The Anglo-Dutch steel firm Corus, which is owned by the Indian steel company Tata has asked the government for help to avoid redundancies.

There a number of issues at question here, not least whether governments should be bailing out companies in capitalist economies, as it goes against the capitalist grain. Already we have the banks knocking at the governments door for cash and we now have banks partly owned by the government (not least owning just under 58% of the Royal Bank of Scotland) and the car manufacturers on both sides of the pond looking at bail-out cash.

The worry is of where all this will end and how much of tax-payers money will be spent in propping up companies in this economic situation. As it is the UK government has already borrowed heavily and even more now with tax cuts at the same time as increased spending!

The other issue at question here is that we, the tax payer, are being asked to put in cash to a foreign owned company, which somehow does not seem right! If however Tata are prepared to give up shares in the company in return for cash then fare enough, however, the government will still be playing investor/entrepreneur with tax payers money and with a company that is not actually a British company.

The US car manufacturers are requesting bail-out cash and US congress will be voting on a $15 billion (£10 billion) package as early as today (Wednesday 10th December 2008) for the big-three car companies, which includes Ford, Chrysler and General Motors. In return for this cash the US government is expected to take non-voting shares in the companies and details some strict financial recovery plan for the companies.

The key question to ask is whether or not these companies were already struggling before the credit crisis amid foreign competition from places like Japan, and whether this bail-out cash will be a short-term fix for a larger problem.

As each day goes by we see more and more how the sub-prime lending disaster in the US is impacting more and more and I think that world governments and in particular the UK and US are finding themselves in new territory.

Sales of previously owned homes in the US rose 3.1% in July, as buyers took advantage of falling prices in the wake of the housing slowdown.

Sales climbed to a seasonally adjusted annual rate of 5 million units, said the National Association of Realtors.

While the figures were greater than expected, home sales were still 13.2% less than the level a year earlier.

Many parts of the US worst hit by the US sub-prime crisis have seen prices slump, sending average prices lower.

The median price for homes sold in July fell 7.1% year-on-year to $212,000 (£114,439).

“The small rise in monthly home sales is a reflection of increased sales of foreclosed homes at very low prices, rather than a pick-up in the regular private sales market,” said economist Ian Shepherdson at High Frequency Economics.

“But they all count,” he added.

However despite the increase in sales, the number of unsold homes for sale was sharply higher.

Unsold single-family homes and condominiums increased to 4.67 million, matching the record set in April.

Unsold homes are increasing in the number of foreclosures increase.

Richard Gaylord, president of the National Association of Realtors said: “We hope the new tools in the hands of home buyers from the recently enacted housing stimulus package will spark a sustained sales uptrend in the months ahead.”

News reported by The BBC

US private equity firm Lone Star is to take over German lender IKB Deutsche Industriebank, according to KfW, the German firm’s biggest shareholder.

State development bank KfW has not given details of its plan to sell its 90.8% stake but one source told Reuters it was worth about 100m euros (£79m).

IKB was one of Europe’s first firms to be hit by the US sub-prime crisis.

KfW and other firms intervened to stop IKB from going bankrupt in a rescue package worth several billion euros.

KfW has a 45.5% share in IKB but that is set to increase to 90.8% in an already-agreed deal.

Like other banks, IKB invested in financial products backed by mortgages given to US homeowners with poor credit histories.

IKB faced the threat of bankruptcy as it emerged that it had around $24bn in investments connected to high risk loans.

Once interest rates rose, many borrowers were unable to meet their monthly payments, thereby defaulting on their loans.

More details of the sale are expected to be given at a news conference later on Thursday.

Lone Star – which manages more than $13bn in assets – is reported to have beaten off competition from Swedish bank SEB and fellow US private equity group Ripplewood.

News reported by The BBC