Archive for the 'Personal Finance' Category



School Bank is open for business

St. Gerald's School BankThe St. Gerald’s School Bank is now open for business.

The Bank had its official launch day on January 23rd and has been set up in association with AIB. The bank is open every Wednesday and Friday in Room 0-7  from 10.45 to 11.00

Visit their new website to find out more about the team from Transition Year running the bank and how to open an account.

Wordle for 2008

Here is a Wordle from all the posts on the blog during 2008.

Wordle for 2008

Click on the image to see the full size Wordle.

What is a Wordle? Create your own Wordle.

We’re now in recession

Google Apps – New voice and video chat

Google TalkGoogle have released a new feature in all Gmail and Google Apps accounts. You can now chat with other Google Apps and Gmail users by voice and video.

To use the chat feature in your Gmail or Google Apps account, you must download Google Talk.

You can check the settings for Chat by selecting Settings in your account and then go to the Chat page.

Learn more about Google Talk.

This Week

The collapse in global share prices continued this week. Everyone is now feeling the impact of falling stock markets, from Roman Ambramovich to Ryanair’s Michael O’ Leary. The ISEQ index is now at an 11 year low.

This week we started looking at Enterprise and Entrepreneurs. While Richard Branson is an example of a classic entrepreneur, there are other such as EasyJet founder Stelios Haji-Ioannou. His easyGroup now has a range of businesses from an airline to van rental.

We also looked at intrapreneurs. As well as the examples we discussed already, here are a few more.

A good example of a successful global online Irish enterprise was PollDaddy.com whose polls we have used on this blog before. Today, Polldaddy.com was taken over by US company Automattic, the company behind WordPress.com and WordPress.org

PollDaddy.com had built up 350,000 customers in a short space of time and with no sales effort. 96% of its customers used its free online poll service. The business was also self-funded. Full report here.

Take the test to see if you are an entrepreneur.

And finally:

Another celebrity involved in a breach of contract

The Irish Times now has a business blog. You should add it to your favourites or RSS feed. What is RSS?

Interested in a career in Stockbroking?

Don’t forget that all the websites we use in class and on the blog are on my del.icio.us page.

Budget 2009

Down to Business has a summary of all the changes in yesterday’s Budget and some videos of the Budget speech from the Dáil.

You can also get more information from the official Budget 2009 website.

This Week

So what happened this week?

The fallout from the subprime crisis continues. On Monday, Germany had to rescue Hypo Real Estate, the country’s second biggest mortgage lender at a cost of €50bn.

On Wednesday, six of the world’s Central Banks announced a co-ordinated 0.5% reduction in interest rates to help the financial system. The UK government also announced a £64bn financial package to help all the major UK banks. They may even take shares in these banks in the future i.e. nationalisation.

Even a country is now in danger of going bankrupt. Iceland’s banks, having enjoyed years of enormous growth, are now experiencing liquidity problems. The value of these banks once outstripped the country’s GDP. The Icelandic stock market has collapsed, inflation has soared and the Icelandic krona has fallen sharply in value.

The credit crunch is now also having an effect on clubs in the Premiership and FIFA have warned clubs with excessive debt that they may be excluded from certain competitions.

An 8% fall on the Hong Kong stock market lead to riots on the street.

Remember Lehman Brothers, the first of the US investment banks to go bust. Look at the amount of money its Chief Executive Officer earned from 2000 – 2008.

Watch this Youtube video to get a different explanation of the subprime crisis.

Is this a case of insider trading?

This week we talked about downsizing or companies restructuring their operations. This is going to become more common as companies have to cut costs in times of recession. Three companies announced rationalisation plans this week – Aer Lingus, HP and Ebay.

An Irish Dragons’ Den on RTE in 2009. Do you have a good idea?

On Monday we will be starting Unit 4 on Enterprise.

The Ernst & Young Entrepreneur of the Year awards will be starting on RTE1 next week. There will be a weekly programme on RTE1 on Thursday night. It’s worth watching.

Social Bookmarking in Plain English

You will notice that I have added a del.icio.us widget on the blog. Del.icio.us is a social bookmarking site. This short video will explain what social bookmarking is. Here are my bookmarks on del.icio.us

Vodpod videos no longer available.

more about “Social Bookmarking in Plain English“, posted with vodpod

Online Poll

Crisis in the banking sector

Following the crisis in the banking sector in the last week, the Irish government has improved the deposit protection scheme.

The scheme now guarantees deposits up to €100,000 and covers deposits held in all banks and credit unions. Prior to this, the scheme only guaranteed 90% of deposits up to a maximum of €20,000 held in a bank account. This scheme is funded by the financial institutions themselves. They must contribute 0.2% of all deposits held to the Financial Regulator.

The Financial Regulator in both Ireland and the UK has also banned the short-selling of banking shares as of midnight on Thursday September 18th.

Short-selling of shares is the practice of selling shares in a company you do not own and hoping that the share price falls so you can buy them at the lower price.  It happens when a speculator borrows shares in a company from another party for a particular period of time and then sells them in the hope of buying shares in the same company again for a cheaper price. The speculator then gives back the shares borrowed and pockets the money made in the intervening trade. It is simply a way of making a profit from a falling share price.

Speculators have targeted bank shares in the past 18 months by betting that their share prices will fall due to the “subprime crisis” in the US and falling profits due to the collapse in the property sector in Ireland and the UK. This strategy has proven to be extremely profitable. Northern Rock and AIG have been nationalised. HBOS had to be taken over by Lloyds TSB. Bear Stearns was taken over by JP Morgan, Lehman Brothers has gone bankrupt and Bank of America took over Merrill Lynch.

Some speculators have made enormous profits from short-selling banking shares in the last year. Here are a few examples:

Crispin Odey

Mr Odey and his wife Nichola Pease have been dubbed the “Posh and Becks” of the investment management industry. While Ms Pease works for the more traditional JO Hambro, Mr Odey, a former portfolio manager of Barings, runs his own hedge fund Odey Asset Management. The group, set up in 1991, made a profit of £55.3m (€70m) in the financial year to April, and he earned an eye-watering £28m (€35m) himself. Much of his success has come from his bearish stance on financial stocks and his prediction of the credit crunch. This has bolstered his fortune to more than £300m, (€375m) according to The Sunday Times Rich List.

Paul Ruddock and Steven Heinz

Paul Ruddock, a former Goldman Sachs banker, and Steven Heinz set up Lansdowne in 1998, and a decade on The Sunday Times Rich List puts their fortunes at £350m (€440m) each. Lansdowne is one of the biggest UK-based hedge funds and is a serious investor, short and long, in the domestic financial services market. It was famous for a long-term short position in Northern Rock, which paid off spectacularly when the bank fell apart – talk was that the trade brought in $200m (€140m) for the group. It also shorted HBOS, holding a 0.58 per cent short position earlier this year. The group manages more than $17bn (€12bn).

Philip Falcone

The American former head of trading at Barclays Capital is reputed to have earned £865m (€1bn) following a successful year for the group. This allowed him to spend $49m (€34m) on a 27-room townhouse in New York previously owned by the Penthouse magazine publisher Bob Guccione. He runs Harbinger Capital, the US based fund, which scours the globe looking for distressed investment situations, and earlier this year its focus firmly fell on HBOS. At the time of the UK bank’s rights issue it revealed it was holding 3.29 per cent of the stock on loan, a bet then valued at about £348m (€437m). Harbinger, which manages around $20bn (€14bn), also owns a significant stake in The New York Times and is pursuing the satellite group Inmarsat.

Paul Marshall

The $15bn (€11bn) hedge fund Marshall Wace was established in 1998 by Paul Marshall and Ian Wace. The group became one of the most powerful in the City through a computer programme called Tops built by Mr Wace. It rated analyst’s reports and allowed the managers to invest accordingly. Mr Marshall, formerly of Mercury Asset Management, was a researcher for the former Liberal Democrats leader Charles Kennedy.

Noam Gottesman

The Israeli-American businessmen is chairman and co-chief executive of the company he founded with Pierre Lagrange, a Belgian, in 1995. The group is the largest independent hedge fund manager in Europe, and looks after assets worth $23bn (€16bn). Last year its founders both made an estimated £400m. GLG is a serial UK bank shorter, targeting Bradford & Bingley and Northern Rock.

The most successful short-seller

Source: Irish Independent


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