Eurocrisis Takes A Day Off

Today being Mayday, means that the financial markets on the continent of Europe are closed. The result being a "lull", for a day anyway, in the crisis engulfing the Eurozone.

Barclays Accused of "Reckless Disregard"

An independent report prepared for Guardian Care Homes (GCH), which operates 30 care homes, by derivatives experts at JC Rathbone Associates accuses Barclays of "reckless disregard" over its sale of a set of complex derivatives to GCH.

GCH are suing Barclays for £36M, and the report will be used in its case against the bank.

The Telegraph notes that the report alleges that the terms of the loan posed "a risk of breach of covenant", while also claiming that the hedges sold to GCH were never likely to have protected it against rising interest rates.

Barclays in a statement last week said:

"This action is completely without merit and we will contest it vigorously. Barclays is satisfied that it provides sufficient information to enable a client to make an informed, commercial decision about the products it offers."

On Friday, Bob Diamond, CEO of Barclays, said the number of complaints was "very small", but admitted "mistakes" were likely to have been made.

The banks marketed these products as protection against potential higher future costs, the products do not do this. It would have been in the hapless purchasers' interests to take out a simple to understand fixed rate loan. Unfortunately, for the hapless customer, the commission earned by the banks on these complex financial products were higher.

I will leave you with the thoughts of Bob Diamond, 3rd November 2011:

"The only way that banks will win back the public's trust is to become better citizens. That starts with how we behave, and in demonstrating we act with trust and integrity. 

At banks this means the interests of customers and clients must be at the very heart of every decision made."

How very true!  

Spanish Youth Unemployment Soars

As our EU overlords seek to impose further austerity measures on their subjects, whilst at the same time seeking an increase in their own budget for 2013 of 6.8%, it is worthwhile remembering that the EU financial straitjacket is having real consequences for real people.

Spanish unemployment figures have hit a record level of 5,639,500 at the end of March (24.4%), with youth unemployment at a shocking level of 52%.

The EU may care to pause and reflect on those figures for a moment, before it continues with its self destructive quest to fill its bloated coffers with a 6.8% increase in budget.

Britain Back in Recession?

According to figures released by the ONS, the UK is back in recession.

However, as with all figures produced by the ONS, the data needs to be taken with a pinch of salt. ONS figures are notoriously unreliable and as with all previous figures they will be revised upwards in the coming weeks, thus taking Britain out of recession.

Useless Gobshites - The EC

Here are threes sets of figures:

- Total cuts in public spending in Greece: -20% (as share of GDP)
- Total cuts in government spending in Latvia: -22%
- Proposed increase in the EC’s 2013 budget: 6.8%

Notice something odd?

Yes, that's right, the body that is imposing austerity packages on EU countries is asking for an increase in the budget of the European Commission of 6.8%!

The EC has lost touch with reality, and is quite clearly a threat to stability and well being of Europe itself.

Shackled To Debt

Britain (like every other significant national economy) is shackled to debt.

The UK public sector net debt has risen to £1.022 Trillion, that is the equivalent to 66% of GDP and the highest since records began.

Some are questioning how this can happen, given that the politicians have launched an austerity programme designed to cut back on on debt.

The answer is simple.

The "planned" cuts and austerity drive will never cut the actual level of debt, at best the cuts will reduce the rate of increase of debt.

We are destined to be shackled to debt for the rest of our lives!

"Free" Money - The Great PPI Giveaway

Courtesy of the greed and lack of ethics of our tainted financial services industry, there are billions of pounds to be "given away" by the recalcitrant banks and lending institutions that conned people into buying the now widely derided Payment Protection Insurance (PPI) policies.

Simon Gompertz has published the headline figures:

"The extraordinary scale of the PPI compensation grab:

£5bn compensation still to be paid out

12 million policies may have been mis-sold

800 claims management companies  trying to get a slice of the money

£2m a month being spent on advertising by these claims companies

They charge 25% or more in fees, plus VAT

Banks are making 50,000 compensation payments a week

That's around £400m a month being paid out

The payments average £2,750, some are £16,000 or more

Some say this massive cash payout could give a boost to the economy

How to claim compensation? Contact your bank, or the  Financial Ombudsman Service"

Given that the banks showed no ethics in selling these now widely derided products onto their naive customers, there is no shame in asking for them to pay the money back (but don't waste money on using a claims company).

Dutch Government Resigns

In a display of irony, probably lost on them, the Dutch government (which in the past has berated other nations for failing to implement austerity measures) has resigned this morning.

For why?

Talks about implementing austerity measures broke down.

Not so easy is it, when you have to implement cuts in your own country?

The Netherlands now faces a general election, which of course will further destabilise the EU's attempts to pull itself out of its self created financial crisis.

Unfortunately, for the citizens of the EU, the financial structure of the EU (ie the Eurozone) is not "democracy friendly". One or the other has to give way, either financial dictatorship is imposed in order to try to resolve the crisis or the current structure (ie the Eurozone) will fail as democracy once again reasserts itself.

The latter option is infinitely preferable, as the former will lead to civil and social chaos.

Greece Oil Shock

In January I warned that the EU embargo on Iranian oil would cause Greece problems:

"There has been much hype and sanctimonious puffing of chests from the EU about its agreement "in principle" to ban imports of oil from Iran.

However, as Paul Stevens economist and emeritus professor at Dundee University in Scotland notes, Greece currently imports 30% of its domestic oil from Iran on favourable terms.

Were Iranian oil imports to be banned, where would Greece get its oil from?

Saudi Arabia?

Maybe, but at an economy busting $150+ per barrel.

As with all EU "plans" this one has not been thought through ."

In February I noted that:

"They are currently negotiating for supplies of oil from elsewhere, any admission that their supplies have been cut will negatively impact those negotiations and cause panic buying in Greece."

As predicted, things are not going well; as reported by News.AZ:

"The EU has postponed an April deadline to review the impacts of the bloc’s embargo on oil imports from Iran due to Greece's concerns on finding new oil suppliers."

As ever with all EU "plans", no one has bothered to think through the consequences of them.

Oh The Irony - Panic Buying Saved Britain

In a twist of irony, it seems that the panic buying of petrol caused by the government mishandling of the tanker drivers' dispute may have helped pull Britain out of recession.

Figures from the Office for National Statistics (ONS) showed a 1.8% month-on-month increase in retail sales volumes and a 3.3% year-on-year rise. The increase was above economist forecasts, and were partly helped by a 4.9% increase in petrol purchases.

French Downgrade Rumours

The Twittersphere is awash with rumours that France is to be downgraded.

Sacrebleu!

HomeServe Fined £750K For Cold Calling

HomeServe have been fined £750K by Ofcom for cold calling during the period 1 February 2011 and 21 March 2011:

"HomeServe confirms that it has been notified that Ofcom has imposed a fine of £750,000 pursuant to section 130 of the Communications Act 2003 in relation to Ofcom's finding, that between 1 February 2011 and 21 March 2011 ('the Relevant Period') a number of outbound marketing calls made on behalf of HomeServe by one outsourced supplier, did not meet Ofcom's rules regarding silent, abandoned or repeat calls. HomeServe is reviewing the detailed determination.

HomeServe identified the issue and promptly reported it to Ofcom, following an internal audit of all of HomeServe's telemarketing operations. The problem was identified as having resulted from the incorrect use of Answering Machine Detection (AMD) technology via an outsourcer. HomeServe can confirm that it no longer works with outsourcers on its outbound marketing and that AMD is no longer used in any calls made by the company.

HomeServe can also confirm that all of its dialler systems have been fully compliant with Ofcom regulations since 22 March 2011, following the rectification of the errors identified during HomeServe's audit.

HomeServe is providing goodwill gestures of £10 to customers who received a silent, abandoned or repeat call from the referenced outsourcer over the Relevant Period. Anyone who believes they were subject to these over the Relevant Period should contact the company before 31 May 2012 on 0800 389 5280 and the claim will be investigated.

The above details will not have a material impact on HomeServe's financial results and the Company’s financial guidance remains consistent with the pre-close trading update of 29 March."

That's all very well, maybe.

However, why did Ofcom only fine HomeServe for that period and what about the people (such as myself) who were bombarded with cold calls in 2010?

UPDATE

To HomeServe's credit I have just received a call from them, and have been promised £10 for my poor experience of their cold calls.

Greece Stares Into The Abyss

As the Greek election on the 6th of May approaches, the voters of Greece have been afforded an opportunity to see their future and stare into the abyss (courtesy of the IMF).

Whoever is elected, on the assumption that Greece remains within the Eurozone, the soul destroying austerity that Greece is experiencing is set to be ratcheted up:

- There will be more cuts in social benefits and healthcare.

- There will be cuts in the public sector.

- Wages and pensions will be reduced by 15%.

According to The Slog, the EU are even trying to influence the result of the elections by placing their preferred candidate in pole position to become Prime Minister.

Greece is staring into the abyss, if it chooses to remain in the Eurozone it will be pushed into the abyss. The choice that the Greek people need to make is whether they wish to be pushed into the abyss, or leave the Eurozone of their own accord.

Jim Yong Kim New World Bank President

Jim Yong Kim, the president of Dartmouth College, has been chosen as the next president of the World Bank. He will take over the World Bank in June this year.

Obama Demonises Oil Speculators

President Obama has today castigated oil speculators for manipulating the oil market, and has proposed new measures to limit speculation in the oil markets,.

This is rather ironic, as only a month ago the Whitehouse manipulated the oil market by leaking rumours (and then denying them) of a release of strategic reserves which of course sent the price of oil down.