Shocks & Stares » China 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 FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2012/01/fps-friday-fiver-29/ http://blogs.hillandknowlton.com/shocksandstares/2012/01/fps-friday-fiver-29/#comments Fri, 06 Jan 2012 18:20:08 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=475 This is the last time in 2012 I say this – Happy New Year! I hope you all had a good Christmas but now it’s done let’s look forward to what will no doubt be a memorable year, in many ways, most of which Dr Doom will relish, but many of which are truly historic. Here is our first fiver of the year.

Probably the best recovery of any opposition party in history

So the Labour Party hasn’t had the best of weeks. In fact on Thursday it really didn’t have the best of days. Firstly, Lord Glasman, adviser to Ed Miliband, gifted the tories and the so-called ’Miliband hunters’ in the Labour Party with a stinging critique of the Labour leader’s, err, leadership. Shortly after this excitement, Diane Abbott kicked up a storm over comments she made on twitter, later interrupting an interview on Sky News to take a call from Ed Miliband himself, who proceeded to give Abbott a ‘severe dressing down.’ The icing on the cake was a leaked strategy document script for broadcast (according to Labour HQ), which is worth a read, if you haven’t already (P1 & P2), and yes, it does include those fateful words in the above subtitle.     

Count the cars

No doubt you’re bored of hearing about Europe and the mess our inter-dependent economies now find themselves in. The simple fact of the matter is, the problems are not over, and 2012 is set for more of the same.

Singing a different tune at the end of 2011 however, Sam Jones, the FT’s Hedge Fund Correspondent penned an intriguing piece about the lengths hedge fund managers go to find out what they are investing in. The crux of the article was that all may not be quite as rosy as it seems in the East and that problems may lurk within the Chinese economy. Hedge fund managers have dispatched intelligence gatherers to factory gates to “count the cars” and ensure official figures match realities on the ground.

Image: http://thefederalist-gary.blogspot.com/2011/07/real-estate-bubble-chinas-ghost-towns.html

The article also linked to a video of hedge fund manager Hugh Hendry dating back to 2009 on a jaunt amongst seemingly empty Chinese skyscrapers pondering who is actually going to rent these steel giants. Both the article and the video are worthy of five minutes of your attention.

Top 50 Most Valuable Brands in China

Moving seemlessly from empty skyscrapers to those who might fill them.

Click on the image – Simples!

Old hacks new tricks

After tweeting this in error, Sky’s crime correspondent Martin Brunt gave a quick lesson in how to shut down an embarrassing moment with this swift response.

Tweet that

A precise report which helpfully landed in our inbox earlier today revealed the following:

Who ‘owns’ your company’s Twitter followers?

A US firm is suing a former employee who took 17,000 Twitter followers with him when he left the company. PhoneDog Media is seeking damages of up to USD370,000 from Noah Kravitz after claiming the costs and resources invested in its followers and fans were substantial. Kravitz speaks to TheDroidGuy about the dispute and says the company never asked for the Twitter account back and suggested he could tweet on its behalf. In contrast, PhoneDog president Tom Klein says the Twitter account was created to promote PhoneDog content and to give fans a chance to follow Noah ‘as a representative of the company’. The New Statesman says the case could have far-reaching legal implications regarding the value of social media and its users and how intellectual property law has adapted to the emergence of social media. The outcome could also influence how companies choose to use and invest in such technology in future.

It is an interesting development, and follows (to some extent) the debacle around Twitter account ownership of Laura Kuenssberg, who you may remember, moved from the BBC to ITV taking some 60,000 followers with her. The central question (or one of them) being are you following the tweeter due to the specific interest you may have in them as a person, or because of the inherent brand association they enjoy thanks to their role i.e., were you following Laura Kuenssberg, or the BBC ‘s Chief Political Correspondent?

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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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Same inflation, different growth – China vs the UK http://blogs.hillandknowlton.com/shocksandstares/2011/10/same-inflation-different-growth-china-vs-the-uk/ http://blogs.hillandknowlton.com/shocksandstares/2011/10/same-inflation-different-growth-china-vs-the-uk/#comments Tue, 18 Oct 2011 13:39:25 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=367 It’s been an exceptionally busy morning of news today. Not withstanding Goldman Sach’s widely predicted poor Q3 results (which we discussed last week alongside many others), two key stories stand out today.

Firstly, China reported another slowdown in its growth. This is likely to send shivers down chief executives’ spines, as the global economy continues to cling onto China as its last great hope for growth. Then again, the word ’slowdown’ still masks the impressive statistic that China continues to grow at nearly 10% a year.  Inflation is coming down too, and a ’soft landing’ seems more likely than a hard bump.

Over in the UK meanwhile, George Osborne would likely kill for even a tenth of the 9.1% growth China reported. Instead, he has to grapple with another round of uncomfortable economic headlines, this time regarding inflation, which soared to 5.2% in September (or 5.6% if you prefer the old measure).

The news is particularly grim on the energy and food bills front, according to the ONS. It’s equally desperate for savers – as one of our clients pointed out today, savers are seeing a £10,000 pot in a savings account depreciate in value by around £500 a year, thanks to the combination of high inflation and low interest rates.

High Inflation + large budget deficit + stagnant growth + interest rates that can’t go much lower.

That’s the uncomfortable equation again confronting the Chancellor today.

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