Link to the article: Economist
Feb 25th 2009 | WASHINGTON, DC
From Economist.com
Barack Obama, in his address to Congress, asks for sacrifice but skips the details
AS A new president, Barack Obama’s first speech to Congress was not, officially, a state-of-the-union address. That was just as well: its current state is awfully precarious. On Tuesday February 24th, a few hours before he spoke to the Senate and House of Representatives, a survey reported that consumers’ confidence in the future was at its lowest in 40 years of polling.
Mr Obama did not sugar-coat matters. The economic crisis “is the source of sleepless nights,” he said. His budget, to be delivered on Thursday, “reflects the stark reality of what we’ve inherited—a trillion dollar deficit, a financial crisis and a costly recession.”
He promised that beyond this grim present lies a brighter future of plug-in hybrid-energy cars, wind- and solar-powered cities, digital health records, vanquished disease, and the world’s highest college-graduation rates. And, with the inspirational flourish for which he is famous, he insisted that Americans would triumph because there exist “amid the most difficult circumstances”—his voice descending to a throaty growl—“a generosity, a resilience, a decency”.
Such speeches are typically meant to sketch a president’s broad agenda rather than deliver specifics. This one at times felt like an economics class with simple explanations of how credit markets work, and at others like a late-night cable TV commercial: “The average family who refinances today can save nearly $2,000 per year on their mortgage.”
Still, he did give clues to his priorities. Congress, he said, had to act soon to overhaul America’s multiplicity of financial regulators, which struggled to anticipate and cope with the financial crisis. He called for a cap-and-trade system to reduce the growth of greenhouse-gas emissions. He gave warning that the Treasury would probably need more than the $700 billion that Congress has already authorised for propping up the banking system (while studiously avoiding the debate over whether banks should be nationalised in the process). He strongly indicated that there would be more aid for General Motors and Chrysler, which are now contemplating whether to file for bankruptcy to shrink themselves more rapidly. “The nation that invented the automobile cannot walk away from it,” he said.
A theme that permeated the speech was rapidly rising national debt, following the budget-busting $787 billion stimulus that Mr Obama just signed. “Everyone in this chamber—Democrats and Republicans—will have to sacrifice some worthy priorities for which there are no dollars. And that includes me,” Mr Obama said. But he has yet to say what he is prepared to sacrifice. He still plans to expand publicly financed health care, make permanent tax credits to the majority of workers, expand college assistance and invest in alternative energy.
The budget on Thursday is expected to show that Mr Obama inherited a deficit of $1.3 trillion this fiscal year, and raised it to $1.5 trillion with the fiscal stimulus (a post-war high of some 10% of gross domestic product). Mr Obama will promise to get it down to $533 billion or 3% of GDP by fiscal year 2013. Most of that drop will come from the expiration of temporary stimulus measures, the cessation of capital injections and the hoped-for start of economic recovery. The rest will come from withdrawing troops from Iraq, trimming payments to privately-managed Medicare plans, letting George Bush’s tax cuts expire as scheduled in 2010 for the richest 2% of Americans, the taxation of foreign corporate income and the sale of permits for carbon-emissions trading. He promised, as every previous president has, to vet the budget “line by line” for waste; he will find it just as hard as his predecessors to kill programmes with powerful congressional backers.
At a Monday budget summit with congressional leaders and again on Tuesday Mr Obama rightly noted that the cost of old people’s health care and pensions are the country’s biggest long-term fiscal threats, but on neither occasion did he propose how to deal with them. In fairness it is early and stabilising the economy should be Mr Obama’s priority, not long-term fiscal discipline. Premature fiscal tightening could abort a recovery. The summit on Monday and the speech on Tuesday were part of the process of softening up the public for future pain.
Both events also demonstrated that despite being jilted on his quest for some Republican support during the debate on the fiscal stimulus, he is not giving up on his pursuit of bipartisanship. On Tuesday night, at least, Republicans were co-operative, rising in applause almost as often as Democrats.
Wednesday, 25 February 2009
Virgin Media posts loss of £50m
Link to the article
Last Modified: 25 Feb 2009
Source: ITN
Virgin Media has blamed the consumer downturn for a quarterly loss of £50 million.
It comes after the company slashed the balance sheet value of its home shopping business Sit-up, which trades as bid tv, price-drop tv and speed auction tv.
Group operating losses, following the Sit-up write-down of £54.8 million, were £50.2 million compared with £17.8 million a year earlier, Virgin Media said.
At Virgin Media's core business, net customer additions of 14,800 in the final three months of the year were down from more than 24,000 a year earlier.
It sold 185,000 contracts for broadband, television, telephone or mobile phone services during the period, down from 272,100 in the same period of 2007.
However, the company said it was encouraged by a further increase in average revenues per user - to £42.30 - and a reduction in churn (the rate at which customers leave the service) to 1.2 per cent. It was 1.4 per cent in 2007.
Chief executive Neil Berkett said: "Record numbers of customers are now using Virgin Media's services, despite the current economic environment."
He described the customer response to the recent launch of 50Mb broadband as encouraging and said the company had also strengthened its position in the video-on-demand and catch-up TV markets.
"Over the course of 2008 we received more than half a billion views as on-demand TV came of age," Mr Berkett said.
Virgin said its total number of broadband additions stood at 57,100 in the final quarter of this year, compared with 68,700 in the previous quarter.
It said this reflected slower growth in the market as a whole and its own focus on higher revenue services offering faster broadband speeds.
The company reported 3.68 million broadband customers at the end of the period. It also added 44,500 television customers, leaving it with a total of 3.62 million at the end of the year.
Virgin is reportedly expected to decide later this week whether to sell its broadcast division, which includes 50 per cent of its UKTV joint venture with the BBC.
The content arm, excluding UKTV, generated fourth quarter revenues of £118.8 million, including £84.6 million from Sit-up. However, Virgin said year-on-year revenues and profits at the home shopping operation were lower due to the downturn in retail spending.
Last month, the Sit-up business stopped broadcasting one of its two Freeview channels following an unsuccessful auction process.
© Independent Television News Limited 2009. All rights reserved.
Last Modified: 25 Feb 2009
Source: ITN
Virgin Media has blamed the consumer downturn for a quarterly loss of £50 million.
It comes after the company slashed the balance sheet value of its home shopping business Sit-up, which trades as bid tv, price-drop tv and speed auction tv.
Group operating losses, following the Sit-up write-down of £54.8 million, were £50.2 million compared with £17.8 million a year earlier, Virgin Media said.
At Virgin Media's core business, net customer additions of 14,800 in the final three months of the year were down from more than 24,000 a year earlier.
It sold 185,000 contracts for broadband, television, telephone or mobile phone services during the period, down from 272,100 in the same period of 2007.
However, the company said it was encouraged by a further increase in average revenues per user - to £42.30 - and a reduction in churn (the rate at which customers leave the service) to 1.2 per cent. It was 1.4 per cent in 2007.
Chief executive Neil Berkett said: "Record numbers of customers are now using Virgin Media's services, despite the current economic environment."
He described the customer response to the recent launch of 50Mb broadband as encouraging and said the company had also strengthened its position in the video-on-demand and catch-up TV markets.
"Over the course of 2008 we received more than half a billion views as on-demand TV came of age," Mr Berkett said.
Virgin said its total number of broadband additions stood at 57,100 in the final quarter of this year, compared with 68,700 in the previous quarter.
It said this reflected slower growth in the market as a whole and its own focus on higher revenue services offering faster broadband speeds.
The company reported 3.68 million broadband customers at the end of the period. It also added 44,500 television customers, leaving it with a total of 3.62 million at the end of the year.
Virgin is reportedly expected to decide later this week whether to sell its broadcast division, which includes 50 per cent of its UKTV joint venture with the BBC.
The content arm, excluding UKTV, generated fourth quarter revenues of £118.8 million, including £84.6 million from Sit-up. However, Virgin said year-on-year revenues and profits at the home shopping operation were lower due to the downturn in retail spending.
Last month, the Sit-up business stopped broadcasting one of its two Freeview channels following an unsuccessful auction process.
© Independent Television News Limited 2009. All rights reserved.
The middle class credit crunch
Link to the article
Last Modified: 24 Feb 2009
By: Nina Teggarty
More4 News reports that those now finding themselves without work include professional people who may once have assumed their careers would be immune.
Unemployment is at its highest level for a decade, and the experts all agree it is likely to continue rising.
Nearly two million people are out of work in Britain as the economic downturn bites ever deeper.
Nina Teggarty reports.
Last Modified: 24 Feb 2009
By: Nina Teggarty
More4 News reports that those now finding themselves without work include professional people who may once have assumed their careers would be immune.
Unemployment is at its highest level for a decade, and the experts all agree it is likely to continue rising.
Nearly two million people are out of work in Britain as the economic downturn bites ever deeper.
Nina Teggarty reports.
Battle for the Royal Mail's future
Link to the article
Last Modified: 24 Feb 2009
By: Jenny Wivell
Postal workers protest as the government says a partial sell off is the only way to save their pensions.
Postal workers are demonstrating in Westminster this lunchtime against government plans to sell off one third of the Royal Mail.
But the government insists that selling off 30 per cent of the Royal Mail is the only way to protect the pension scheme, which its trustees reportedly say is massively in deficit.
The row has been intensified by the publication of a letter warning staff that they face having their pensions slashed unless the part-privatisation goes ahead.
But with more than 140 Labour MPs set to vote against the plans, Gordon Brown may face the largest rebellion of his premiership over the measure.
Pat McFadden
Samira Ahmed is joined from Westminster by the postal affairs minister, Pat McFadden.
Last Modified: 24 Feb 2009
By: Jenny Wivell
Postal workers protest as the government says a partial sell off is the only way to save their pensions.
Postal workers are demonstrating in Westminster this lunchtime against government plans to sell off one third of the Royal Mail.
But the government insists that selling off 30 per cent of the Royal Mail is the only way to protect the pension scheme, which its trustees reportedly say is massively in deficit.
The row has been intensified by the publication of a letter warning staff that they face having their pensions slashed unless the part-privatisation goes ahead.
But with more than 140 Labour MPs set to vote against the plans, Gordon Brown may face the largest rebellion of his premiership over the measure.
Pat McFadden
Samira Ahmed is joined from Westminster by the postal affairs minister, Pat McFadden.
Tuesday, 24 February 2009
What is "quantitative easing"?
Feb 24 - Senior Reuters economics correspondent Sumeet Desai explains some terms currently being used to describe the current financial crisis.
Understanding economic news used to be much more straightforward but the global financial crisis has changed all that ...now there is toxic debt, sub-prime mortgages, tier 1 capital and ....quantitative easing by central banks. Our senior UK economics correspondent Sumeet Desai explains what it means and what is behind the headlines about "printing more money".
Link to the full article: Reuters
Understanding economic news used to be much more straightforward but the global financial crisis has changed all that ...now there is toxic debt, sub-prime mortgages, tier 1 capital and ....quantitative easing by central banks. Our senior UK economics correspondent Sumeet Desai explains what it means and what is behind the headlines about "printing more money".
Link to the full article: Reuters
Monday, 23 February 2009
LDV vans 'running out of cash'
Link to the article
Last Modified: 23 Feb 2009
By: James Blake
The department of business says Peter Mandelson will not be involved in negotiations to save a carmaker for the sake of "propriety", James Blake reports.
The LDV vans plant in Birmingham says it is "running out of cash" and has asked the government for a multi-million pound loan.
LDV is owned by the Russian company Gaz, which is run by Mandelson's friend, the Russian Oligarch Oleg Deripaska.
The plant, believed to be the one union leaders were warning last week was under threat, has not produced any cars for two months.
Company bosses have asked for the loan to tide it over while it negotiates a buyout.
Last Modified: 23 Feb 2009
By: James Blake
The department of business says Peter Mandelson will not be involved in negotiations to save a carmaker for the sake of "propriety", James Blake reports.
The LDV vans plant in Birmingham says it is "running out of cash" and has asked the government for a multi-million pound loan.
LDV is owned by the Russian company Gaz, which is run by Mandelson's friend, the Russian Oligarch Oleg Deripaska.
The plant, believed to be the one union leaders were warning last week was under threat, has not produced any cars for two months.
Company bosses have asked for the loan to tide it over while it negotiates a buyout.
Sunday, 22 February 2009
Brown calls for honest and open lending
Link to the article
Last Modified: 22 Feb 2009
By: Channel 4 News
Gordon Brown says bankers must be stewards of our money not speculators with it.
Tougher Financial Regulation, Further Tax Cuts and increased Government Spending. Alongside seven other leaders in Berlin today, Gordon Brown claimed Europe was united in its policy response to an extraordinary financial crisis.
The prime minister told high street banks in Britain that he wanted the return of traditional and prudent lending practises and has asked the FSA to curb 100 per cent mortgages. His opponents said he should have done that five years ago when he was warned the loans were too risky.
Interview: Paul Myners
Paul Myners - the Financial Services Secretary responsible for setting up the asset protection scheme - talks to Krishnan Guru-Murthy.
Last Modified: 22 Feb 2009
By: Channel 4 News
Gordon Brown says bankers must be stewards of our money not speculators with it.
Tougher Financial Regulation, Further Tax Cuts and increased Government Spending. Alongside seven other leaders in Berlin today, Gordon Brown claimed Europe was united in its policy response to an extraordinary financial crisis.
The prime minister told high street banks in Britain that he wanted the return of traditional and prudent lending practises and has asked the FSA to curb 100 per cent mortgages. His opponents said he should have done that five years ago when he was warned the loans were too risky.
Interview: Paul Myners
Paul Myners - the Financial Services Secretary responsible for setting up the asset protection scheme - talks to Krishnan Guru-Murthy.
Selling the recession
Link to the article
Last Modified: 22 Feb 2009
By: Krishnan Guru-Murthy
When everyone's feeling nervous about spending, how do advertisers persuade us to part with our cash?
Every week more and more figures confirm that we're in the grips of long and deep recession. We speak to one of the titans of British advertising, Sir Frank Lowe, and take a look at some of the ads that got us reaching into our pockets in previous recessions.
Last Modified: 22 Feb 2009
By: Krishnan Guru-Murthy
When everyone's feeling nervous about spending, how do advertisers persuade us to part with our cash?
Every week more and more figures confirm that we're in the grips of long and deep recession. We speak to one of the titans of British advertising, Sir Frank Lowe, and take a look at some of the ads that got us reaching into our pockets in previous recessions.
Selling the recession
Link to the article: Channel 4 News
By Krishnan Guru-Murthy
When everyone's feeling nervous about spending, how do advertisers persuade us to part with our cash?
Every week more and more figures confirm that we're in the grips of long and deep recession. We speak to one of the titans of British advertising, Sir Frank Lowe, and take a look at some of the ads that got us reaching into our pockets in previous recessions.
By Krishnan Guru-Murthy
When everyone's feeling nervous about spending, how do advertisers persuade us to part with our cash?
Every week more and more figures confirm that we're in the grips of long and deep recession. We speak to one of the titans of British advertising, Sir Frank Lowe, and take a look at some of the ads that got us reaching into our pockets in previous recessions.
Saturday, 21 February 2009
US thanks China for recession aid
Link to article
Last Modified: 21 Feb 2009
By: Faisal Islam
America thanks China for helping it through recession and says human rights concerns come second to economic survival.
America and China will work together to help lead the world recovery, says the secretary of state, Hillary Clinton.
On her first official visit she has downplayed her past criticism over human rights and expressed her appreciation of China's purchasing of American debt.
It is the first time a top American politician has recognised the long running reality of American financial dependence on China.
But as our economics correspondent Faisal Islam reports from Shanghai, the price the Chinese want for further support could cause other problems.
This report contains flashing light.
oining Krishnan Guru-Murthy is Dr Linda Yueh, an expert on globalisation and the Chinese economy.
Last Modified: 21 Feb 2009
By: Faisal Islam
America thanks China for helping it through recession and says human rights concerns come second to economic survival.
America and China will work together to help lead the world recovery, says the secretary of state, Hillary Clinton.
On her first official visit she has downplayed her past criticism over human rights and expressed her appreciation of China's purchasing of American debt.
It is the first time a top American politician has recognised the long running reality of American financial dependence on China.
But as our economics correspondent Faisal Islam reports from Shanghai, the price the Chinese want for further support could cause other problems.
This report contains flashing light.
oining Krishnan Guru-Murthy is Dr Linda Yueh, an expert on globalisation and the Chinese economy.
Dublin: credit crunch protest
link to article
Last Modified: 21 Feb 2009
By: Carl Dinnen
Fury at those who led them to economic disaster brings more than 100,000 people to the streets of Dublin.
They could be the kind of scenes Europe will soon get used to - thousands of people took to the streets of Dublin today to protest at the government's handling of the economic crisis.
They are angry about plans to cut public spending, especially after the bailout out of Irish banks.
Last Modified: 21 Feb 2009
By: Carl Dinnen
Fury at those who led them to economic disaster brings more than 100,000 people to the streets of Dublin.
They could be the kind of scenes Europe will soon get used to - thousands of people took to the streets of Dublin today to protest at the government's handling of the economic crisis.
They are angry about plans to cut public spending, especially after the bailout out of Irish banks.
Friday, 20 February 2009
Financial crisis is hits eastern EU
Link to article
Latvia's ruling coalition has collapsed and the president has called for talks to to forge a new government to tackle the deepening economic crisis. Latvia has already had an IMF led rescue loan of $9.5bn last year, and a team from the IMF was back as the government fell. After the end of the eastern bloc all the accession countries were helped by their richer neighbours to the West but now they want their money back amidst fears of a widespread collapse that could impact us all. Alex Ritson reports.
Latvia's ruling coalition has collapsed and the president has called for talks to to forge a new government to tackle the deepening economic crisis. Latvia has already had an IMF led rescue loan of $9.5bn last year, and a team from the IMF was back as the government fell. After the end of the eastern bloc all the accession countries were helped by their richer neighbours to the West but now they want their money back amidst fears of a widespread collapse that could impact us all. Alex Ritson reports.
Thursday, 19 February 2009
Is Britain bust?
Link to the article
Last Modified: 19 Feb 2009
By: Siobhan Kennedy
One and a half trillion pounds, that is how much Britain's national debt could shoot up, thanks to the cost of bailing out the banks.
£1.5tn is equivalent to almost the entire economic output of the UK.
The grim estimate by the National Office of Statistics is far higher than the chancellor's pre-budget forecasts.
The first time the billions poured into the ailing banks has been taken into account.
And the deepening recession is also denting the government's income from tax.
Last Modified: 19 Feb 2009
By: Siobhan Kennedy
One and a half trillion pounds, that is how much Britain's national debt could shoot up, thanks to the cost of bailing out the banks.
£1.5tn is equivalent to almost the entire economic output of the UK.
The grim estimate by the National Office of Statistics is far higher than the chancellor's pre-budget forecasts.
The first time the billions poured into the ailing banks has been taken into account.
And the deepening recession is also denting the government's income from tax.
Wednesday, 18 February 2009
Mandelson frothy over Starbucks
Link to the article
Last Modified: 18 Feb 2009
By: Jane Deith
The coffee chain Starbucks has rowed back from comments made by its chief executive on US television that sparked a row with business secretary Peter Mandelson.
The chairman of Starbucks Howard Schultz was on the business network CNBC to talk up his new instant coffee brand but when he was asked about the economic crisis, he put the blame at Britain's door.
Mandelson was booked for the same show and Schultz's comments had filtered back to him, leaving a bitter taste.
He insisted the UK is not spiralling and claimed Starbucks is in a great deal of trouble.
Mandelson was in New York to dispel gloom about the British economy so when the Guardian's New York correspondent asked him about Howard Schultz's swipe at a drinks party at the British Consul, he said what he really thought.
He swore about the comments and criticised Starbucks again.
The coffee chain's profits are falling. It is closing 300 stores and Peter Mandelson's spokesman says he does not stand by the language, but does stand by the sentiment of his comments.
A Starbucks spokesperson said: "Starbucks has no intention of criticising the economic situation in the UK. The reality of the global economy is that no country is immune to the difficulties. We are all in this together.
Last Modified: 18 Feb 2009
By: Jane Deith
The coffee chain Starbucks has rowed back from comments made by its chief executive on US television that sparked a row with business secretary Peter Mandelson.
The chairman of Starbucks Howard Schultz was on the business network CNBC to talk up his new instant coffee brand but when he was asked about the economic crisis, he put the blame at Britain's door.
Mandelson was booked for the same show and Schultz's comments had filtered back to him, leaving a bitter taste.
He insisted the UK is not spiralling and claimed Starbucks is in a great deal of trouble.
Mandelson was in New York to dispel gloom about the British economy so when the Guardian's New York correspondent asked him about Howard Schultz's swipe at a drinks party at the British Consul, he said what he really thought.
He swore about the comments and criticised Starbucks again.
The coffee chain's profits are falling. It is closing 300 stores and Peter Mandelson's spokesman says he does not stand by the language, but does stand by the sentiment of his comments.
A Starbucks spokesperson said: "Starbucks has no intention of criticising the economic situation in the UK. The reality of the global economy is that no country is immune to the difficulties. We are all in this together.
Can you clear your credit card?
Link to the article
Last Modified: 18 Feb 2009
By: Bridgid Nzekwu
Some law firms claim they can write off your debts by exploiting loopholes in credit legislation. But is it too good to be true?
The Ministry of Justice has told claims management companies to stop their misleading marketing campaigns, or it will take action.
Krishnan Guru-Murthy spoke to our money reporter, Bridgid Nzekwu, to Kevin Rousell, head of claims management regulation at the justice ministry, and to John Rattigan of claims management company Cartel Client Review.
Last Modified: 18 Feb 2009
By: Bridgid Nzekwu
Some law firms claim they can write off your debts by exploiting loopholes in credit legislation. But is it too good to be true?
The Ministry of Justice has told claims management companies to stop their misleading marketing campaigns, or it will take action.
Krishnan Guru-Murthy spoke to our money reporter, Bridgid Nzekwu, to Kevin Rousell, head of claims management regulation at the justice ministry, and to John Rattigan of claims management company Cartel Client Review.
Subscribe to:
Posts (Atom)
Posts
