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Sunday Times and Croissants - CEO's weekly update 20th November

There is something special about Sunday morning, the Sunday Times, hot croissants with honey and butter, excellent. Headlines, the Duke of Edinburgh blasts wind farms as useless, Chris Huhne, the energy secretary dubs him a “curmudgeon” (ex ante) describing turbines as elegant and beautiful. Concerning!

David Smith is concerned about employment “jobs carnage as firms lose hope on recovery” the headline, DS admits he was shocked by latest data from the ONS. He must have spent some time with John Cridland the CBI Director General, according to the latest CBI survey one third of firms are looking to cut staff numbers. The eurozone crisis, a possible second banking crisis and the imminent autumn statement to blame for the strident views from Centre Point. 

UK economics news this week, inflation CPI falls to 5%, unemployment figures increase but the claimant count data suggest the rate is slowing. Retail sales are flat, up just 1% year on year. Bad news from Mothercare and The Game group illustrate problems in retail as household incomes remain under pressure and more activity swings on line.

The Bank of England Inflation report confirms the economy is flatlining but CPI inflation is expected to fall below target by the end of next year. The Governor does not answer questions about problems in Europe. He is not in the forecasting business after all.

The UK banking crisis must be over, four years ago Northern Rock experienced a run on the bank, this week, Virgin, ran off with the bank, leaving HMT with the bad bits and a near half billion pound loss on the deal. By Saturday morning, it emerged Branson had paid half the price with the Northern Rock balance sheet. So this is vendor finance?

Back to the day job and on Monday, the day begins with a 7:30 appearance on Radio Manchester with Alan Beswick. We are talking about the Manchester riots, I make reference to the Riot Damages Act of 1896. Beswick “remembers that” - big mistake, I can never resist an open goal. Interview closes, will I ever be invited back? Hopefully not, at that time in the morning.

Also to be interviewed was John Morris, an ex soldier on Christmas Island at the time of the Atomic Bomb tests. One of the few survivors of the tests, the old soldier has been denied compensation from HMG for exposure to radiation. His search for compensation from the BBC suffers a similar fate. We do not pay expenses says the production manager. His taxi ride from Oldham remains unpaid. “Sorry” - “you don’t look sorry” - the pensioners riposte. 

Later, internal meetings, then off to MBS for a panel session - restoring faith in our cities, a reference to the August riots. Sir Howard is on the panel along with Mike Luger (MBS), Andy Bounds (FT) and Damian Wild from Estates Gazette. In the chair is Gordon Burns. An enjoyable session and good exchange of views. I get to talk about the ground breaking I Love MCR campaign.

Wednesday morning, an early start at Shoosmiths for a corporate finance event involving the NorthWest Fund Managers. Slick presentations from the managers ensures my role in the chair is limited. 

In the office during the day, then off to dinner at Deloitte, Mike Blackburn is the main presenter talking about the LEP. Graham Hallworth and I form the supporting act in a question and answer session which follows. For once I get to speak as much as GH in one of those eatstalks and leaves evenings. Am reminded it is my turn to buy lunch for Hallworth and Currie. 

Thursday and in the afternoon off to the Manchester Conference for growth incorporating the launch of the business growth hub. Lord Heseltine the guest speaker breaks Faulty Towers protocol and talks about the war, slips off message and argues for an elected Lord Mayor, then declares war on the enemy within - the Civil Service. It is like an extract from Yes Minister. No mention of return of the matrons but problems in schools, sack the headmasters is the battle cry.

Mike Blackburn chairs and explains the role of the LEP, Richard Guy covers the business growth hub strategy. Moneeb Awan has a protracted advertising slot for eSay and David Benstead begins his presentation with the story of Ferranti in 1888. Excellent. The Business Growth Hub is a great development for our city. We have to get this right. The real test will be in execution, so far so good.

Friday a day off, (of sorts) I meet with ex Coloroll colleagues for lunch and begin work on the model for my FPS 2020 employment paper for the New Economy and AGMA. The Manchester forecasting model suggests 70,000 jobs will be created in the Business, FInancial and Professional sector over the next ten years. In the current climate, this has to be at the top end of expectations, a lost decade (of growth) would produce just half that number according to my own model. 

Saturday, working in the morning, the day starts as usual with tea, the Telegraph (on line) and the excellent Economist app. An article on Chinese jewellers - Beijing Bling - grabs attention together with the piece on Italy’s new PM - the full Monti. The future of Russia - Putin his place - demonstrates still further the wit of the sub editors on the erudite weekly, probably my favourite app for the iPad 2. 

Yes, I now have the new iPad 2 and the iPhone 4s for that matter. Let the e-team weep, my day has come. 

Afternoon, it is off to play tennis with Mary as usual. It is a close run thing - a set each!

Hope all is well with all, more news next week, 

John

Check out the new site, www.johnashcroft.co.uk

Follow on Twitter @jkaonline, or join me on LinkedIn or Google+.

 

Sunday Times and Croissants - CEO's update 13th November

There is something special about Sunday morning, the Sunday Times, hot croissants with honey and butter, excellent. Headlines, the Chancellor has a £50 billion plan for growth which appears to involve other people’s money in an off balance sheet vehicle. Thus do we learn lessons from the financial crisis. It is plan A plus in a 1930s style new deal for infrastructure and housing.

David Smith writes of the Euro crisis with lyrics from the Neil Sedaka classic, breaking up is hard to do, ending with a challenge to the Perry Como ditty - it is impossible. Not only is it possible, according to the DS song sheet, it is probably desirable.

UK economics news this week, producer prices in October suggest the inflation peak has passed, retail prices are expected to fall significantly next year. Manufacturing output (September) increased by just 2%, so much for the march of the makers rebuilding the workshop of the world. One bright spot capital goods increased by 7% stimulated by export growth. It would appear workshops are being built but in other parts of the world.

Constructions stats are flat and the trade figures will disappoint those in search of a rebalancing to net export growth. It just is not going to happen. Revise the models. The J curve is just a slippery downward slope with no bend in sight.

The UK economy is flatlining, at least we know where we are for the moment. If employment holds and the debt reduction targets can be met, then accept a few years of flat growth as a base case, until the election beckons.

Back to the day job and on Monday, the day begins with internal meetings followed by a presentation to the Colliers senior management team. Then follows my MBS lecture on valuing high tech stocks, Groupon, Facebook, LinkedIn, Twitter and Zynga.

Tuesday, it is the Business Leadership Council meeting led by John Early. The BLC is a good group of business leaders with lots of hot topics around the table. Always enjoyable.

Later in the day Mark Fahy from the London Stock Exchange is in the office to brief me on the panel session the following day.

Wednesday, it is the LSE access to finance session led by Shore Capital Partners. Easy role to chair. with excellent presentations with Simon Caunt from the Bank of England, Mark from the LSE, Gerard Lane from Shore, Gervais Williams from MAM funds, David Smith from AXM, and Steve Smith from Daisy Communications wrapping up proceedings. All is finished by 11:40.

Back to the office then off to lunch with Yorkshire Bank. I am asked to lead the conversation on quantatitive easing and the asset purchase facility. The conversation soon moves on to other topics. What is it about economics?

Back to the office to finalise my lecture, then off to MBS to deliver on the new macro prudential regulatory environment. I cover, Basel III, G-SIFIS, the Vickers Report and the new approach to financial regulation.

I explain the FSA is scrapped to be replaced by the FPC, the PRA, the FCA (not the CPMA as first thought). It is the end of boom and bust.

Regulators must think that HSBC stands for the Hornchurch and Shoreditch Banking Corporation. It does not. Much more regulation and a relocation is on the cards for all but the state owned.

Thursday, early meeting with the Chairman for the pre board meeting meeting. All is well but Paul is hobbling with a tight achilles tendon. I am sympathetic. Richard Bertram from TSK is in the office later to discuss a conference planned for next year.

After lunch I have a briefing meeting with Sir Howard. Father Christmas is guarding City Hall resting on a structure which must have been specified by Thomas Telford or developed from bits left over from the Forth Bridge. The free climbing option has been canned by health and safety several years ago. A now sedentary Santa is safe in our city.

In the evening I call in to the Business Desk birthday celebration at Epernay. Lots of good people around and Chris Barry is in good form. Simon Allport sorts out a lunch date. David Allanson asks if he can sponsor the Business conference again as part of the banking group. Least I think that is what he said. It was a bit noisy. Must call next week.

Friday the day starts with a panel session on the Future of Professional Services at the Hive. I am on a panel with Jonathan Hurst from KPMG, David Partridge from Argent and Mike Reeves from Clearwater. Mike opens with a challenging presentation. Michael Taylor is in the chair. 7:30 start but I make it. I do not have a bacon sandwich, my body is a temple. I am a slave to my tennis.

Later in the day, Nick Boden confirms sponsorship of the Andrew Sentance lunch in December. Andrew is now senior economic advisor at PwC and has just called for the resignation of two deputy governors from the MPC. Lunch at the Yang Sing on the 8th December, the theme is fire crackers and fortune cookies at the Bank of England. Not one to miss - book early for this and the Business Conference in March.

Saturday, working in the morning, then off to play tennis in the afternoon with Mary as usual. It is a close run thing!

Hope all is well with all, more news next week,
John
Check out the new site, www.johnashcroft.co.uk
Follow on Twitter @jkaonline, or join me on LinkedIn or Google+.

Sunday Times and Croissants - CEO's update 6th November

There is something special about Sunday morning, the Sunday Times, hot croissants with honey and butter, excellent. Headlines, the Euro crisis could set the UK back six years according to the Ernst and Young Item club. This gloomy projection is based on Greece being forced out of the Euro along with Portugal and Ireland.

David Smith has been in China all week but warns their is no such thing as an irrevocable monetary union. An orderly reduction in Euro membership with a Greek exit the best outcome he says. Jim O’Neill from Goldman Sachs, interviewed in another place, suggests the euro could split apart with Finland joining the PIGs in flight. Who would want to stick around as Merkel suggests it will take ten years to sort out the turmoil.
 
History repeats, peace in Europe last week, followed by cold war between the allies. The Eurozone travails continue. No one wants to back the bail out or form a coalition in Greece, the Italians begin to look vulnerable, the Merkosy alliance looks flaky and the Prime Minister is impatient about progress. Ah well...

UK Economics news this week, all eyes on the ONS for the Q3 growth figure. GDP is up by 0.5% in the quarter. This is growth but not as it should be for this stage in recovery. The crisis in Europe the explanation. Depreciation, inflation, the squeeze on real incomes,  a VAT rise and the tight fiscal stance largely ignored.

Back to the day job and on Monday a series of internal meetings for most of the day. Overall it is a quiet week for meetings out of the office. Preparation of the business plan for 2012 begins together with further discussions on a relocation strategy.

Tuesday evening - the MPEG private equity group dinner hosted by Deloitte. Always a great evening with some of the major corporate finance players in the city. As much as £5 billion of investment funds around the table, such is the size of activity in Manchester.

Wednesday a snap visit to London for a visit to HM Treasury. A meeting with Dave Ramsden head of macro economic policy is on the cards. I arrive to discover the Chancellor has taken priority and summoned DR to number eleven. I meet with Andy King, deputy director responsible for co-ordination of macro economic policy. It is a good meeting as we discuss QE accounting and latest developments in the plans for credit easing. The Chancellor statement is due in just a few weeks and the revisions to the OBR forecasts will also be presented at the same time.

Lots of research and prep, as next week, I am lecturing twice at MBS. Wednesday Banking Regulation, the G20 resolutions, the Vickers Report and the new UK macro prudential financial regulatory structure. Sounds pretty unexciting but students get to watch a film - The Inside Job, before my presentation. The theme is stable financial management - barn doors, bolts and horses, that sort of thing.

The first lecture is on Monday - investing in high tech stocks, Apple, Microsoft, Yahoo, Amazon and Google. The pricing of the new generation of high techs, LinkedIn, Facebook, Groupon, Twitter and Zynga will also be examined. I well explain how Groupon, yet to make a profit has just IPOd with a market cap forty times last years revenue! Challenging. Goldman Sachs are on the ticket, no cause for alarm.


Saturday, working in the morning, finish the presentations, then off to play tennis in the afternoon as usual. Hope all is well with all, more news next week,

Check out the new site, www.johnashcroft.co.uk
Follow on Twitter @jkaonline, or join me on LinkedIn or Google+.