More banks down in the US: The grandly-named Park Avenue Bank, based in New York, was one of four financial institutions to be closed in the US last week to take to 30 the number of bank failures in the first 10 weeks of 2010. It was the second New York bank to fail in two days, one catering to mostly Jewish customers was closed on Thursday evening by regulators because a large number of its employees are Jewish who would not be available on Friday evening because of The Sabbath. The three other banks to fail were small operations in Florida and Louisiana. The Park Avenue Bank was the largest of the three on Friday with about $US520 million in assets and four branches. Last year 140 banks failed, compared with 25 in 2008 and three in 2007.

Dejavu all over again, again! You’d have thought that with banks falling most Fridays there would still be an enormous will to reform the financial sector (including regulation) to make sure that the terrible near collapse of late 2008 (and what got us to that point) can’t happen again for generations to come. But watch Washington, where talks between the Democrats and the Republicans on a final reform package collapsed last week. Now the about-to-retire Senate Banking Committee chairman Christopher Dodd (a Democrat) is expected to unveil his own proposed legislation on overhauling the country’s financial regulation tonight our time. Not much hope is now given for US financial reforms this side of 2011. Senator Dodd’s Bill is given little chance of getting up. He, of course, is tainted by accepting a VIP housing loan from CountryWide Financial Services, one of the big failures of the subprime mess. CountryWide’s CEO is facing fraud charges.

Chinese inflation explained: Rising food costs are driving up China’s consumer price index in February, a point ignored by many of the doomsters. As the AMP’s Dr Shane Oliver pointed out on Friday, “it’s worth stressing that much of the rise in Chinese inflation is being driven by higher food prices — non-food inflation is just 1% at the moment.


Murdoch watch: News Corporation is reported to be looking to sell its mobile content business called Jamba, (Jamster in the US). Jamba is a mobile content provider based in Germany and responsible for that horrible frog tone that was popular a few years back.  News paid a total of $US381 million for the business in two deals in 2006 and 2008 (a month after Lehman Brothers collapsed, great timing). The mooted sale follows the disposal of other digital businesses such as Photobucket and Rotten Tomatoes. It wants to concentrate its digital business around its ailing MySpace and compete more aggressively with Facebook. News Corp bought Jamster to try and leverage off brands such as The Simpsons, Idol and other Fox and News products to try and create premium-priced products. But that seems to have flopped, perhaps because MySpace is a flop.

Banking Ireland-style: Allied Irish Bank, the country’s banking basket case, has produced another unwanted record: its worst ever financial result of a loss of €2.41 billion ($US3.26 billion) for 2009 due to its holdings of dud property loans, many made to insiders and mates of the board. The bank had made a profit (it claims) of €772 million in 2008. Loan loss provisions jumped to €5.36 billion, from €1.82 billion a year earlier and AIB said 29% of its total loans are now on a form of credit watch. The Irish Government has established an agency to buy up dud  loans from the country’s crippled banks. AIB says it expects to transfer €23 billion of loans to this agency. The agency, called NAMA, this week will tell the five banks involved of the price it will pay for the dud loans of the country’s 10 top property developers. Big discounts will be revealed, shocking the banks.

Good snow, man: And the snowstorms might have impacted economic activity in the US and Europe in January and February, but there’s been one big positive: they seem to have shaken European industrial output back onto a strong growth path. The 1.7% fall in December was revised to a rise of 0.6% and the first estimate for January was a rise of 1.7%, the biggest jump in two decades. The cold weather in January boosted output from power stations and other utilities, and boosted coal, oil and gas production as well.

Another private equity success story: Will, Bob the Builder, Thomas the Tank Engine, Angelina Ballerina and Barney the Dinosaur all end up being run by Larry Liquidator,  or Regina Receiver? Well, children, something bad is on the cards for all our heroes, judging by a story in the London Sunday Telegraph HIT Entertainment owns these iconic kids names —  it is in turn owned by a private equity group called Apax Partners. The paper says HIT hasn’t cut its debt ($US470 million as at July 2008) enough to meet the terms of an agreement with its banks, so it could cause a “soft” breach of the banking agreement, rather than a “hard” breach. Children know that a hard breach is very naughty indeed. To fix the breach it will have to seek the agreement of the banks to change it and then pay a higher rate of interest. That usually in turns worsens the financial position of the group in trouble. The paper says “HIT, which is chaired by former BBC director-general Greg Dyke, has suffered from a recent drop in US toy sales. Last year the group cut 20pc of its staff in an attempt to improve its balance sheet position.”

Another private equity looting: And, by the way, the float of retailer Myer in Australia late last year cost the company $94 million, which it had to account for in the lacklustre result it revealed last week. That’s equal to 16 cents a share. the interim dividend was only 10.5c a share. You’d have thought the private equity mob would have wanted to share the costs, instead of lump them all on the incoming investors. But no, it’s all take and no give from these financial charlatans. The private equity groups led by TPG of the US took their huge profits from the float and left all the costs of the sale with the company. TPG, of course, spirited its money off shore as quickly as it could, and before the Tax Department could get a look. That was defended by journalists on some papers and spinners and spokesmen for the private equity industry. The float was a dog, the shares have not hit the $4.10 sale price since the float, but that has been ignored by the journalists and their private equity spinner mates and sources. Some more hard-nosed commentary, please!

FT success: The august Financial Times now sells more papers in the US than it has real sales in its original home market, the UK. Circulation figures for last month, released on Friday in London. The figures show that last month the FT sold a net 390,203 copies, in its various global editions, but mainly in the UK, Europe, the US and Asia.  That was down 7.32% on the year. In the UK and Ireland, sales were made up of headline sales of 116,400 ( not counted, subscriptions of 12,166, 32,699 bulks and full price sales of 63,705). The US edition sold 129,137, the Europe edition 112,214 and the Asia edition 32,452. Total 390,203.

Refinance Greeks who come with debts: According to reports in London papers, the latest the Financial Times we are about to get a Clayton’s safety net for Greece: that’s the one you have when the one being saved hasn’t asked to be saved, yet. The FT story is the latest of a series that started with The Guardian on Saturday. Now the FT reports that “Eurozone finance ministers hope to reach agreement on Monday on how to support Greece if it fails to refinance its debts. Proposals include direct loans from individual governments and a system of loan guarantees, all tied to strict Greek observance of fiscal discipline and implementation of structural economic reforms. However, ministers of the 16 nations are not expected to make an explicit offer of aid, partly because Greece has made no request and partly because its fiscal outlook is regarded as less threatening than in late January and February.” France’s finance minister, Christine Lagarde, told the paper: “At this point in time, it does not need help. It was able to raise capital quite constructively and positively with financial terms that were not totally unreasonable, which demonstrated that the market has appetite for Greek debt — so as far as we are concerned there is no such need.”  Yet?