La Manga Club in Murcia filed for bankruptcy protection

La Manga Club in Murcia filed for bankruptcy protection. Owned by George Soris’s company MedGroup, the company says that they will continue to trade, but will take ‘very strong measures’ to make the company viable.
They purchased the club from P&O for 102 million pounds in 2004. It includes three golf courses, 28 tennis courts, 8 football pitches, a spa, 1,800 private villas and apartments, and a 5 star Hyatt Regency hotel. It’s one of the most complete tourist complexes in Spain and one of the best in Europe, and currently employs 700 workers.
The Concurso Voluntario de Acreedores was placed in the mercantile court in Murcia, but the judge has yet to make any decision on the case.
The situation implies that the firm has problems meeting debts which are pending. Some reports say that its banks have declined to re-finance part of a 97 million € debt, despite its assets being valued at 170 million.
The La Manga Club is well known internationally as it has been used by many tennis stars, such as Anna Kourniokova and football teams such as Manchester United and Real Madrid for training.

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Posted in: La Manga Club in Murcia

severe fall-off in bookings is alarming tourist authorities and businesses.

The severe fall-off in bookings is alarming tourist authorities and businesses.
Figures from the Spanish tourist industry reveal that the number of Britons who visited Spain in November, for example, was down by 15% on 2007.
The fall has closely tracked the decreasing value of the pound. Britons began to turn their backs on Spain in September, when numbers were down 5%, reaching 7% in October. Last month's dramatic decline came after the pound had lost 25% of its value against the euro in a year. With the pound and the euro now apparently heading for parity, tourist authorities fear that worse will come ? with the all-important summer season now looking grim. Thousands of Britons are dropping traditional holidays to Spain because of the weakness of the pound and fears over the after-effects of the banking crisis. "We are seeing principal markets fall away," explained Marien Andr?, of the Catalan government's Tourism Observatory. "Everything has become very volatile." That is causing alarm in a country which relies on a steady flow of Britons to keep its tourism sector buoyant. Some 17 million British tourists land at Spanish airports or drive across the border every year, according to the Foreign Office, accounting for almost one in three tourists who visit Spain, which earns 11% of GDP from tourism. The Canary Islands, where the mild winters attract many of end-of-year British tourists, have seen the number arriving this winter fall by 15%, while the Costa del Sol area around Malaga suffered even worse, with visitors down by 17%. Spanish hotels have dropped their prices by 2% this year, but this has not been enough to hang on to British tourists - many of whom now prefer to rent houses and apartments online or off friends and relatives. While British people are abandoning their Spanish holidays, however, Spaniards are beginning to fill the budget airline seats that they are leaving empty. The weakness of the pound has made England suddenly seem cheap to Spaniards who previously found Britain's most popular tourist spots too expensive. With the euro also stretching much further in British shops, Spaniards who last year traveled to New York to hunt for bargains in the post-Christmas sales have been booking into London hotels. Spanish internet hotel booking sites report increases of up to 70% in London bookings for immediately after Christmas. Bookings for flights plus hotels were up 80%, according to one portal. One route, from the northern city of La Coruna, to London is carrying double the number of passengers this year compared with 2007.
"The attraction of London is very strong,'' said one travel agent. "It is not that far away and its currency is weak." Newspaper travel supplements in recent weeks have been full of the bargain prices in London, with iPods now 25% cheaper there than in Spain. Barcelona's La Vanguardia newspaper filled three pages on Monday to explain to its readers the advantages of traveling to London in the coming months.
"No one doubts that this year London will be the favored destination for those who, despite the economic crisis, still want to keep traveling," the paper said.
Not all Spaniards, however, were mourning the disappearance of the British tourist. "They only ever spend their money on alcohol and then they have to be carted off to hospital after they get drunk and pass out,'' said a comment posted on La Vanguardia's website. "Perhaps we can start bringing in quality tourism now."

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Posted in: They only ever spend their money on alcohol and then they have to be carted off to hospital after they get drunk and pass out

arrest of 20 members of a suspected international counterfeit money distribution network, operating in Spain and Portugal.

code-named ‘Margarita-Kuskus,’ in Alicante, Valencia, Murcia, Malaga, Almeria and Lugo provinces, has led to the arrest of 20 members of a suspected international counterfeit money distribution network, operating in Spain and Portugal.
The operation, carried out in collaboration with the European Union's criminal intelligence agency (Europol), also resulted in the seizure of 150,000 fake euros in 50 and 20 euro denominations destined for distribution in Spain.

The investigation was launched toward the end of last year after in increase in false bank notes was detected in circulation in Alicante and Lugo Provinces. Given that the modus operandi of these crimes was the same in both provinces, Guardia Civil officers from both agreed to work in partnership on the investigation.

Once the distributors, mostly of North African origin, were identified and located, they were arrested. One of those arrested, a Torrevieja resident, with dual Spanish-Moroccan nationality who had worked as a judicial interpreter, now faces further charges of passing confidential information relating to the case to the criminal gang.The investigation revealed that the main distribution point in Spain was in Alicante Province, between Callosa del Segura and Torrevieja. The boss of the gang was identified as being from Torrevieja and three of his partners in crime were from nearby Callosa del Segura.Towards the end of October this year, Guardia Civil officers followed the head of the gang and stopped him at a toll-booth on the A-7 in Puzol, Valencia. It is believed he was on his way to southern Italy, with the intention of purchasing a large quantity of fake notes. When they searched his car, they found six wads of 20,000 euros in 20 euro bills. He was arrested along with another two men of North African origin, whose job was allegedly to make contact with other gang members, resident in Italy, where the counterfeit notes were printed by the Calabrian Mafia, ‘Ndrangheta’, one of the most powerful and violent known crime organizations in Italy.It is believed that other members of the organisation periodically travelled to Italy where they purchased the false money and smuggled it back into Spain hidden in specially designed compartments in their vehicles. As a security measure, the vehicle carrying the cash was always escorted ahead by a second vehicle whose purpose was to act as a look-out for any police presence or checks.

Once the money was in Spain, it was stored and at several premises between Callosa del Segura and Redovan, in the Orihuela area. From there, the notes were then distributed throughout Spain, Portugal and North Africa.

In a similar pattern to that known to be used by drug- trafficking gangs, the organisation had a further network of people who would purchase the fake notes at prices between 30 and 40 per cent of their face value. They would then introduce the money into the legal economic system, making small purchases that generally managed to avoid detection.Once the money had been changed into authentic cash, it was laundered through the purchase of properties, vehicles and other goods, often in other people’s names to avoid drawing attention to themselves.

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Posted in: Portugal and North Africa,Spain

purple €500 notes are so rarely seen that they have earned the nickname “Bin Ladens”.

Spain is estimated to have one of the biggest black economies in Europe, accounting for between 20 and 23% of annual GDP. Spanish tax authorities are investigating 12,000 big transactions involving €500 notes.

It is, perhaps, the strangest idea yet for pumping extra liquidity into Europe’s troubled banking system. Spanish officials were yesterday reported to be looking for ways of encouraging Spaniards to remove the estimated 108m €500 notes they have hoarded in safes or under floorboards and take them to the bank. That averages out to at least two per Spaniard, or a total of €54bn, circulating outside the country’s banking system.

A combination of tax-cheating and a long-standing mistrust of banks, means Spain soaks up a quarter of all the €500 notes - one of the world’s highest denomination bank bills - released every year.One option for getting the notes into the banking system, by offering a no-questions-asked fiscal amnesty, was ruled out by the finance minister Pedro Solbes yesterday. El Mundo newspaper reported, however, that there had been pressure from within the government’s finance team to consider a fiscal amnesty. Spain’s tax inspectors, whose job it is to root out the notes when they are used for tax fraud, were among those opposing the idea.The purple €500 notes are so rarely seen that they have earned the nickname “Bin Ladens”.Most are used in real estate deals, where property is often bought and sold in a mixture of fiscally opaque cash and fiscally transparent bank transfers. The price of property deals reported to the tax authorities is, therefore, often much lower than that really paid.Other notes circulate in the country’s black economy. Sectors including the footwear industry, construction or silversmiths are thought to do much of their business in black currency.

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Posted in: Spain is estimated to have one of the biggest black economies in Europe

Banco Santander SA,hit by worlds largest fraud

The $7.3 billion Fairfield Sentry Fund invested solely with Madoff, taking a cut of 1 percent of assets and 20 percent of gains, which averaged about 11 percent annually in the past 15 years, according to data compiled by Bloomberg. Fairfield Greenwich is one of at least 15 hedge-fund firms and private banks, including Tremont Holdings Group Inc. and Banco Santander SA, that earned similar fees for sending customers’ cash to the 70-year-old money manager. “It’s mind-boggling that people like Tremont and Fairfield Greenwich had been doing this for so long,” said Brad Alford, who runs Alpha Capital Management LLC in Atlanta, which helps clients choose hedge funds. “It’s the job of these funds of funds to be doing due diligence. That’s why they get paid.” Madoff was arrested Dec. 11 after he allegedly confessed to running a “giant Ponzi scheme” that may have bilked investors of $50 billion. That fraud escaped the notice of Fairfield Greenwich, Tremont and other funds of funds that had at least $17 billion invested with Madoff. Hedge-fund investment adviser Aksia LLC said the managers should have seen “red flags,” such as Madoff’s use of a little-known, three-person auditing firm. Hedge funds that have disclosed holdings with Madoff were due at least $290 million in fees this year, based on reported assets, fees and Bloomberg data. The calculations don’t include fees of as much as 5 percent that clients paid for some funds when they first invested. Madoff didn’t assess fees for his money-management services, getting paid instead through commissions from his brokerage business for trading the stocks in the accounts. Investors ensnared by Madoff include Fred Wilpon, the owner of the New York Mets baseball team, clients of private bankers in Geneva, wealthy Jewish families in New York and Palm Beach, Florida, and institutions including BNP Paribas SA in Paris that loaned investors money to increase their bets. Losses have been reported by a pension fund in Fairfield, Connecticut, New York hospitals and a charity in Salem, Massachusetts.
While Madoff didn’t run a hedge fund, his alleged crime may accelerate investor defections from the $1.5 trillion industry, already hit by its worst losses since at least 1990 and redemptions that may reach $400 billion this year, according to estimates by Morgan Stanley. In a Ponzi scheme, returns to early investors are paid with money from later ones, until there isn’t enough cash to go around. Madoff’s alleged scam unraveled when he received $7 billion in redemption requests that he couldn’t meet. Funds of hedge funds such as Fairfield Greenwich act as middlemen, raising money from investors and farming it out to other managers that they vet. The go-betweens manage 44 percent of hedge-fund assets, according to data compiled by Hedge Fund Research Inc. Their investments lost 19 percent on average through November, a little more than a percentage point more than single-manager funds, the Chicago-based firm says. Institutions including New York State’s $154 billion retirement system and the endowment of Baylor University have been cutting back their investments in funds of funds to save the extra layer of fees -- generally 1 percent of assets and 10 percent of profits -- that they charge on top of the underlying managers’ take. Last year, for the first time, more than half of the hedge-fund assets of the 200 largest U.S. pension plans were invested directly with individual managers, according to data compiled by Pensions & Investments magazine.

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Posted in: Banco Santander SA

Man driving his car against the traffic at 120 kms/hour with a woman hanging on for dear life on the bonnet.

Police in Marbella could not believe what they saw. A scene more at home in a Quentin Taratino film than on the local N340 road. A man driving his car against the traffic at 120 kms/hour with a woman hanging on for dear life on the bonnet.
It happened at 4am in the morning last Tuesday, but details have only now been released. Diario Sur newspaper reports that witnesses said the driver was zigzagging and appeared to be trying to get the woman to fall from the car bonnet. The police patrol radioed for support in an attempt to block the way of the car which refused to stop to their sirens. After a long chase with the woman hanging on to the windscreen wipers, a second patrol car managed to stop the vehicle. The 31 year old Brazilian woman told the police that the driver, a 34 year old Spaniard, was her boyfriend and that he had been trying to kill her. He has now been arrested accused of attempted murder.

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Posted in: Marbella

Fortuna Land scam was run out of offices on the Costa del Sol using companies registered in places like Cyprus and Delaware (USA).

The Spanish land investment scam run for years by Fortuna Estates has finally been busted, with the Spanish fraud squad swooping last week on several office in Mijas and Fuengirola, arresting at least 2 people, and questioning 20 others. This could be one of the biggest Spanish property scams to date, with hundreds, if not thousands of British and Irish victims. The Spanish authorities estimate that Fortuna Estates made at least 65 million Euros out of this fraud.Still under official secrecy orders, the police have released few details about “Operation Fuentespino”, but the Spanish press reports that there could be more than 2,000 victims, mainly middle class investors from the United Kingdom and Ireland.Fortuna Estates, which had changed its name to Fortuna Land (Investment) by 2007, snared its victims with the promise of high returns from land reclassification projects in rural Andalucia.

“Watch your investment in raw undeveloped land turn into commercial projects with multi-million euro potential,” promised Fortuna Estates, which started selling ‘shares’ in its projects in 2002.

Fortuna Estates contacted potential investors at through property exhibitions, cold calls and mailing lists, and a fairly substantial advertising campaign in the British quality press.Claiming to be the “leading land investment agency based in Southern Spain,” Fortuna Estates offered its clients ‘shares’ in greenfield projects purporting to turn land in out-of-the-way parts of Andalucia into hot commercial property investments.
“Working primarily in the commercial sector of land development, Fortuna Estates has developed a program of investment techniques that bring this highly lucrative sector within the grasp of the ordinary investor,” claimed Fortuna. Targeting the ‘ordinary investor’ was a key part of Fortuna’s strategy. It claimed it was making high-return land investments accessible to people who could not otherwise afford them. Many of Fortuna’s victims probably invested the minimum of around 10,000 Euros, and the vast majority probably had no experience of land reclassification or the realities of investing in Spanish property.Fortuna sold various different projects over time, starting with a project called Bella Fortuna, then going on to sell projects called Sierra Fortuna, and Cazadores Reales.An insight into how Fortuna hooked its clients with talk of high returns, backed up with invented figures, can be gained from Fortuna’s sales material. “These factors have contributed towards the success of the Bella Fortuna project,” goes the patter. “This plot of stunning Andalucian countryside is over 400,000m² in size and located midway between Malaga and Granada, next to the town of Zafarraya. This project was first released to private investors in Sept 2002 at a price of €6.80m² and closed at a price of €9.20m² 14 months later. In Oct 2004 official planning permission for the Hotel Zafarraya complex was granted and the land was then independently valued at €37.59m².”The valuations were meaningless, as Fortuna made them up to make it look like investors were making big profits, on paper at least. This was enough to keep filling the pipeline with new investors, and convince existing clients to invest more money in new projects. Some of Fortuna Land’s hapless investors are thought to have invested in as many as 3 of their projects.Fortuna also beguiled it clients by doing all transactions through ‘independent’ lawyers and notaries, and giving clients “legally notarised title deed to the land in which they have invested.”
“ Whether your investment is for 5 acres or just a quarter of an acre, every investment is secured by physical ownership of the title document,” Fortuna assured its investors.
The plans Fortuna had for its land reclassification projects, and the way in which it kept changing them and announcing delays should have had investors’ alarm bells ringing. Plans veered around from hotels with a wedding chapel, to retirement homes, to solar farms. At one point, after long delays, they claimed they had received ‘verbal’ planning permission, but there is no evidence that Fortuna were serious about delivering on their promises.Most of the victims of this scam are thought to be British, though Irish and Germans investors are also thought to be involved. As an article in the Spanish daily ‘El Pais’ points out, the British have fallen for numerous scams on the Costa del Sol over the last decade, mainly involving property.
The Fortuna Land scam was run out of offices on the Costa del Sol using companies registered in places like Cyprus and Delaware (USA). Currently the Fortuna Land website (fortunaland.es), claims they have “implemented a strategic relationship with The Oanna Group to realise your investment projects in Spain,” and instruct visitors to direct all future communications to oannagroup.com. The Oanna Group appear to have an office in London.Despite making several arrests, the Spanish police do not think they have nabbed any of the masterminds, who are thought to have disappeared, and may already be working on their next scam.Indeed, ‘El Pais’ reports that victims of the Fortuna Estates fraud have already been targeted by new scam that promises to recover their money for a fee of 10% of their investment paid up front.

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Posted in: Fortuna Estates fraud

Death of the Beach Bars,500 bars and restaurants in the Malaga province alone have been built on the sand in contravention to planning regulations

Coastal authority of Andalusia has announced plans to enforce a 1988 law designed to prevent construction within 100 yards of the waterline. An estimated 500 bars and restaurants in the Malaga province alone have been built on the sand in contravention to planning regulations, authorities claim. Around 300 of them will be forced to close when their concessions end next year. Javier Hermoso, the chief of beaches on the eastern Costa del Sol, said closing the bars and clearing the coastline had become his main objective since taking office in September. "It will be a long complicated process because nothing has been enforced for 20 years," he told local newspaper La Opinion de Malaga. Critics of the move fear that the clamp down will lead to huge job losses at time when the area is already suffering a downturn in the tourist industry. "We are talking about making 7000 people out of work in Malaga alone with this move," said Norberto Del Castillo, of the Federation of Beach Businesses of Andalusia. Others said it would drive tourists away. "A beach without a beach bar is one lacking the essential elements," said one commentator in Malaga. "They are a tourist must-have. Eating and drinking with the sea nearby and one's feet in the sand is one of greatest delights of the beach."

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Posted in: 7000 people out of work in Malaga alone with this move

15 self-proclaimed anarchists stormed the Greek embassy in Berlin

Protests at the killing of Athens teenager Alexandros Grigogorpoulos have spread abroad. About 15 self-proclaimed anarchists stormed the Greek embassy in Berlin, saying Greece itself bears responsibility for his death. There was no violence reported, but the group displayed a banner saying the youth was killed by the Greek state. Berlin police sealed off the embassy while talks began on ending the stand-off.

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Posted in: Berlin

Greece has been hit by a third day of unrest

Greece has been hit by a third day of unrest, as anger continues to boil over at the police killing of a teenage boy on Saturday. Rioting erupted again in the Athens suburb of Exarchia, where 15-year old Alexandros Grigoropoulos was shot dead, and also in the northern city of Salonika. The Greek Communist Party called a popular demonstration in Athens and a 24-hour strike against the police’s action. This morning papers carried dramatic pictures of the weekend’s rioting, with blazing headlines like ‘Athens under siege’ and ’48 hours of horror.’ “The trouble, for me, simply highlights the lack of education in this country,” said lawyer Haralambos Samaras. “It is the most important thing we lack, both here in Greece and across Europe.” Dozens of people were hurt in the worst rioting in years in Greece, as gangs rampaged through the streets, goading police and destroying shops and businesses. Despite the arrest of two officers connected with the teenager’s death, general unrest is simmering beneath the surface. There is widespread youth resentment at the widening gap between rich and poor, a situation only made worse by the global financial crisis.

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Posted in: Greek Communist Party

falling pound poses a serious danger for millions of ordinary British people since almost every daily essential, from food to fuel and manufactures,

A falling pound poses a serious danger for millions of ordinary British people since almost every daily essential, from food to fuel and manufactures, is imported. The dominance of finance capital has left the UK with a manufacturing sector that accounts for no more than 16 percent of GDP, while the service sector, much of it related to finance, accounts for 73 percent.Joining the euro does not offer a lifeline, since it would not offer a solution to the economic and fiscal problems that underlie the falling pound. With government borrowing now set to rise to 57 percent of GDP, it might not even be possible.Britain’s borrowing requirement puts it well outside the convergence criteria originally set for euro membership. The criteria might be relaxed because so many existing member countries are now outside those criteria, too. They have also had to borrow vast amounts in response to the credit crunch. Ultimately, the decision is a political one, and as national tensions increase in Europe, the other members may be unwilling to admit Britain.
Even as a member of the euro, Britain would still have to raise money by selling bonds on the international markets to finance its fiscal policies. The cost of doing so depends on the perceived risk that a government will default on the bonds it issues.The markets use credit default swaps (CDS’s) to insure against government bond defaults. The price of CDS’s has risen for all the major economies. Simply being in the euro does not protect a government against the risk of default. Italy, a euro member, has the highest CDS price because its debt-to-GDP ratio is now the highest in the Eurozone, at 103 percent.But the price for British CDS’s has risen the fastest. The price of insuring £10m of UK debt against default over five years has risen from £8,000 last February to £60,000 in the middle of November, and has now reached £110,000 (US$162,000)
According to the Financial Times, “It now costs more to ensure the UK against default than some of its banks such as HSBC and Lloyds.”
“No one expects the UK to actually default,” said Roger Brown, global head of rates research at UBS, “but the risk is higher because of the amount of debt.”No one may expect a country like the UK to default, but until recently no one expected a major bank to go under either, still less a whole string of banks. Amid so many unknowns, one thing is certain. The experts may disagree on the correct response, but they are all agreed on who should bear the cost of the recession that is engulfing the world economy—the working class.

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Posted in: ” said Roger Brown,“but the risk is higher because of the amount of debt.”,global head of rates research at UBS,No one expects the UK to actually default

Sweden cut its rates by a massive 1.75 percent, bringing the base rate down from 3.75 percent to 2.00 percent.

The cut in British interest rates was part of a general move by the world’s central banks in response to the deepening recession. The European Central Bank (ECB) cut its rates by three quarters of a percentage point. By the standards of the ECB, this is a huge cut. Over recent months, it has never cut by more than one half of a percent. Interest rates in the Eurozone now stand at 2.5 percent.Sweden cut its rates by a massive 1.75 percent, bringing the base rate down from 3.75 percent to 2.00 percent. Sweden’s action was in response to worsening economic data. Growth of 0.1 percent had been anticipated, but the latest figures point to a contraction of 0.5 per cent in Sweden’s export-oriented economy.Even in this context of sharply deteriorating economic conditions across Europe, the situation facing the British economy looks more serious than elsewhere because of its dependence on finance capital and cheap credit.The fall of the pound has led to speculation that Britain may have to join the euro. European Commission president José Manuel Barroso recently said that he thought British membership was “closer than ever before.”
“Some British politicians have already told me: ‘If we had the euro, we would have been better off,’ ” Barroso told French radio.
Foreign Secretary David Miliband and Lord Mandelson, the business secretary, are thought to be the most likely government figures behind these rumours. But even the Conservative shadow chancellor, George Osborne, has adopted some of the arguments being advanced by economist Buiter, a strong advocate of the euro.Osborne warned that the government’s fiscal stimulus package and the huge increase in government borrowing that it entails could cause a run on the pound. His concerns were ridiculed by Anatole Kaletsky in the Times of London, who argued that “…in the modern world of paper money and floating exchange rates, there is no such thing as a ‘reserve currency’—only different currencies that are traded and used as stores of value in the same way as other assets.”Kaletsky agreed with Sir Samuel Brittan of the Financial Times, who recently wrote: “The most frequent objection is to ask: ‘Where will the money come from?’ The short answer is: the Bank of England printing works in Debden. This is not just a debating reply. In a paper currency system there is no fixed pot of money, but a total influenced by human action.”While this could, Kaletsky admitted, lead to Zimbabwe-style inflation, under present deflationary conditions such an outcome was not inevitable.Kaletsky’s articles are in their way quite chilling. They demonstrate that policy options that would until quite recently have been denounced as actions reserved for megalomaniac dictators have entered into the realm of, if not the desirable, then at least the possible, for sections of the British political elite.

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Posted in: European Commission president José Manuel Barroso recently said that he thought British membership was “closer than ever before.”

If you feel any insecurity in your job you are not going to go out and buy a house

The government’s hastily unveiled plan to reduce the number of home repossessions was dismissed by leading UK house builder Bellway. Finance director Alistair Leitch said it would have “absolutely zero effect on new housing. It will not entice Joe Public to buy a new property.” Leitch identified concerns about unemployment as the major factor in slumping house sales. “If you feel any insecurity in your job you are not going to go out and buy a house.”His impression was confirmed by a new survey of job trends, which showed that the UK job market is weakening rapidly.
“The UK jobs market is heading downhill at breakneck speed,” said Mike Stevens at KPMG. “Employers in almost all sectors have drastically cut recruitment plans and are shedding contract and temporary staff as fast as they can.”The contraction of the job market is reflected in record falls in pay levels for both permanent and temporary staff.In the latest round of job losses in the finance sector, Nomura has cut 1,000 jobs in London after it acquired the European branch of Lehman Brothers. Up to 800 jobs are under threat after Honda decided to withdraw from Formula One racing. The job losses cover all sectors of the economy. Some 3,000 jobs are threatened in the tax service.The same pressures on jobs and credit are reflected in new car sales, which fell by 37 percent last month, according to the Society of Motor Manufacturers and Traders. At the top end of the market, Aston Martin’s sales fell by 73 percent. But the high volume brands were also hit by falling sales.“The scale of the downturn in the UK manufacturing PMI [Purchasing Managers Index] data during November is unprecedented,” said Rob Dobson, an economist who has just carried out a survey of manufacturing industry in Britain. The decline in manufacturing has reached “absolutely horrific levels,” he said.“We are already seeing a pretty rapid pace of contraction in hard manufacturing activity in the UK,” said Alan Clarke at BNP Paribas, “and it is going to get even worse.”

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Posted in: The scale of the downturn in the UK manufacturing PMI [Purchasing Managers Index] data during November is unprecedented

The UK jobs market is heading downhill at breakneck speed

The reason for the drastic fall in the pound is the state of the British economy. “The outlook for the British economy is particularly dire,” the Economist warned, “because it has been hit so hard by the banking crisis.” As a result, “Lending to the sectors that matter—households and non-financial companies—has essentially stalled since the summer.”Lending has dried up because banks are attempting to shrink their balance sheets so that they can stay in profit. But the effect of every bank doing this is to send the whole economy into a further downward spiral. The banks are shifting the risk from their own balance sheets to other companies and to working people who lose their jobs and homes.Recent economic data has pointed to Britain entering a deeper recession, and at a more rapid rate, than was expected. Recent surveys of manufacturing, services and construction show that British gross domestic product (GDP) is falling by 0.8 to 0.9 percent in the fourth quarter, as compared to 0.5 percent in the third quarter.
House price inflation was one of the results of the flood of money into the UK. Britain came top of the house price inflation league of industrialised countries earlier this year. The fall has been correspondingly dramatic. Prices have fallen by 18 percent since their peak last year. The average house price fell by £144 a day in November.The fall in house prices has not made it easier to buy a home. According to Bank of England figures, just 32,000 new mortgages were approved during November. The monthly average in 2007 was 104,000.

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Posted in: outlook for the British economy is particularly dire

It now costs more to ensure the UK against default than some of its banks such as HSBC and Lloyds

Bank of England cut its interest rate to 2 percent on Thursday, bringing the UK base rate to its lowest level since 1951. This historically low level reflects the scale of the crisis that has hit the British economy after decades of being the favoured destination for global flows of speculative money.In the run-up to the interest rate cut, the pound fell to US$1.45. This is its lowest level against the dollar for six years. As recently as July the pound was trading at US$2.00. From its peak, the pound has fallen by a total of 30 percent against the dollar.The pound hit its lowest ever level against the euro at €1.1 and a 10-year low against the Japanese yen. It has lost 45 percent of its value against the yen since last summer. The extent of the fall in the pound is comparable to its collapse in 1992, when it was forced out of the European Exchange Rate Mechanism.Market analysts expect the pound to come under further pressure in expectation of more rate cuts over the next weeks. Markets are anticipating that the benchmark UK interest rate will hit zero early next year.

Many economists have argued that the best policy would be to go straight to that level. Professor Willem Buiter, a former member of the Bank of England Monetary Policy Committee, has argued that all the major economies should cut interest rates to zero.“If zero is the floor, there is no reason not to go there immediately,” Buiter wrote in the Financial Times. “The recession in the US, the UK, the Eurozone, Japan and the rest of Europe is, with probability verging on certainty, going to be so deep and so prolonged that the zero lower bound will be reached even by the most anal-retentive gradualist central bank before the middle of 2009. So why not get it over with in December 2008 and possibly do some good in the mean time?”Other commentators see zero percent as an immediate necessity for the UK and regard the latest rate cut, unprecedented though it is, as insufficient. “There’s no point in saving bullets when there’s nothing left to shoot,” said Neil Jones of Mizuho Capital Markets after the Bank of England cut its rate. “The impact on sterling will be negative.”

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Posted in: impact on sterling will be negative.

British pensioners living overseas should be stopped from raking in millions of pounds in winter fuel payments

British pensioners living overseas should be stopped from raking in millions of pounds in winter fuel payments, campaigners are insisting.Charities and OAP groups will next week protest that more than £10million a year is being paid to those who have escaped the chilly UK and retired to the sun.Some 50,000 elderly Britons who have moved permanently abroad are claiming the yearly allowance, worth between £200 and £300, which is supposed to help with winter heating bills.Campaigners have hit out at winter fuel payments made to those living in sunny climates abroad, while elderly UK residents struggle with rising energy bills
Even those living on Spain's Costas and in Portugal, Greece and some tropical islands are benefiting from taxpayers' money.As long as they register for the allowance in Britain, they are entitled to continue claiming if they move to any of 29 European countries or their overseas territories.Under European law, benefits acquired in one member state must be paid to those who move to another.

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Posted in: British pensioners living overseas should be stopped from raking in millions of pounds in winter fuel payments

Guardia Civil and the National Police have seized 26,199 kilos of drugs in the Campo de Gibraltar so far this year

The Guardia Civil and the National Police have seized 26,199 kilos of drugs in the Campo de Gibraltar so far this year, compared to the 25,001 kilos seized in 2006 for the same period. More facts: during the first three months of this year they have caught more than the total for 2006; the total street value of the hashish hauls alone amount to €37 million.

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Posted in: Guardia Civil and the National Police