Scots and the City: the money-managers' questions about independence - Daily Telegraph Blogs
Edinburgh - would an independent Scotland shoulder much of the national debt?
A little while ago, I went back to the City for an event that brought together the subjects that dominated my two previous jobs: money and Scotland. At the British Bankers Association, Stewart Hosie, the Scottish National Party’s finance spokesman, was discussing the financial and economic aspects of Scotland’s proposed independence.
And there are a lot of questions about that. How much of the UK national debt would Scotland take? Since it would keep the pound, would Scotland have any influence over its own interest rates? If Scotland had to borrow, what interest rate would it pay on its bonds? What credit rating would that debt have? What maturity? Can we even trust the statistics on Scotland’s economy and financial system?
Mr Hosie answered some of those questions, and sidestepped others. I assume his answer about the national debt (suggesting that Scotland could hand back some UK military assets in exchange for a lower share of the debt) was a joke. But his answer about Scotland’s influence on the Bank of England over monetary policy (essentially: we’d ask very nicely to be heard) was serious, and highlights an SNP position that will come under a lot more pressure as the referendum approaches.
That’s all interesting stuff, but what really strikes me about the event was the fact that it took place, and the guest-list. The event was organised by Tods Murray, a serious law firm, which has helpfully put the whole thing up on its website here. The audience was made up of serious people from serious financial institutions, companies that control huge sums of money, and they were asking Mr Hosie those searching questions.
In both of my previous jobs (Bloomberg News and The Scotsman) such a level interest from the financial world in the question of Scottish independence would have been more or less unthinkable; the independence debate was strictly for the politicos. Times have changed. The fact that the City is thinking about independence is just another sign that the vote is a serious business indeed.
MONEY MARKETS-ECB rate cut may not encourage bank lending - Reuters India
* ECB deposit rate cut may spark money market fund outflows
* May hurt repo market volumes due to low rates
* Higher-yielding non-periphery paper to benefit
By Marius Zaharia
LONDON, July 9 (Reuters) - The European Central Bank's cut in interest rates to record lows last week may accelerate outflows from euro zone money market funds and may -- contrary to design -- make banks even more reluctant to lend to each other than before.
The ECB cut its deposit facility rate, which banks use to park money with the central bank overnight, to zero and its key refinancing rate to 0.75 percent on Thursday, in a bid to push banks to lend more to businesses.
In theory, lower interest rates should increase demand for loans in interbank market and boost the banks' appetite to lend to the real economy as a result of easier access to funds.
But uncertainty surrounding the euro zone debt crisis is breaking this chain. Most banks are unwilling to lend to each other or to businesses as they fear an intensification of the crisis could create massive damage to the financial sector.
And the few banks that were still willing to lend in interbank markets before the ECB move may stop doing so in the future as rates around the zero mark mean returns may not be enough to cover the transaction costs.
The same goes for the money market fund industry, which is not earning enough interest on its cash.
JPMorgan Chase & Co, BlackRock Inc, which is the world's largest money manager, and Goldman Sachs Group Inc , have restricted investor access to European money market funds in the wake of the ECB's moves.
"Euro zone money market funds will likely see further outflows. The move to zero (in the ECB's deposit facility rate) is another blow for the money market fund industry," said Nikolaos Panigirtzoglou, managing director of the global asset allocation and alternative investments at JPMorgan.
He said it was almost impossible to estimate the potential damage, but pointed to cumulative outflows of 34 percent in U.S. money market funds since 2008 as an indicative figure.
"From mid-2008, euro zone money market funds shrank from 1.3 to 1 trillion euros. If the experience of U.S. funds is any indication ... then euro zone money funds could see outflows of another 150 billion euros."
Bond funds will likely be the main beneficiaries of these outflows, he said, with higher-yielding corporate and sovereign paper outside the euro zone's periphery, such as Belgian and French short-term debt, likely to see the most inflows.
Belgian bonds outperformed other euro zone paper on Monday, especially shorter-term debt.
PENALISED FOR LENDING
It is still too early to gauge the full impact of the ECB's rate cut, but analysts expect it to hit volumes in the most active sector of the euro zone interbank markets - the repo transactions, in which investors raise cash backed by collateral, usually government debt.
The rates to borrow cash using a basket of top-rated German general collateral were in single-digit negative territory across different maturities on Monday, traders said.
This means those who are asking for German collateral to lend are being penalised for doing so. Given the low confidence government debt issued by countries which are the forefront of the crisis, such as Italy or Spain, it is likely that they will hold on to cash rather than accept lower-rated collateral.
"The danger is that liquidity in repo markets will wane," said Benjamin Schroeder, rate strategist at Commerzbank.
Some funds are still willing to brave the ever-lower rates environment, however.
"I'm quite happy to hear that some of our competitors are closing their fund for new investors because we are building up our AUM (assets under management)," said Gerard Moerman, head of rates and money markets at Aegon.
"Money held with the ECB doesn't return anything anymore so one can decide to put the money into a money market fund ... and ours is open," said Moerman, whose 150 billion money market fund is currently returning 0.85 percent. (Editing by Jeremy Gaunt.)
FastFunds Financial Corporation Announces the Effectiveness of Its Forward Stock Split - Market Wire
WEST PALM BEACH, FL--(Marketwire - Jul 9, 2012) - FastFunds Financial Corporation (
- Payment Date for the forward split is July 9, 2012;
- Ex-Dividend Date is July 10, 2012 and
- Bill Redeemable Date is July 12, 2012.
The stock split will entitle each common stock shareholder as of the Record Date to receive two (2) additional shares of common stock for each one (1) share owned. Additional shares issued as a result of the stock split will be distributed on the Payment Date. Shareholders do not need to exchange existing stock certificates and will receive a new certificate reflecting the newly issued shares.
Shareholders who sell their common stock before the Ex-Dividend Date are selling away their right to the stock dividend. Such sale will include an obligation to deliver any shares acquired as a result of the dividend to the buyer of the shares, since the seller will receive an I.O.U. or "due bill" from his or her broker for the additional shares. The day stockholders can sell their shares without being obligated to deliver the additional dividend shares is the Ex-Dividend Date, the first business day after the stock dividend Payment Date. As of the Ex-Dividend Date, the Company's stock will trade on a post-split adjusted basis.
For a reverse or forward split, a "D" will be placed on the ticker symbol for 20 business days. After 20 business days, the symbol will revert back to its' original symbol (FFFC).
As reported on the Company's Current Report on Form 8-K filed on June 11, 2012; the Board of Directors, on June 5th, 2012, unanimously approved a dividend whereby the shareholders of FastFunds Financial Corporation (the "Company") would receive a dividend payable as a three for one (3:1) forward split of the issued and outstanding shares of the common stock (the "Dividend Shares") of the Company pursuant to Section 78.215 of the Nevada Revised Statutes. Pursuant to NRS78.215 and consistent with the Company's Articles of Incorporation there was no shareholder approval required for this action. The record date for shareholders to receive the Dividend Shares is June 18, 2012.
Barry Hollander, Acting President of the Company, stated, "The stock dividend is intended to lay the groundwork for the growth of our Company, allowing us to continue our ongoing efforts to improve trading liquidity, broaden ownership, promote capital investment for acquisitions and enhance shareholder value. As we reported on our Current Report on Form 8-K, filed on May 31, 2012 we recently acquired Carbon Capture USA, Inc. The Carbon acquisition is our first step in the Company's plan for diversification into several business segments including consumer products, natural resources and technology."
About FastFunds Financial Corporation
FastFunds Financial Corporation is a holding company that is publicly traded on the Over-the-Counter Bulletin Board under the symbol "FFFC." The Company currently operates in the financial services industry segment with a single credit card services portfolio. The Company is currently seeking new business opportunities to diversify and complement our current services and products, enhance our technical capabilities or otherwise offer growth opportunities for our stockholders.
The board of directors has approved a business plan to extend the Company's business activities into additional business segments including: technology development; consumer products; and natural resources including alternative energy.
We recently announced the formation of a new subsidiary, Advanced Technology Development, Inc., as well as the acquisition of Carbon Capture USA, Inc. through our new subsidiary. Carbon Capture USA has an exclusive US license related to provisional patent Serial number 61/077,376 and a US Patent to be issued. The patent titled, "METHOD OF SEPARATING CARBON DIOXIDE," relates to methods of decomposing a gaseous medium, more specifically, relating to methods of utilizing radio frequency energy to separate the elemental components of gases such as carbon dioxide. ATD will commence research and development with a goal of potential commercialization; subject to financing. Mr. Henry Fong, the Chairman of our Company is a shareholder and a control person of Carbon Capture.
We also intend to seek other business opportunities in natural resources and consumer products to expand our reach and diversify our business segments.
The Company's strategy is to seek potential growth opportunities, develop and incubate them, and seek industry partners for the commercialization phase. These affiliations may take the form of partnerships, joint ventures or spin-offs.
Asda to push financial products - BBC News
Asda has become the latest retailer to launch new financial products as banks' reputations among the public continue to take a hit.
The supermarket has launched Asda Money to promote products such as currency exchange, insurance and a credit card.
It will sell these products in stores although they are provided by specialist companies.
The move comes shortly after Marks and Spencer said it would launch an in-store banking service this summer.
M&S Money will be backed by HSBC, but will include 50 branches in stores over the next two years.
Information about the Asda products will be supplied at checkouts and online.
Customers with its new credit card - which includes a cashback element - will have to manage it online, by telephone to a UK call centre, or by post.
The new Asda Money brand will also sell breakdown cover, as well as travel, home and car insurance.
Overall, Asda Money is still dwarfed by the operation of Tesco Bank, which is fully owned by the supermarket, has 6.5 million customers, and - unlike Asda - has its own banking licence.
A series of scandals have hit the reputation of the UK's High Street banks, prompting a number of other financial service providers to step up their offers.
Nokia Offers “Amazing Money Back Challenge” in India, Guarantees Money Back for Lumia 800, 710 - Softpedia
Dubbed “Amazing Money Back Challenge” is aimed at customers who are not sure whether a Windows Phone is worthy enough.
According to Nokia, customers who purchase a Lumia 800 or/and a Lumia 710 will be eligible for a refund if they don’t like the experience offered by Microsoft’s operating system.
However, those who change their mind about their recently purchased Lumia 800 and 710 devices will have to return the smartphones within a 7-day period.
Nokia guarantees customers will get their money back if they meet the requested requirements and visit its Indian Facebook account page to fill in their contact details and select the closest store.
A Nokia rep should get in touch with those who want to return their Lumia 800 and 710 phones to confirm they are eligible for the “Amazing Money Back Challenge” offer.
Keep in mind that customers will only be able to return their Windows Phone device to the store where it was purchased from.
The Lumia 800 and 710 have similar specs except for the main camera. While the former comes with an impressive 8-megapixel rear photo snapper that features Carl Zeiss optics, the latter only sports a 5-megapixel rear camera with autofocus, LED flash and HD (720p) video recording.
In the same piece of news, Nokia has recently launched the Lumia 610 and the Dark Knight-themed Lumia 800 in India, as well as the Music Store and the Mix Radio application.
However, these two new handsets are not included in the “Amazing Money Back Challenge” offer for the moment. Still, it won’t come as a surprise if Nokia expands the availability of the promotional deal to these smartphones as well.
The Bank of England's black hole: As another £50bn disappears, are they shovelling good money after bad? - Daily Mail
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Throwing good money after bad? Mervyn King, the Governor of the Bank of England, announced more QE
An increasingly desperate Bank of England is showering the economy with another 50bn of fivers and tenners, the ink, metaphorically speaking, still warm.
It takes the total under the Quantitative Easing scheme to 375bn, a huge amount of money by any measure. Mervyn King is not actually strewing sacks of new notes into cash machines; the money is created by electronic transfer as the Bank buys up gilts from banks and pension funds.
But to put the size of the operation into perspective, it amounts to more than a third of all the gilts – government IOUs – that are in issue. And no-one has the least clue what, if any, good it is doing.
Certainly, QE3 has been greeted with a marked lack of enthusiasm in the City, which fears the law of diminishing returns.
Even if earlier bouts were effective at boosting the economy – and that is incapable of being known - the Bank is getting less bang for its buck (or pound) this time, simply because the ‘shock and awe’ factor has worn off. The City had already factored more QE into its thinking; in other words, markets are becoming addicted to their fix.
At the same time, pensioners and savers are furious that the policy is eroding their hard-earned savings.
The arrival of CBI economist Ian McCafferty on the Monetary Policy Committee that decides on interest rates and QE might, one hopes, have a good effect on that body, which at the moment is stuffed with Bank insiders, academics and professors of the dismal science of economics.
McCafferty at least has been working at close quarters with real businesses and might help focus the minds of the committee on their needs: namely, for credit so they can invest, export and grow.
QE has not succeeded in opening the sluice-gates of credit to small firms – hence the latest wheeze, an 80bn ‘funding for lending’ scheme.
Cash: The Bank of England is showering the economy with another 50bn taking the total amount under the Quantitative Easing scheme to 375bn
The initiative involves the Bank of England taking low quality loans off the commercial banks’ books. That, in turn, will free the lenders to make cheaper loans to small and medium firms, or so the theory goes (the fact it will saddle the Old Lady with a pile of dubious assets is glossed over.)
It was announced with great fanfare at the Mansion House speech. But it has all been very quiet since then.
Hardly surprising: everyone has other things on their minds.
Paul Tucker, widely seen as favourite to be the next Governor, has been dragged into the scandal surrounding Bob Gissa Job Diamond. (I have always thought a man of 60, with such a luxuriant head of hair, in such an unconvincing shade of nut brown, must be up to no good).
The Bank’s latest action on QE came as the European Central Bank cut interest rates to 0.75pc and the People’s Bank of China slashed its lending rates in a surprise move.
The latest jobs figures from the US suggest that hopes of a recovery in the world’s largest economy may have been premature. There are fears of a slowdown in China and other emerging markets, that supposedly were insulated from the malaise in the West.
Borrowing costs in Italy and Spain soared yesterday as Christine Lagarde, the head of the International Monetary Fund issued yet another dire warning that more needs to be done to shore up the single currency.
Banks need billions of pounds of fresh capital to withstand the Eurozone crisis – another Mansion House measure was the ECTR, designed to pump 5bn a month into the banks to keep them afloat.
In this terrifying battlefield, QE has been the main weapon in the Bank’s armoury. The problem is, QE does not solve anything. There is no exit strategy, and there can be no guarantees it can be unwound in an orderly fashion. It runs counter to the cultural changes in our attitudes to borrowing and sound money that are needed for a sustainable future.
At best, it is a palliative – at worst it is a monstrous gamble that risks debasing the currency.
Those who are authorising the printing of money like there is no tomorrow must remember history does repeat itself. It's reminiscent of the 70's where there was stagflation owing to the Labour government under Harold Wilson injecting large amounts of money into the system giving a peak of 25% inflation in the mid 70's. Another £50 million disappearing into the ether is not tackling the problems of today. The real issues lies with the banks of course and our output flow which cannot grow as there is not enough trust and support for new industries and designers.
- Marie1797, Britain, 08/7/2012 17:38
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