Shocks & Stares » Occupy London H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 en hourly 1 FPS’ Friday Fiver Fri, 28 Oct 2011 17:50:07 +0000 David Chambers Hello All! We’re a little late this week, though happily the ever entertaining Matt Muir provided yet another great Web Curios which has probably kept H&K blog readers’ attentions for most of the afternoon. However, we’re still committed to bringing you a round-up of this week’s news from the world of financial and professional services (and yet again it’s been a week not to miss). It’s a little shorter this week, but we hope you enjoy it as always. Thanks to Ed Jones and Jonny H as always.

WE HAVE A DEAL – JUST…..It went down to the wire, involved a very well received slap-up meal, and what most leaders likely found an annoying intervention from the British PM. However, we have a deal on the eurozone which should see it stabilise for at least a few weeks.

The medicine is nothing if not severe though – a 50% writedown on Greek debt held by private institutions (i.e. banks) and £100bn which needs to be found in order to recapitalise banks and prevent them from falling into the abyss (sound familiar from about 3 years ago?).

Will it work in the long or even short term? The jury is definitely out on that one but already things are looking a wee bit wobbly

THE RICH GET RICHER…THEN RELATIVELY LESS WELL-OFF…THEN RICHER AGAIN…..The info-graphic below from the New York Times captured our attention this week. It tracks the financial fortunes of US citizens dating back as far as the First World War and the original web version can be found here.

Wealth across the years (Image: New York Times)

The figures are relatively self-explanatory but they highlight how the relative prosperity of each segment of society has evolved over time. The Top Fifth of earners have done particularly well of late and in 2007 the top 1% of earners controlled 23.5% of all wealth. If you’ve been following the remarks of Warren Buffett of late you’ll know that the issue of distribution of wealth is a source of some debate in the US at present and only time will tell whether the 21st century will follow a similar pattern. Today’s figures from Income Data Services only fuelled the fire as well.

WHEN IS AN EMPTY TENT NOT AN EMPTY TENT…..On Monday, the Daily Telegraph (and others) shone an infrared camera on tents at the Occupy London site outside St Paul’s. Their results appeared to show that most of the tents were empty during the night, implying that these were the most fairweather of protestors.

It dealt a severe blow to the credibility of the movement, but not it seems the story may not have been entirely accurate. As The Guardian and others reported later in the week, the technology used to hunt for tent-dwelling heat-producing humans wasn’t entirely equipped for the job at hand. There seems to be little doubt that some protesters are sleeping at home, but probably far fewer than some media outlets tried to claim initially.

TESTING THE WATERS OF IMPARTIALITY…..Andrew Marr wrote in last weekend’s Sunday Times about the Queen on the eve of her diamond jubilee. One thing he noted in particular was that while the Monarch retained a thoroughly impartial stance on political matters, she did still enjoy quizzing ministers on matters of policy.

The same doesn’t quite seem to apply to the other supposedly impartial institution at the top of the British power tree, the Bank of England. In another sign that it is becoming increasingly bold with its statements, the Bank’s director of Financial Stability, Andrew Haldane, gave a bold speech on Monday about the dangers as he saw of the 21st century banking system. His comments received the support of prominent commentators, not least for his conclusion that:

“The words bank and bankrupt have common etymological roots dating from the 13th century. In the 13th century it was bankers bankrupting banks. In the 21st century bankers are still bankrupting banks. But it is no longer just banks. This tells us that the risks from banking have been widely spread socially. But the returns to bankers have been narrowly kept privately”

GOOD WEEK/BAD WEEK…..Silvio Berlusconi is pretty much a no-contest winner for the bad week slot this week, finely topped off by some more lurid accusations on Thursday evening.

Good week though goes to our favourite interviewee of the past year, Noel Gallagher, who gave this gem to Shortlist at the back end of last week. Still got it Noel, still got it.

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FPS’ Friday Fiver Fri, 21 Oct 2011 13:22:39 +0000 David Chambers Hello All! We seem to say this every week, but yet again it’s been a very busy and news heavy 7 days in the world of professional and financial services. This week’s Friday Fiver has a distinct air of gloom about it I’m afraid, though we do find room for a spot or two of humour as always. Thanks as ever to Ed, and Jonathan for their contributions.

CHART OF THE WEEK – GREECE: IN A NUTSHELL…..Stephen Hawking’s follow-up to his immensely successful 1988 book on the cosmos was labelled ‘The Universe in a Nutshell‘. As anyone with a passing interest in physics knows, it would take a forest of nutshells to even begin explaining the wonders of our universe. At times, the complex, ever-changing state of the Greek and wider eurozone crisis can feel pretty similar.

Help is at hand though, thanks to a handy chart unveiled by The Spectator this week. Sadly, upon reviewing it, only the most optimistic person would conclude that the eurozone is heading for anything other than very troubled waters.

The options (or not) for Greece (Chart: The Spectator)

THE DEVIL OF THE DETAIL – BANKING RESULTS…..Hot on the heels of Goldman Sach’s results this week came Morgan Stanley’s trading update. Unlike their rivals, MS were able to report a large profit for the quarter of $2.2bn.

Or were they? As some media outlets quickly noted, the majority of MS’ profits for the quarter were a result of the company reducing the value of the debt it holds. Once the benefits of this accounting manoeuvre were removed, the results looked far less impressive - Iain Dey at the Sunday Times provided one of the best summaries of the ‘revised’ picture.

He wasn’t the only journalist somewhat peeved at the sleight of hand either:

BEHIND CLOSED DOORS…..A “dark pool” may sound like a feature of an exotic health spa and for all we know, it could well be. The increasing importance of dark pools in financial markets however was apparent this week.

In simple terms these are markets behind closed doors that allow institutional investors to trade with one another outside public exchanges like the London Stock Exchange. This week we heard that investors are increasingly using dark pools to access and trade privately owned stock in companies like Facebook before they float.

The emergence of dark pools was one consequence of the European Commission’s MiFID regulation which was in part designed to break up the monopoly of public exchanges. Now however the Commission is looking to take back control of its creation amid concerns about their lack of transparency. Complicated stuff, but as always, the FT [article here] explains developments in simple terms and their graphic below illustrates the overarching trend.

PROOF THAT PLAN A COULD BE OK?…..In amongst the growing concern about the eurozone, and increasing focus on the OccupyLondon movement, the ONS announced on Friday that public borrowing for September was below expectations. In addition, borrowing in August was actually lower than first thought.

Does this mean that the Chancellor’s refusal to adopt anything less his Plan A might be starting to bear fruit? Quite possibly, though as the BBC’s Hugh Pym pointed out, much depends on UK growth in the next few months. The Chancellor hasn’t been proved right yet by any means, but at least he now has a proof point to attack his critics with.

GOOD WEEK/BAD WEEK…..Leaving aside the obvious winners and losers over the last 7 days, it was a good week for the economist and Sunday Times columnist, Irwin Stelzer, who picked up the ‘economics commentator of the year’ award at the media industry’s Editorial Intelligence awards on Thursday.

Or at least he would have picked it up if not for a small error by the normally unflappable Robert Peston who is this week’s ‘bad week’ winner. Regrettably for the BBC’s Business Editor, he fluffed his lines on stage by announcing the wrong winner. And thus, the FT’s Martin Wolf walked on stage to collect the prize, only to have it quietly taken away from him 10 minutes later. If you want to read more on this little tale, Roy Greenslade provides a full commentary here. Mr Peston’s stablemate, Rory Cellan-Jones also clearly enjoyed the incident, as well as his colleague’s fashion sense.

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