Homeowners win right to sue over mortgages

In America, a lot of homeowners aren't able to pay back their mortgages. Although the housing market has been crashed, the prices of the houses are very high compared with 10 to 15 years ago. Many of the borrowers don't have to pay back a fixed amount to the bank, but the loan depends on the increase in the value of the house. More than 300 homeowners have been united and they now sue Barclays and Bank of Scotland for selling such risk-bearing mortgages.

Thomas De Coninck

http://business.timesonline.co.uk/tol/business/law/article6863171.ece

Recession, it's not all bad.

While some companies have real problems staying alive during a recession or even go bankrupt, their are also those who take advantage of the situation. Numerous studies have shown that there are 3 different strategies to get trough the ruff patch unharmed and even grow during these times of despair. First there are the ones who benefit from the problems of other companies to negotiate better deals than during a boom ( up to 15% more return to shareholders). The second successful strategy is to use the turmoil to reposition yourself in the marketplace and finally there are companies that realize the key to survival isn’t economizing but innovating.

Philippe Blancquaert

Sarkozy heats up discussion on bonuses

Sarkozy heats up discussion on bonuses.

In France, BNP Paribas’ decision to reward its employees with enormous bonuses (up to €1 billion, of which €800 million in 2009) caused a stir among citizens and politicians. President Nicolas Sarkozy therefore summoned bankers to his office and forced them to accept new rules concerning bonuses. BNP Paribas and other big french banks accepted a bonus-malus system, under which at least 50% of bonuses depend on long-term overall performance. Moreover, bankers agreed to publish bonus policies in the future and accepted some sort of “bonus supervisor”. Sarkozy is now hoping that other countries are willing to follow France’s example.

Laurens De Baere

The Economist - Aug 27th 2009

KBC as a herald of recuperation

Today, the BEL20 presented the best results on the stock market since 10 mars 2009, all thanks to KBC, whose stocks rose by 15,4 per cent. This was mostly due to an increase of capital by Société Générale and a positive advice on buying European bank shares. Even though KBC had the biggest improvement, other banks, such as Dexia and Fortis, displayed some excellent results as well. This tremendous news can only stimulate the idea that we’ve survived the worst and are up for better times!

Laura Demeyere

Bron: De Standaard

No banking qualifications? Become bank chief!

A survey has revealed that a lot of chief executives of Britain’s banks do not have the right degree for their job. The problem is that there are few people who have qualifications that are suitable to run a large retail bank. Because there are so few they changed those people by “fit and proper people” with the right experience. On top of it, they receive a golden handshake when they have to leave the company. Great job, isn’t it?!

Bram De Cocker

http://news.bbc.co.uk/2/hi/uk_news/politics/7888161.stm

“I know how unpopular these bankers are”

While banks all over the world are blamed for the financial crisis, Boris Johnson is embracing them with both arms. Almost everyone else is screaming for additional regulations but not Johnson, he is reaching out for these financial institutions! Despite of his warning: "Banks cannot return to business as usual" he is against the 'ill thought-out' regulation. He reminds the UK audience that the financial sector contributes to society by employing a large number of people and by paying a vast amount of taxes every year.

Ruben Buysse

Source: Johnson defends 'pariah' bankers

More flexible bank system

Banks all over the world want a larger separation between commercial banks and their investment-banking divisions; only Japan pursues a contrary policy. The reform of the Japanese bank system implies that different departments can interact with each other to preserve the overview. The reform must ensure that the employees can work more easily, moreover their efficiency must improve. The reforms purpose is to introduce more sophisticated financial products on the Japanese market.

Problems in the air !

Although British Airways asked their employees this summer to work one month for free, to work part-time or to resign freely. The revenues of British Airways still stay down, therefore they have to reduce their costs by dismissing 1,700 employees and introducing a two-year pay freeze for their crew. But the passenger numbers were falling so sharply, that these measurements weren’t good enough to bounce back. The International Air Transport Association (Iata) forecast the losses of the whole industry to € 7,5 billion.

Maarten Callaert

Link: BBC News

Starbucks makes a new start

Starbucks has made a spectacular alteration concerning its policy, a change that seemed to be of importance to the financial position of the company on the stock market. Howard Schultz (founder of Starbucks) decided to reverse the tendency towards expansion, by giving the shops a more cosy setting and improving the efficiency, through which the operating costs declined by around $500 million. The company returned to its roots and simultaneously decided to pay more attention to charity, the social media and the quality of the service; factors that have lead to an increase of the value of shares of nearly 120%. Starbucks has also sent up its margins by successfully launching new projects, and almost halted its decline despite of the hard rivalry.

Tessa De Backer

Source: Starbucks

The new normal

Simon Cox said in an interview that although the world economy is recovering from the latest financial disaster, it will never return to normal. The European Commission published a line grapf about the expected output level for the next years. As you can see, there are three different scenarios: a full recovery, a permanent loss or a widening loss. Many reasons can be given for each of them, so read the full article.

Matthias Dendooven

http://www.economist.com/specialreports/displaystory.cfm?story_id=14530093

"Ethical" hacker frightened Belgian banks

Always thought your personal information was safe in the hands of your bank?
The ethical hacker Unu proves the contrary by cracking the computer systems of both Dexia and ING Belgium.
Luckily for them Unu had no bad intentions, by hacking the computer systems he just wanted to point at the lack of safety.
Both banks confirm the occurrence, but emphasize that nothing serious happened.

Toon Boermans

http://www.standaard.be/Artikel/Detail.aspx?artikelId=8B2EPCUV&word=hacker

BNP Paribas will repay it's debts earlier

BNP Paribas is willing to pay back it's debt to the French government faster then was agreed. The bank borrowed billions from the French and Belgian government last year. Due to the state support the bank lost it's independence. Because the bank is making profits again and the interest on loans will rise next year, BNP Paribas wants to get rid of its loans and wants to regain it's independence.

Carron Jordy

Man the guillotine, sign the death panels.

Death panels, a horrific term, but it’s the brand new remedy to the ‘moral hazard’ that triggered today’s economic slump. The idea is that regulators and banks will be forced to organize themselves so that it will be easier to execute the ‘bad’ firms in order to keep the economy healthy. This concept should involve lower monetary loss for civilians when future banks get into trouble. These new laws are ought to give people their confidence back in order to revive the whole economy!


Arne De Cloet

Source: www.economist.com/businessfinance/displayStory.cfm?story_id=14558456

IMF dusts off Tobin tax

The IMF plans to reintroduce the so-called Tobin tax on the world's biggest banks and hedge funds. The money gained by this levy will be used to support poor countries. Strong opposition is expected from the financial sector, as it already faces high charges because of the credit crisis. But the IMF states that the banks should pay for the damage they have caused in the global economy.

Filip De Geyter

Source: Banking Times

Raising all-in

Research has recently shown that going ‘all-in’ on the stock market gives better odds on being more lucrative than simply averaging in. After a comparison of both strategies, scientists had to conclude that there is a 3% higher success rate when you bring in a ‘lump sum’ of money at once, than when you invest small bits monthly. Nevertheless many investors remain having their doubts, since timing is crucial in this approach. As the Times itself states, it is probably more wise for investors to keep the wisdom of this research in the back of their minds and figure out the way that suits them best, themselves.


Asselman Wouter
Source: Times Online

Shark attack

Loan sharks have flourished since the moment Debt Advice Centres started with waiting lists, which increased from one week to six weeks. Most loan sharks work in teams and are seen as high-level crimals because they blackmail people and even force wives or daughters of borrowers into prostitution! In an attempt to deal with the illegal trade, The Illegal Money Lending Team has changed from an evidence-gathering institution to an organ that can act immediately. Because of those rapid reactions and the successful prosecution of one of the biggest loan sharks from Manchester, they hope to encourage even more victims to come forward!


Tine De Pandelaere

Source: Times online

An appetite for risk

While the banks don't really have an appetite for giving out new loans, the debt and equity markets are regaining their appetite for risk. In the period following August 2008, there were only two IPO’s (Initial Public Offering) in America. That is nothing compared to the IPO’s in the last week of September 2009 alone, when there were seven in one week. Not only has it become easier to find news loans, the conditions are even better than before the economic crisis.

Lorenz De Bruycker

Source: http://www.economist.com/businessfinance/displayStory.cfm?story_id=14558585

The crisis has also an advantage

We all know that the emission of carbondioxide is the major malefactor of globalwarming. According to the Internation Energy Agency (IEA) in Bangkoo the emission of carbondioxide could decline by 3% this year just because of the financial crisis. Great isn't it?

At a press conference Fatih Birol, the expert in economics at the IEA, declared that this decline would be the biggest of all in the past fourthy years!
So far, the emission increased by an average of 3 %, says Birol. He also says that the interruption of this trend is the perfect opportunity to put up the right policy to decrease globalwarming.

De Ridder Steff

Source : De Morgen

Iceland's recovery blocked by IMF

Nearly a year after the financial crisis demolished the country's banking sector, Iceland's prime minister blames the IMF for delaying the recovery of its country. The IMF has postponed a review of Iceland's economy for months. This review would allow Iceland to get hands on a part of a $5.1bn recovery fund. Nevertheless, the prime minister believes that the IMF will start the review within the coming month.


Peter Depypere

Iceland criticises IMF, UK and Dutch

Microsoft's boss doesn't believe in a quick recovery!

Microsoft’s sales remain static but we can’t talk about a recovery, according to Steve Ballmer, the software giant’s boss. Microsoft knew a recession since December 2007 and lost a third of its profit in the April-to-June quarter. Ballmer insured that Google’s recent competition has nothing to do with that, “we always have had competitors, there’s nothing magic about Google”, he says. Furthermore Ballmer doesn’t believe sales will jump in the following years, he even thinks the world will be in a period of marginally growth for YEARS!

source: BBC news

Caroline Cuypers

Société Générale plans €4.8bn capital-raising

Société Générale launched a €4.8bn rights issue to repay the government’s €3.4bn capital aid and is, by doing this, the third French bank to start repaying government money. Société Générale follows the lead of two other French banks (Crédit Mutuel and BNP Paribas, which announced a €4.3bn rights issue last week) and many other European and US banks. The French bank has taken advantage of good perspectives in stock markets to announce this cash call. It is the second time in less than two years that SocGen has called on shareholders, the last time was in January 2008 when the bank tried to repair the damage done by a trading scandal.

Bruno Borghmans

http://www.ft.com/cms/s/0/7487d23c-b23f-11de-bbaf-00144feab49a.html

First G20 nation back in the game

Australia is the first country of the G20 nations to raise interest rates to  3,25 % ( was 3%) as Australian economy expands in the first half of 2009. The strength of the Australian economy is based on the fact that Australia has a lot of natural resources (iron ore, bauxite, gold, copper, etc.); as China is very active in the building sector and reconstruction, the Chinese are major clients for Australia’s commodities, but they are also major players in the Australian economy through direct investments. Another factor is that Australia has a lack of manpower and therefore is slackening their immigration policy to attract people to come to Australia. To state that the global economy is recovering might be overoptimistic as Australia’s economy was and is healthier than the rest of the G20 countries.

Arnaud Bakker

 

Put your money in s(t)ocks

With rising stock exchange indexes many believe the economic crisis is over. Quite the opposite in fact. Specialists believe that the current stock market recovery is too enthusiastic because the economic activity is recovering much slower than first thought. Therefore a correction of stock charts, causing even more losses for investors, seems inevitable.

Arne De Jongh

Beurzen volgens experts aan vooravond van nieuwe crash

Milked out

In the European market, the fall of milk prices is caused by the economic crisis and the fact that supply exceeds demand. Although the prices in the shops fluctuate, dairy farmers have seen their prices decrease. If the farmers want a higher income, the EU might have to tighten the quotas. On the other hand, dairy farmers should be more independant and creative, so they can prove they are not milked out.

Annelie Carlier

Source: http://www.economist.com/world/europe/displaystory.cfm?story_id=14170799

Purchase of own shares out-of-date

The purchase of own shares seems to be out-of-date in Belgium, with the exception of the holding NPM and Colruyt. NPM and Colruyt are the only two companies who still buy their own shares on a large scale with the intention to destroy them afterwards. In times of financial crisis, Bel20- companies prefer the storage of cash above the purchase and destruction of their own shares. The purchasing activity that slowed down is in sharp contrast to the purchasing rage of 2007-2008, when cash was used to purchase millions of Euros of own shares.

Beeckman Pieter

Mazda invests green money.

Mazda will raise 1bn dollars to invest in hybrid and electric cars, by selling 363m new shares and treasury stock from Ford Motor. Mazda’s results are better than expected, they have returned to profit much quicker than they thought and the forecast of its results in the coming periods are positive. A part of the raised cash will further be spend on “environment- and safety-related development”, the rest will be used for factory upgrades and other investments. The Mazda Tribute is the only hybrid car that Mazda offers, it’s based on the Ford Escape and only a small number have been sold yet.

Source: Mazda to raise $1bn to fund green cars

Jonathan Dauchot

Taxes solve everything

The Belgian Government is in debt and now those who are not to blame might even have to solve the mess. In an attempt to balance their budget, the Belgian Government is considering to increase the tax deduction at source from 15% up to 25% on the interest of bank accounts. This could shrink the budget deficit by 420 million Euros. However, as this tax would mainly affect normal households, skepticism is high and there is little chance this new source of revenue for the Government will become reality.

Michael Agon


Verhoging roerende voorheffing afgeschoten

Belgians forget to pay their invoices!

Over 6% of the Belgian people doesn’t pay their invoices in time, which is why the company Isabel searched for some solutions to solve this problem. People claim that the reasons for not paying their invoices are mainly laziness and negligence. Therefore Isabel proposes for people to be able to pay and request their invoices via internet banking, so we don’t have to drop any invoices in the mail box anymore. Unfortunately this proposition isn’t very popular yet, nevertheless it would be quicker, more efficient and better for the environment!




Claire Cammaert

Source: Belg heeft een hekel aan facturen betalen (Het Nieuwsblad)

Power Is Shifting

Since the beginning of the financial crisis, the economic power of the US has decreased whereas the power of new and rising economies like China and Brazil has increased. Because power is shifting, it seems that the G20 - the group of the 20 largest economies - will replace the G7. The leaders of the G20 claim they have been doing this over the past year and they say they will become decision maker number one. According to World Bank president Robert Zoellick this is rather a good thing, because he believes "A multi-polar economy less reliant on the US consumer will be a more stable world economy."

Maxime Deleye

Source: US economic power 'is declining' (BBC News)

AB InBev in troubles?

Last year Inbev took over Anheuser-Busch in order to become the world’s largest brewer. The investment of 52 billion dollar made the group has a debt of about 1 million dollar. To fill the financial gap, ABInBev has set up a divestment programe which includes the sell of 10 theme parks to Blackstone, already one of world’s biggest theme park operators. Unfortunately the prudent negotiations of private equity firms are only a fraction of the amount AB InBev want to collect.

http://www.ft.com/cms/s/0/33ef8a3e-afac-11de-ba1c-00144feabdc0.html

Thomas De Borle

Transparency as a solution for the financial crisis…

Wouldn’t it be better if banks were much more transparent?
The website of the ethical bank Triodos provides you the privilege to access information about what happens with your money, who it is lend to. It gives you the opportunity to observe and examine your money float. However Triodos contains only ecological companies, therefore it is recommendable for other banks to be more transparent in their investment portfolio.

Source

Rosalien De Saer

The Oracle of Omaha loses $10 billion

According to Forbes Magazine, the 10 richest Americans have lost a combined 39.2 billion dollars thanks to the failing economy, the real estate crisis, divorce and fraud. Among those most affected is Warren Buffet, one of the worlds most succesful investers. Despite losing over 10 billion dollars, he still remains the second richest man in the United States. First place, for the 16th consecutive year, went to Microsoft co-founder Bill Gates.

Renate Catthoor

Banks forced to pay the poor

During the financial crisis, the banks were able to lend enormous amounts of money from the government. Now the government wants something back: the banks will have to pump money into the poor communities that might be forgotten during the financial catastrophe. The goal of ministry is to force the banks to have more social responsibility and to help the communities in need of money. Doing so the banks might gain back their licence to operate and a second trauma could be occurred.


Stijn Casneuf

Source:
http://www.guardian.co.uk/business/2009/oct/04/treasury-banks-funding-community-reinvestment-act

Microcredit ventures aren’t the answer to world poverty

The success of micro-financing isn’t enough to make world poverty disappear, this is what recent studies proved concerning the benefits of microlending.
Grameen Banking gives a solution too entrepreneurs in the poor countries, studies, on the other hand, showed that poor people use these loans to buy household goods.
The method of microlending helps little pockets of people to escape poverty ,but the overall success of this system is delicate or even non-existent.
Muhammad Yunus, probably the world’s most popular banker and the defenders of micro-lending say that studies based on a period less than one year give a distorted picture.

“World poverty guru ‘fails’ to spread wealth”
From The Sunday Times
October 4, 2009

Farmer's income cut in half

This is the second year in a row that farmers will have a historically low earning.
Agricultural product became substantially cheaper, causing the profit margins to evaporate. Low-priced forage, fertilizer & energy neutralize this effect, nevertheless has a farmer half the income he had 2 years ago! The Boerenbond estimates this income at 14.451 euro, which is 63 percent less then the average flemish employee earns.

Simon Buysse
Source

Good luck, Mr Bernanke

On August 25th, Barack Obama nominated Ben Bernanke as chairman of the fed as he managed to lead America out off one of the worst recessions ever. The news caused a wave of relief among economists, for he has done a great job in dealing with the crisis. He lowered the interest rates as one off the first central bankers in the world and he used some unconventional methods to prevent America for further harm. Some say the economy has recovered, but for Bernanke the task will be more difficult than ever.

Brecht Boone

Source: The economist, number 8646, p. 10-11

The recession puts students to trouble

Thousands of first-year university students won’t be able to pay their tuition fees due to delays at the SLC (Student Loans Company). Lloyds TSB, a high street bank, offers bigger overdrafts to help freshers who already have an account at the bank. The delays at the SLC were caused by the big amount of workers returning to education because of the recession. Those who want to receive full funding next year should fill out their application in time and take care of the right paperwork.

Bram Cool

Source: The Independent