friday night flight or fight, page-19

Weird day - weird markets. This was the newspaper summary for today from a UK market roundup service - and the FTSE is up 30 points! Suppose it's all hanging on George and Ben later.....

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Royal Bank of Scotland became the latest bank to admit discomfort from the credit crunch as it parted company with the head of its once-booming collateralised debt obligations unit, reports the Times.

Rick Caplan, managing director and co-head of CDOs at RBS Greenwich Capital in the US, has left the bank, along with six of his colleagues. RBS aggressively and profitably marketed CDOs - packages of sub-prime mortgages and other asset-backed securities - both originating deals and then selling them on.

Profits at the big investment banks of Wall Street and the City of London will collapse by 70% in the second half if the credit crunch proves as fierce as in 1998, Standard & Poor’s said yesterday. The debt rating agency predicted that revenues would collapse by 47% in the second half if the dislocation followed a similar pattern to the dark year when Russia defaulted and the hedge fund Long-Term Capital Management collapsed, writes the Times

Hedge fund Cheyne Capital Management is pleading with investors for a stay of execution for its structured investment vehicle (SIV) after the crisis in the commercial paper market pushed the SIV close to meltdown. The fund is asking investors in its $6.6bn (£3.3bn) Cheyne Finance SIV to agree to a refinancing to prevent an enforced sale of assets, says the Independent.

Meanwhile, Alistair Darling could face a multi-billion pound tax shortfall in the coming year as the City's market misery takes its toll on bonuses and bank profits. The Treasury could miss out on as much as £2bn in tax revenues if the coming round of City bonuses disappoints, according to preliminary estimates by the Daily Telegraph and financial experts.