Those returning to work this week after their summer holidays may be a trifle bemused by the news in their papers and on radio & television. Is the economy getting better or are we on the cusp of another dip into recession?
The figures, as ever, are confusing: UK growth in the second quarter was revised upwards last week (albeit by a fraction) while GDP in the US in the same three months was scaled back sharply. Yet German growth enjoyed its fastest pace since unification.
And while stock markets have a bad case of the jitters at present, seemingly lost about which way to turn, corporate activity is powering ahead with record summertime M&A deals and a number of major cash-calls on the way.
Even central bankers enjoying their end-of-August retreat at Jackson Hole in Wyoming (although, as usual, not Mervyn King) appear at sixes and sevens over whether the US, UK, eurozone and global economies are really facing a slide back into recession.
What is going on? The answer, of course, depends on whether you are a glass half-full or a glass half-empty sort of person - and central bankers, highly-paid financiers and Cabinet ministers are as prone to this syndrome as the rest of us.
Much of the media, of course, prefers the doom-and-gloom outlook of events (it makes for a better story) while those holding the levers of power tend to be on the optimistic, glass half-full side. The coalition government obviously has a bit of a problem with this, since it is trying to be serious about the need for spending cuts while at the same time not 'frightening the horses', as they say.
In fact, there is always the possibility we are actually drinking in the 'Last Chance Saloon' for the economy, so it is probably best to just keep filling the glasses up... - David Churchill
Federal Reserve chairman Ben Bernanke made clear at the annual Jackson Hole meeting of central bankers that he would use all available tools, including holding more Treasury bonds and other long-term securities, to boost the flagging US economy. His comments came as revised US growth figures for Q2 showed GDP on an annualised basis down from 2.4% to 1.2%, a contrast to the UK where Q2 growth was revised upwards from 1.1% to 1.2%. For Bernanke, the stakes he now faces over US recovery are higher than at any time since the financial crisis was at its peak. But, in an editorial, the FT suggests there may be little Bernanke can do 'beyond not rocking the boat'.
[ pp.1, 3, 5, 9, 8 ]BBC director-general Mark Thompson has launched an attack on BSkyB chairman James Murdoch and his father Rupert, who he claimed were among the 'commercial and political forces' seeking to undermine the BBC's independence. Thompson's comments, in a speech at the Edinburgh television festival, were a delayed response to James Murdoch's own criticisms of the BBC at the same event last year. Thompson also said News Corporation's plan to acquire the near-61% of BSkyB it did not own would create a concentration of cross-media ownership not allowed in either the US or Australia.
[ p.1 ]Research in Motion has rejected latest Indian government demands for access to Blackberry e-mails and messaging services, claiming it did not have the encryption codes as these were generated by its corporate clients. India has set a Tuesday deadline for the country's mobile operators to shut down Blackberry's messaging services unless the codes are given to its security agencies.
[ p.4 ]Dana Petroleum delayed launching its defence against the £1.87bn hostile bid from Korean National Oil Corporation when it unveiled interim pre-tax profits on Friday of £82m. Dana had been expected to disclose a £240m deal to buy North Sea assets from Canada's Suncor but only said it would release a detailed response to the KNOC bid on 8 September.
[ p.13 ]...thinks that many economists and investors are privately fretting that a new crisis is on the way, or even that the last one never really ended.
...Releasing money in circulation but not used, such as unwanted store gift cards and dormant bank accounts, would give a timely stimulus to the US economy, although cashing in all these sources of 'free money' at the same time would also lead to trouble.
...Tales of mammoth traffic jams in China are a reminder that the country's infrastructure is still struggling to keep pace with rapid economic growth.
...Experience in the US and other developed nations suggests that technology has undoubtedly made more people richer over the past century, although this extra wealth this has not reduced the numbers in work as once seem likely.
[ p.22 ]...James Mackintosh says investors are starting to realise that under-performing hedge funds probably reflect the fact that many are little more than just overpriced mutual funds, with the top performers achieving their success through uncorrelated efforts ranging from expensive lawsuits to exotic derivatives.
[ p.22 ]...Mark Kleinman thinks HSBC chairman Stephen Green is likely to become the latest business leader to turn down the offer of filling the vacant Trade Minister's job in the coalition government.
...Connaught's beleaguered chairman Sir Roy Gardner has rejected an approach from Centrica to buy back the GasForce business Gardner sold to Connaught in 2002 when he was Centrica CEO.
...TNK-BP has appointed Credit Suisse to advise on a possible bid for BP's interests in Vietnam and Venezuela.
[ p.13 ]...Patrick Hosking says Rightmove has proved an online winner in spite of a shaky start when it floated in 2006.
...Fears of a double dip recession on both sides of the Atlantic look overdone.
...Boeing's public castigation of Rolls-Royce over its engine problems does not bode well for their future relationship.
...The Pensions Regulator is being asked to adjudicate on the size of the pension fund deficit at EMI, the first time it has been asked to make such a decision.
[ p.51 ]...Alistair Osborne thinks Tullow Oil may have to accept that Heritage Oil CEO Tony Buckingham has proved more clever and ruthless in getting out of Uganda without paying a disputed tax bill.
...If Korean National Oil Corporation holds its nerve it is likely to get Dana Petroleum for the £18 it has offered, whatever Dana CEO Tom Cross may say or do.
...Aga Rangemaster's return to profits is almost entirely due to a £16.3m accounting gain from freezing pensionable pay rather than improved trading.
[ p.35 ]...Stephen Foley says the irrational bidding war between Hewlett-Packard and Dell for loss-making 3Par is a sign that both sets of directors have let the 'clash of the tech titans' rhetoric go to their heads.
...The US Supreme Court or even Congress may now have to decide whether the Federal Reserve should be able to keep secret the details of which banks applied for government support during the financial crisis.
...Doubts remain on both sides of the Atlantic over whether quantitative easing really helps the economy.
[ p.55 ]...Ben Laurance thinks the economic outlook is more challenging than the Q2 growth figure of 1.2% suggests, which could see the coalition government's nerve tested over its commitment to public spending cuts.
[ p.105 ]...Andrew Johnson thinks even the fact that Ben Bernanke was forced to promise fresh stimulus measures if necessary is a cause for concern.
...The possible move by Thailand's Sahaviriya Steel Industries to restart steelmaking on Teeside shows just how the global economic power is shifting.
...Aga Rangemaster's iconic ovens are becoming increasingly popular in France, it has emerged.
[ p.71 ]Warren Buffett's Berkshire Hathaway is among the potential bidders for Royal Bank of Scotland's Direct Line insurance business which the bank is being forced by the EC to sell following its government bailout. RBS had been considering a float of Direct Line in 2012 but heavy losses from its car claims division has made a sale more likely, especially given the level of interest.
[ p.3.1 ]Vodafone is planning to raise more than £4bn from the sale of its stake in China Mobile as part of planned asset sales. A deal could be announced next month ahead of Vodafone's strategic update due in November, although the board has yet to decide whether to find a strategic investor to take on the stake or place it on the Hong Kong stock exchange where China Mobile is listed.
[ p.3.1 ]BP's institutional shareholders are reportedly seeking to resurrect the career of the oil major's outgoing CEO Tony Hayward by paving the way for him to take on another senior role as either CEO or chairman at a large mining or engineering group. The investors think Hayward was unfairly made the scapegoat for the Gulf of Mexico disaster and, at 53, has another major job left in his career. Meanwhile, BP's Gulf of Mexico partner Transocean faces increased scrutiny over its role in the oil leak at the Deepwater Horizon well.
[ pp.3.1, 3.7 ]Bank of England deputy governor Charlie Bean has warned that further government support for the economy may be needed to ensure the recovery continues. His comments, at the annual Jackson Hole meeting of central bankers in the US, comes as revised forecasts from BNP Paribas and the British Chambers of Commerce suggests UK growth will be ahead of expectations, although the threat of a double-dip recession is still a worry for the markets and business.
[ pp.3.1, 3.5 ]Numis Securities is facing a US$95m compensation claim from Fidelity and London-based hedge fund CQS over allegations that Numis made 'fraudulent misrepresentations' during a US$150m fundraising for Canadian oil company Rock Well Petroleum in 2007. At about the same time Omega Oil of the US launched a legal claim that Rock Well had infringed its patents, although it is claimed there was no mention of this in the fundraising memorandum. Numis says the claim is spurious and will be defended 'robustly'.
[ p.3.3 ]A bonus pot of £31.3m has been shared by two London hedge fund managers after their Bluegold fund, set up in early 2008, successfully took advantage of oil market volatility over the past two years. Pierre Andurand and Dennis Crema were previous senior traders at oil trading giant Vitol.
[ p.3.3 ]...Dominic O'Connell says the Serious Fraud Office should resist taking the easy option of 'doing a deal' with Asil Nadir and press charges against him.
...Bumper interim profits from Agricultural Bank of China reflect the Chinese government's demands last year to pump extra money into the economy to fuel growth, a move which could lead to waves of bad debts for the banks over the next few years.
...The surprise decision by Royal London CEO Mike Yardley to step down in the middle of a rescue takeover of rival Royal Liver shows just how out of touch the 'world of mutuals' has become in contrast to the cut and thrust of real financial markets.
...Part of the delay for Boeing's Dreamliner project has been its attempt to cut costs by farming out production around the world, emphasising that globalisation of such complex programmes only works if tight control is maintained.
...Outgoing Corus CEO Kirby Adams deserves some praise for finding a rescue deal for the mothballed Teesside steel plant, especially given the vilification he received when he announced the shut-down last year.
[ p.3.4 ]...Peter Spencer, economic adviser to the Ernst & Young Item Club, thinks that if the government comes anywhere near achieving its aim of eliminating the budget deficit in the current Parliament, then it will mean interest rates will probably stay lower for longer than the market expects.
[ p.3.4 ]...Irwin Stelzer says uncertainty at the Federal Reserve about what to do to keep the recovery on track means it is little surprise that investors have headed for the perceived safety of US Treasury bonds in spite of their low yields.
[ p.3.4 ]...James Ashton reveals how the Oxford University Press has become the most successful university publishing house in the world, making a £99m profit last year and contributing £67m to the university's funds.
...Sean O'Driscoll in New York reports on the continuing courtroom battle over claims by the Lehman Brothers estate, trustees and creditors that Barclays Bank was able to buy the assets too cheaply because of alleged collusion with Lehman executives.
...Matthew Goodman says that food sales are now more important than drink revenues in many pubs as a result of changing consumer habits.
...Iain Dey suggests that HSBC's move to take a controlling stake in South Africa's Nedbank is part of its developing strategy to become a truly global player.
...Kate Walsh reveals that J Sainsbury CEO Justin King is already coming under pressure to justify the £20m sponsorship - its biggest-ever such deal - of the 2012 London Paralympics.
[ pp.3.1, 3.6, 3.7, 3.12 ]Treasury chief secretary Danny Alexander, responsible for agreeing the public spending cuts with Whitehall departments, has warned in an interview with the Observer there that there will be no reduction in the overall tax burden for at least five years. His comments will dismay Tories in the coalition government who believe tax cuts would help secure a majority at the next general election. Meanwhile, the funding of a new Trident nuclear deterrent out of the MoD's budget could see several Army regiments disbanded, including the Gurkhas.
[ pp.1, 8-9 ]...Ruth Sunderland, in her final column as Business Editor, thinks that in spite of the difficulties in reconstructing the evidence against Asil Nadir, it is important for the creditors of collapsed Polly Peck that the Serious Fraud Office passes ahead with charges.
...Public relations people are likely to get little sympathy over their belief they are being unfairly stigmatised by the government as being a prime target for Whitehall cuts.
[ p.39 ]...Jon Davis, a history lecturer at the University of London, believes the Treasury is now back on the front-foot after its reputation and confidence 'went to the wall' during the recession and financial crisis.
[ p.39 ]...Peter Preston says that while the BBC continues to fight its many opponents on several fronts, the real solution to its problems is that it needs to break free from the shackles of the licence fee.
[ p.40 ]Leading British companies are to urge the government to scrap plans to break up the banks, arguing that it would make banking facilities more expensive and less efficient. The companies, who are not named, are said to be planning to use a CBI consultation process on the issue to coordinate their campaign.
[ p.B1 ]Nathan Kirsch has told the Sunday Telegraph he believes Minerva should be split into two with half the property group turned into a real estate investment trust. Activist investor Kirsh, whose KiFin investment vehicle owns 29.5% of Minerva, is seeking to replace the chairman and CEO at an EGM on 8 September, although Minerva claims this is a takeover bid by default.
[ pp.B1, B7 ]...Kamal Ahmed says Vince Cable's trade trip to Brazil this week, along with the heads of several major companies, highlights the potential importance of South America as a key export market just as much as China and India.
...George Osborne should appoint Robert Chote, director of the Institute of Fiscal Studies, as new head of the Office for Budget Responsibility in spite of the IFS's criticisms of the emergency Budget in a report last week.
[ p.B4 ]...Liam Halligan, chief economist at Prosperity Capital Management, thinks the US authorities are well aware that global investors cannot afford to dump US Treasuries without harming themselves, so the Administration can continue to bang the drum of 'ever looser money and more profligate government'. But UK and eurozone government bonds do not enjoy the same protection.
[ p.B4 ]...David Buik, an analyst at BGC Partners, believes greater transparency by the banks and sensitivity towards the needs of their clients would go a long way to improving their reputation with the public.
[ p.B4 ]Malaysia's US$112bn Employee Provident Fund has hired ING Real Estate Investment Management and RREEF, the property fund management arm of Deutsche Bank, to establish a £1bn European property portfolio. It has allocated each £500m of equity for acquisitions, part of a wider strategy to diversify its asset base outside Malaysia.
[ p.77 ]...Mark Leftly thinks there are plenty of reasons to be cheerful about the economy and outlook for the City, in spite of fears for the stock market and a possible double-dip recession.
...BP chairman Carl-Henric Svanberg should back former BHP Billiton CEO Charles 'Chip' Goodyear as one of two new non-executive directors, even if it leads to speculation that he is in line to replace him as chairman.
...British businesses risk losing out from the 'golden opportunity' of the 2012 London Olympics unless the games are better promoted at home as well as abroad.
[ p.83 ]...Hamish McRae believes that once the global recovery is secure - which it will be in the next 18 months - the next big threat to world financial stability will be the high debt mountain.
...While the domestic tourism industry appears to have had a good summer, much will depend next year on the exchange rate as a rising pound will make the UK less attractive to overseas visitors while at the same time encouraging more Britons to holiday abroad.
[ p.82 ]...Deirdre Hipwell reports on the problems facing the major pharmaceutical groups as they lose patent protection on their blockbuster drugs, with few replacements in the pipeline.
...Deirdre Hipwell reveals how Aim-listed ITM Power is developing hydrogen power technology for commercial vehicles in spite of little support from the government
[ pp.80-81, 85 ]...Lisa Buckingham thinks the UK authorities should take a look at a Canadian organisation called Investment Canada which has to be convinced by a foreign predator that there is a 'net benefit' to Canada if a takeover bid is allowed to go ahead. But while this is to be admired, Canada's 'quite breathtaking support for price-fixing cartels' is not so welcome, especially the moves to force BHP Billiton if it takes over Potash Corporation to agree production quotas with other producers.
[ p.74 ]Taking Stock: Simon Watkins suggests the current outbreak of M&A activity is mainly linked to commodity deals in emerging markets rather than any fundamental sign that 'happy days are here again'.
Economics: Dan Atkinson says this week's Bank of England figures for lending to individuals are likely to be fairly flat, which is now regarded as bad news even though the pre-2007 borrowing binge was seen as one of the causes of the financial crisis.
Outlook: The Restaurant Group is expected to report interim profits on Thursday up 9% at £23.7m.
[ p.78 ]...Tracey Boles thinks BBC employees who vote for strike action over proposed curbs to their pensions will receive little public sympathy, especially since many workers in the private sector have already had to put up with adverse changes to their retirement funds.
...Federal Reserve chairman Ben Bernanke has few credible options to boost the US economy if necessary, which makes it increasingly likely there will be a bumpy ride ahead.
[ p.F2 ]He helped M&S repel invaders: can he charm the investors?
Robert Swannell, Marks and Spencer chairman-elect, was a key player in the retailer's defence against the hostile takeover bid from Sir Philip Green in 2004. But M&S insiders believe it is Swannell's experience as a senior non-executive director of British Land during the transition years following the retirement of Sir John Ritblat that is more relevant. Yet given the iconic status of M&S in the country, Swannell will find chairing the retailer a 'massive job' and he would do well to follow his predecessor and wear M&S suits at the company's AGMs.
[ p.53 ]Bookmaker gambles the future on football
Ralph Topping, CEO of William Hill, is defensive over suggestions that betting shops are rather an anachronism in the age of online and offshore betting. He claims that shops are still popular with working class punters, although also points out that betting on horses is being overtaken by gambling on football matches. In particular, Topping highlights the growth of 'in-play' gambling (where bets are placed during actual games) which he says has been 'phenomenonal.'
[ p.3.6 ]'An average engineer in India costs $7,000, an engineer in the UK costs $45,000'
Azim Premji, chairman of Indian IT services group Wipro, is investing heavily in India's educational system because he fears low standards will hamper the country's economic growth. Premji has a reputation for austere living (he drives a Skoda and flies economy) and has pledged to give away most of his fortune, estimated at about £11bn. But he appears irritated over the UK's apparent obsession with offshoring and outsourcing, pointing to Wipro's wide range of IT activities, which includes consultancy, process management and software development and infrastructure.
[ p.B9 ]David Kenton, group managing director of lingerie company Rigby & Peller, is embarking on an ambitious expansion programme for the privately-owned business although insists this will not be at the expense of his traditional customers, which includes the Queen. New shops are being opened in fashionable market towns such as Harrogate and Bath rather than big cities.
[ p.77 ]