm proposals. Meanwhile, it will stand ready to intevene whenever the next domino falls in the crisis that began more than five years ago.
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Isner Reaches Clay Court Final
New York Times John Isner got his big serve working after a slow start to reach the final of the United States Men's Clay Court Championship, beating Juan Monaco of Argentina, 1-6, 6-4, 6-4, in Houston. Isner, the fifth seed, will face top-seeded Nicolás Almagro of Spain, who … Isner, Almagro reach Houston final Monaco primed for rematch with Isner
Sean Jude Kelly, 31, faces up to 20 years in US jail if found guilty of aggravated assault and threatening police officers A British holidaymaker was in a Florida prison cell Tuesday facing up to 20 years in jail after allegedly spitting on crew members and threatening fights with other passengers on a flight back to London. Sean Jude Kelly, 31, was charged with aggravated assault on a law enforcement officer and resisting an officer with violence after the captain of the British Airways flight from Cancún to Gatwick made an emergency landing in Orlando on Sunday night. Kelly, of Chingford, Essex, drank half a bottle of vodka and became disruptive shortly after takeoff, then fought with police officers and threatened to kill one of them as they removed him from the aircraft when it was on the ground, according to his arrest report. Once in a cell at the airport, Kelly began shadow boxing and shouted: “You’re dead, you fat fuck,” at a customs official through the door, the report continued. Kelly, who lists himself on his Twitter page as a money broker and entertainments officer, had spent a week in Cancún, often posting photographs of beaches and alcoholic drinks on his social media feeds. In a post before his flight to Mexico on March 31 he boasted of taking valium pills “to get through takeoff”, and in another post said he spent, “Sunday night rolled into Monday day knocking back daiquiris”. He was being held in Orlando’s Orange County jail on Tuesday afternoon charged with aggravated assault, a second-degree felony in Florida punishable by up to 15 years in jail, and resisting arrest with violence, a third degree felony with a possible sentence of up to five years. Bail was set at $5,300, although he was placed on an immigration hold, meaning he would be kept in custody even if he raised the money. He is expected to appear in court on Wednesday. A spokeswoman for British Airways told the Guardian that the 265 passengers aboard were delayed for more than an hour by the unscheduled landing. “We apologise to customers for the disruption to our Cancún to London Gatwick service on April 7. The flight was diverted due to a disruptive passenger,” the airline said in a statement. “The safety and well-being of our customers and crew is our top priority. We will not tolerate abusive behaviour.” The spokeswoman said British Airways reserved the right to seek compensation from the passenger for the extra costs incurred by the landing in Orlando and subsequent delay. Kelly, the arrest report said, became “irate” on board the flight and was “spitting on flight attendants and cursing while trying to pick fights with every passenger he made eye contact with.” He was handcuffed by customs officials on arrival at Orlando International Airport at about 8pm and continued to struggle and try to kick police officers as they led him through the airport to a holding area, they said. “Kelly was being combative, both verbally and physically, over the entire route,” said Corporal Russell Emerson, the arresting officer of the Orlando police department, in his report. He said Kelly told Officer Cleopatra Margaritis: “I’m going to kill you,” then tried to kick her, sustaining a “small laceration above his left eye” after falling to ground when he lost his balance. Kelly’s booking photograph, meanwhile, shows his face with a bruised and bloodied fully closed left eye.
Fri, Apr 05, 2013 12:00 – Face Up Entertainment Group, Inc. (FUEG: Grey Market) – Venue Change – The symbol, FUEG, no longer trades on OTC Link/FINRA BB. As of Fri, Apr 05, 2013, FUEG trades on Grey Market. You may find a complete list of venue changes at otcmarkets.com. Continue reading here: Face Up Entertainment Group, Inc. (FUEG: Grey Market) | Venue Change Category : Business The U.S. stock market slumped in the face of disappointing payroll report, with only 88,000 jobs created in March. The S&P 500 and Nasdaq delivered their worst weekly performances of the year, falling 1% and 2%, respectively. View post: S&P 500 has worst week of the year |