Monthly Archives: January 2011

More than £25bn profits for just FOUR British banks as earnings soar


Increase: Four British banks – Barclays, HSBC, Standard Chartered and Lloyds – are expected to announce a 15 per cent increase in profits

Daily Mail | Jan 31, 2011

By Ben Griffiths

Four of Britain’s largest banks are preparing to unveil combined annual profits of more than £25billion next month.

At a time when austerity cuts are just beginning to bite, Barclays, HSBC, Standard Chartered and Lloyds are expected to tell the stock market their annual profits have grown by more than 15 per cent from the £21.5 billion figure they posted a year ago.

The £25billion total, based on City estimates, will include a profit of up to £6.5billion from Barclays, whose chief executive Bob Diamond was criticised this month for telling MPs that the time for bankers apologising for the global financial meltdown was over.

Mr Diamond is also in line for an £8million bonus this year. Barclays’ figure is lower than its £11.6billion profit in 2009.

HSBC is expected to post the biggest profits of 2010 with an estimated £13.5billion, while Standard Chartered – based in the UK but focused on emerging markets – will announce about £4.5billion, according to analysts at City investment bank Nomura.

The state-backed banks are expected to fare less well. Lloyds is due to announce about £1billion, while Royal Bank of Scotland – which is 83 per cent taxpayer-owned – will remain unprofitable with a loss of about £613million.

Britain’s big banks are expected to show a hefty gain from a year earlier because their bad loans are shrinking, helping to offset lower revenues from investment banking and trading activities.

Barclays is due to report on February 15, and RBS on February 24, a day before Lloyds. HSBC will announce its figures on February 28 and Standard Chartered on March 2.

News of the bumper profits haul will increase pressure on the Government to force the banks to increase lending to small businesses and the transparency of bankers’ pay deals.

Ministers have been in talks – called Project Merlin – with the banks on issues such as pay and lending but a final agreement has yet to be reached.

Lord Adair Turner, chairman of the Financial Services Authority watchdog, warned that society needs assurances from the banks that the financial collapse will never happen again.

In a Sunday newspaper interview, Lord Turner said more regulation was on the cards to stop banking’s riskier activities from moving to murkier, unregulated markets.

There were continued efforts to resolve the issue of how big banks could fail without bringing down the entire sector, he added.

Lord Turner also dismissed threats from London’s banks to shift their business to Singapore or Hong Kong to escape over-regulation in the UK as a ‘fantasy’.

He added: ‘I think the industry needs to recognise that society wants to be assured that measures that have been taken are robust enough to prevent this terrible crisis ever happening again.’

Chancellor George Osborne appeared to have softened his stance on banks during the World Economic Forum in Davos, Switzerland.

It was time to ‘move on’ from banker bashing, he said, and for the Government to ‘make it explicit that it wants the UK to be the undisputed European home of wholesale finance and great global centre of finance’.

But he added he would only do a deal with banks on bonuses and lending in return for state backing if it was a good deal.

South Carolina scientist works to grow meat in lab

Reuters | Jan 30, 2011

By Harriet McLeod Harriet Mcleod

CHARLESTON, South Carolina (Reuters) – In a small laboratory on an upper floor of the basic science building at the Medical University of South Carolina, Vladimir Mironov, M.D., Ph.D., has been working for a decade to grow meat.

A developmental biologist and tissue engineer, Dr. Mironov, 56, is one of only a few scientists worldwide involved in bioengineering “cultured” meat.

It’s a product he believes could help solve future global food crises resulting from shrinking amounts of land available for growing meat the old-fashioned way … on the hoof.

Growth of “in-vitro” or cultured meat is also under way in the Netherlands, Mironov told Reuters in an interview, but in the United States, it is science in search of funding and demand.

The new National Institute of Food and Agriculture, part of the U.S. Food and Drug Administration, won’t fund it, the National Institutes of Health won’t fund it, and the National Aeronautics and Space Administration funded it only briefly, Mironov said.

“It’s classic disruptive technology,” Mironov said. “Bringing any new technology on the market, average, costs $1 billion. We don’t even have $1 million.”

Director of the Advanced Tissue Biofabrication Center in the Department of Regenerative Medicine and Cell Biology at the medical university, Mironov now primarily conducts research on tissue engineering, or growing, of human organs.

“There’s a yuck factor when people find out meat is grown in a lab. They don’t like to associate technology with food,” said Nicholas Genovese, 32, a visiting scholar in cancer cell biology working under a People for the Ethical Treatment of Animals three-year grant to run Dr. Mironov’s meat-growing lab.

“But there are a lot of products that we eat today that are considered natural that are produced in a similar manner,” Genovese said.

“There’s yogurt, which is cultured yeast. You have wine production and beer production. These were not produced in laboratories. Society has accepted these products.”

If wine is produced in winery, beer in a brewery and bread in a bakery, where are you going to grow cultured meat?

In a “carnery,” if Mironov has his way. That is the name he has given future production facilities.

He envisions football field-sized buildings filled with large bioreactors, or bioreactors the size of a coffee machine in grocery stores, to manufacture what he calls “charlem” — “Charleston engineered meat.”

“It will be functional, natural, designed food,” Mironov said. “How do you want it to taste? You want a little bit of fat, you want pork, you want lamb? We design exactly what you want. We can design texture.

“I believe we can do it without genes. But there is no evidence that if you add genes the quality of food will somehow suffer. Genetically modified food is already normal practice and nobody dies.”

Dr. Mironov has taken myoblasts — embryonic cells that develop into muscle tissue — from turkey and bathed them in a nutrient bath of bovine serum on a scaffold made of chitosan (a common polymer found in nature) to grow animal skeletal muscle tissue. But how do you get that juicy, meaty quality?

Genovese said scientists want to add fat. And adding a vascular system so that interior cells can receive oxygen will enable the growth of steak, say, instead of just thin strips of muscle tissue.

Cultured meat could eventually become cheaper than what Genovese called the heavily subsidized production of farm meat, he said, and if the public accepts cultured meat, the future holds benefits.

“Thirty percent of the earth’s land surface area is associated with producing animal protein on farms,” Genovese said.

“Animals require between 3 and 8 pounds of nutrient to make 1 pound of meat. It’s fairly inefficient. Animals consume food and produce waste. Cultured meat doesn’t have a digestive system.

“Further out, if we have interplanetary exploration, people will need to produce food in space and you can’t take a cow with you.

“We have to look to these ideas in order to progress. Otherwise, we stay static. I mean, 15 years ago who could have imagined the iPhone?”

Halliburton tops profit forecast with 80 percent jump on U.S. oil surge

Reuters | Jan 24, 2011

By Matt Daily and Braden Reddall

NEW YORK/SAN FRANCISCO (Reuters) – Oilfield service company Halliburton Co (HAL.N) posted higher-than-expected profits, boosted by oil projects in North America, and forecast steady growth elsewhere, but said pricing competition could be tough.

Shares of the world’s second-largest oilfield services company, which have long traded at a discount to those of larger rival Schlumberger Ltd (SLB.N), outperformed the sector on Monday in response to the more than doubling of fourth-quarter profit.

The rise in oil prices to near $90 a barrel during the period spurred a bout of spending on new wells, overshadowing a decline in natural gas projects, as prices for that fuel remained weak.

An 80 percent jump in Halliburton’s North American revenue in the fourth quarter was driven by robust onshore activity, though offshore activity in the Gulf of Mexico remained slack.

On Friday, Schlumberger posted higher-than-expected profits and said it expected client spending to grow.

Related

Shares of Halliburton were up 0.5 percent at $39.37 on the New York Stock Exchange in early afternoon trading, off an earlier high of $40.31. The Philadelphia Stock Exchange’s Oil Service index .OSX was down 0.2 percent.

Halliburton shares are up 25 percent in the last 12 months, but remain a bargain compared with those of peers, analysts said.

“It’s still the cheapest of the large-cap diversified (oilfield service) companies,” said RBC Capital Markets analyst Kurt Hallead.

Halliburton was trading at a 20 percent discount to rivals based on 2012 earnings forecasts, according to UBS analyst Angie Sedita, who has a price target of $48 on the shares.

BEAT THE MARKET

Halliburton’s fourth-quarter net profit rose to $605 million, or 66 cents per share, from $243 million or 27 cents per share, a year earlier.

Excluding a 2 cent-per-share charge related to former subsidiary KBR Inc’s (KBR.N) settlement with Nigeria, earnings per share were 68 cents, topping the 63 cents that analysts had forecast on average, according to Thomson Reuters I/B/E/S.

Revenue jumped 40 percent to $5.16 billion, while analysts had expected $4.88 billion.

Houston-based Halliburton is looking abroad for growth in the year ahead, but margins are likely to remain under pressure as its rivals are chasing growth in the very same markets.

Full Story

Egypt riots escalate; political prisoners shot


Masses hit streets in Egypt (Photo: AFP)

Riots break out at Egypt jail holding political prisoners, including Muslim Brothers members; eight detainees reportedly killed. Meanwhile, protests in Cairo, Alexandria rage on, demonstrators try to break into Interior Ministry headquarters

Egypt riots escalate: The riots raging on in Egypt have spread into several prisons in the country Saturday, as at last eight detainees were reportedly killed in a jail holding political prisoners.

ynetnews.com | Jan 29, 2011

by Roee Nahmias

Prison guards reportedly fired live ammunition and tear gas in the northern Egypt prison as detainees attempted to stage a mutiny at the site, which also holds Muslim Brotherhood prisoners. Security forces were reinforcing their presence at jails throughout the country as result of the violence there.

Hamas sources have reported that a few Palestinian detainees have escaped Egyptian prisons during the unrest, and are making their way to the Gaza Strip.

Meanwhile, medical sources in Egypt confirmed that the overall number of fatalities in the riots raging in Egypt since Tuesday has reached at least 82 people. Some 2,000 others were hurt in protests against President Hosni Mubarak’s 30-year rule.

Full-fledged chaos had been reported at several regions of Egypt, as the masses crowd public squares, and banks, government buildings, and businesses are being looted. In Cairo, some 1,000 protestors attempted to break into the Interior Ministry headquarters. Al-Jazeera reported that police forces were attempting to disperse the demonstrators using live fire. At least three people were shot and killed in the clashes, the network said.

Looting and lynching

Overall, tens of thousands of Egyptians are demonstrating in the streets of Cairo and Alexandria, and according to some reports there is no security forces’ presence on the streets. Elsewhere, reports are coming in about the torching of government buildings, police stations, and security headquarters nationwide.

Some people have exploited the ongoing riots to settle the score with Egyptian business figures. The al-Arabiya network reported a mass looting of businesses in the Suez area belonging to a prominent businessman, including a lynching at one of the sites. Just like in Tunisia, reports are coming in of “popular committees” set up to prevent attacks on businesses and homes. Overnight, attempts were made to loot the Egypt National Museum.

Authorities in Egypt have declared that a curfew will be imposed in the country from 4 pm today to 8 am Sunday morning, yet enforcing it in the current atmosphere of total chaos seems a largely impossible task.

Egypt’s business sector is attempting to minimize the damage, with trading in Cairo’s stock exchange suspended following the massive 10.5% drop Thursday. Local banks will not be operating Sunday for fear of looting, yet the country’s Central Bank says that bank accounts are safe and that liquidity is not an issue.

According to a report by the Arab-language BBC Saturday afternoon, Egyptian army units were attempting to prevent protestors from breaking into the Central Bank in Cairo and looting it.

Crop circles appear in a rice field in Sleman, Indonesia


People watch the nearly 230-foot-wide crop circle that appeared over the weekend in a rice field in Sleman, Yogyakarta, Indonesia. AP

NY Daily News | Jan 26, 2011

By Michael Sheridan

Crop circles in Indonesia have some locals fearing an alien invasion.

The design, measuring nearly 230 feet in diameter and consisting of several circles and triangles, was discovered in a rice field in Sleman, Yogyakarta, earlier this week.

It is believed to be the first time a crop circle has appeared in the Asian country. Explanations have ranged from it being the work of extraterrestrials, to the sign of a higher being.

“I think they were left by an alien spaceship, like one I saw in TV,” Krasakan resident Cahyo Utomo told The Jakarta Post on Monday. “It is impossible that this was made by the wind or any animal.”

“Whether a UFO has indeed landed here, I don’t know precisely,” a resident named Madurejo told the Indonesian news website, Kompas.com. “What is clear is that this is a sign of God’s greatness.”

Whatever the cause, the mysterious circles have now appeared in at least 30 countries, according to crop circle expert Freddy Silva.

“The phenomenon has been going on since 1680,” he told the Daily News, with eyewitness accounts of their creation being recorded “since the 1880s.”

The author of “Secrets in the Field,” he has been researching crop circles for more than two decades, and said there are always tale-tell signs if one is for real, or just a joke.

“With the real circles, the plants are not damaged, they are bent over about inch from the soil,” Silva explained. Plus, “the plants, their cellular structure, have been altered.”

However, hoax crop circles have grown more and more common in the past two decades.

“From the 1800s to 1991, at least 99% were genuine,” Silva said. From 1992 to 2000, that number fell to “about 70%.”

Since the turn of the century, he said, “95% are hoaxes … The real ones have gone quiet.”

A dedicated group could conceivably create a manmade crop circle in a short period of time, Silva admitted. Some have paid off farmers and picked isolated locations in order to make their creations.

“In two or three days, a group of 14 people who have been doing this for years [could] create a coherent design,” he said, but felt that it would likely be harder in a wet rice field.

“It would be more difficult to hoax something in a rice field, because there’s so much mud,” Silva said.

The Indonesia crop circles may prove to be just another of those hoaxes. The Jakarta Post reports Yogyakarta’s Gadjah Mada University investigators are looking into claims that a group of local college kids may have been behind the elaborate design.

Bank of England chief Mervyn King: standard of living to plunge at fastest rate since 1920s


Households face the most dramatic squeeze in living standards since the 1920s, the Governor of the Bank of England warned, as he reacted to the shock disclosure that the economy was shrinking again.

Telegraph | Jan 25, 2011

By Robert Winnett

Families will see their disposable income eaten up as they “pay the inevitable price” for the financial crisis, Mervyn King warned.

With wages failing to keep pace with rising inflation, workers’ take- home pay will end the year worth the same as in 2005 — the most prolonged fall in living standards for more than 80 years, he claimed.

Mr King issued the warning in a speech in Newcastle upon Tyne after official figures showed that gross domestic product fell by 0.5 per cent during the final three months last year. The Government blamed the unexpected reduction — the first since the third quarter of 2009 — on the freezing weather that paralysed much of the country last month.

But there were fears that the country was poised to slip back into recession, defined as two successive quarters of negative growth. Economists said the situation was “an absolute disaster”.

The economic gloom deepened this morning as figures showed that mortgage lending by the major banks dived to an 11-and-a-half-year low during December.

Net lending, which strips out redemptions and repayments, fell to £880 million during the month, the lowest level since June 1999, according to the British Bankers’ Association.

Labour has accused ministers of jeopardising recovery by pushing ahead with public spending cuts too quickly.

Mr King said he was unable to offer any imminent hope of a rise in interest rates in coming months because of the poor economic outlook. Savers and “those who behaved prudently” would be among the biggest losers in the squeeze, he admitted.

Disposable household income has been hit by sharp increases in the cost of food, fuel and tax, coupled with restricted wage rises for most workers. Last year, take-home pay fell by about 12 per cent, official figures showed, and the trend was expected to continue in 2011.

The governor warned that the Bank “neither can, nor should try to, prevent the squeeze in living standards”.

He said that the economic figures were a reminder that the recovery will be “choppy”. However, he said the biggest threat facing the Bank’s Monetary Policy Committee, which sets interest rates, was rising inflation.

The Bank is expected to use interest rates to keep inflation below two per cent, but the governor said inflation could rise “to somewhere between four per cent and five per cent over the next few months”.

He claimed that rising inflation had been caused largely by increases in global oil and commodity prices, and tax rises such as the increase in VAT introduced at the beginning of the year, which the Bank was powerless to control.

“In 2011, real wages are likely to be no higher than they were in 2005,” he said. “One has to go back to the 1920s to find a time when real wages fell over a period of six years.

“The squeeze on living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies.”

Mr King insisted that the Monetary Policy Committee could not have increased interest rates from their current record low level to tackle the rise in inflation.

“If the MPC had raised the Bank Rate significantly, inflation might well have started to fall back this year, but only because the recovery would have been slower, unemployment higher and average earnings rising even more slowly than now,” he said.

“The erosion of living standards would have been even greater. The idea that the MPC could have preserved living standards, by preventing the rise in inflation without also pushing down earnings growth further, is wishful thinking.”

He added: “Monetary policy cannot be based on wishful thinking. So, unpleasant though it is, the Monetary Policy Committee neither can, nor should try to, prevent the squeeze in living standards, half of which is coming in the form of higher prices and half in earnings rising at a rate lower than normal.”

“The Bank of England cannot prevent the squeeze on real take-home pay that so many families are now beginning to realise is the legacy of the banking crisis and the need to rebalance our economy.”

The comments represented one of the governor’s starkest warnings yet. His claim that the banking crisis was behind the ongoing squeeze on living standards comes at a sensitive time, as banks prepare to announce multi-million pound bonuses for their executives.

Mr King expressed sympathy for savers and highlighted the failure of lenders to pass on cuts in interest rates. “I sympathise completely with savers and those who behaved prudently now find themselves among the biggest losers from this crisis,” he said. “But a return to economic stability from our fragile condition will require careful and well-judged steps looking beyond the next few months.”

Addressing the problems of borrowers, he added: “Households and small businesses with little housing equity may be unable to borrow at all or are able to borrow only in the unsecured market – where rates are much higher than before the crisis.”

Iran sets up ‘cyber-police’ force to clamp down on the Web


Iranian women raise their arms in protest as demonstrators burn rubbish in the streets on July 9, 2009 in Tehran, Iran. The country recently set up a ‘cyber-police’ force to allegedly combat spying. Getty

NY Daily News | Jan 25, 2011

BY Colin Jones

In an effort to make the restrictive country even less free, Iran has announced the formation of a “cyber police force.”

Gen. Ismail Ahmadi Moghaddam, Iran’s top police chief, said on state television Sunday that the Web has become an access point for spying, The Associated Press reported.

Iran already has a cyber-crimes task force, set up in 2009.

But the new cyber police “can prevent espionage and sabotage in Information Technology tools,” Gen. Seyed Kamal Hadianfar, head of the police information production and exchange department, told FARS News.

Many Iran observers believe the force is a reaction to the important part the Internet played during the unrest following the disputed 2009 presidential election. The news also comes after a Stuxnet computer virus infiltrated the country’s nuclear program.

Tehran’s Public and Revolutionary Court even announced that the formation was a reaction to aid the U.S. gave to protesters and “anti-Islamic republic groups” with anti-filtering software.

Gen. Moghaddam announced that Tehran will be an initial focal point for the Web patrols and that by 2012, Web cops will be in every police station.