Not sure the FT.com coverage of the emergency budget is up to much.

http://www.ft.com/cms/s/0/896c4b1e-7df1-11df-b357-00144feabdc0.html

just has the paragraph

“George Osborne, presenting his first Budget as chancellor on Tuesday, slashed public expenditure in a bid to tackle Britain’s dire finances and kick start his goal of eliminating the structural deficit by the end of this parliament.”

repeated 13 times!  Not the sort of financial reporting I would normally expect from them. While the slashing of public expenditure to reduce the deficit may be an important story, I am not sure that is the best way to report it.

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Oh, how the mighty banks have fallen.

Since Goldman Sachs started around 80 years, the phrase ‘Long-term greedy’ which was used by Sidney Weinberg, who was managing partner during the 1930s through to the 1960s, has been a sort of guiding mantra.  This ‘Long-term greedy’ attitude helped the company grow from being a simple unknown brokerage to become the world’s most profitable and powerful financial institution.

While most people would not describe being greedy as a virtuous trait, according to a highly controversial comment last year by Goldman Sachs’ current chairman and chief executive, Lloyd Blankfein, he believed the bank was doing ‘God’s work’.

The recent announcement by the America’s Securities and Exchange Commission (SEC) that the bank and one of its vice presidents, Fabrice Tourre, was being charged in relation to claims that investors were mislead over its collateralised debt obligations, a complex financial product sold by the bank during the boom years of the Noughties, must have been seen by him as some form of blaphemy.

According to the Motley Fool, “The watchdog alleges that the bank mis-stated and omitted key facts about the CDO, and failed to reveal that a major hedge fund had a hand in selecting the underlying portfolio of securities– even though Paulson & Co. had bet its value would fall by shorting the CDO.”

With the mantra, “No one ever got fired for hiring Goldman Sachs”  still persisting to ring true for many in the financial markets, it seems that the current claims and various other allegations over the past few years may have partly tarnished the wings of gods financial messenger, or as Rolling Stone magazine once described it, a “vampire squid wrapped around the face of humanity relentlessly jamming its blood funnel into anything that smells like money”.

The news of the SEC charging the bank with civil fraud has meant that the most profitable investment bank in the world saw its shares plunge by 12.5% to $160 over the weekend, taking off a whopping $12 billion from the market cap of the firm.

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It seems as though things have moved on from simply taking a disused airplane and turning it into a house, as discussed in a previous post (See – Is it a Bird? Is it a Plane?)

According to an article on the BBC, a company based in Swansea has developed a new material, made from recycled plastics and minerals, called Thermo Poly Rock (TPR), which is designed for use as a structural building product.

Affresol claims the patented low energy cold process converts the plastics into a very strong structural element which can be made into panels and then bolted together to form the load bearing frame of the house.  This can then be covered with some form of brick, block or stone cladding and the interior insulated and plastered as a standard house.

I could think of loads of puns to include in here about using refuse to build houses, but I think it is probably best if you make up your own.

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1. Is it a bird? Is it a plane? No it’s a fully equiped 3 bedroom des res

Under new Financial Services Authority (FSA) rules, financial firms who collect an excessive amount of complaints against them are to be named and shamed reports MoneySavingExpert news.

Over a six month period companies who receive 500 or more complaints will, under the rules, have to publish the numbers of complaints twice a year so consumers can see which firms draw the most ire.

Under the rules, companies must state complaints numbers in a prominent position on their website including:

• How many complaints they have opened and closed
• The percentage closed within eight weeks
• The percentage of complaints upheld

The number of complaints will also be available on the FSA website. FSA rules differs from those of the Financial Ombudsman Service rules in that FSA numbers will include all complaints and not just those that have gone to the Ombudsman.

Sheila Nicoll, FSA conduct policy director, says: “For the first time, people will be able to see how many complaints particular firms receive and how they handle them.”

All affected firms must publish figures by 31 August 2010, with the FSA following in September.

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The BBC report that the OFT has issued guidelines to lenders and borrowers about when their loans and other credit may, and may not be enforced. The guidelines come in the wake of OFT fears that some debtors may be misled into their ability to have debts written off.

The OFT draft guidance focuses on rules laid down by the Consumer Credit Act and draws on recent rulings by Judge Waksman at the High Court in Manchester. In his ruling the judge ruled that it was acceptable for lenders to produce reconstituted copies of original loan agreements which contain all the original information, apart from the few exceptions that the law allows (which include the signature, signature box and date of signature for the purposes of providing the borrower with information about their debts when challenged to provide a copy of an alleged debtor’s credit agreement.

The OFT believe some debtors are being misled into believing their credit agreement is unenforceable and can have debts legally written off if certain information is missing from the agreement. Debtors have typically sought to challenge their lenders to meet strict criteria as led out in the Consumer Credit Act. One such clause challenges lender to produce a ‘true copy’ of the loan agreement – ie. one that has been signed by the debtor. It is argued that if a signature, date or terms of credit aren’t present then the agreement could be deemed unlawful.

However, the judge also stated that the agreement should contain the borrower’s name and address at the time of signing, while in the case of an amended agreement the lender should provide copies of both the original and amended agreements.

While Cashzilla doesn’t advocate debt avoidance, it can’t help but feel there is a fatal flaw here in that ownership of debt can surely only be determined by the presence of a signature, otherwise it can only be implied? If a reconstituted credit agreement can be considered legal in absentia of a debtor’s true signature, what safeguards does the average person have in these times of identity theft against any enforcement action where a fraudulent credit agreement exists?

As usual the law will give the benefit of the doubt to the lender, leaving innocent peoples’ financial affairs in tatters and that’s wrong. Cashzilla wonders if the Judge and Office of Fair Trading have thought of the implications of giving Identity theft a green light?

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1. Shorn of the debt..responsibility
2. Too quick to judge?
3. UK consumers regaining control of runaway levels of personal debt

Well it seems as though the deal is going through after management announced they would support the Kraft proposal to takeover Cadbury. This is despite comments by Gordon Brown and, the trade union, Unite’s warning that Kraft plans at least 10,000 job cuts worldwide to slash costs and repay the cash it will need to borrow for the deal. This assertion is predicated on Kraft’s history when it bought Terry’s, another well-know British chocolate company, in 1993 and then closed its York factory shortly afterwards.

In advance of the take-over, a professor at Henley Business School also publicly expressed fears over Cadbury’s UK jobs, the possible ‘food security’ implications, as well as highlighting that, “the company has rejected fair trade as a model for their coffee and chocolate” and that this “may impact on the reputation of the UK in areas of strategic importance such as India and Africa.” If this is the case, then it may also significantly affect the highly respected Green& Black’s brand which Cadbury’s currently own.

Worries over the deal appear to be widespread, with few people actually welcoming the news.

The main fear of this old dinosaur though is whether the good old bar of Dairy Milk will end up tasting like American chocolate. Yeuch! I changed to munching on chocolate some time ago after I gave up eating tourists because it seemed that most of them were now American and I am not really a fan of fast food. Now it looks like I may have to find something else again.

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In the world of personal finance there are a great number of financial terms which get bandied about alot, however many of these can be difficult for anyone who does not have something higher than a Masters degree in Economics to understand. To help out I have decided to try to demystify some of the regular phrases with this handy little cheat list. And here at Cashzilla we are always happy to receive any additional definitions that any of you out there may want to provide to make the finance jungle just that bit more understandable.

Hedge fund manager:
Gardener who is serious about their savings

Salary:
A posh salad vegetable

Broker:
Unsuccessful investment

Bull market:
One that is not very good

Bear Market:
Where Paddington and Winnie The Pooh buy groceries

Banker:
Job title and cockney rhyming slang describing the job holder

Institutional Investor:
Financial trader specialising in care homes

Stock analyst:
Restaurant critic

Drop shipping:
Placard statement by air freight company

Time management:
How to display a collection of Rolex watches

Depression:
A sad hole into which everyone’s money disappears

Black Monday 1987:
Unsuccessful follow up to New Order’s Blue Monday

Fanny Mae:
But seldom does

Freddie Mac:
Aka Frederic the light brown overcoat

Millionaire:
Someone who aspires to be a billionaire

Billionaire:
Someone who never learnt to share as a child

Wall Street Crash:
Public safety announcement

Philanthropy:
The art of letting everyone know how much money you have given anonymously to charity

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1. Google Finance – a really serious article for once. Sorry.
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Plans outlined by the party has revealed that one casualty of their proposed financial shakeup would be the Financial Services Authority (FSA) with their power being transferred to the Bank of England.

Under the Conservative’s proposals, the BoE would also have the power to regulate city pay structures, risk complexity and size of financial institutions; including requirements on those which put financial stability at risk to hold large amounts of capital to act as insurance to protect the taxpayer. Meanwhile, the Financial Services Authority would be amalgamated into a new consumer protection body.

Currently the UK financial system is controlled by a triumvirate involving the Bank of England, the FSA and the Treasury and it is this model which David Cameron, the Conservative party leader, believes is inadequate and failed to protect the country’s economy during the recession.

Launching the reform plans, Mr Cameron said: “The decisions that led to this crisis represent a policy failure of historic proportions. We now need deep, wide-ranging reform that matches both the magnitude of the crisis and the scale of the hardship inflicted on the British people.

“That reform must be based on a clear understanding of what went wrong in the first place and a clear determination to put it right.

“I’m afraid the government’s proposals that all we need are a few more tweaks and a little bureaucratic tinkering are totally inadequate and risk preventing a recovery,” he said.

Interesting times ahead in the city should the Tories sweep to power…

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Following a disagreement with my local bank which resulted in my biting the head off the manager and then rampaging through downtown Tokyo pursued by a troop of badly dubbed and poorly acted Japanese scientists and soldiers, I decided I wanted to rant and find out what the current view of the various banks was from the customers point of view. To this end I revisited a site I found some time ago, and thought it might be worthwhile pointing you to it, in case any of you, like myself, already know the interest rates and charges being offered by the banks but also want to know which ones are providing good or bad customer service. Basically, you want to get past the figures and find out what do their customers really feel about them.

Reviewcentre covers a huge range of products, and I do recommend checking them out just to find out other peoples experiences, as well as checking out the facts and figures which other sites provide.

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