Another busy week for business news. Here’s a brief summary of developments during the past week.
The week began with Meltdown Monday – the largest one day points drop in the history of the DJIA (-777 points) and the single biggest daily percentage fall on the Irish market (-13%).
This was caused by the collapse of UK bank Bradford & Bingley and the large Dutch/Belgian bank Fortis last weekend. The failure of the US House of Representatives to back George Bush’s $700bn plan to help US banks and the collapse Wachovia, the fourth biggest bank in America, also sent stocks lower.
However, you need to put Monday’s fall in the Dow Jones in context. It was not the biggest daily fall in the Dow in percentage terms, only in points terms. The Dow fell 777 points but the percentage fall was 7%. The last big daily fall in the Dow Jones was 22% in the 1987 stock market crash. Read the following article and see how large falls in the Dow Jones occur every 7 years.
On Tuesday, there were rumours that at least one Irish bank was in danger of default. The government quickly responded by guaranteeing the safety of all deposits in the six Irish commercial banks – AIB, Bank of Ireland, Anglo Irish Bank, Permanent TSB, Irish Nationwide and EBS.
They have also guaranteed the repayment of loans given to these banks by other financial institutions. The total cost of this guarantee could reach €500bn. This is over twice our annual GDP and over 14 times our National Debt.
Question: What effect will the above guarantee have the Irish operations of UK and foreign banks here?
On Wednesday, the CSO released the latest unemployment statistics for Ireland. The number of people unemployed has increased by 50% or 80,000 people in one year. This is the biggest ever annual increase in the Live Register. Our unemployment rate (6.3%) is now the highest it has been in 11 years and is likely to reach 9% in 2009. Download the CSO report.
On Wednesday night, Warren Buffet made his second big investment in a week when he purchased $3bn worth of stock in General Electric and the option to buy $3bn more over the next five years. This follows his $5bn investment in US bank Goldman Sachs last week. He made a profit of $783m in one day in Goldman Sachs.
On Thursday, Facebook announced that it has chosen Dublin as its European Headquarters. Dublin is now the European HQ for internet companies such as Ebay, PayPal, Google, Yahoo and Amazon. They will be creating 70 jobs in Dublin. These are now the types of jobs that will be created in Ireland in the future. What type of workers are Facebook looking for?
Don’t forget to look at some cases that have been resolved by the Labour Relations Commission and the Labour Court.
For example: Is this a case of a change in work practice?
And finally, another example of an organisation not taking data protection seriously. I’m sure Newcastle and Ireland keeper, Shay Given, would agree.
Keep up to date with all the daily business news on Down to Business.