Thursday, February 28, 2013
1 High Street closures mount (Simon Neville in The Guardian) High street store closures increased tenfold last year. A report by PricewaterhouseCoopers and the Local Data Company showed the net number of store closures was 1,779 in 2012 – up from 174 in 2011. It added that the number of stores closed by retail chains could double this year from 14 stores a day in 2011 to 28 a day in 2013, after HMV, Blockbuster and Jessops collapsed.
The report found that payday loan stores and pound shops are the fastest-growing retailers on the high street, with card shops, computer game and health food stores the most depleted. Payday loan firms increased their high street presence by 20%, pawnbrokers were up 13%, and nearly two pound shops were opened every week across the country.
Mike Jervis, insolvency partner and retail specialist at PwC, said: "2012 saw more retail chains go into insolvency than ever before. The failed chains generally shared two problems – too many stores and too little multichannel activity." Card shops suffered a net fall of 188 stores, a 23% drop, while the failure of Game contributed to a 45% fall in high street computer game stores.
The survey, which measured data from 500 towns and cities, also found that the number of store closures outstripped the number of store openings in every region of the country.
2 The myth of working from home (Margaret Ryan on BBC) Yahoo has banned its staff from "remote" working. After years of many predicting working from home as the future for everybody, why is it not the norm? The move to get staff back into the office from June this year is thought to have been driven by new chief executive Marissa Mayer, who herself returned to work weeks after giving birth.
Virgin entrepreneur Richard Branson, who spends much of his time working on Necker Island in the Caribbean, was quick to respond, calling it a "backwards step in an age when remote working is easier and more effective than ever". People in the West are constantly bombarded by news about technology that makes it easier to communicate with the office. Many have fast broadband and webcams that allow their faces to appear through the ether at any important meetings. They are surrounded by smartphones, laptops and tablets.
Everything is surely there to free them from the daily commute. Those in manufacturing or retail might always have to be present, but in an age when so many work in offices, why can't they have their office space at home?
Yahoo is not a lone voice in espousing the virtues of physically being in the office. Only last week Google’s chief financial officer Patrick Pichette said when the company is asked how many people telecommute, their answer is "as few as possible". "There is something magical about sharing meals," Pichette explained. "There is something magical about spending the time together, about noodling on ideas, about asking at the computer 'What do you think of this?'"
There are obvious reasons why working from home has not proliferated in the way people thought it might. There is still ingrained cultural antipathy.
3 Perils of macho culture (Jonathan Jansen in Johannesburg Times) To change the epidemic of rape in South Africa, we need to change the culture that produces these kinds of men in this kind of society. It starts with how we raise our boys. Take, for example, the socialisation of the rugby boy. The youngster is taught aggression from early on, and encouraged to be physical in his encounter with the opposition. As some competitive bodies are pumped with steroids, physical fights are common - even deadly ones.
Then there is the home, where the son observes how his father treats women, including his wife. The physical abuse of women is common in many South African families. Wherever I have worked, I would see the head of a colleague drop as I asked how she came to have those facial bruises. This is not only a disease of the working classes and the poor - wife-beating is a classless sport.
It is in these everyday practices of what men do, and are allowed to do, that we establish in our culture the kinds of gender relations that sometimes explode into the terror of rape. We need to do things differently. First, teach your boy to cry from an early age. Learning to express emotion in a safe and positive way, rather than through aggression and retaliation, goes a long way to healing the woundedness of men in our society.
Second, model as men the alternate behaviour, especially in a crisis. In the almost 50 years that I knew my father, I can honestly say I did not hear him - ever - raise his voice towards my mother. That, I know, had an enormous influence over my life. Third, speak the language of love. Tell your children you love them. Fourth, reprimand bad male behaviour in public so your children know there is right and wrong.
Tuesday, February 26, 2013
Vatican is Popeless, Italy 'hopeless'; Looming US cuts raise fears of global poor; JP Morgan Chase job cuts to touch 19,000; Could we all soon own a drone?
1 Vatican is Popeless, Italy ‘hopeless’ (Mahir Ali in Khaleej Times) The Vatican, as of tomorrow, will temporarily be popeless. As for the rest of Italy, initial results and projections from this week’s elections point to consequences that could be designated as hopeless. A conclave of cardinals, meeting in the Sistine Chapel, will sooner or later pick a new pontiff. Just before his exit, the incumbent changed the law whereby the electoral college could not be convened before a fortnight had passed — allowing for a mourning period, given that for the past six centuries the norm has been for a pope to breathe his last before the need for a successor arose.
Benedict XVI chose to break with that tradition, ostensibly on account of increasing physical and intellectual infirmities. Commentators suggested that his unexpected decision was based partly on the experience of witnessing the embarrassing decline of his predecessor. An Italian press report indicated that a nasty bump on the head during a trip to Mexico last year might have served as a reality check. A likelier explanation came last week in La Repubblica, which reported that the decision to resign was taken on December 17 last year, the day the pope received a dossier containing the report of an internal inquiry into the so-called Vatileaks episode, sparked by his butler’s decision to leak pilfered papal documents relating to the sordid goings-on within the Vatican.
Papal spokesmen initially refused to comment on the allegations, although the Vatican eventually issued a statement deploring “a widespread distribution of often unverified, unverifiable or completely false news stories that cause serious damage to persons and institutions” — which falls short of an explicit denial.
Mario Monti, as The New York Times’ Paul Krugman noted in his column this week, was “the proconsul installed by Germany to enforce fiscal austerity on an already ailing economy” in 2011, and it is hardly surprising that his policies entailed his relegation to a distant fourth place in the polls. Hailed by fellow bankers as “Super Mario”, Monti failed to make much of an impression on most of his fellow Italians within a European context where neoliberal measures to “rescue” failing economies have also proved remarkably unpopular in countries such as Greece, Spain and Portugal.
Italy hasn’t enjoyed stability since the CIA, in its anti-communist zeal, manipulated the first postwar election result in the 1940s. That appears unlikely to change in the short-term. Italian voters this week could have been forgiven for humming the 1970s hit by Stealers Wheel that went: “Clowns to the left of me/Jokers to the right, here I am,/Stuck in the middle with you.” It could take a while, though, to find out who the “you” is — and perhaps the same goes for the Vatican.
While the showdown has caused concern in numerous circles, activists are pushing hard to avoid a 5.3% in US development assistance which they fear could set back programmes to feed the poor and prevent disease. "The sequester is an equal cut across the board, but equal cuts don't have equal impact," said Mr Tom Hart, US executive director of the One campaign, the anti-poverty group co-founded by U2 frontman Bono.
3 JP Morgan Chase job cuts to touch 19,000 (BBC) JP Morgan Chase has increased its planned job cuts to 19,000 by the end of next year. The US bank revealed plans to reduce headcount by 3,000-4,000 at its consumer and community banking unit. And it reiterated previously announced plans to shed 13,000-15,000 jobs at its mortgage banking unit. It expects about 4,000 losses to come this year, mainly through attrition. JP Morgan Chase is the biggest US bank. At the end of last year it employed almost 260,000 people.
4 Could we all soon own a drone? (Matthew Wall on BBC) Rapid advances in camera, sensing, aeronautics, battery and autopilot navigation technologies have helped make UAVs affordable, easy-to-operate and increasingly reliable for individuals, civil authorities and businesses alike. Small, vertical take-off or landing (VTOL) multi-propeller helicopters equipped with hi-tech equipment are already saving big business millions of pounds.
John Moreland, spokesman for the UAV Systems Association, the UK's main industry body, with about 140 members, said: "Hundreds of these UAVs are being used commercially these days, typically flying below 400ft (120m) and with a range of about 500m (0.3 miles). "Most are engaged in aerial photography and 3D surveying, but applications are expanding all the time." For example, UAVs are being used to carry out aerial inspections of oil refinery flare stacks, fuel tanks, power lines and pipelines.
In time, automated drones could be used as city couriers delivering letters and packets around congested cities or over difficult terrain. "The civilian and commercial potential of UAVs is being realised more and more now", says Tony Dodd, of the Institute of Engineering and Technology. "The market is potentially worth billions."
But low-cost UAVs could also become the voyeur's tool of choice. A spokesman for the Information Commissioner's Office, the body responsible for policing the Data Protection Act, said: "It would become a major concern for us if organisations were using these things to record people without giving notice. It's definitely an issue of growing concern."
Monday, February 25, 2013
Italy vote rattles Europe; In India, missing school to work in mines; Will new technology mean end of cash?
1 Italy vote rattles Europe (Alessandra Galloni & Giada Zampano in The Wall Street Journal) In a national election meant to push Italy further down a path of economic reform, voters delivered political gridlock that could once again rattle Europe's financial stability. Markets in Europe and the US gyrated even in response to early returns. The Dow Jones Industrial Average swung nearly 300 points, ending with its worst day in almost four months, as the prospects of a stable government appeared to drop.
A majority of voters endorsed parties that had promised to tone down or even reverse the financial sacrifices Italy has promised its European partners, giving surprise lifts to both the center-right coalition of former premier Silvio Berlusconi and a party of protest led by a former comedian. Late Monday, the left-wing coalition led by the Democratic Party's Pier Luigi Bersani appeared to have gained a razor-thin victory in the lower house of parliament over the center-right coalition headed by Mr. Berlusconi—29.6% to 29.2% with 99.9% of the ballots counted.
The election surprise poses a challenge for euro-zone creditor nations such as Germany, which have demanded that financially stressed euro-zone countries overhaul their economies in exchange for supporting the European Central Bank's pledge to save the currency union if necessary. A public rejection of austerity policies could rapidly spread to Spain and beyond, forcing European authorities to accelerate their response to the regional crisis or risk another round of the kind of contagion that effectively closed a host of euro-zone credit markets.
Italy's unclear election results are in large part due to the country's electoral law, which was introduced in 2005 and has been dubbed "porker" law because of all its critics. The law awards the majority of seats in the lower house of parliament to the party that wins the most votes at a national level, even if the victory is by one vote.
2 In India, missing school to work in mines (Gardiner Harrris in The New York Times) Just two months before full implementation of a landmark 2010 law mandating that all Indian children between the ages of 6 and 14 be in school, some 28 million are working instead, according to Unicef. Child workers can be found everywhere — in shops, in kitchens, on farms, in factories and on construction sites. In the coming days Parliament may consider yet another law to ban child labour, but even activists say more laws, while welcome, may do little to solve one of India’s most intractable problems.
“We have very good laws in this country,” said Vandhana Kandhari, a child protection specialist at Unicef. “It’s our implementation that’s the problem.” Poverty, corruption, decrepit schools and absentee teachers are among the causes. India’s Mines Act of 1952 prohibits anyone under the age of 18 from working in coal mines, but enforcing that law would hurt families.
While the Indian government has laws banning child labor and unsafe working conditions, states are mostly charged with enforcing those laws. The country’s police are highly politicized, so crackdowns on industries sanctioned by the politically powerful are rare. Police officers routinely extract bribes from coal truckers, making the industry a source of income for officers.
3 Will new technology mean end of cash? (David Wolman on BBC) Like forecasts of flying cars, predictions of a cashless future have a history of failure. This is in part because progress is incremental, and in part because physical money is a time-tested technology. Yet powerful forces are aligning against cash. Together, they provide a glimpse of what a cashless or mostly cashless future might look like, and illuminate the promise of digital money, irrespective of whether cash is ever kaput or just increasingly marginalised.
The battery against cash is coming from three fronts - new technologies, scepticism about the stewardship of sovereign currencies and increased enthusiasm for alternative currencies, and greater scrutiny about cash's myriad costs. Digital money innovations, particularly tools anchored to mobile phones, offer faster and cheaper ways to pay bills, buy and sell goods, send and receive money and make bank transactions.
Angst about government currencies has traditionally sent people flocking to gold, and for many devotees of the shiny stuff, gold remains the one and forever answer. But gold is not value incarnate. It's just another commodity, albeit a historically pivotal and impressively hefty one.
Digital tools are already providing millions of people worldwide with the opportunity to avoid cash. And avoid it they do. They are storing value and transacting by way of electronic accounts "on" their mobile phones.For the first time, people who were trapped in the informal economy can steer clear of usurious local moneylenders, save precious time and money, and benefit from the basic financial services that you and I take for granted.
And no, looping people into the formal economy isn't a clandestine Valentine to banks and bankers. The fact is that a bank account, online bill, person-to-person payment, access to credit, insurance - all of these tools for building economic stability depend on money in electronic form. If you don't have that, it's far more difficult to climb permanently out of poverty. The truth is that it doesn't matter all that much whether cash's further marginalisation ever leads to extinction. What matters far more is the potential for digital money innovations to improve the welfare of so many.
Sunday, February 24, 2013
Financial markets as stimulus junkies; Eurozone recession 'to persist'; Pound seen vulnerable after AAA fall
1 Financial markets as stimulus junkies (Larry Elliott in The Guardian) Financial markets have become stimulus junkies. They crave their next fix of quantitative easing and when they don't get it they turn ugly. The rush they get from the drug wears off after a while, and then they become needy and whiny. Witness last week’s sell-off on Wall Street following the hint from the Federal Reserve that it was about to cut off the drug supply.
A similar dependency exists in the UK, where stock market traders expectantly await an injection of QE, courtesy of the Bank of England, after deterioration in the UK's economic outlook. Governor Sir Mervyn King voted for another £25bn of cheap money and his colleagues should endorse his view in the coming months. The loss of the UK’s much coveted AAA status, thanks to the credit ratings agency Moody's, is likely to make the markets salivate even more.
The situation today is the closest the world has been to a depression since the 1930s. Then, Keynes said a depression was a "chronic condition of subnormal activity for a considerable period without any marked tendency towards recovery or towards complete collapse". The global economy has exhibited all these traits since the deep slump of 2008-09. Growth has been sub-par for a long period. There is no real sign that output is about to slump as it did four years ago, but the sort of strong recovery expected after previous post-war recessions has proved elusive. It's a depression all right.
Analysts at Morgan Stanley say we are on the brink of the third wave of global monetary easing.
Phase one came in the winter of 2008-09 when interest rates were slashed virtually to zero and quantitative easing was introduced as a "temporary" measure. The drying up of credit meant the money supply was contracting and there was a fear of being sucked back to the 1930s. The hard economic data at the time suggested this was a genuine prospect. So money was made cheap and plentiful, just as Keynes would have suggested.
But by late 2011, the global economy needed another fix of the monetary stimulus drug. In part, this was because the drugs had side-effects – QE led to asset-price speculation which pushed up commodity prices, which in turn raised business costs and cut the real incomes of consumers. In part, it was because certain finance ministers – no names, no pack drill – tried a course of cold turkey too soon. In part, it was because the eurozone crises hit the rest of the world.
Now we are entering the third phase of monetary easing. The Bank of England has decided to adopt a "flexible approach" to the government's 2% inflation target and looks likely to increase its QE programme to £400bn within the next couple of months.
2 Eurozone recession ‘to presist’ (BBC) The eurozone recession will persist into 2013, the European Commission has conceded in its latest forecast. Governments face an uphill battle to rein in their overspending, with Spain, France and Portugal all failing to cut their deficits to agreed targets.
Spain's deficit, at 10.2% of GDP in 2012, was well above its 6.3% target, and would stay above target into 2014. The eurozone economy would shrink 0.3% in 2013, the Commission said, making the governments' task even harder. Previously, the Commission had expected the 17 economies in the eurozone to collectively enjoy 0.1% positive growth this year. In 2012 the economy is estimated to have shrunk 0.6%.
Commission Vice-President Olli Rehn said that unemployment across the single currency area expected to continue rising to 12.2% this year as the recession lingers. Last year's jobless rate was 11.4%. However, he said the eurozone was expected to rebound in the last three months of this year, registering 0.7% growth in the fourth quarter. The Commission's acknowledgement that the eurozone is in worse economic shape than previously mirrors a change in the International Monetary Fund's thinking. The IMF said in January that it expected the eurozone to experience a "mild recession" in 2013, having previously predicted growth.
While clearly supportive of the coalition's austerity programme of deep public spending cuts, the two senior Tories, Kenneth Clarke and Lord Lawson, both cautioned that the UK was vulnerable.
Clarke, now minister without portfolio in the cabinet, defended Osborne's previous claims that the government's economic policy could be judged on its credit rating, arguing that problems with the global economy and particularly in the eurozone had pushed recovery "several years" beyond what had been expected at the general election in 2010.
"It seemed perfectly sensible to me at the time," Clarke said. "It would now if it were not for the fact that it is quite clear that the global economic and financial crisis is persisting, it's worse than we thought, several more years are required." Lawson said it was vital that ministers and the Bank of England made no suggestions they would like to see a further weakening of the value of the pound – which could help boost exports by making British goods cheaper for foreign customers – in case it prompted "a run on sterling".
"That would not be clever, that would not be sensible, that would not be helpful," said Lawson. "But I don't think that George Osborne wants that."