World stocks hit five-week highs on Tuesday on optimism a U.S. plan to purge toxic assets from banks’ balance sheets could ease the misery of the sector, but the rally also provided investors a chance to take profits.

The dollar rose against the yen and the euro on hopes the U.S. plan, detailed on Monday by U.S. Treasury Secretary Timothy Geithner, will revive the world’s largest economy.

This helped the dollar to halt last week’s slide, which was sparked by the Fed’s plan to buy government debt as part of a move to expand its balance sheet.

The MSCI World index, a gauge of global stocks performance, rose 0.5 percent after rising to its highest level since mid-February. The index, which fell to a six-year low on March 9, has risen in 10 of the last 11 sessions.

The FTSEurofirst 300 index of top European

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Russia will lend Belarus $2 billion, in a goodwill gesture intended to improve economic and political ties with the country and keep open the option of incorporation into the Federation. "During this time we decided to draft a joint action plan to create a common currency," said Russian Finance Minister Alexei Kudrin. As Russian grocers and food sellers feel the pinch of the economic crisis, an aide to Medvedev announced that Russian banks will loan more money to grocery chains and pharmacies. Texas engineering and construction giant Fluor has secured a contract from Sibur Group, one of Russia's leading petrochemical companies, for a gas processing expansion project in the West Siberian oil fields.The European banking stocks of commodities tycoon Suleyman Kerimov, meanwhile, have taken a pretty big hit. "He sold out of Gazprom and Sberbank in the late spring, which was smart, but invested the ...

by Edward Hugh: Barcelona Keynes, however, once semi-seriously proposed, as an anti-deflationary measure, that the government fill bottles with currency and bury them in mine shafts to be dug up by the public. Ben Bernanke, Deflation: Making Sure "It" Doesn't Happen Here Many of the macro-economic fundamentals of Spain today are very different from those of ten or fifteen years ago...........A lot of factors look better this time around. Compared to its history, Spain has low interest rates, low unemployment and a strong fiscal position........the 2007 levels of government debt, unemployment and interest rates are about half the level of 1993. Equally, a lot of factors related to debt levels, housing and bank funding are worse versus the last downturn. For instance, the relative size of mortgage debt or total private sector debt to GDP, or the size of the construction sector to GDP, were all about 60% bigger in 2007 than in 1993. As was the bank system’s loan-to-deposit ratio. And the housing PE has expanded almost as much. So when Spanish bank management’s argue that the world today is not like the early 1990s, they are right: some things are better, but others are worse. As Mark Twain noted many years ago, history may not repeat itself but it does rhyme. Spanish Banks, How Bad Can It Get? - Citigroup, September 2008 As I suggest in the title, the contents of this post resembles more an online training session about how the recent proposals to refloat and reinforce the Spanish banking sector may work out in practice than a conventional blog post, but still, this is the weekend, and at weekends, as well as all that interminable football, hiking and tapas snacks in bars, people are supposed to enjoy complementary and value-enhancing activites like going on courses, aren't they? So why don't we have a try. But remember, this topic is only for those with the sternest of stomachs, and the greatest of abilities to find - now what was the word Krugman recently used, ah yes, beauty - in that otherwise most arid of landscapes, the world of financial book-keeping. So, as is the custom in all good training sessions, let's all start by watching a video, just to get us in the mood, and into the swing of things as it were. I think after the viewing what follows may be a lot more digestable, and certainly it should be more comprehennsible. (The version is conveniently supplied with substitles in Castellano the benefit of any Spanish speaking readers who might drop by).

Financial NewsJason Corcoran in Moscow 13 October 2008 Many holdings are up for saleOligarchs on opposing sides of the cash crisis are set to trigger a boom in merger and acquisition activity in Russia and the Commonwealth of Independent States.Cash-tight tycoons are being forced to sell holdings to meet pending margin calls while their rouble-wealthy counterparts are sizing up distressed assets affected by the liquidity crunch.Oligarch Oleg Deripaska had to sell a stake in Canadian auto parts maker Magna to meet a $1bn (€734m) margin call while Ukrainian billionaire Kostyantin Zhevago was forced to sell a large stake in Swiss-based ore miner Ferrexpo worth $180 in order to meet a margin call by JP Morgan.Analysts are predicting Deripaska, who has $28bn, may have to divest further holdings in his Basic Element investment vehicle to shore up his finances….

This post is a guest contribution by Niels Jensen*, chief executive partner of London-based Absolute Return Partners.

It is time to move on. Not that the crisis is over, by no stretch of the imagination. But it is not going to make one iota of difference if I join the blame game bandwagon. It is what it is. Allow me instead to focus my energy on what is likely to happen next. That is more productive and definitely more useful.

A can of worms We are dealing with a rather large can of worms. The lid is off and the worms are all over the place. Let’s focus on what these worms might be up to. For all the

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THE PRICE OF SPOT GOLD bounced 1.6% from an overnight low of $860 on Wednesday, steadying at $876 an ounce as Western stock markets ticked higher despite a raft of miserable Eurozone data. Crude oil rose back above $100 per barrel, while long-dated government bonds continued to rise in price, pushing yields still further below the rate of inflation. The Dollar slipped from two-week highs on the currency markets. "European economic woes should sustain the greenback's safe-haven appeal today," believes Manqoba Madinane at Standard Bank in Johannesburg , "despite downside correction warnings from technical momentum indicators, and this could impact precious metals. "Several other warnings of downside risk for precious metals have emerged," he adds, noting that CDX investment grade credit spreads have narrowed, "indicating receding financial market system risk." Tuesday saw inter-bank lending rates leap yet again, however, with the cost of raising ...

by Edward Hugh: BarcelonaThe euro fell against the dollar yesterday - by the largest amount registered in any single day since the introduction of the single currency in 1999. The drop was effectively a response to the growing signs of strain in Europe's banking sector. Activity in support of banks was widespread throught the day, and across the whole system. The euro fell 2.5 percent to $1.4077 by mid morning in New York, down from $1.4434 on Monday. Early this morning in Europe it was trading in the $1.41 range.This current pressure on the euro is more the result of signs of liquidity problems in the banking sector than it is a response to the growing weaknesses in the eurozone real economies, which, as we saw at the end of last week, are really pretty substantial in their own right. What follows is simply ...

Anyone looking at the headlines coming in from the Northern Hemisphere in the last couple of days would be forgiven for being a little nervous. I have received many calls from savers asking about our banks.

Even over the weekend the news has got worse. British mortgage bank Bradford and Bingley is likely to be nationalised by the government there after it failed to find a buyer. Dutch/Belgian bank Fortis is in crisis talks about either a forced sale or a government bailout. America’s sixth-largest bank, Wachovia, is hunting for someone to rescue it, although it is possible it could be allowed to fail so buyers can snap up assets in a fire sale.

The US$700 billion bailout of US banks by the US taxpayer looks more likely to pass Congress this week after leaders from both sides of the House re-railed the derailed plan. But many

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Financial News OnlineJason Corcoran in Moscow18 September 2008 Energy giant Gazprom's pension fund manager Leader is close to buying up troubled Russian brokerage KIT Finance as the government drew up a "red list" of 15 banks requiring urgent capital injections.In a statement late on Wednesday night, KIT said it was in the final stages of selling a controlling stake to Leader Asset Management with credit support from state-controlled banks Gazprombank and VTB.The rescue of KIT comes as Moscow's stock markets were suspended for the second day in a row and as the state pledged $60bn (€41.9bn) to save banks as a spreading liquidity crisis threatened to push the sector into insolvency.Minister for Finance Alexei Kudrin told Russian media several banks were have difficulties with meeting their obligations and were now holding talks with strategic investors.KIT, a ...

Financial News OnlineJason Corcorcan in Moscow17 September 2008 Russian brokerage KIT is holding talks with strategic investors after defaulting on its debt as analysts suggested a number of small to medium-sized bank are facing similar difficulties refinancing on the repo market.KIT, a second tier investment bank, was forced to look for a buyer after it defaulted on a repo deal. Investment banking sources said a buyer had been found and announcement would be made by close of play today.A KIT spokeswoman declined to comment and said a statement would be made at 5pm Moscow time.Analysts said KIT's problems were contagious and the state would have to intervene quickly to restore liquidity and confidence in the market.David Nangle, director of financial research at Renaissance Capita, said: "There are other banks and boutiques with exposure to repos whereby ...