Shocks & Stares » CBI http://blogs.hillandknowlton.com/shocksandstares H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/12/friday-fiver-3/ http://blogs.hillandknowlton.com/shocksandstares/2011/12/friday-fiver-3/#comments Fri, 02 Dec 2011 16:43:35 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=453 It’s been a big ol’ week in the land of FPS, what with the Autumn Statement, Public Sector strikes, another round of downgrades for Europe’s banks and the beginning of Yuletide. Here’s our take on the week that was.

The Autumn Statement

After declaring the Pre-Budget Report dead, the Government this week delivered their Pre-Budget Report Autumn Statement. It was depressing news, but we all knew it was going to be and it looks set to continue for the foreseeable future. The headlines are lower growth, increased borrowing, a squeezed public sector and more measures to help small businesses, a 0.088% increase in the bank levy and a promise to further reduce corporation tax.

Picture: Reuters UK

What really caught our eye(s) however, were the measures to help mid-size businesses; a theme championed by John Cridland at the CBI, the forgotten army of mid-size businesses have suddenly been remembered. In an attempt to create the UK equivalent of Germany’s Mittelstand, tucked away on page 64 of the Autumn Statement are a host of measures to help mid-size firms achieve their potential and export more proactively. After all, where else is growth going to come from?  

Going down, down, down…..

There’s been so much grim news on the economic front this week that it’s a little hard to pick out the ‘highlights’. To recap quickly – China’s domestic consumption appears to be slowing, as does its manufacturing production; the UK is going to grow very little in 2011, and even less in 2012; Italy continues to have to pay a fortune to borrow money; business confidence that the eurozone will survive is ebbing away; and several stars of The Only Way is Essex are about to be booted off.

Amongst the carnage, two (possibly linked) events stood out. On Tuesday evening, the ratings agency Standard & Poor’s downgraded its investment rating on a string of high-profile banks including HSBC, Barclays and Goldman Sachs. The markets, predictably, took a grim view as the FTSE and other indices headed south yet again. It’s possible, though unproven, that regulators took a grim view as well. On Wednesday afternoon, as most of the UK’s economic journalists were huddling down for some post-Autumn statement analysis at the IFS, the Bank of England and several other central banks released a statement detailing co-ordinated action to lower the cost of borrowing in dollars for banks and other financial institutions. The markets, predictably, took a decidedly less grim view of this and promptly shot up north, yet again. Conclusions? That the global forces buffeting the global economy have become so strong that every announcement either way is now being leapt upon like a cure for cancer – stand by for next week…

Happiness is… a cigar called Hamlet

Who would believe it? Despite being in the depths of one of the worst economic cycles in recent history, the people of Britain consider themselves, for the most part, to be pretty damn happy! In a survey commissioned by David Cameron to gauge how happy the UK is, three quarters of us place ourselves at seven out of ten or higher on a scale of wellbeing.

With unemployment scaling 8% and inflation pushing 5%, you would be forgiven for thinking that the good people of Britain would be pretty miserable. But that good old stiff upper lip and Blitz spirit appears to be in abundance. People claim that their children’s well-being, personal relationships and mental well–being are the things they are most satisfied with. Which basically means that those things that money can’t buy, make us happy and we value them most.

Now isn’t that something to smile about?

Smile! Image Source Page: http://dzzle.com/videos/yogurt+advert

The ultimate compliment

This week we were reading about Warren Buffett’s latest investment, the acquisition of his local newspaper, the Omaha World-Herald Company.

Whilst reading the FT’s report on the subject, we were struck by a realisation of profound significance. Warren Buffett is the spitting image of Carl Fredricksen from Disney/Pixar’s 2009 film Up.

Carl has much in common [full plot here] with Buffett who is known for his kind nature and is a renowned philanthropist. Perhaps Disney/Pixar were paying him a compliment.

The Fiver team were dissapointed to subsequently find via Google that others have spotted the resemblance but we are still claiming this one for industry event small talk.

Carl Fredricksen from Pixar smash Up (Pic: Bloomberg News via The Telegraph)

Warren Buffett (Picture: Disney/Pixar)

Good Week/Bad Week…..

Leaping up the charts this week, it’s tall, thin and very clever economist, Robert Chote, head of the Office for Budget Responsibility. As we noted above, the OBR released decidedly grim numbers on the future of the UK economy on Tuesday, so you might not think Mr Chote would be a particularly happy bunny. He picks up our award however, because as one media commentator put it, Mr Chote is now effectively chief policy officer for the UK economy – based on his numbers, the Chancellor (and probably the Bank of England) have to react.

Hurtling down the charts sadly is former Italian footballer, Damiano Tommasi. The follically-blessed former Roma man came up with a novel solution to Italy’s debt problems this week when he called on his fellow footballers to use their sizeable wage packets to buy Italian bonds at a discounted rate – hence saving the government from having to agree to interest rates of over 7% every time they were looking to top-up the cash register. Sadly, the idea bombed, seemingly never to return.

So there you have it. Thanks to Clare Coffey, Jonathan Henderson and Dave Chambers for their contributions.

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/10/fps-friday-fiver-22/ http://blogs.hillandknowlton.com/shocksandstares/2011/10/fps-friday-fiver-22/#comments Fri, 14 Oct 2011 14:48:34 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=354 Hello All, and welcome to a surprisingly sunny Friday in central London. There’s certainly not been a shortage of financial services and politics related stories this week, and we’ve tried to give you a flavour of some of our favourites below. Thanks as ever to Ed Jones and Jonny H for their contributions.

TAXING TIMES…..Barely a week goes by without the EU sparking controversy on our idyllic isle. Among other things it was the EU’s proposed financial transaction tax causing consternation. As noted by the Telegraph this week, John Cridland said: “The likely effect of many of Brussels’ current proposals will be to damage the UK’s prospects for growth. Nowhere is this more acutely the case than for professional and financial services, which are being bombarded with unwarranted regulation.” He went on to describe the proposals as “a Brussels revenue-raising exercise, and one that will hit London disproportionately hard”. He didn’t stop there though, also slamming Brussels’ plans for Solvency II…

Cridland’s point was very clear - this will lead to the demise of London as a financial centre, to be overtaken by the perennial competitors New York, Singapore and Hong Kong. Sad times.

A TOUGH WEEK FOR GOLDMAN…..A lot of people like to have a dig at Goldman Sachs, but the first time in a while investors now have a reason to complain as well. It’s been a grim week for the world’s premier investment bank. Having their name dragged back into the mud following Raj Rajaratnam’s sentencing to 11 years in prison for insider trading didn’t help. Being accused of dodging a large UK tax bill didn’t exactly add to the party mood either.

These are tricky issues for Goldman, but the real concern for them is their bottom line performance. Ahead of their quarterly results next week, some analysts are suggesting the bank may be headed for an (almost) unprecedented loss. To put this into context, the bank has made precisely one quarterly loss in the past 12 years – right in the heart of the financial crisis. To be fair, it’s not just Goldman. Other investment banks are struggling as well. But when the leader of the pack is looking down at their shoes, you know something is definitely up.

IT’S OH SO QUIET…Shhhhh…..It’s not been a great week for Blackberry users. The company avoided the Friday Fiver’s Bad Week slot but owing to a loose wire or something of that ilk, services across the globe went down and messages piled up in the virtual post-room.

As Alice Ross of the FT observed on Twitter, the business community did not know what to do with themselves. People were forced to talk to each other and instead of shuffling head down, thumb scrolling their way on to the tube, take in their surroundings. Email can become fatiguing and we’re sure this week’s enforced rest will not have done anyone any long-term harm.

APPS FOR FINANCE…..The tweet below caught our eye this week from Hargreaves Lansdowne’s Tom McPhail, signalling an interesting development in the way that people manage their investments.

GOOD WEEK/BAD WEEK…..It remains pretty hard to find people or companies enjoying good weeks at the moment, but the FT’s Claer Barrett managed to find two on Friday. As she noted, both Harrod’s and Poundland posted strong trading results this week. Regardless of which end of the retail spectrum you’re at, the message is clear – if you’re a market leader, there is still room for growth. It’s mainly those in the chasing pack that are struggling at present.

As for bad weeks, Goldman above qualifies for one definitely, but we’re plumping for BNP Paribas. It’s tough enough being an investment bank at present anyway. But what you really don’t need to add to your woes is one of Germany’s leading business newspapers losing its rag with you and publishing a quite unique interview, minus any of the words uttered by the bank’s chief executive (you can see the worded version here). PR’s a tough game sometimes….

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