US COMMISSION SAYS FINANCIAL CRISIS WAS 'AVOIDABLE' - Politicians, regulators and bankers were to blame for the US financial meltdown, a new report claims. The US Financial Crisis Inquiry Commission, set up to examine the causes of the crisis, said the crisis was 'avoidable'. The report highlights excessive risk-taking by banks and neglect by financial regulators. 'The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble,' the report stated.
Justin Urquhart-Stewart, of Seven Investment Management in London, says the findings of the report were astonishing. He says that compared to previous inquiries - like the Savings and Loans inquiry in the 1970s which resulted in hundreds of people going to jail for their part in the scandal - the findings of this report are really of no use. He says that the main reason the crisis happened was complacency. He points out that regulations were in place and regulators - including the Bank of International Settlements - were warning about possible risks but no-one wanted to heed those warnings.
Turning to the current turmoil in the Middle East, Mr Urquhart Stewart says that the situation in Egypt is really serious. He points out that Egypt is the main stay of capitalism in the area and any trouble there will have a serious impact on world trade. He adds that the financial industry can no nothing about the worrying situation except 'fret'.
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MORNING BRIEFS - Quarterly results for Amazon show an 8% rise in profit and a 36% jump in sales for the last three months of last year, outperforming the overall online-retailing industry. Its growth was fuelled by sales in North America, which increased by 45% over the quarter from a year earlier, while international sales rose 26%, below some expectations. Amazon said that for every 100 paperback books that it sold in the three months, it sold 115 downloads for its Kindle electronic book reader.
*** Microsoft results for the same three months show better than expected revenue and profit as consumers bought its Windows and Office products over Christmas. For the second quarter of its financial year, Microsoft posted a profit of $6.63 billion, down from $6.66 billion a year earlier. Sales at the company's entertainment and devices division jumped by 55% on the success of the company's Kinect motion-based controller and the Xbox 360 consoles. Operating profit for the division has surpassed a billion dollars so far this fiscal year.
*** French President Nicolas Sarkozy has passionately defended the euro against sceptics at the World Economic Forum, saying he and German Chancellor Angela Merkel would never let the currency fail. The European Central Bank chief, Jean-Claude Trichet, echoed Sarkozy's robust defence, telling another panel: 'There is no crisis of the euro currency. That is absolutely clear'.
*** On the currency markets the euro is trading at $1.3714 cents and 86.23 pence sterling.
