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’No clean exit from RBS
Attention George Osbourne.
The UK taxpayer will not get out of RBS clean. There will be no early return to recent share price highs and the bank will not meet its return on equity targets (15 per cent by 2013!),
HBOS remembered
We said earlier on Monday that only one bank came off badly in the interim report from the Independent Commission on Banking.
We were wrong.
There’s another bank that comes in for some criticism.
Gordon Brown resigns. No, really.
The crackshot live-bloggers over at the FT’s Westminster blog are on the case (warning: for UK politics wonks only):
5.36pm: Jim wants to contradict my contradiction of his post (see 5.24pm), making the point:
Somewhere, over the rainbow… a UK downgrade
In the wake of Friday’s non-result in the UK’s general election, BNP Paribas said the British people had voted for a downgrade.
The bank reiterated that view on Tuesday morning, as the Liberal Democrats and the ruling Labour Party continued discussions about the creation of a rainbow coalition,
GBK watch – Lib/Lab edition
Flashes, via Reuters:
10May10 RTRS-UK’S PM BROWN SAYS LIB DEMS WANT TO HOLD FORMAL GOVT DISCUSSIONS WITH LABOUR PARTY
10May10 RTRS-UK’S PM BROWN SAYS PRIORITY FOR TALKS SHOULD BE AGREED DEFICIT REDUCTION PLAN
And that was good enough to do this:
A party political broadcast on behalf of the Conservatives
From an email doing the rounds in the City of London on Thursday morning:
Pimco makes it personal in the UK
Pimco has laid into the UK again – this time having a go, specifically, at the Labour government.
In an interview with Dow Jones Newswires, Scott Mather, head of global portfolio management, said there was an 80 per cent chance of a credit rating downgrade for the UK if the chancellor’s debt reduction plans remain as they are.
Rescanning Smiths Group (updated)
On Monday we reflected on the recent performance of Smiths Group, the world leader in airport security and inspection.
Since the failed terrorist attack on a US-bound airplane over Christmas its shares have risen almost 10 per cent as investors have focused on the possibility of full body screening being introduced at airports globally.
Bonus backlash
A copy of the letter sent by Joanthan Keeling, chief executive of Arden Partners, to the FT:
Dear Sir,
Bank Payroll Tax
As CEO of a quoted stockbroker I am angry to find that the draft BPT legislation appears to capture our firm,
A global banker tax? (updated with breaking news from France)
Might other countries follow the UK’s lead and hit the bankers where it really hurts?
That certainly is the impression one gets reading the letter penned by Gordon Brown and Nicolas Sarkozy in the Wall Street Journal on Thursday.
Banker tax – further details (updated with bonus maths)
From page 48 of the pre-Budget report, unveiled on Wednesday (emphasis ours):
Box 3.2: Banking Bonuses
The Government attaches great importance to tackling the remuneration practices that contributed to excessive risk taking by the banking industry.
Banker tax unveiled
From the pre-Budget report, via Reuters:
DARLING – WILL CHARGE BANKS 50 PCT TAX RATE ON STAFF BONUSES OVER £25,000
DARLING – TAX ON BANK BONUSES EXPECTED TO YIELD £550m
And from FT.com:
The Treasury estimates that the move – which comes into immediate effect and runs until April 5 next year – will affect 20,000 bankers.
PBR preview, bankers’ bonus edition
We all know the chancellor is going to announce a bankers’ bonus tax in Wednesday’s pre-Budget report. What we don’t know are the details; Things like the level at which the tax will kick in and whether it will be levied on bonus pools or individual bonuses.
Presenting RBS’s toxic assets
As you may have read, HM Treasury has released full details of the toxic RBS assets being guaranteed under the Asset Protection Scheme.
Annex A of the 100 page report (which was quietly put up on the HM Treasury website on Monday) provides the full breakdown of the £282bn assets being insured.
Bank windfall tax looms
According to PestoWire:
The Treasury is preparing to levy a windfall tax or super tax on British based banks, which could be announced as soon as Wednesday in the pre-budget report and would raise considerably more than £1bn a year for two or three years.
Fiscal bill central to Queen’s Speech
Gordon Brown will on Wednesday put fiscal discipline at the heart of the annual Queen’s speech to force ministers to accept budget cuts and boost his own credibility on public spending ahead of an election battle with the Tories.
UK shifts on bank tax plan at G20
Gordon Brown, the British prime minister, backed away from his proposal for a financial transactions tax on Sunday after widespread criticism of his plan, set out in a weekend speech to G20 finance ministers in Scotland.
Brown and Darling rebuke King
Gordon Brown and Alistair Darling on Wednesday rebuked Mervyn King, Bank of England governor, over his call this week to break-up Britain’s biggest banks. King, who is increasingly seen as an opponent of government policy,
Sterling slammed
News of Gordon’s great autumn clearout (what am I bid for this bridge, bookmaker and uranium enrichment company?) does not seem to have impressed the FX market.
Monday’s price action and headlines:
RTRS-STERLING EXTENDS LOSSES,
Brown: ‘City is ideologically bankrupt’
Gordon Brown declared the City “ideologically bankrupt” and promised Labour that bankers “will pay back the British people”, in a speech positioning his government firmly against London’s financial community ahead of a general election,
Back to bondage
Encyclopedia Britannica – Debt Bondage — description ( in slavery (sociology) )
A person became an indentured servant by borrowing money and then voluntarily agreeing to work off the debt during a specified term.
Bears, keep the faith
It is not much fun being a bear at the moment with seemingly everything going up – except the US dollar. But there is still hope, according to Soc Gen’s Albert Edwards.
In his latest Strategy Weekly he draws our attention to the recent performance of the Baltic Freight index,
Brown pledges bonus clampdown
Gordon Brown has pledged tough action to clamp down on excessive remuneration for bankers as part of a global push to rectify the systemic weakness that led to the financial crisis. The UK prime minister told the FT that banks should “claw back” bankers’ rewards if their performance suffered in subsequent years and that regulators should be able to increase banks’ capital requirements.
Lloyds repayment could boost Brown
Lloyds Banking Group is expected to repay about £2.3bn to the UK government this week, becoming the first lender in Europe to return bailout money to the taxpayer, reports The Times. The repayment would come far sooner than either the City or the government could have expected,
Bearing the Brownt – Day II
No false news shock resignation rumours on Friday morning – in fact the opposite. It looks like the prime minister is going to bring forward the Cabinet reshuffle in a desperate attempt to shore up his position,
Third minister quits in UK political crisis
Gordon Brown was on Thursday night fighting for his political life after a third cabinet minister resigned as the polls closed on local and European elections expected to inflict a drubbing on Labour. James Purnell became the first cabinet minister to call openly for Brown to go,
Bearing the Brownt
Here’s a live example of “false news shock” – the tendency of erroneous news to move markets even after it is proved to be wrong.
Just after 1pm on Thursday, Sterling jackknifed – falling from 1.64 to the dollar to a low of 1.61 and moving above 0.87 to the euro.
The UK’s BB debt
Sean Corrigan of Diapason Securities brings us the following chart:
The clue is in the acronym (it’s a duo).
Taxing tweets
Isn’t Twitter useful:
Maybe Gordon’s just there to admire the view. Or maybe, given how keen the PM is on offshore tax havens n’ stuff, he was there to ask why the (Scottish) Clydesdale bank only yesterday set up a major new subsidiary on Guernsey,
Old world news values in the ‘New World Order’
It’s official, forget the world as we knew it. We are now living in a New World Order (NWO), according to Gordon Brown and his G20 pals.
But just to reassure you that the “old” world still exists,