Monday, September 16, 2013

UK starts Lloyds Bank privatisation; New wealth record for US super-rich; Airbnb's revolution in a spare room


1 UK starts Lloyds Bank privatisation (BBC) The government's sale of Lloyds Banking Group has begun, with big investors being offered 6% of the bank. Based on Monday's closing share price, that stake would be worth £3.3bn and the deal will cut the government's stake in Lloyds to 32.7%. Back in June, the Chancellor of the Exchequer, George Osborne, announced that the government was preparing to sell its stake.

The sale of Lloyds is a big privatisation. The 6% stake is worth more than the expected market value of the entire Royal Mail, which is due to be privatised in the next few weeks. From today big investors will be able to say how many shares they want of Lloyds and at what price. The government and its advisors will then look at those offers, decide on a price and divide up the available shares.

In August, Lloyds announced profits of £2.1bn ($3.2bn) in the six months to the end of June, compared with a loss of £456m for the same period last year.

2 New wealth record for US super-rich (Jennifer Rankin in The Guardian) Five years after the 2008 financial crisis, America's super-rich have recovered all their losses to see their wealth reach an all-time high. According to Forbes magazine the 400 wealthiest Americans are worth a record $2.02 trillion, up from $1.7tn in 2012, a collective fortune slightly bigger than Russia's economy. 

In another sign of fizziness at the top of the economy, the cost to enter the billionaires' club has also gone up to levels not seen since the 2008 crash. In 2013, an aspiring plutocrat needs at least $1.3bn to make the Forbes list – the highest since just before the collapse of Lehman Brothers sent stock markets plummeting.

Bill Gates has been named as the richest American for the 20th year in a row, with a personal fortune of $72bn. The computer entrepreneur turned philanthropist recovered his position as the world's richest man in May, when he overtook mobile phone tycoon Carlon Slim, who had held the top spot for the previous four years. In second place is Warren Buffett, the investor feted for his shrewdness. Buffett, with a fortune of $58.5bn, was one of the biggest gainers in 2013, which helped him retain his place on the list. The outspoken founder of software company Oracle, Larry Ellison, takes third place with a $41bn fortune.

According to Forbes, one in 10 of the top 400 richest Americans are foreign-born. These include George Soros, the Hungarian-born investor. Others include Ukranian-born serial investor Len Blavatnik ($17.8bn); Russian-born Google co-founder Sergey Brin ($24bn) and the Australian-born media tycoon Rupert Murdoch ($13.bn).

3 Airbnb's revolution in a spare room (Carol Cadwalladr in The Guardian) Founded by two designers, Brian Chesky and Joe Gabbia, and a technologist, Nathan Blecharczyk, in 2008, Airbnbt is now the granddaddy of what has come to be known as the "sharing economy". Its rate of growth is phenomenal. At the start of 2012, one million people had used the site. By the end of 2012, it was 4 million. And the effect – on the hotel industry, on people's travelling habits, on householders' incomes – is only just starting to be felt. There's an economic revolution that Airbnb is spearheading. And it's happening in people's bedrooms.

Airbnb takes a booking every two seconds, and there are now 300,000 rooms, apartments and houses listed on the site (including 500 castles, 200 treehouses and 1,400 boats). There are a lot of people saying that Airbnb is the next eBay; one of the most recent attempts to value it has it going public for an estimated $10bn. Although Blecharczyk is keeping his cards close to his chest, it's clear they're not going to stop at apartments. "I think there is a lot before us that people can't fully anticipate," he says. He's probably right. Because who could have anticipated this?

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