Bob Tallent
The Synergy Group
17^th November 2011

Below are some of the main International headlines which made the news during the period 12^th – 17^th November 2011. Noticable amongst them was the ECB and the Euro zone debt crisis, the UK’s decision to sell Northern Rock to Virgin Money at a loss to the British taxpayer, and intriguingly, Warren Buffett’s decision to buy shares in IBM.

• Spanish and Italian debt was the focus of the European Central Bank this week when they intervened in the bond markets.  However, the Germans insisted that the bank didn’t see itself as a bank of last resort.  The markets were nervous by the uncertainty about the willingness of the ECB to stand behind Euro-zone governments.  It was worrying to see the spread of Austrian, French and Dutch bond yields over German Bunds also shot up, though to levels still well below those of Italy and Spain.
• The European Commission put forward proposals for the credit rating agencies to be rotated by companies.  The Agencies weren’t happy with this.  They also want to give regulators the power to approve the methodology behind the agencies' analyses. But the commission didn’t recommend an outright ban on providing credit ratings for countries seeking a bail-out.
• Josef Ackermann, who was offered the position of Chairman of Deutsche Bank, stunned colleagues by deciding that he would not take up this position. Mr Ackermann is stepping down as the German bank's chief executive. Shareholders scuppered a succession plan that envisaged Mr Ackermann staying on at the bank as chairman, with Anshu Jain and Jürgen Fitschen sharing the job of chief executive. Deutsche Bank now wants Paul Achleitner, Allianz's chief financial officer, as chairman.
• UBS unveiled its new strategy, which focuses on the company’s core wealth-management business and curtails its investment-banking activities. The Swiss bank also appointed Sergio Ermotti as chief executive (after some speculation that Mr Ackermann would get the job, see above). When Oswald Grübel resigned over the lack of supervision of an alleged rogue trader, Mr Ermotti took the position on an interim basis.

• The British Treasury sold Northern Rock (NR) to Virgin Money for £747m. NR is the "good" part of a failed British bank that was taken into public ownership.
• Mainly due to rising energy prices slowing a bit, the annual inflation rate in America fell in October, for the first time in four months, to 3.5%.
• Britain's annual inflation rate dropped to 5%.
• An airline based in Dubai, Emirates, announced that it would buy fifty Boeing 777 jets with a listed dollar value of $18 billion, and an option to buy another twenty.  This is Boeing’s biggest single order for commercial aircraft to date.
• The UK’s unemployment rate has risen to its highest level since 1996 and now stands at 8.3%.The Bank of England has reported that the prospects for the British economy have "worsened" and it indicated that it would undertake more quantitative-easing measures over the coming months.
• EMI has been split in two in order to facilitate the sale of the Company. Universal Music will give $1.9 billion for EMI's recorded-music division, and a consortium which includes Sony Music and the estate of Michael Jackson will buy EMI's music-publishing unit for $2.2 billion.
• The “Cloud” is being used by Google when it launched its own online music store, in an ambitious attempt to challenge Apple's iTunes.  Other players in the market are also using the same method.
• Warren Buffett disclosed that from March last, Berkshire Hathaway, his investment company, has been buying shares in IBM. The value of the stake amounts to around 5.5% in the IT Company. Mr Buffet has been generally cool about the IT industry in the past and it is the first time that he has taken such a big bet on a stock in the technological industry. He said he made an exception for IBM as he is impressed with its long-term strategy and because IBM treats its share price "with reverence".