EU, Dependent on Russian Energy, Balks at Georgia War Sanctions

Sept. 2 (Bloomberg) — European Union leaders refused to impose sanctions on Russia over the invasion of Georgia, acknowledging their reliance on Russian oil and gas at a time of faltering economic growth.

EU leaders took the symbolic step yesterday of suspending talks over expanded trade ties with Russia, fearing that tougher measures would expose the energy-dependent bloc to Russian retaliation.

Russia is the 27-nation bloc’s main supplier of oil and gas and third-biggest trading partner, giving it leverage at a time when the European economy threatens to tip into recession. Europe’s determination to maintain business links also undercuts U.S. efforts to line up allies against the reassertive Russia.

Read moreEU, Dependent on Russian Energy, Balks at Georgia War Sanctions

Korea Development’s Min Confirms Talks With Lehman


A man walks past the Korea Development Bank headquarters in Seoul on Aug. 24, 2008. Photographer: Nasha Lee/Bloomberg News

Sept. 2 (Bloomberg) — Korea Development Bank is in talks to buy a stake in Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm.

Chief Executive Officer Min Euoo Sung confirmed the discussions in an interview in Seoul today. “I cannot comment further,” said Min, who headed Lehman’s Seoul branch before joining the Korean bank in June. Matthew Russell, a Hong Kong- based spokesman for Lehman, declined to comment.

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U.S. Stocks at 25.8 Times Earnings Means Rally Can’t Continue

Sept. 2 (Bloomberg) — The best already may be over for the U.S. stock market this year.

The Standard & Poor’s 500 Index, which had the worst first half since 2002, added 0.2 percent this quarter, the only gain among the world’s 10 biggest markets in dollar terms. Shares in the benchmark index for American equity climbed to an average 25.8 times reported profits, the highest valuation in five years. The last time that happened, the S&P 500 fell 38 percent.

Read moreU.S. Stocks at 25.8 Times Earnings Means Rally Can’t Continue

Home Office: Recession will bring big rise in crime and race hatred

Ministers are bracing themselves for a rise in violent crime and burglaries and a shift to far-right extremism as the effects of the economic downturn take their toll, a leaked Home Office report to the Prime Minister says.

In a series of warnings, the Home Secretary, Jacqui Smith, says that Britain also faces a “significant increase” in alcohol and tobacco smuggling, hostility towards migrants and even a potential rise in the number of people joining terrorist groups.

Read moreHome Office: Recession will bring big rise in crime and race hatred

Supermarkets go high-tech to combat shoplifters


Cheese theft is on the rise, but razor blades, confectionary and oysters are still the top shoplifting targets. Photo / Brett Phibbs

Supermarkets are introducing electronic tags on items popular with shoplifters and other thieves.

The Source Tagging Alliance, set up by leading retailers, is encouraging suppliers to use radio frequency identification (RFID) and source tagging on grocery product packaging at the point of manufacture.

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UK: Housing sales sink to worst for 30 years

· Estate agents average one deal a week as prices fall
· Rics calls for tax-free cash help for first-time buyers

The government is being urged to act swiftly to help drag the ailing property industry up off its knees as housing sales slow to their worst level in three decades and prices continue to decline.

Read moreUK: Housing sales sink to worst for 30 years

Lehman Brothers in urgent talks on capital injection

The Wall Street investment bank Lehman Brothers is this weekend locked in talks with a group of foreign government-backed investment funds in an effort to secure billions of dollars in new equity capital.

The Sunday Telegraph has learned that Lehman has intensified talks in recent days with Korea Development Bank, the South Korean ­government-backed lender, about a capital injection of as much as $6bn (£3.3bn). KDB has drafted in bankers from the heavyweight advisory boutique Perella Weinberg to provide counsel on the talks, which could be concluded this week.

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ECB May Keep Rates at 7-Year High as Recession Looms

Sept. 1 (Bloomberg) — The European Central Bank will probably keep interest rates at a seven-year high this week, and may even threaten to raise them, at the risk of prolonging the economic slump.

All but one of 47 economists surveyed by Bloomberg News predict the Frankfurt-based central bank will leave the benchmark rate at 4.25 percent on Sept. 4 and only five expect a cut this year, even after the region’s economy contracted in the second quarter.

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Lehmans puts another 1,500 jobs on the block

Lehman Brothers is planning to axe up to 1,500 more jobs, as part of its desperate struggle to reduce costs, raise money and rebuild its battered balance sheet.

The job losses, which are still being planned by executives at the company’s New York head office, are expected to be spread among its 26,000-strong global workforce, including at its European headquarters in London, where it employs more than 4,500 people.

Rumours of the cuts began circulating internally at Lehman late on Thursday, adding to the gloom at the company, which is engaged in a fire sale of assets in order to replace billions of dollars lost on mortgage investments since the credit crisis began.

Read moreLehmans puts another 1,500 jobs on the block

Millions more face big energy price increases

· Up to 34% rise as last two big suppliers get into line
· Government urged to act as more face fuel poverty


Photograph: Steve Taylor/Getty Images

This summer’s misery for energy consumers reached a climax yesterday when the last two of the big six suppliers raised prices for millions of household customers.

ScottishPower, which has just over 5 million customers, said gas bills would rise by 34% from the beginning of next month, and electricity by 9%. Npower said it was putting up gas prices by 26% and electricity by 14% for its 6.6 million customers with immediate effect.

Read moreMillions more face big energy price increases