Trading on the LSE’s electronic platform was shut down this morning on one of its busiest days of the year.

The timing of the shutdown is unfortunate for the LSE, which is facing increased competition from rival trading platforms such as Turquoise, a Europe-wide platform set up by a number of the world’s biggest investment banks.

Another rival, Chi-X, claims to have taken over 15 percent of trading in FTSE 100 stocks recently.

To counteract the challenge, the LSE slashed trading fees at the start of this month in response to a partial launch of Turquoise, which is not due to start trading proper until October.

Today’s debacle was thought by the BBC’s Business Editor Robert Peston, to have serious consequences for the exchange. A great deal of money was tied up in the system, money that could not be used in a rapidly rising market.

The United States’ Federal Reserve has just cut base rates by a whopping 75 basis points or 0.75 percent, indicating that it regards recession as more likely than not.

Recession now seems inevitable

Syntagma has an in-depth analysis of the upcoming recession. Here’s a taster :

As we’ve been saying here in Syntagma for some months, a long, deep worldwide recession now looks more likely than not. Opinions are hardening among key players, principally in America and Britain.

Yesterday, the Wall Street Journal proclaimed : “U.S. warning signs point toward deep recession”.

Now even the insurance companies, or Monolines, that underwrite possible defaults, are also in trouble, with two of the biggest in the U.S. said to be close to Chapter 11 status (a form of bankruptcy protection against creditors).

Clearly, with the Fed in near panic mode something nasty is moving in the undergrowth.

Dividends are a welcome addition to investor’s returns on their shares. they represent the portion of profits that companies distribute to shareholders.

However, it’s not widely known that reinvesting them can greatly increase returns on share investment. Growth in dividends from Footsie 100 shares in the UK has outpaced inflation over the last 20 years, according to M&G. Indeed, they have grown by 31 percent over the past three years.

Ben Willis, Head of Research at Whitechurch Securities said, “Volatility in the market can benefit the long-term investor. If you reinvest dividends you get more units for your money, which puts you in a stronger position when markets rebound.”

Reinvesting rising dividends often bring handsome returns. Anyone who invested in, for example, the M&G Extra Income fund 20 years ago will have doubled their capital and would have received total net income payments of 176 percent of their original investment. Those who reinvested those same dividends would have seen their investment increase fivefold in the same period.

More financial journalists have been giving their top tips for shares on the London Stock Exchange during 2007. Here’s a list of their suggested buys :

Lucy Farndon : Royal Bank of Scotland.
Brian O’Connor : Ark Therapeutics.
Alex Brummer : Prudential.
James Ashdon : Vodafone.
Geoff Foster : Redstone.
Ian Lyall : Oakdene Homes.
Tamsin Brown : Rank.
Manfreda Cavazza : Tesco.
Karl West : ICI
Sam Fleming : Geiger Counter.

All of the above are from the Mail Group of newspapers.