MySweetMoney.com - Current News on the Financial Crisis

This was always going to happen, with the pound falling for ages, it is now at a record low against the euro and a near on 6 year low against the dollar.

Sterling fell to $1.4955, as against $1.5426 at the previous close, while it now takes 83.88 pence to buy a euro.  The pound is below $1.50 for the first time since July 2002.

With the euro at pretty poor rates due to the world economy this was always going to happen, it will pick itself up in the latter, but i feel it is going to be a fair amount of time before it is back to anything it once was.  This cannot be helped to the fall in the UK’s economy and the whole world’s economy because of this collapse and recession the key issue being the money will obviously fluctuate.

Since my last Unemployment topic, the unemployment rate has gone up considerably more since the 15th October 2008, (my last thread on this topic).

It is now up to 1.82 million the highest unemployment rate in 11 years.  The unemployment rate is now at 5.8% and it was at 5.5% around 3 weeks ago.  The number of people claiming the Job seeker’s Allowance rose by 36,500 to 980,900 in October - the highest monthly increase since 1992.  Those claiming Job seeker’s Allowance - has now increased for nine months in a row and is 154,800 higher than a year ago. Economists say unemployment could top two million within months.
The unemployment rate is only going to get worse at the moment before it can get better with the current economy state, it could rise to around 2.5 million by the end of 2009 to 2010.

Redundancies, 18-24 year-olds unemployed has risen, and the number of men and women without a job has also gone up.

Europes biggest bank HSBC has had losses of up to $4.3bn (£2.7bn) recognised this is due to the US housing market crisis.

HSBC Holdings plc is a public limited company incorporated in England and Wales, headquartered in London. HSBC stands for Hong Kong Shanghai Banking Corporation.
HSBC said it was still unclear whether there were “further risks to be uncovered” in the financial sector. The bank recently announced it was cutting 1,100 jobs worldwide because of the current financial turmoil. The new US losses come on top of a $3.6bn write-down in the second quarter. So after the second quarter and third quarter the losses total $8bn which is a substantial amount of money. The bank said that its asset sales and growth in Asia helped offset the worsening US economy.

Shares in HSBC fell by 1% to 738.5p in early trading.

Not looking good for HSBC after the 3rd quarter, where will they be after the year end?

Travelodge is a chain of hotels around the United Kingdom and all over the globe.  It is owned by Dubai International Capital, Travelodge currently has 350 hotels in the UK and 11 overseas.

Travelodge can offer fantastic value accommodation all year round because we do things differently to other hotel companies, they keep their costs low and pass on the savings to our customers with low room prices.

They always have great deals, with the saver rooms, bargain rooms and are currently offering rooms from as little as £9.  It said its average room rates in 15 UK cities would fall by an average of 10% for the rest of 2008, and is selling some rooms for next spring at £9.

The UK hotels sector is under pressure because of the downturn, and Travelodge has been buying out struggling hotels.  “We are now seeing many more hotels coming onto the market due to a more severe financial climate,” managing director Guy Parsons said.  Recent PricewaterhouseCoopers figures show hotel insolvencies rose 150% between the end of 2006 and October 2008.  Travelodge currently has about 5,000 employees, and 6.5 million people spent a night at one of its hotels last year.

At the moment is the best time to book a little getaway for a few days, because of the price but then many people are choosing not to go away and save their money as nobody knows whether their job is safe at the moment.

Sir Peter Burt and Sir George Mathewson have had their bid for HBOS rejected.

In relation to this topic i posted on Friday :

http://mysweetmoney.com/2008/11/08/sir-peter-and-sir-george-want-in-on-hbos/

The follow up to this is that their bid has been rejected and they will be not the pair to lead HBOS.

Finance ministers and central bank presidents from the world’s 20 major economies have been meeting at a G20 summit in Sao Paulo in Brazil.  This is to discuss how the world economy is failing, every economy is suffering and things need to be done, and the economy must be stable.
A quote “All countries are moving into a danger zone.” - This basically hits the nail on the head because every is finding this financial crisis and recession for many countries a hard challenge to master.

Things discussed at the G20 show that Emerging nations want to see the G20 grouping - which includes the G7 and the BRIC countries (Brazil, Russia, India, China) plus others - enhanced and also elevated to a heads-of-state and heads-of-government level, above the present finance ministerial status.

(BRIC defined is a term used in economics to refer to the combination of Brazil, Russia, India, and China.)

On Friday the Bric nations had called for reform of institutions like the IMF to give more influence to developing economies.  China and the Gulf states have trillions of dollars in reserves that could help the IMF help smaller countries withstand the present turmoil.

(IMF defined is an International Monetary Fund, established in 1946 to provide international liquidity on a short and medium term and encourage liberalization of exchange rates. The IMF supports countries with balance of payments problems with the provision of loans.)

Things need to be done in the world economy as it currently needs Solutions!

Sir Peter Burt and Sir George Mathewson want to run HBOS themselves by running it their own way.  They do not want the Lloyds TSB takeover to go ahead, and are trying anything in their power to stop it happening.  However, the £12.2bn deal with Lloyds TSB has been well thought out and does provide certainty to our shareholders and real financial benefits.  With with Lloyds TSB on our side we will be a stronger group, a group in a better position to access funding.

According to a represenative of HBOS Sir Peter Burt and Sir George Mathewson they are not offering shareholders anything - no cash, no value nor any certainty.  The rumour is with these pair is that they are just wanting to run the company with no cashflow behind them.

Lloyds TSB has said its acquisition of HBOS would save it at least £1.5bn ($2.4bn) a year, raising fears of heavy job losses from the merger.  The pair are saying that HBOS no longer needs to be rescued by Lloyds TSB, because the government and Bank of England have offered vital funds to replace those that could be withdrawn by money managers and other creditors.

They are also calling for HBOS’s chairman and chief executive to resign, apparently they are leaving the company soon anyway, but are offering it them on a plate so that the pair can get their foot in the door and get HBOS back to a sound standard.

The US jobless rate rose to 6.5% in October, official figures have shown, the highest rate since March 1994.  After the harsh month of October the unemployment rate rose up by nearly 7 %.  US employers cut 240,000 jobs in October, the 10th month in a row that the economy has lost jobs.  The increase means that in the first 10 months of this year, 1.2 million people in the US have lost their jobs.

It is predicted that the jobless rate could climb to 8%, or possibly higher, next year.  Employers cut 127,000 positions in August, compared with 73,000 previously reported, while 284,000 jobs were axed in September, compared with the first estimate of 159,000 jobs.  The revised figures for September showed the biggest monthly cut in jobs since November 2001.

On Friday, car giant Ford announced plans for more job cuts after reporting third quarter operating losses of $2.98bn. The firm it would cut its salary costs by an additional 10% by the end of January 2009.  Compared with the recession of 1980-1982 the unemployment rate was at a staggering 10.8%, who knows whether in the recession of 2008 that will most certainly go into 2009 could rise up to that figure?

The number of people and company firms that have gone bust has gone up by 9%.  This was always going to happen because of the current financial crisis and recession.  The increases have been widely predicted because of this year’s sudden economic downturn and the consequent rise in unemployment.  The rising trend started this year as the economy stated to slowdown under the impact of the credit crunch.

The number of firms being liquidated is now up by 26.3% on a year ago.  Liquidation is the orderly sale of assets and other properties for disbursement among creditors. When a business or firm is terminated or bankrupt, its assets are sold and the proceeds pay creditors. Any leftovers are distributed to shareholders. 2. Any transaction that offsets or closes out a long or short position.

More people are expected to file for bankruptcy, the number of firms and people is only expected to go up this year and even high in 2009.  2009 will be a true test for many people.

Congratulations on being the first black US president Democratic Senator Barack Obama, a thoroughly deserved victory. Unlucky to John McCain he did all he could, but i think it was Obama’s year.

Let’s see what Barack Obama said he would do in his speeches and see if they are carried out.

Congratulations to Obama, and Commiserations to McCain.