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 and Morgan Stanly 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,
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The views expressed are my own. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts.