Bank posts biggest loss in British history

CNBC just announced that Royal Bank of Scotland, one of the major banks in Britain, has posted a $30 billion loss for 2008.

This is the biggest loss in Britian’s corporate history.

“If the banking system collapses, every single one of us would see the obvious problems. The economy would come down with it,”  said Alistair Darling, Britian’s Chancellor of the Exchequer.

This news comes as the UK government prepares to take over as much as 70% of the bank in a bid to rescue it. This is part of a £300bn rescue package that was announced this morning.

Some sectors of the press are however already doubtful whether this second bank bailout will be successful.

Professor Peter Spencer from York University however argues, “We must not lose sight of the fact that they [bank bailouts] have prevented the collapse of the monetary system.” Were this to happen, this would spell disaster for the whole global economy.

Ambrose Evans-Pritchard however states that “this does not mean that recovery is imminent’.

I do not envy anyone who has to deal with this financial mess.

When will situation improve? It may take 2 – 3 years – argues steel giant

Steel giant Nippon Steel today argued that the global steel industry may well take two to three years to recover from the current economic downturn, Reuters reports.

The company’s announcement comes as one of its top clients, Toyota, is seeking to reduce its orders for steel.

So, with the car industry and steel industry feeling the brunt of the global economic downturn, which sectors should an investor eye?

The Baring Global Agriculture Fund and fund manager Managing Partners’ British Property Opportunities Fund are two options, argues William Kay in an article appearing on today’s The Sunday Times.

He also reminds readers to start thinkng aobut their retirement plans early as research shows that one in every four of today’s 55-year-olds in the UK is expected to live till 95.

Brown claims global leadership spot as his economy’s still in coma

Saying that Gordon Brown’s ambitious is an understatement.

The Guardian today quotes Brown telling GMTV that his government is leading the world in its policies for dealing with the global downturn.

Earlier on today, Brown’s government announced it will give employers up to €2,800 for every new worker they hire prompting newspapers to dub this initiative as the ‘golden hello’.

The initiative will cost the public coffers €560 million.

Young graduates are also on top of Brown’s agenda as plans to create 35,000 new traineeship posts were unveiled.

Brown has been on a spending spree since the begninning of the crisis. However, Sky reports how he’s failing to excite business confidence with only 28% confident in his ability as PM.

Maybe Brown would be better off in stimulating the businessmen’s creativity with funds fostering more innovation and research and helping those who are really in need rather than giving handouts to everyone.

Ford hopes green will take it out of the red

What a switch for American carmaker Ford, at least on paper.

The crisis ravaging among carmakers has persuaded the troubled firm to start selling small electric cars by 2011.  Ford executives at the Detroit Auto Show promise that the fully charged lithium battery-powered car will be able to drive for more than 100 miles.

Meanwhile the same car maker presented another one of its gas guzzlers today – the Ford Shelby GT 500 (see video).

My question is: who will afford to buy the Shelby when the US has one of the highest jobless rates since WWII?

Going green doesn’t necessarily mean employing nutty managers Mr Ford.

Bernie Madoff to burn in hell with new sauce – artist vows

 

The new 'hell hot' sauce

‘Bernie in Hell’. This is the name of a new habanero sauce, featuring the face of disgraced Wall Street investor Bernard Madoff on its label, which was launched yesterday by New York based artist Alex Gardega.

Bernard Madoff is accused of having defrauded his clients of $50 billion in the largest Wall Street scam ever.

Each bottle is a work of fine art, argues Gardega on his blog, and sells at $10 each.

Trouble mounts for Primark

Primark may be financially successful, but its ethical record is not so bright, especially after yesterday. 

Primark, known for its cheap garments and a symbol of the fast fashion phenomenon, had to launch an investigation yesterday as an undercover investigation carried by The Observer and BBC showed that workers were being abused of their rights at Manchester based TNS Knitwear, one of its suppliers.

The textile firm which produces garments for Primark was found to be employing illegal immigrants, mostly Indians, Afghans and Pakistanis. These were allegedly being paid £3 an hour – just over half the minimum wage of £5.73 – for 12-hour days, seven days a week in a damp and cramped environment.

Primark argued in a statement that TNS Knitwear was a ‘relatively small supplier’. But this hasn’t stopped ethical trade watchdog ETI from revoking its label from Primark stores last Friday. 

Primark is considered as the fastest growing retail chain in Britain. Thanks to its success, the chain’s holding company posted  £8.2 billion in revenues last year.

The question is: If Primark took the case of a ‘small supplier’ so seriously, how would a Maltese businessman have acted were the press to uncover any ethical wrongdoing?

Also, isn’t it high time Government starts promoting the idea of ethical standards in employment and business?

Video: Customers flocking into Primark’s Oxford Street Store on its opening day. This store is Primark’s jewel in the crown.

Even Lara Croft’s feeling the crunch

Game publisher Eidos announced that 2008 sales for its game Tomb Raider: Underworld, featuring computer character Lara Croft, were below expectations, especially in the United States.

Eidos in fact expected its sales to be around STG 200 million for 2008 but is now revising the figure by STG 20 million downwards.

The game publisher now hopes Batman will manage to fight the recession away in 2009. Will he manage?

Video: Tomb Raider: Underworld trailer

Last minute travel is recession’s latest casualty

British travel companies are going to axe holiday packages on offer by as much as 20%, The Guardian reports today.

This has prompted the King’s Cross based newspaper to say that:

Last-minute deals will disappear over the next two years 

The newspaper also reports that British travellers are choosing long-haul destinations like Australia and New Zealand and medium-haul destinations as Egypt as countries in the Euro area, including Malta, become too expensive for them.

So, the article begs the question: Is it wise for Malta to continue investing in new routes and more marketing in the UK when our product is becoming more expensive among British tourists?

Video: A Thomas Cook advert released in February 2008. Everything was different just eleven months ago: Malta was registering double-digit growth in its tourism industry.

Obama should remove export and visa restrictions, report suggests

A report published by the National Research Council urges Obama to remove export and vis restrictions which make it harder for academics, scientists and businessen to travel to the United States and thus stimulate its economy, the AFP says.

“To reform visa controls and grant US businesses access to the most talented scientists, the report recommends streamlining and including “skills-based preferential processing” in the visa application process to facilitate entry into the country for foreign researchers and students.

Foreign student visas should also be extended so that recent graduates can properly search for work with US-based employers, the report recommended.”

This is a golden opportunity for Malta to strengthen relations with the world’s largest economy after it joined the US Visa Waiver Programme on 22nd December 2008.

Principles fashion stores owner in financial woes

Items bought from Principles might become a rare species as The Guardian reports that Mosaic, owner of fashion store chains Principles and Oasis is in financial trouble. 

Mosaic, an Icelandic company, is feeling the brunt of the financial crisis which led Iceland to ask for help from the International Monetary Fund, the equivalent of a bank which nations resort to when in need.

The company told the Kings Cross-based newspaper that it is currently in talks with banks  over its long term financing.