Those Scotsmen who were complaining that not enough Government money was finding its way north of the border had little to complain about yesterday when the news broke that the Nationwide Building Society will be taking over what remains of what was Scotland’s largest building society.

Nationwide will take over various divisions of the Dunfermline that are operable on the condition that the UK treasury invests the tidy sum of £1.6 billion to freeze up the society’s “toxic debts”

Chancellor Alistair Darling, showing a touch of heartwarming humility pointed out that the Darling children had saving accounts at the Dunfermline, but this was not the reason that the government had intervened to save the society, which had a rich history going back 140 years. What made their failure inevitability was the usual formula of taking risks in search of paper profits which turned into losses of of more than £24 million in 2008.

To show that you don’t have to be banker to run a bank, and in some cases it would be better if you weren’t, was the announcement that Tesco, the UK largest supermarket chain intend to get into the banking business, with plans to open thirty in-house branches throughout the UK, and by the end of 2009. The markets showed their skepticism by pushing their share value down by 4.1 percent (13.6 pence to 317.5)

Other news on the FTSE was not positive with banks and commodities standing still. The U.K. mobile phone retailer Carphone Warehouse Group saw their shares rise a modest 1.4 percent (1,75 pence to 125.75) on news that they were about to enter the bidding for Tiscali’s SpA UK operations.

The James Halstead Plc group also moved forward on news of increased income and profits. Their shares rose by 2.1 percent (8.25 pence to 399.25)

The largest owner of shopping malls in Britain, Liberty International Plc who are currently negotiating with Peel Holding Plc regarding the possible purchase the Trafford Centre in Manchester enjoyed a share increase of 2.1 percent on the day (8.75 pence to 433).

Also on the high street, Marks and Spencer Plc, still the UK’s largest clothing retailer were under a cloud yesterday, with uncertainty abounding as to whether the company will be hiring an independent chairman. Their shares fell by 1.3 percent (3.5 pence to 265.25)

On the day, the FTSE 100 index rose by 3.14% or 118.26 points to 3881.17 while the FTSE 250 finished the session 1.53 per cent, or 95.08 points to reach 6,319.36

Sterling rose slightly against the dollar and teetered downward against the Euro and whilst holding its own against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4308
Pound/Euro 1.075
Pound/Japanese Yen 141.10
Pound/Swiss Franc 1.6284

Wall Street shares had a bad day on trading as uncertainties, especially in the car industry, began to emerge.

The Dow Jones Average dropped 254.16 to close at 7522.02. Nasdaq also dropped 43.4 points to 1501.84

Understandably shares in General Motors dropped like a stone after President Obama proved once again that he is not only charismatic but also a pretty tough cookie. GM’s boss, Rick Wagoner knows that now as he was sent packing, as Obama has cut the credit line for those who will not toe the line in getting the US car industry back on track. In Asia, the Hong Kong Hang Seng index fell by almost five percent on the news,

With the Nikkei also taking a turn for the worse, down 4.5%.

Overall fears for the short term future of the car industry was a key factor in pushing stock markets down across the board yesterday.

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Tags: Bank of England, Banking, British Economy, Credit Crunch, Financial News, General Motors, Money, Nationwide Building Society, Obama, President Obama, Recession, UK Banks, UK Recession