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WiseMoney.com Ltd confirms that we are NOT connected in any way shape or form with the Financial Services Authority (FSA) fined money-wise.co.uk Moneywise IFA Limited.Yesterday the FSA posted on their website- FSA fines Moneywise IFA Limited for advice failings in relation to platforms. Firms that move to platform-based investment models need to ensure their advisers are properly trained.

The Financial Services Authority (FSA) has fined Moneywise IFA Limited (Moneywise) £19,600 for failing to have sufficiently robust compliance arrangements for the investment advice it gave customers using platforms and discretionary portfolios.

An investigation by the FSA found that Moneywise did not ensure its compliance arrangements evolved as the business grew. As such, the firm did not have robust arrangements for training advisers and ensuring suitability reports were clear, fair and not misleading.

Moneywise also recommended platform-based investment to 519 customers but failed to ensure its advisers explained their rationale clearly to investors. Furthermore, the firm didn’t ensure its advisers understood the reasons for making such a recommendation.

The FSA also found that Moneywise had not made it clear to customers that some of the underlying investments contained Unregulated Collective Investment Schemes (UCIS) and the associated risks that needed to be understood prior to investment.

The full story can be found on the FSA website at: http://www.fsa.gov.uk/pages/Library/Communication/PR/2010/138.shtml

WiseMoney.com provide online quotes for financial services including loans, mortgages, insurances for homes, carstravel as well as currency converters for foreign exchange.

Whereas wise-money.co.uk seem to provide investment advice.

Global markets are in the doldrums and with decreased trading volumes and a lack of positive data there has been little to prevent a downward path this week. The Dow is down 2.23% on the week and just over 6% on the month, slipping below the critical 10,000 level (closing yesterday at 9,985). S&P and Nasdaq have followed suit heading into the end of the month 6.7% and 6% down on the month.

In the UK the FTSE clawed back from the 6 week low of 5070 seen on Wednesday but is still 3.50% down on the month.  In Asia, the Nikkei and Hang Seng haven’t bucked the global trend also down 5.5% and 2% on the month.

Yesterday the Labor Department in the States reported a reduction in new U.S claims for unemployment benefits. Initial claims for state unemployment benefits fell 31,000 to a seasonally adjusted 473,000, below market expectations for a drop to 490,000.

However this figure did little to support the dollar as firstly the claimant’s number still remains high and there is still a real concern about the recovery of the States after the horrendous week it has had.

Many economists also look at the four week average price of initial claims which is viewed as a better gauge of employment trends; this figure was up slightly by 3,250 from 486,750.

Despite the onslaught of poor data Germany continues to shine as German consumer morale increased for the third month running, hitting its highest level since last October.

The Bank of England has announced it is to overhaul its macroeconomic model (the excitingly titled- The Bank of England Quarterly Model) after a glut of large revisions to GDP and inflation figures.
In addition to the GDP forecasts it’s inflation forecasts haves been above target for 42 of the 51 months, triggering seven letters from BOE Governor Mervyn King to the Chancellor over the same period.

A chat over a few pints of beer and a packet of crisps are no longer deemed an acceptable method of assessing the health of the UK economy and the Bank plans to spend £3.5 million (or 350,000 magic eight balls) on overhauling and improving their forecasting model.

The announcement has led some commentators to suggest the markets may start to lose credibility in the Bank’s ability to forecast inflation and this could feed into Sterling weakness.

But since the story broke Sterling has hardly budged and along with us at Wise Money, the market probably sees the announcement as good rather than bad news.

The Financial Times yesterday also reviewed the BoE forecasts and discovered that the most reliable method of predicting future UK inflation and growth was to look at what happened in the previous quarter and copy those figures forward to the next quarter. Simples.

An unnamed bank or banks had lent 380 tonnes of gold to the Bank of International Settlements in return for foreign currencies causing widespread surprise and confusion.
The news that a mystery bank has just pawned the family jewels gave traders a jolt – nervous about the sudden transfer of almost 20pc of the world’s annual gold production and the possibility of a sell-off.

In a tiny footnote in its annual report, the BIS disclosed its unusually large holding of gold, compared with none the year before. The disclosure was a large factor in the correction of the gold price this week, which fell below $1,200 for the first time in more than a month.

Concerns hinged on whether the BIS could potentially sell on this vast cache of bullion in the event of a default, flooding the market with liquidity.

It appears to have raised $14bn for whoever’s been doing the swapping – small fry on the currency markets, but serious liquidity in the gold market.

Denominated in euros, gold has fallen 8pc since the beginning of the month and is now trading at a seven-week low of €937 per troy ounce.

The big gold exchange traded funds (ETFs) – having peaked at record inflows in May – have also been showing net outflows over the past few days.

Meanwhile, economists and gold market-watchers were determined to hunt down which bank is short of cash – curious about who is using their stash of precious metal for what looks suspiciously like a secret bailout.

At first it looked like the BIS was swapping gold with a troubled central bank. After all, the institution is the central bankers’ bank and its purpose to conduct transactions with national monetary authorities.

Central banks in the troubled southern zone of Europe were considered the most likely perpetrators.

According to the World Gold Council, central banks in Greece, Spain and Portugal held 112.2, 281.6 and 382.5 tons of gold respectively in June – leading analysts to point fingers at Portugal, or a combination of the three.

The only other potential monetary authorities with enough gold as the US, China, Switzerland, Japan, Russia, India and Taiwan – and the International Monetary Fund.

This led to musings that the counterparty was the IMF, making sense because the lender of last resort is historically prone to cash shortages and has been quietly selling off gold in the first half of the year.

Renowned gold expert Jim Sinclair adopted this explanation. The panic came when people mistook a lease for a swap, he argues. Far from being a big release of gold into the market, it is simply a commercial arrangement between the IMF and BIS with a favourable rate of interest paid for the foreign currency.

“Gold swaps are usually undertaken by monetary authorities,” he writes on his industry blog, JSMineSet. “The gold is exchanged for foreign exchange deposits with an agreement that the transaction be unwound at a future time at an agreed price.

“The IMF will pay interest on the foreign exchange received. Historically swaps occur when entities like the IMF have a need for foreign exchange, but do not wish to sell the gold. In this case, gold is a leveraging device for needed currency to meet requirements.

“The many reports that characterise the large IMF gold swap as a sale of gold into the markets do not understand the difference between a swap and a lease.”

However, the day after original reports about the swaps, BIS emailed a statement saying that the swaps had not been conducted with monetary authorities but purely with commercial banks.

This did nothing to quell the sense of mystery surrounding the deal or deals. It is almost inconceivable that a single commercial bank could have accumulated so much gold alone. And cynics have suggested that the whole affair still looks like a secretive European bailout that a single country wants to keep quiet.

In this case, one or more of the so-called bullion banks – which act as wholesale market-makers and include Goldman Sachs, Deutsche Bank, JP Morgan, HSBC, Barclays, UBS, Societe Generale, Mitsui and the Bank of Nova Scotia – would have agreed to act on behalf of a monetary authority.

Money markets around the world fell this morning as investors worried about the lack of global growth resurfaced in Asia.
London’s FTSE benchmark index of top companies was down 1.08pc at 4,911.56 points in early trading, Frankfurt’s DAX 30 slid 0.6pc and Paris’ CAC 40 sank 1pc.

Sterling slipped to $1.51 as the fall in shares took the steam out of the Pound’s corrective rally against the dollar.

Data showing a slide in UK job growth in June helped the Pound lower as it highlighted the fragility of the employment sector, which is likely to face more pressure when drastic public spending cuts take effect.

The UK Recruitment and Employment Confederation said its permanent placements index fell to a five-month low of 60.7 in June from 61.3 in May.

Asian markets retreated as investors lost their appetite for stocks after a disappointing US services sector report pointed to an anemic recovery in the world’s largest economy.

Despite a short-lived rebound in global markets on Tuesday as bargain-hunters piled in, traders remained unable to shake deepening unease about the global economy.

Japan’s Nikkei 225 fell 0.6pc as a strong yen kept pressure on exporter shares. A strong yen reduces the value of their overseas profits and makes Japanese products more expensive abroad.

Elsewhere, Hong Kong’s Hang Seng index lost 1.1pc and Seoul’s Kospi was down 0.5pc. China’s Shanghai Composite edged higher.

Global stock markets have fallen sharply on renewed concerns over the European banking sector.
Investors are apprehensive ahead of a deadline this week for banks to repay loans taken out a year ago at low interest rates.

As a result, leading European share indexes slumped about 3%, while US stocks fell more than 2% in morning trading.

The concerns also pushed the Pound to a new 19-month high against the euro.

The pound rose almost half a cent to 1.2389 euros, its highest level since the immediate aftermath of the financial crisis in November 2008.

Last summer, the ECB was forced to offer European banks cheap 12-month loans to help them through the financial crisis. This was a longer repayment term than the usual three to six months.

But the ECB has said it will not offer 12-month loans this time around, raising fears that European banks may again face funding difficulties.

So with heightened concerns about which banks still have bad loans on their books, there is a growing fear among investors about the health of the European banking sector.

Your pile of foreign euros left over from your last European holiday might not keep it’s value for the future.
With the ongoing currency and european credit crunch, not all euros are the same and some might be worth more than others in the future.

Each euro banknote’s serial number tells you which country created it.

Worries about sovereign states’ differing abilities to repay their debts prompted world leaders at the G20 Summit in Toronto to pledge they will half their national budget deficits by 2013. But translating words into action will be a more difficult challenge for some than others.

For a few, the challenge could prove simply impossible.

Now rising fears about southern European countries’ financial stability mean it could pay to be able to read the code on your euro.

Some Germans are already insisting on holding on to euros issued in their own country and passing on those backed by southern states. They know from not too distant history what it feels like to be left holding worthless paper which used to be official currency.

All euros are backed by the European Central Bank but the serial numbers prefixed with X may be regarded as most secure because they are issued by Germany. N is also a good prefix, because these come from Austria. P, L, U and Z prefixes may also be favoured because these are issued by the authorities in Holland, Finland, France and Belgium.

Code     Country
Z            Belgium
Y           Greece
X           Germany
V          Spain
U          France
T          Ireland
S           Italy
P           Holland
N          Austria
M         Portugal
L           Finland
H          Slovenia
G         Cyprus
F          Malta
E          Slovakia

If you share widespread fears that the euro cannot last in its present form, you might want to avoid notes with the prefixes F, G, M, S, T or Y. These are issued by Malta, Cyprus, Portugal, Italy, Ireland and Greece- highlighted.

If you have some euro cash left over from your last holiday then Wise Money has a great value euro cash exchange service which includes home/ office delivery service.

Deutsche Bank- Germany’s largest bank has revealed it is currently shorting Spanish and Portuguese government bonds- despite the country’s ban on holding short positions in the debt of other European governments.
Deutsche Bank has admitted that it has a net £900m short position on Spanish government debt and a £660m short on the Portuguese sovereign, as the German government attempts to ban all short sales in European sovereign debt.

The position will be doubly embarrassing for the German government, as Deutsche Bank’s own shares are currently the subject of a short trading ban imposed by the country’s authorities at the same time as sovereign ban.

Details of Deutsche Bank’s shorting came in a presentation given in at the Goldman Sachs European financials conference in Madrid by the company’s chief risk officer Dr Hugo Banzinger.

Dr Banziger described the bank’s overall exposure to Southern European government debt as “relatively small, except Italy”. Deutsche Bank’s net sovereign exposure to Italy is £2.6bn, based on a gross position of about £23bn.

Germany’s unilateral ban last month on the naked short selling of euro-denominated government bonds, credit default swaps based on those bonds, and shares in the country’s 10 leading financial institutions initially surprised other Eurozone governments, but has since gained support.

Deutsche Bank’s revelation of its short position in European government debt shows how easy sophisticated financial institutions with trading operations located around the world have found it circumvent national bans.

This morning the Office of Budget Responsibility delivers its first independent assessment of the outlook for the British economy and the budget deficit.

This has some important ramifications for Sterling in the both the short and log run. We will get the first glimpse of whether the scorched earth legacy supposedly left by the previous Government is as bad the new Government has said it is – and a downbeat fiscal forecast would undoubtedly see a fall in the value of the Pound.

However, the Chancellor would love to see the forecasts confirm the message he has been driving home, namely that to get the British economy back on the road to recovery, deep cuts to government spending are needed.

Returning Britain to long term sustainable growth would see the Sterling rise towards it long run average levels against the Euro and Dollar (but it is far from clear if demand in the economy after the cuts are implemented will be able to support growth in the medium term)

The quarterly inflation report from the Bank of England also released this morning suggests the market expects interest rates to stay low for an extended period. Spencer Dale, chief economist at the Bank, highlighted the Eurozone fiscal crisis as the main concern over UK growth and said that Britain will continue to suffer the ill effects of the crisis even as the economic recovery continues.

Mixed messages from the Bank however as Andrew Sentence, member of the MPC, raised the possibility of higher interest rates (due to far lower excess capacity in the economy than the bank originally thought and the higher inflation that this may produce). Sentence suggested rates may rise as early as the second half of the year.

Sterling is performing strongly in early trading on the back of this news.

The euro will have broken up before the end of this Parliamentary term, according to the bulk of economists taking part in a wide-ranging economic survey for The Sunday Telegraph.
The euro is facing its worst crisis since it was founded with the survey’s findings underline suspicions that the new Chancellor, George Osborne, will have to firefight a full blown crisis in Britain’s biggest trading partner in his first years in office.

The single currency is in its death throes and may not survive in its current membership for a week, let alone the next five years, according to a selection of responses to the survey – the first major wide-ranging litmus test of economic opinion in the City since the election.

The findings underline suspicions that the new Chancellor, George Osborne, will have to firefight a full-blown crisis in Britain’s biggest trading partner in his first years in office.

Of the 25 leading City economists who took part in the Telegraph survey, 12 predicted that the euro would not survive in its current form this Parliamentary term, compared with eight who suspected it would. Five declared themselves undecided. The finding is only one of a number of remarkable conclusions, including that:
• The economy will grow by well over a percentage point less next year than the Budget predicted in March.
• The Government will borrow almost £10bn less next year than the Treasury previously forecast, despite this weaker growth.
• Just as many economists think the Bank of England will not raise rates until 2012 or later as think it will lift borrowing costs this year.

But the conclusion on the euro is perhaps the most remarkable finding. A year ago or less, few within the City would have confidently predicted the currency’s demise.

But the travails of Greece, Spain and Portugal in recent weeks, plus German Chancellor Angela Merkel’s acknowledgement that the currency is facing an “existential crisis”, have radically shifted opinion.

Four of the economists said that despite the wider suspicion that Greece or some of the weaker economies may be forced out of the currency, the most likely country to leave would be Germany.

The recent worries about the euro’s fate followed the creation last month of a £691 billion bail out fund to prevent future collapses. Although the fund boosted confidence initially, investors abandoned the euro after politicians showed reluctance to support it wholeheartedly.