Headlines

Global unemployment and poverty are set for a “dramatic increase” in the coming year as the world economic crisis deepens, according to a new report, the Financial Times reported. Projections by the International Labour Organization, a UN agency, on global employment trends predict that on a worst-case scenario, recorded unemployment could rise by more than 50 million from baseline 2007 levels to 230 million or 7.1 percent of the world’s labour force by the end of 2009.

Germany's Finance Ministry is weighing the nationalization of Hypo Real Estate Holding AG, the Munich bank whose troubles prompted Germany to bail out its entire banking sector last year, The Wall Street Journal reported. No decision has been made, according to a senior German official. But Finance Minister Peer Steinbrück is considering ways to take control of Hypo as a prelude to radically scaling down its operations, this person said. The government could even confiscate shareholders' stakes in the bank, under one option being considered.

After seeing seven London partners jump ship earlier this month, Cadwalader Wickersham & Taft LLP is reportedly considering legal action against the group for alleged violations of their partnership agreements, Bankruptcy Law360 reported. On Tuesday, London's Legal Week reported that Cadwalader had sent letters before action to the seven, accusing them of breaching the confidential terms of their partnership deed by moving to Paul Hastings Janofsky & Walker LLP.

The Japanese government said it is considering supplying public funds to companies hurt by the global financial crisis, using the Development Bank of Japan and other state-owned organizations, The Wall Street Journal reported. Tuesday's statement by the Ministry of Economy, Trade and Industry shows that Japan, like other crisis-hit nations, is thinking of channeling public money into its battered and credit-short private companies.

Thousands of employees in the bus industry could lose their jobs if government fails to pay operators millions of rands in subsidies owed to them, MPs heard on Tuesday. Briefing the National Assembly's transport committee, Southern Africa Transport and Allied Workers Union (SATAWU) representative Jane Barrett said many bus operators would close shop unless the government paid all outstanding subsidies within a week's time, the Independent Online reported. "If payment is not made within the next week, 26 000 bus workers are in danger of losing their jobs.

Iceland’s government collapsed on Monday following political turmoil prompted by the global financial crisis, the Financial Times reported. The demise of the two-party coalition forced Geir Haarde, prime minister, to resign with immediate effect, having said on Friday that he would step down in May because he is suffering from cancer. “This is not good. We have a currency crisis, a banking crisis and now a political crisis,” said Tryggvi Thor Herbertsson, professor at the University of Iceland.

British consumers opted to pay off debts rather than go on a pre-Christmas spending spree, the banking industry's main lobby group said Monday, in another sign of the difficult retailing climate, the Associated Press reported. In its monthly assessment of lending conditions, the British Bankers' Association said the amount of money outstanding on credit cards dropped by £218 million in December, while bank customers continued to pay off more of their overdrafts and personal loans than they took on.

The owner of the Barratts and PriceLess shoe chains in Britain filed for a form of bankruptcy for the two businesses Monday in an attempt to save itself from collapse, the Associated Press reported. In a statement to the London Stock Exchange, Stylo PLC--the Bradford, England-based parent company--said it had appointed administrators from Deloitte for its shoe chains as it attempted to come to an agreement with creditors to secure its long-term survival.

Wireless Age Communications, Inc. is awaiting a judge’s ruling on last week’s legal challenge of SaskTel’s court-ordered receivership of the Ontario-based cellular phone and wireless device dealer, the Leader-Post reported. John Simmonds, chairman and CEO of Wireless Age, said the Court of Queen’s Bench judge indicated the ruling on Wireless Age’s legal challenge of SaskTel’s receivership order would likely be handed down this week.

Candover, the private equity group, is likely to face pressure from banks to inject more money into Ferretti after the yacht builder defaulted on its debt as a result of sinking sales. As reported in the Financial Times this month, Ferretti has appointed Rothschild to advise on talks with its banking syndicate, led by Royal Bank of Scotland and Mediobanca, about restructuring its €1 billion-plus debts. The global financial crisis has hurt the Italian company, with many of the world’s multi-millionaires pulling back from buying big-ticket items.