The Gordon Brown road show hits Brazil

Ostensibly to gather support and unify global efforts to get to grips with the global economic crisis but more likely in a move to get away from the increasingly angry UK taxpayer, Prime Minister Gordon Brown hit the Copacabana beach in Brazil today.

He will meet there with President Luiz Inacio Lula da Silva whose country is also suffering deeply from the effects of the World economic crisis. Brown arrived in Brazil from New York, where he met UN Secretary General Ban Ki-moon. At their meeting, the Prime Minister stressed the importance of the next month’s G20 summit in London. He voiced his intentions to take positive action by saying “doing nothing is no longer an option” and that the G20 must take action to protect jobs and help the world’s poorest countries.

In a later statement, Brown also reiterated his support for statements made by counselor for trade and economic policy of the British Embassy in Beijing Duncan Sparkes relating to the need to expand China’s role in international financial institutions. The issue will be discussed at the G20 summit

Despite the fact that they are accepted as being the world’s third largest economy, China enjoys a disproportionately limited role in global international financial institutions.

Back in the UK, Bank of England policymaker Andrew Sentence expressed his opinion that Great Britain needs to ensure that the fiscal deficit is being incurred to buy her out of the current crisis is sustainable, even in the medium term. Not to do so, would risk damaging business confidence.

Mr. Sentence went on to add that there may well be a case for some well-targeted fiscal measures to help companies with cash-flow problems.

The implications of refusing to return bonuses that most members of the UK felt were unjustified hit home very strongly to Sir Fred Goodwin. Sir Fred’s home in Edinburgh came under attack early Wednesday morning by characters unknown. Windows were smashed and one of Sir Fred’s luxury Mercedes cars was also damaged. A late e-mail announced that other bankers. Who make huge losses for the now largely state owned banks and expect to paid bonuses for doing so may receive the same treatment.

In another embarrassing ( but probably unlinked) moment for the UK banking system, for the first time since 2002, the U.K. failed to find sufficient takers buyers for the one and three quarter billion pounds of government that they had put up for sale. The government only managed to sell around 80% of their target, and although they waited around for a while to see if Sir Fred would gobble up the balance, he failed to show. Rumour had it that he was out looking for a glazier.

In a sign of the times, the world’s largest listed hedge fund firm, Man Group announced that funds being held under management by the company have fallen 11 percent since end-December 2008, as markets continued to decline.

The firm said net client outflows for the three months to March are estimated at $3.2 billion, with both private investors and institutions pulling out assets.

Man Group’s chief executive, Peter Clarke announced “Many investors, particularly institutions, have sought liquidity regardless of performance and reduced their exposure to all asset classes

Under pressure to reduce costs, HSBC are expected to announce their intentions to cut out more than 1,000 jobs in the U.K. as well as reducing office space across the country. The cuts will come in addition to the 500 UK based posts axed as recently U.K. jobs in November 2008.

On the FTSE, there was a lot of buzz around that Britain’s largest energy supplier, Centrica Plc were about to raise their offer to purchase the Venture Production Plc. Their initial bid for more than a billion pounds was rejected. After they were rejected, Centrica also saw their stock fall by 2.6 percent (6.25 pence to 236.75).

Proving the fact that doing the right thing doesn’t always make for profit was the news that GlaxoSmithKline Plc, the world’s second largest drug maker, would make 500 patents as well as another approximately 300 pending available to further the development of medicines for “neglected diseases.” The company’s shares immediately fell by 1.2 percent (12.5 pence to 1,004)

Doing better is Britain’s third-largest supermarket chain J Sainsbury Plc who’s trading statement about to be published is expected to show considerable sales and profits. In anticipation, their shares climbed 3.2 percent (10.25 pence to 330.75)

Legal & General Group Plc (LGEN LN): The 173-year-old U.K. insurer is due to announce earnings. The shares dropped 2.1 pence, or 4.68 percent, to 42.8 pence.

On the day, FTSE 100 Index fell a modest 1.1 percent (41.35 points to 3,911.46.) The FTSE 250 did proportionately better, dropping only 0.15% (9.71 points to 6,361.40)

On the money markets, the Pound rose slightly against the dollar and trimmed downward against the Euro.

Pound/US dollar 1.4565

Pound/Euro 1.0709
Pound/Japanese Yen 143.18

Pound/Swiss Franc 1.6365

On the global currency stage, the dollar took a mild tumble against the Euro. This came after US Treasury secretary Tim Geithner was heard to suggest that the US were considering a proposal made by the Chinese to curtail global reliance on the dollar as its reserve currency.

Wall Street shares took another step forward as nothing seems capable of breaking the optimistic mood that has prevailed there since the beginning of the week.

The Dow Jones Average climbed 89.84 points to close at 7749.81. Nasdaq also rose 12.43 points to 1528.95

Crude oil dropped more than $1 a barrel after a US government report revealed that stocks had climbed to their highest levels 1993, largely due to a consistent fall in demand.

On speculation that a weaker dollar was on its way demand precious metal as an alternative investment, increased. Both Gold and Silver climbed in value on the days trading.

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Tags: Economics, Financial News, Gordon Brown, Money Management, Stocks and shares, UK Recession