U.S. President Barack Obama has celebrated his first year in office by showing a more brittle side to his personality, and in recent statements has been particularly vehement in his comments regarding the US banking system. Obama has stated his intention to raise legislation that would force around 50 banks, insurance companies and large broker-dealers to pay a tax of 0.15 percent on all of their U.S. assets, less their capital and deposits. Falling into that category will be the Royal Bank of Scotland (RBS), Barclays Banks and HSBC who, if the legislation is passed, could be forced to pay more than $10 billion to the U.S. government over the next 10 years. Analysts have already calculated that HSBC could be forced to pay around $3.8 billion dollars and Barclays could face a total bill of around $5.6 billion dollars over ten years. While the RBS will only be paying out around one and half billion dollars, they appear to be already in the process of raising capital to meet the bill, when it comes. They have announced that the Grosvenor House hotel, , is to be put up for sale by the part-nationalised RBS and proceeds for the sale is expected to raise between £600 and £700 million as part of RBS’s unwinding of its property portfolio. The Grosvenor House hotel, which has previously hosted events such as the CBI annual dinner, could be on the market as early as this month.

Meanwhile the Bank of England (BOE) are still feeling the effects of their quantitative easing programme, with the news of the loss of £3.6 billion s on its purchases of government bonds, whilst projecting that capital losses from the purchase, so far of £192 billion pounds in gilts would be £8 billion if these were sold today. The reason for the shortfall is the steep drop in government bond prices as a result of the strengthening economic recovery felt the past month. On the upside, losses will be offset by £4.4 billion pounds, which is the interest payment the BOE has received from the securities.

Construction companies made up more than 20 percent of UK business failures in 2009, a recent survey has disclosed. While the number of companies involved in the construction sector that closed their doors in 2009,

decreased slightly from 2008, there were still 683 who fell into administration during 2009, compared with 716 in 2008. The fourth quarter of 2009 saw a 17 percent decline in construction administrations according to Deloitte with 129 compared with 155 in the third quarter.

Shares in Premier Foods have fallen by more than ten percent after the food manufacturer announced that full-year pre-tax profits would be lower than expected, at around £165 million pounds for the financial year to February 16. Total sales increased by 1.5 percent during the fourth-quarter with sales of the company’s branded goods increasing to around £1.7 billion, making up to two thirds of the total turnover for 2009, compared with 61 percent the previous year.

The bus operator FirstGroup has reported a drop in turnover of around 20 percent for the company’s U.S. Greyhound operation during the first half of their financial year. A little ray of sunshine was that revenue for the third quarter was only down by 11.4 percent and passenger revenue for the group’s UK bus business grew by 0.7 percent during the three months to December 31. On the upside, FirstGroup announced that they remain on course to achieve earnings targets for the year and that trading, was in line with management expectations.

The European electrical groups DSGi, who own and operate the Currys and PC World chains in the UK, have announced trading figures that are in excess of most City analyst’s projections. Group sales rose by eight percent during the 12 weeks to January 9, much higher figure than the three percent expected by most analysts, with the reason attributed to an upturn in consumer sales.

Home Retail Group (HRG) have also updated their predictions for its full-year profits, which they now expect to be around £20 million higher than the £265 million initially forecast, following a four percent improvement in sales at HRG’s DIY chain Homebase.

One of Cadbury’s major shareholders has indicated that US food giant Kraft will have to increase their hostile takeover offer if it wishes to win support.

Legal & General Investment Management, which owns 5% of Cadbury shares, said Kraft’s current offer did not meet "the long term value" of the UK firm. Legal & General’s comments come ahead of Tuesday’s eagerly anticipated deadline for Kraft to increase its offer to Cadbury shareholders.

Reports continue to gather strength that Hershey is also planning a rival bid for Cadbury which may be announced as early as this week. The current state of affairs is that Kraft is currently offering £10.5 billion or 761 pence per Cadbury share, which was rejected by the chocolate-maker’s shareholders. .

Kraft’s current bid is worth less than Cadbury’s share price which closed on Friday at 793.5 pence.

British Telecom (BT) announced their intentions to enter a price war with Sky over the price charged for fans to watch premium sports events on TV, including football and cricket.

The telecoms firm is awaiting the outcome of an Ofcom probe, which will be known in March, examining whether Sky must drop the wholesale price it charges rivals for content.

BT Vision has leaked their intentions to charge about £15 a month for Sky Sports 1, about £10 cheaper than Sky currently charges. A spokesman for BT projected that there would be benefits to the viewing public for choosing BT as they would be getting more choice

Vodafone UK has launched a new online business centre, bringing information and insight on its full range of capabilities in mobile, fixed and unified communications together in one place. The site, www.vodafone.co.uk. Has been designed to make it even easier for private and business customers to find the information they need and the solutions that best suit them. Meanwhile Vodafone (has become the third mobile phone operator in Britain to begin to market the Apple iPhone in the UK. Results are encouraging with a total of 50,000 units delivered on the first day of sales. Until recently, Vodafone had been disallowed from marketing the premier smartphone due to exclusivity rights brokered between Apple and O2.

Vodafone is now the fourth company in the U.K. to carry the iPhone, following O2, Orange and Tesco. While O2 once enjoyed a two-year exclusive deal with Apple to offer the iPhone in the U.K., that exclusivity ended last year and Orange and Tesco began offering the Apple smartphone in November and December, respectively.

Orange sold 30,000 iPhones on its first day of its launch in November 2009 while Tesco has not disclosed any sales figures.

Also enjoying some good trading on the back of the iPhone launch is the Carphone Warehouse. Their trading update for the last quarter of 2009 is expected to show a four percent increase in the number of phone connections compared to the same period in 2008. Sales of the most expensive products, such as the Apple iPhone and BlackBerry, are believed to contribute considerably to sales and profits, while the company’s fixed-line division TalkTalk is reported to have added 46,000 new subscribers during the last three months of last year.

The pound improved a little against the dollar before the weekend, closing at 1.6301, while the Euro being traded at 1.321

The FTSE 100 Index dropped 43 points before closing on Friday finishing on 5,455.37.

Wall Street bank JP Morgan Chase has reported profits of $3.3 billion (£2 billion) for the last three months of 2009, compared with profits of $702 million for the same period in 2008, which was the height of the financial crisis. Total profits for the bank for year were $11.7 billion, with investment banking providing the bulk of the profit.

The Dow Jones Industrial Average took a tumble before closing on Friday down 81 points to 10,609.65. The NASDAQ Composite was also down. 23 points to close on 2287.99

financial

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Tags: Apple iPhone, Bank of England, Banking, Barack Obama, Barclays Banks, BlackBerry, British Economy, British Telecom, BT Vision, Cadbury, Carphone Warehouse, Currys, Deloitte, Dow Jones, DSGi, Economy, Employment, Financial News, FirstGroup, Grosvenor House hotel, Home Retail Group, Homebase, HSBC, JP Morgan Chase, Kraft, Legal & General, Money, NASDAQ, O2, Ofcom, Orange, PC World, Premier Foods, Recession, Retail, Royal Bank of Scotland, Sky, Stock Markets, Stocks and shares, Tesco, UK Banks, UK business, UK Economy, UK government, UK Recession, Vodafone UK, Wall Street

Officers in charge of the Chelsea Building Society held their head in their hands on Friday as they sheepishly admitted that the society had fallen victims to £41 million fraud by some of their buy-to-let borrowers.

The Chelsea, UKs fifth-largest building society, hastened to explain that if the fraud hadn’t taken place their half year loss of £26 million would have been a £15 profit, which still looks bad when compared to their £23 million of last year, but will still be acceptable given the current economic circumstances.

In an act of accountability which is rare in the UK these days, the society announced that both Finance Director Andrew Parsons and Chief Executive Richard Hornbrook will be resigning their posts as details of the fraud began to unravel. Initial findings are Chelsea reveal that artificially inflated property values by professionals such as mortgage brokers and surveyors were the main factors, whilst acknowledging that the society’s risk controls may not have been as tight as they could have been at a time of booming demand for mortgage finance and runaway house prices.

Chelsea has since conducted a review of its risk management, setting up a number of risk committees.

The much heralded government scheme purporting to offer up to £5 billion to help protect suppliers from the collapse of their customers has so far attracted only minor interest with only £7 million of assistance being provided to a mere 52 UK companies to date. .

The thinking behind the scheme was to prop up private sector insurers who were growing increasingly nervous about their levels of exposure during the credit crisis.

The reasons for the scheme’s low take-up has been blamed on the scheme’s tight restrictions and comparatively high charges, amounting to 2 per cent of turnover, which is more than four times the cost of typical private sector insurance.

On Thursday, the UK business department announced that they would be cutting charges to 1 per cent in the hope that more entrepreneurs would take up the initiative.

Barclays has recently published research suggesting that business sentiment amongst the UKs businesses is on the rise.

Almost three quarters of UK businesses surveyed in the poll described their attitude towards the economy as more positive, with the research also revealing a confident stance towards recovery, with 15 per cent of respondents believing their company will move back into a sustained growth phase within the next six months.

An interesting point raised in the poll was that a significant number of business leaders believe that the current recession was positively affecting motivation levels of staff and management within their company.

Officials of the UKs largest state controlled bank, the Royal Bank of Scotland Group Plc have been asked to appear at a hearing due to take place in October where the subject of whether the Treasury violated its own environmental standards by bailing out the bank will be discussed

It was also revealed on Friday that clients of Lehman Brothers’ European operations are liable face further delay before they can recover part If not all of their $9 billion of assets. The news came after an English judge decided he could not approve a scheme mooted by PwC, administrator of the defunct bank’s main European operations that would have helped expedite the winding up of the collapsed bank’s complicated operations.

PwC had proposed a scheme that would have divided the bank’s more than 1,000 clients into three classes. A move that would have allowed the administrators to deal with claims by class rather than each one separately. .

Thelondonpaper, the free sheet published by News International, owners of the Sun and the Times, will be wound up after the company announced advertising income had “fallen short of expectations”.

Rupert Murdoch has vowed to charge for all the online content of his newspapers and television news channels. Price rises are now one of the few growth strategies available to newspaper publishers.

The UK Office of Fair Trading (OFT) could force some of Britain’s largest bus companies to sell off their buses or even entire depots after they ruled that a lack of competition in the local bus market may be a cause for inflated fare tariffs and sub standard services.

OFT’s proposal is one of a series suggested in a recent study that reach the overall conclusion that operators in the £3.6 billion market could be overcharging customers.

After a rapid wave of consolidation in 1986, currently almost y two-thirds of UK bus services are controlled by five operators – Go-Ahead, National Express, Arriva, FirstGroup and Stagecoach, with OFT revealing that passengers were paying 9 per cent more for fares in areas where there was only one national operator.

On the FTSE Friday, Cable and Wireless was among the risers, gaining 1.6 per cent to 143 pence amid hopes that the market rebound would allow it to revive plans to split out its worldwide division.

The insurance sector was also on the rise, boosted by Aviva rising 5.5 per cent to 411 pence and Friends Provident up 4.3 per cent to 82 pence

Legal & General also gained 5.6 per cent to 78 pence after major market analysts named the stock among their top picks in the sector.

The FTSE’s advance also favoured stocks with recovery potential, with British Airways being among the hottest rising 7.2 per cent to close at 188 pence.

A 2 per cent rise gave the FTSE 100 its fourth straight session of gains, up 94.31 points on Friday to its biggest gain in more than a month at 4,850.89. For the week, the benchmark was up 2.9 per cent, lifting the index to a 10-month high.

On its way back in some style is the FTSE 250 jumping a further 1.73 % or 147.47 points to close for the weekend on 8,678.83

Currency markets remained fairly stable on Friday.

• Pound/US dollar 1.6501
• Pound/Euro 1.1522
• Pound/Japanese Yen 155.7159
• Pound/Swiss Franc 1.746

World stock markets have risen after US central bank chief Ben Bernanke said the world’s biggest economy was nearing the start of a recovery.

The Fed boss said unemployment, which is expected to top 10% in the US, would fall "only gradually".

However, European Central Bank president Jean-Claude Trichet expressed concern at what he saw as premature talk of a full recovery.

On Wall Street, the Dow Jones index rose more than 1%, while European markets were also sent higher.

US stocks rallied to new highs for the year on Friday after early optimism from Europe was boosted by signs of a US recovery.

An unexpected jump in the sales of existing homes fuelled the US stock market’s best day since late July.

This gave investors further confidence that the recession is ending, after figures earlier in the week showed factory activity in the mid-Atlantic region and manufacturing in the New York area both rose impressively last month.

The Dow Jones Industrial Average continued its steady recovery, up a further 155.91 Points to close on 9505.96. The NASDAQ also crossed the 2,000 point barrier again up 31. 68 points to close on 2020.90

Monday evening in the US will see an end to the cash-for-clunkers scheme which has been described as "a victim of its own success" just a month after the scheme was introduced.

The decision to wind down the scheme was taken to ensure that payments do not exceed the $3 billion allocated by Congress.

By Thursday, the transportation department had recorded 457,000 transactions, worth almost $2 billion in rebates.

The board of General Motors was set to choose their preferred bidder for a controlling stake in Opel/Vauxhall on Friday. Amid intense pressure from the German government to favour Magna International, the Canadian parts maker, the decision is to be made amid growing disquiet over the sale process among other EU member states where the Detroit carmaker has operations. The UK government is concerned that the Germans will seek to call the shots in deciding which GM plants are closed or scaled back as the new owners work to put the unit on a more even financial keel. Magna is competing against RHJ International, the Brussels-based private equity group.

The price of oil has hit its highest level of the year, boosted by sharp rises in Chinese stocks and rising shares on Wall Street.

The price of US crude rose to $74.15 a barrel before settling at $73.89, a gain of 98 cents. London Brent was up 86 cents at $74.19.

Worldwide oil prices have been extremely volatile this year.

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Tags: Andrew Parsons, Arriva, Bank, Banking, Barclays, Ben Bernanke, British airways, buy-to-let, Chelsea Building Society, Currency, Dow Jones, Economy, European Central Bank, Financial News, FirstGroup, Fraud, FTSE, General Motors, Go-Ahead, Legal & General, Lehman Brothers, Mortgage, NASDAQ, National Express, News International, Office of Fair Trading, Opel, Richard Hornbrook, Royal Bank of Scotland, Stagecoach, Stock Markets, Stocks and shares, Thelondonpaper, UK Banks, UK business, Vauxhall, Wall Street

Signs that the UKs hard hit investment banks are springing slowly back to life comes with the news that new job openings in July were at their highest for the year and the impetus is expected to continue if not increase in the autumn.

According to recent data, the number of job listings in June and July across London’s financial sector was almost double of that in December 2008 with an August looking to be even stronger.

The strong half-year results from most of the major UK banks show a dynamic upward trend, especially in investment banks, which at the peak of the financial crisis cut their staff back to the bone.

Another item of positive news from that banking sector is that the Lloyds Banking Group is to place their decision to close its 164-strong Cheltenham & Gloucester branch network on hold for the time being. Less than three months after announcing their decision, partially state owned Lloyds, are to take a second look at their decision, and while the situation is under review, the branches will remain operational after their planned closure date of November. Lloyd’s sudden change of heart is believed to be connected to its recent request for state aid approval from the European Commission.

Shares in John Menzies rose more than 24 per cent on Wednesday after demand for air travel and new contracts for newspaper delivery boosted underlying profits at their aviation services and news distribution division.

Meanwhile Menzies’ news distribution division, responsible for more than two thirds of the company’s total turnover, announced a 2 per cent reduction in sales to £573 million.

In the first half to June 30, Menzies negotiated new contracts with all the leading newspaper and magazine publishers, and is now serving an extra 3,000 retail outlets.

One of the largest and well known UK camera retailers, Jessops, who have been experiencing financial difficulties for some time now, have announced that they are close to closing a rescue deal with their bankers.

In spite of falling sales, Jessops, who operate 211 stores across the UK and Ireland, announced their intention to defer the end of their financial year to November, hopefully to allow the company sufficient time to reach an agreement with HSBC on restructuring its £60 million debt facility.

A spokesman for Jessops announced that sales had been weak for the summer months, down 4.7 per cent in the 12 weeks to August 16, on top of the expectations that the company would make a pre-tax loss before non-recurring charges for the year, following its £49.8 million pre-tax loss in the year to September 2008.

Britain’s largest bus and train operator FirstGroup, who also own and operate the Greyhound coach brand in the US, announced that the famous Greyhound buses will soon be seen on UK street, The company plans to start a bus route, running from London Victoria to Portsmouth and Southampton . .

The buses will be equipped with all the comforts that a passenger could ask for, including free Wi-Fi, power sockets for each passenger, air conditioning, complimentary newspapers and leather seats. To add a bit of character, each Greyhound bus will be named after character featured in US classic pop music, with of the names brought to mind including Peggy Sue, Billy Jean and Barbara Ann.

FirstGroup, who acquired the Laidlaw company, Greyhound’s parent company in a £1.9 billion deal in 2007, intend to provide strong opposition to their competitors through providing greater comfort and improved service at low cost. Each Greyhound coach will have a maximum of 40 seats compared with the usual 50. Customers will be able to reserve their seats over the internet.

The FTSE 100 was in good shape yesterday rising 66.91 points to close on 4,756.58. On the way back is the FTSE 250 jumping by 1.92% or 161.11 points to close on 8,531.36 at the end of the days trading.

It has been revealed that Bank of England governor Mervyn King intended to inject even more billions into the UK economy in August, but his move was vetoed by his colleagues on the monetary policy committee. The news has unnerved markets, sending the pound lower and gilt yields down. King apparently had intended to increase the central bank’s “quantitative easing” programme of injecting cash into the banking system by £75 billion to a total of £200 billion.

The pound remained fairly stable, apart from falling heavily against the Swiss Franc.

• Pound/US dollar 1.6507
• Pound/Euro 1.1582
• Pound/Japanese Yen 155.3327
• Pound/Swiss Franc 1.755

In the six months to April US banks have begun to reduce consumer access to revolving loans including credit cards and home equity lines of credit for about 20% of borrowers, according to a recent study. The study shows that banks in America are becoming increasingly aggressive in cutting their lines of credit to US consumers, with the average decrease to a consumer’s credit line averaging $5,100, more than double the $2,200 average reduction in the six months to October 2008

Seemingly unaffected was the Dow Jones Industrial Average, which continued its steady recovery, up a further 45.19 points to close on 9324.35. The NASDAQ also continued to show improvement, up 14.39 points to close on 1983.63

The sudden surge in the price of oil following data showing a huge drop in crude supplies last week was what pulled US stocks out of their early week slump

US natural gas prices sank to a seven-year low on Thursday amid concerns about a possible supply glut as winter looms in the offing.

Demand for natural gas has been weak, particularly from the industrial sector. US producers have cut the number of rigs drilling for new gas by more than half since September 2008 although stocks continue to rise due to output from existing facilities.

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Tags: Bank of England, Banking, British Economy, British Pound, Cheltenham & Gloucester, Currency, Dow Jones, Economics, Economy, European Commission, Financial News, FirstGroup, FTSE, Greyhound buses, HSBC, Investment, investment banks, Jessops, John Menzies, Lloyds, Mervyn King, Money, Money Markets, NASDAQ, Recession, Stock Markets, UK Banks, US Banks