markets

31 Mar 2008 [0 Comments | 65 views]

FTSE 100, Dow, NASDAQ, 2008-03-31

31 Mar 2008 [0 Comments | 68 views]

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Oil, gold, pound, dollar, euro, 2008-03-31

31 Mar 2008 [0 Comments | 57 views]

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Have Tesco’s US plans hit the buffers?

31 Mar 2008 [0 Comments | 75 views]

Re-invention is perhaps the mother of survival. Most obvious examples are from the world of pop, where the likes of Madonna and David Bowie changed their persona at regular intervals and probably extended their shelf-life in the process. In the world of business it’s harder, but the successes can be spectacular. There is no better example than the Finnish maker of gun boots, that diversified into electronics, to then become the world’s leading manufacturer of mobile phones – Nokia. For other companies, the re-invention was more subtle, BT and IBM’s shift towards consultancy, for example. Apple got it right too with the iPhone. We remember the successes, but the failures tend to be forgotten. A rock star who re-invents him or herself and then has a string of hits is a genius, but one who gets it wrong, and whose career ebbs away, is dismissed as having lost the plot. The truth is, however, that luck plays a role. To hit upon the right business model is incredibly difficult, but the laws of statistics say some will be successful. For a successful business to then diversify and move into new areas is also tough. Of course some will manage the changeover, but others won’t. At the beginning of the last century, the economist Alfred Marshall drew up a list of the top 100 companies. Mr Marshall was no mean economist, he wrote perhaps the first-ever textbook on the subject that was commonly quoted, and he counted among his pupils John Maynard Keynes. So large and powerful were the companies on Marshall's list, he argued, that they would probably survive indefinitely. He referred to them as the Californian Red Woods – trees that can live for so long that to us humans, with our short life-span, they practically appear immortal. Red Woods have in fact been known to live for over 2,000 years. But in 1999, the economist L Hannah revisited the Marshall list, and discovered that of the 100 largest firms in 1912, 29 had, by the time of the study, gone bankrupt, 48 had disappeared, and just 19 of them were still in the US top 100. The truth is that nothing lasts forever – and for business, which depends on ideas, the life-span can be especially short. And that takes us to Tesco.
City feels the pinch

31 Mar 2008 [0 Comments | 61 views]

Credit crunch, what crunch? While the City moans, the rest of the British economy seems to be doing all right. This has led some to claims that the banks have become too pre-occupied with their own problems and can’t see that beyond their own narrow existence, things are pretty good. Well, there is one snag with that analysis. There are time lags involved. Mainstream business will feel the heat – just give it time. The latest Financial Services Survey from the CBI and PricewaterhouseCoopers LLP revealed that
Eurozone inflation hits highest level since 1992

31 Mar 2008 [0 Comments | 73 views]

What a dilemma. It seems the Fed made two mistakes. First, it let the rate of interest fall far too low earlier this decade – fuelling a consumer borrowing boom and a bubble in asset prices. But, maybe more recently it was too slow to lower interest; as a result, the most recent cuts in rates seem to be having limited effect. A stitch in time saves nine, and it appears by lagging behind the curve, the Fed has left itself with lots of rapid stitching, in an apparently vain attempt to fix the threadbare fabric of the US economy. But now, all eyes turn to the UK and Europe. Many argue that the Bank of England and European Central Bank need to embark both on rate cuts, and on pumping money into the economy now, and in the process avoid the apparent panic that has become endemic at the Fed. But inflation in Europe is on the up. Many think the rate of inflation in the UK could once again move by more than a full percentage point above its inflation target within the next few months, thus promoting another of those embarrassing letters from the Bank's governor to the chancellor. In such an environment, how can the Bank of England start lowering rates? Then this morning, news came in telling us that the CPI rate of inflation in the Eurozone is now

28 Mar 2008 [0 Comments | 56 views]

FTSE 100, Dow, NASDAQ, 2008-03-28

28 Mar 2008 [0 Comments | 72 views]

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Oil, gold, pound, dollar, euro, 2008-03-28

28 Mar 2008 [0 Comments | 59 views]

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House prices close to tipping point

28 Mar 2008 [1 Comment | 66 views]

So it’s five months in a row. The Nationwide now has monthly house price inflation in negative territory for five successive months. It has recorded annual house price inflation at just 1.1 per cent, the lowest level in 12 years, and now has house prices at the lowest level since last April. Intriguingly, the Nationwide seems to have changed its tune slightly, but is not admitting it. "Some of the downside risks we identified ...[previously]... have become a reality," it said, and added "however, the path for house prices in 2008 still looks set to remain within our forecast range. We expect a modest fall in house prices during the year." The Nationwide has not predicted a fall in house prices for a very long time – and although it is emphasising words like ‘modest,’ and saying its latest forecast is compatible with previous forecasts, because in the past it warned of downsides to its projections, it is nevertheless quite an admission. Mind you, it is quite curious that it is talking about only modest falls. Of course, modest is a relative term. Given that house prices have risen by 198 per cent since 1997 (according to the Nationwide), presumably a fall of 30 per cent could be described as modest. The Nationwide itself carries out consumer confidence surveys, and its latest findings are that consumers who were willing to quantify their expectation, on average, expect an annual fall in house prices of around 3 per cent in six months' time. The Building Society's Chief Economist Fionnuala Earley said, “If prices were to fall in line with consumers’ expectations, they would still be higher than two years ago. A moderate fall in prices at this stage should not be unwelcome and should help to ensure greater stability in the market going forward.” So while it denies it has changed its mind, it seems to be suggesting a fall of 3 per cent is both modest and would be welcome. Now that’s interesting, because Capital Economics is considered to be an arch bear of this market, and it expects prices to fall by 5 per cent this year. More interestingly still, Capital Economics reckons 2009 will be worse. And quite frankly, we think they are right. If the UK is lagging a year behind the US, then 2009 will correlate to 2008 in the US. So if even the Nationwide is now contemplating a 3 per cent fall this year, then the omens for 2009 are not good. But perhaps even more light can be shone on to the property market’s less-than-gleaming surface, it we take a gander at the latest report from the British Bankers Association. Mortgage approvals for house purchase came to
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