Astrid Zweynert

Here are two word clouds of G20 summit statements - the first is of today's London meeting. The second is from the G20's Washington summit in November 2008. The cloud gives greater prominence to words that appear more frequently in the text.

Above: G20 statement after London summit in April 2009

Above: G20 statement after Washington summit in November 2008

(word cloudes are screenshots taken from wordle.net)

Stocks went in a tailspin again today as banking stocks tumbled after AIG posted a record loss and HSBC announced Britain's largest ever rights issue.

Banking stocks led the FTSE decline after HSBC's plan of a deep-discount rights issue and embattled life insurer AIG announcement of a $61.7 billion quartely net loss, the biggest in U.S. corporate history.

The sell-off fuelled by fears that the global financial crisis shows no signs of abating pushed the Dow Jones industrial average to its lowest level since April 1997 intraday,  while  the FTSE 100 ended trading at its lowest closing level in 6 years.

"This market is running very, very scared," said Howard Wheeldon, a senior strategist at BGC Partners. "There is just no good news out there."

Other analysts described markets as "having gone into survival mode, just like the companies".

(FTSE 100 since 2004/Reuters Graphics)

How much further do markets have to fall before there is a light at the end of the tunnel? When would you consider buying equities again?

Two-for-one restaurant deals and money off vouchers have shrugged off their "uncool" image as the credit crunch bites, according to a survey, and apparently even Wayne Rooney and wife Coleen McLoughlin have used at least one to get a half price evening meal, despite the Manchester United star's 100,000 pound a week salary. 

The practice - which used to carry a stigma - has topped a list of "cool money-saving options" adopted by people in the economic downturn.

Leaving reduced tips or none at all, buying own brand supermarket products and taking packed lunches to work also made the list.

The list of previously frowned-upon practices also includes selling things on eBay and shopping at discount stores such as Lidl and Aldi.

A spokesman from www.OnePoll.com who carried out the research said: ''We all seem to be embracing social habits that we would never have done last year as they were deemed 'uncool' or socially unacceptable. Paying by two-for-one vouchers would have had a stigma attached to it last year, yet now it's almost more normal to hand over a money-off coupon when it comes to paying the bill at the end of the night.

''Everyone is watching their pennies in the current financial climate so any possible money saving opportunities are being snapped up. Things that used to be considered tight-fisted such as failing to tip or buying own brand food is now common practice.''

The poll of 5,000 Brits revealed over two thirds of people feel the credit crunch has made them less judgmental about embracing money saving measures.

Seventy-two percent even admitted they secretly enjoyed saving money by adopting previously uncool customs. And 69 percent said the credit crunch has actually encouraged them to think about their financial future for the first time in their lives.

Forty-eight percent said they now set a monthly budget for their outgoings and the average Brit is now saving an extra 46 pound per month compared to last year.

Other previously frowned-upon practises helping Brits save cash include taking left-over food from the night before to work and shopping in charity shops.

TOP 10 CREDIT CRUNCH TRENDS (according to www.OnePoll.com)

1. Using money-off vouchers

2. Buying supermarket own-brand food

3. Making packed lunches

4. Refusing to tip waiting staff, taxis or hairdressers

5. Shopping in Lidl and Aldi

6. Selling things on eBay

7. Turning the heating down

8. Driving slowly

9. Shopping in charity shops

10. Re-using carrier bags

The last time round when there was such widespread travel chaos in Britain due to snow was quite some time ago....it was in 1991 - the year the "wrong type of snow" was born - British Rail's ill-conceived attempt to explain why the railways had come to a virtual standstill after heavy snowfall.

The "wrong type" of just about anything has since been used to explain why the country's creaking transport system is grinding to a halt ....remember the one about the "wrong type of leaves" on the tracks?

OK, before you read on I should declare that I'm not British and hail from a country that usually copes with bad weather a lot better than Britain.

But I've been here long enough - 20 years to be precise - to think when I heard on the radio in the morning that no London busses were running at all - that didn't even happen during the Blitz, apparently - ..."oh well, it must be bad then ... better log on from home". And so did thousands of employees, many of them actively encouraged by their employers not to travel to work unless it was "critical".

At least I could rest assured, sorry - work from home assured - when the Metropolitan Police declared in a news release that it was maintaining policing despite the bad weather.

But I still couldn't help thinking:  why is this happening, and shouldn't I make a bit more of an effort to get into the office? Why is there hardly any public transport, forcing so many people to stay at home when there is heavy snowfall? Can't the streets of London be gritted, and why is no one shovelling the snow off the pavement outside their houses, an effort common in many countries that experience wintery conditions?

The cost to businesses is huge - an estimated 1 billion pounds a day as about 20 per cent of the country’s workforce is believed to have taken a “snow day” on Monday.

It's not that it never snows heavily in Britain - but in London it's not so common. London Mayor Boris Johnson, facing questions over the inability of the capital's infrastructure to cope with six inches of snow,  conceded the city did not have enough ploughs to keep the roads clear.

"There's no doubt about it, this is the right kind of snow, it's just the wrong kind of quantities," Johnson told the BBC.

But local councils said the snow was simply "too heavy" for their gritters to work.  "The problem with this sort of weather is when you grit and it snows heavily, of course, the maximum effect of that gritting is lost," the Local Government Association said.

So, it WAS the "wrong kind of snow" again....

The National Galleries of Scotland and London's National Gallery said on Monday they had raised the 50 million pounds needed to save a key work by Renaissance master Titian before it was put up for sale by the Duke of Sutherland.

Of the 50 million raised for "Diana and Actaeon", the Scottish government pledged 12.5 million pounds, 7.4 million came from public donations, 12.5 million from National Galleries in London and another 10 million pounds came from the National Heritage Memorial Fund.

The campaign to save the painting has drawn criticism from politicians who said the money, some of which came from government funds, could have been spent more wisely during a deepening recession.

Should public money have been spent on saving this seminal work of art, one of two Titian paintings being sold by the Duke of Sutherland? And do you think the Scottish public is entirely happy with their money going to a family whose notorious ancestors were involved in the Highland clearances of the 19th century?

A weekly selection of some of the best pictures taken by our photographers in Britain, selected by our visuals editors.

Manchester City's Robinho gestures during a match against Newcastle United in Manchester January 28, 2009. The Premier League star, Britain's most expensive footballer, denied any wrongdoing or criminality after his arrest over allegations of serious sexual assault.  REUTERS/Nigel Roddis

An installation entitled "Tehran Prostitutes" by Shirin Fakhim is seen at The Saatchi Gallery in west London January 28, 2009. The installation forms part of a forthcoming exhibition entitled New Art From The Middle East. REUTERS/Toby Melville

Prime Minister Gordon Brown watches apprentices during his visit to a construction skills academy in Glasgow, January 23, 2009. REUTERS/David Moir

A man stands with a brightly coloured umbrella in Portsmouth, January 28, 2009. REUTERS/Luke MacGregor

Alex Kapranos (C), Paul Thomson (L) and Bob Hardy of rock band Franz Ferdinand perform for fans at a record store, to promote their new album, in London January 26, 2009. REUTERS/Andrew Winning

Swimmers prepare to participate in the opening ceremony of the UK Cold Water Swimming Championships at Tooting Bec Lido in London January 24, 2009. REUTERS/Kieran Doherty

A game of poker is reflected in the sunglasses of player Chris Elliot at the World Series of Poker Europe competition at the Empire Casino in London October 1, 2008. REUTERS/Luke MacGregor

Here is our weekly selection of the best pictures taken by our photographers in Britain, chosen by our visuals editors.

A mother and child walk across washed up timber on a beach in Ramsgate January 22, 2009. 1500 tonnes of timber were shed by Russian ship the Sinegorsk during bad weather on January 19 off the British coast. REUTERS/Luke MacGregor

Liverpool and England player  Steven Gerrard arrives at North Sefton Magistrates court in Southport, January 23, 2009. Gerrard appeared before magistrates on an assault charge. REUTERS/Phil Noble

A couple embrace, as the Canary Wharf financial district is seen behind, in London January 22, 2009. Britain entered recession for the first time since 1991, official data showed on Friday, the first G7 nation to officially confirm that it is in recession. REUTERS/Toby Melville

People watch the televised inauguration speech of U.S. President Barack Obama, at a bar in central London January 20, 2009. REUTERS/Toby Melville

Prince Charles stands next to wooden lasts during a visit to cobbler John Lobb's workshop in London January 23, 2009. The Prince and the Duchess of Cornwall visited three businesses holding the Prince of Wales's Royal Warrant.  REUTERS/Kirsty Wigglesworth/Pool

Melanie Bien, director, Savills Private Finance, is a guest commentator. The opinions expressed in this commentary are her own.

It is too early to say whether the latest bank rescue plan will have the desired effect of persuading the banks to start lending again. But it is a step in the right direction and we welcome it as a positive move as it may just remove the remaining stumbling blocks to getting the credit and mortgage markets functioning properly once more.
Clearly, something further had to be done. October’s £37bn bank recapitalisation did little to persuade banks to regain their appetite for lending. Credit continues to be difficult to come by – unless you have a large deposit or equity in your home and a clean credit history.

The latest bailout aims to guarantee lending and insure banks’ bad debts, such as sub-prime lending in the US. The idea is that banks won’t need to hold back vast sums in case of default on loans – something they have been doing until now. What is particularly encouraging is that this is a comprehensive package of measures which taken together is likely to have more of an impact on increasing new lending than addressing one area at a time.

The new £100bn mortgage guarantee scheme to underwrite lending between banks and financial institutions as recommended in Sir James Crosby’s report, is perhaps the most significant development. Before the credit crunch hit, the securitisation market was a key source of funding for the mortgage market, responsible for a third of all lending. This scheme should help rejuvenate the securitisation market, which has all but closed.

There is a danger that it may prove to be too restrictive, however, as only AAA-rated securities are covered.
Much also depends on how honest the banks are about their exposure to bad debt. A fee-based insurance scheme whereby the Treasury and banks will identify bad loans  or toxic debts that will ultimately be covered by the taxpayer should remove some of the blockages in the system that are preventing the flow of mortgage lending. But without an honest and open declaration of exposure by all the banks, it will be very difficult to draw a line under what has gone before and start afresh.

The extension to the £250bn credit guarantee scheme announced in October until the end of this year should also have a positive impact, allowing banks and building societies to roll over new debt, as should the new liquidity scheme to replace the Special Liquidity Scheme allowing banks to swap illiquid assets for gilts.

The change in strategy with Northern Rock is interesting. Instead of encouraging the lender to run down its business and shrink its mortgage book, the government has changed tack. The bank will now encourage existing customers to stay, presumably with more attractive reversion deals. It will also look to attract new borrowers – hopefully those purchasing, not just remortgaging, with more attractive rates.

We wait to see whether this package will have the desired effect and get banks lending again. Mortgages are already becoming cheaper but tend to be most readily available to the lowest-risk borrowers with significant deposits or equity in their homes. An increase in liquidity should encourage more lenders into the market and more competitive rates.

One thing looks to be sure this year - the housing market has further to fall. Some of the gloomiest predictions are for a further 20 percent slump before a recovery may set in.

Our own Reuters poll of 37 analysts at UK banks, published today, predicts that prices are likely to drop by about 11 percent this year and that it will take until 2010 before it gets better.

How much do you think house prices will fall in 2009?

A selection of the week's best images from Britain.  Click here if you would like to see it as a slideshow.

U.S. actor Mickey Rourke arrives for the UK premiere of his film "The Wrestler" at Leicester Square in London on January 5, 2009. REUTERS/Luke MacGregor

Police examine the car of Manchester United's Portuguese soccer player Cristiano Ronaldo after it crashed in a tunnel near Manchester Airport on January 8, 2009. Ronaldo was not injured after crashing his Ferrari into a barrier in a tunnel beneath the runways. REUTERS/Phil Noble

People stand outside a shop displaying a 'sale' sign on Oxford Street in London on January 1, 2009. REUTERS/Kieran Doherty

A police officer walks across a sea of shoes after demonstrators threw shoes near Downing Street during a protest against the Israeli attacks on Gaza at Trafalgar Square in London on January 3, 2009. REUTERS/Luke MacGregor

A duck walks across a frozen lake in the Sence Valley on January 6, 2009. REUTERS/Darren Staples

Woolworths employees embrace as they wait for the last shoppers to leave the building on the final trading day of a store in Edinburgh on January 6, 2009. REUTERS/David Moir

Prince William delivers a speech in west London January 8, 2009. REUTERS/Toby Melville