The Federal Reserve slashed United States interest rates by a hefty three-quarters of a percentage point on Tuesday, giving a lift to stock markets already jubilant over stronger-than-expected investment bank earnings. Trying to avert a deep recession and financial market meltdown, the central bank cut less than many traders had expected but left the door open to additional reductions.
The global credit crunch claimed its biggest victim yet on Friday when the United States Federal Reserve orchestrated an emergency bail-out for Bear Stearns after a cash crisis prompted a run on the US’s fifth-biggest investment bank. President George Bush sought to calm fears of a deep recession in the world’s biggest economy.
Britain’s FTSE 100 index dipped by mid-session on Monday as concerns of a looming United States recession offset gains in oil shares, HSBC and potential bid target Friend Provident. By 1201pm GMT, the FTSE 100 was down 6,6 points at 5 693,3, well off its day’s high of 5 718,8.
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/ 26 February 2008
World economic growth could miss the International Monetary Fund’s (IMF) forecast of 4,1% this year if United States and European banks disclose more major losses on the subprime market, the head of the IMF said on Monday. Dominique Strauss-Kahn warned that emerging economies would not escape the effects of the slowdown in rich countries.
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/ 4 February 2008
President George Bush will acknowledge on Monday that a slowing United States economy will lead to a higher budget deficit this year and next, as he unveils a -trillion fiscal 2009 spending plan that would boost military funding but nearly freeze many domestic programmes.
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/ 30 January 2008
Fresh write-offs at big European and Japanese banks on Wednesday drove investors’ attention firmly back onto the credit crunch after days gazing at Société Générale’s stunning losses, which it blames on a junior trader. With the Federal Reserve expected to cut interest rates for the second week running, Swiss bank UBS illuminated the depth of the crisis.
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/ 13 January 2008
After years of crisis, the big three United States automakers face another brutal year with demand expected to dip again due to an economic downturn threatening to snuff out 2007’s timid recovery. The world’s major automakers will exhibit upcoming models and the concept cars of the future from Sunday as media previews kick off for the Detroit motor show.
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/ 26 December 2007
Oil prices of near per barrel caused alarm in consuming countries in 2007, and analysts forecast another tense crude market next year with triple-figure records a real prospect. Despite a murky outlook for the world economy, crude prices are seen settling at elevated levels.
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/ 17 December 2007
World stock markets slumped on Monday on worries that resurgent United States inflation would reduce the chances of further US interest rate cuts to shield the economy from a credit crunch, dealers said. European and Asian shares sank into the red with losses of up to 3,5% as investors took their cue from Wall Street’s sell-off on Friday.
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/ 3 December 2007
Oil bounced back above a barrel on Monday as traders bet last week’s nearly sell-off was overdone, and might turn the tides against an expected increase in output by the Organisation of the Petroleum Exporting Countries when the cartel meets later this week.
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/ 20 November 2007
United States banking titan Citigroup may have to write off -billion in soured investments including mortgage losses in coming months, a report by Goldman Sachs predicted on Monday. Citigroup, the US’s second-largest bank by market worth, is already reeling from its exposure to the US housing downturn and tighter credit markets.
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/ 4 November 2007
Citigroup chief executive Charles Prince plans to resign this weekend, the Wall Street Journal said on Friday, as the widening subprime mortgage crisis brings to an end the reign of Sanford Weill’s troubled successor. The largest United States bank by assets plans to hold an emergency board meeting on Sunday, at which Prince will step down.
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/ 30 October 2007
The head of the Wall Street investment bank Merrill Lynch was on Monday night negotiating a severance package tipped to be as high as -million after a risky strategy of betting billions on American mortgage-backed securities came disastrously unstuck.
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/ 25 October 2007
China’s biggest lender ICBC is to buy 20% of South Africa’s Standard Bank for R36,67-billion (,6-billion) in cash, in the biggest foreign investment yet in Africa. The move announced on Thursday comes as Beijing encourages major state firms to expand abroad, particularly in developing countries.
UBS AG, the world’s largest wealth manager, unveiled $3,4-billion in losses, has swept out senior managers and slashed jobs in one of the biggest casualties yet of the worldwide credit crunch. UBS said on Monday it will write down a net four billion Swiss francs ($3,42-billion) in its fixed-income portfolio and elsewhere.
The JSE was up 191 points at midday on Monday, but off its record high it hit earlier as gold stocks tumbled on news that Anglo American was selling half of its stake in AngloGold. Anglo said in a statement that it expects the offering to represent a major step in the completion of its stated objectives for its stake in AngloGold Ashanti.
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/ 19 September 2007
The Wall Street investment bank Lehman Brothers has revealed that the global credit crunch knocked -million off its revenue over the summer as mortgage-backed securities plummeted in value. Lehman blamed an ”extremely difficult environment” in global financial markets for a 3% drop in its third-quarter profits to -billion.
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/ 18 September 2007
Oil prices topped 81 dollars a barrel for the first time on Tuesday, setting another record high amid fears of critically tight supplies for the winter season in the United States. Opec’s announcement last week that it would pump an extra 500 000 barrels per day from November has failed to stop the surge in price.