There is something special about Sunday morning, hot croissants with honey and butter, excellent. Headlines this week, Christine Lagarde, head of the IMF was invited to speak at Jackson Hole. In Europe, mandatory recapitalsation of the banking sector is on the agenda. In the US, the government is urged to do something about house prices, including debt write offs for homeowners. Excellent, so much for moral hazard, free markets and the socialist agenda. Let the markets eat cake, we say.
The IMF leader calls for a vision in Europe which includes fiscal rules that work, imagine that. David Smith picks up the European theme in his call for a united Europe but cannot resist a plug for his own excellent book - Will Europe work c1999.
In the UK economics news was light on the ground, the GDP figures were unchanged, the migration figures confirm things are bad, the Poles have stopped coming to the UK. Martin Weale, new man on the MPC has called for a further round of QE just as Bernanke eschews a further round in the USA.
Actually the Bank of England prefers the term asset purchases to QE. What does it achieve? Asset purchases inject liquidity into the banking system, forcing up asset prices and pushing yields down. But what else? The impact on investment is minimal, cost of capital yielding nothing into the payback equation until the uncertainty about growth is cleared. A reduction in the nominal cost of borrowing is more often offset by the increase in bank spreads.
Goldman Sachs US produced a dubious bit of research suggesting that every billion dollars of QE, reduces rates by 100 basis points, increases exports and GDP, reduces imports and unemployment and turns the wolf at the door into a confidence fairy, presumably. So much for econometrics.
Back to the day job, team meeting on Monday to check the action plan for SME club. Only one external meeting this week with Angie, the new head of Manchester Central. Always a pleasure. Friday, and I love Manchester day. Actually, I love Manchester every day but I love Wigan even more and a great pleasure to see them back at Wembley with a trophy in hand.
So back to Friday, I decided to stay in all day waiting for the call from Cupertino that never came. Steve Jobs has resigned as CEO but Tim Cook got the job and a golden hello worth 400 million dollars.
Actually I had to stay in because Doug, the Sky man was coming. Mary and I have made the move to Sky Plus HD. Great. Doug arrived on time and was in and out in ten minutes. The attraction of Sky Plus, we can watch Newsnight and record Pretty Woman at the same time. How cool is that.
Unfortunately, Doug explains, our apartment block doesn't have dual feed, since it was built before the Sky Plus era, we only have one line. We cannot walk and chew gum, as it were. But Doug explains, watching the Wigan game tomorrow, if the phone rings, I can pause the match to answer the phone. I explain, if I am watching a Wigan match and the phone rings, I don't answer the phone.
Yeah but say you are watching the news, it is the same, Doug explains, you can pause the news. I do not get it. What is the point of watching Sky News five minutes behind everyone else in the world, just because the phone rang.
Anyway, it is in now, we have Sky Plus. Back to Martin Weale, he sent me an e-mail last week, he wants to be dropped off the mailing list, saying he was no longer interested in what I had for breakfast. That is the danger of a closed mind and croissants every week. The loss is his, one day it might be a bacon sandwich and he will never know.
Hope all is well with all, more news next week,
John
John Ashcroft CEO pro.manchester. Director Marketing Manchester, Visiting professor MMU BusinessSchool. GM Business Leadership Council. Council GM Chamber of Commerce.Follow on Twitter @jkaonline, or join me on LinkedIn or Google+.Check out the pro.manchester blog post for regular updates.
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