An Aussie recession on the radar; Cure is distant for Indian cricket; 'Embarrassed' to be in financial services; Visiting India with pepper spray

1 An Aussie recession on the radar (David Llewellyn-Smith in Sydney Morning Herald) Suddenly an Australian recession is not such a shocking idea to the mainstream media. The press is full of recession hand-wringing and for good reason. The GDP figures paint a worrying picture of an RBA that is behind the curve. Of fiscal settings that are wildly inappropriate. Of a dollar in outer space. And of a country that has very limited desire to follow the rebalancing path set before it by the same elites that have stuffed our macro settings.

The fact is we are currently four years into the slowest economic recovery of the past 40 years. For the June quarter, government final consumption expenditure will likely still be weak on austerity. It's possible we'll see a negative print on the quarter and probable that it will be significantly lower than June 2012's 0.6, meaning the annual number will fall closer to 2%, which is not far above stall speed for an economy.

More importantly, though, is the lesson offered in the pattern of growth in the first quarter for the next three years. When investment falls, it is a very difficult drag on growth to overcome. The RBA argues that net exports, housing and consumption will be enough to rebalance growth away from mining and towards consumption. But although net exports support quantitative measures they do not create real economic activity (the investment is already done, the profits flow overseas, there is some tax pickup). To boost activity, either the government or private sector must spend or invest more. 

The way forward is plainly obvious. Stop relying so heavily on households. Create a plan of moderate public capital investment aimed at productivity enhancing infrastructure that satisfies the constraints of the ratings agencies, get on with productivity reform and lower the dollar any way you can. The falling dollar will add to growth by boost non-mining (and mining) tradables investment. If not, the risk of recession will continue to climb. 

2 Cure is distant for Indian cricket (Huw Richards in The New York Times) The miasma of corruption claims hanging over the Board of Control for Cricket in India, by far the most powerful body in the game because of its financial clout, is not going away any time soon. Jagmohan Dalmiya, the former president of the board who has returned to the role as an interim measure while incumbent Narayanaswami Srinivasan steps down during investigations, was not kidding when he told his first news conference that he did not have “any medicine with which you get an instant result.” 

Ndtv Cricket, an Indian Web site, reported that officials accompanying the India team to the Champions Trophy were “so scared about the issues confronting Indian cricket” that they were “keeping the Indian media at arm’s length.” 

Dalmiya has declared he will remain in his current role only for as long as he is needed. He is, after all, 73. But after being chased out of the board in 2006 amid allegations, subsequently dropped, of misuse of funds, he would be less than human not to relish both the ironies of his return and the widespread comparisons to the mythical phoenix. 

Interim bosses who do well have a habit of staying around. It says something about the state of Indian cricket administration that a man seen not so long ago as something of an ogre, ruthlessly driving up Indian cricket’s income flows and using that financial clout to get his way internationally, now looks, by comparison, a clean, safe pair of hands. 

3 ‘Embarrassed’ to be in financial services (Katie Allen in The Guardian) Three-quarters of City workers believe pay in their organisations is excessive and only one in three is proud to work in the sector. Those are some of the findings in a report out from the Chartered Institute of Personnel and Development that urges an overhaul of core values and behaviour in the City if financial institutions are to restore trust.

Its survey finds a significant number of workers are embarrassed to admit they work in financial services, echoing recent comments from Lloyds Banking Group boss António Horta-Osório who said the "best and the brightest" students are being put off a career in banking because of the stigma attached to the industry. In all, 15% of workers are embarrassed or very embarrassed to reveal the industry they work in. Outside senior management fewer than one in three say they are proud to tell people they work in banking and financial services.

"Financial services remains a sector under fire," said Peter Cheese, chief executive of CIPD, which represents human resources professionals. The survey of more than 1,000 workers in banking, brokerage, investment and insurance, found that almost two thirds believe some people in their organisation are rewarded in a way that gives them an incentive to behave inappropriately. A similar proportion, 64%, agree that how people are rewarded and what they are rewarded for is not clear, while 67% agree there is still too much secrecy around what senior managers earn.

Unsurprisingly, it is earnings that prove the biggest draw to working in the sector, cited by 32% of workers compared with 27% citing challenging and interesting work.

4 Visiting India with pepper spray (Preetika Rana in The Wall Street Journal) A pocket knife, a taser gun and a bottle of pepper spray are among the items Nancy Stevens, an American publicist, purchased a few days prior to her three-week vacation to India last month. “I thought I was well-prepared in the event of an attempted assault,” said Ms. Stevens, who was walking in New Delhi’s Paharganj area, where restaurants and hotels catering to backpackers are located.

But after the gang rape Tuesday of an American tourist in the hill town of Manali, a crime which raised fresh concerns about India’s efforts to combat violence against women, Ms. Stevens is rattled. Foreign tourists, particularly women travelers, are growing increasingly wary of visiting India, according to a recent survey by the Associated Chambers of Commerce and Industry of India, a New Delhi-based trade body.

Assocham, in its survey, estimated large-scale travel agencies lost as much as 25% of their business this year versus last over growing worries about female safety. Travel agencies surveyed estimated they received 35% fewer bookings from women travelers in the first three months of 2013, compared to the same period last year.

But not all tourists agree. “Violent attacks can happen anywhere,” said a former marketing executive from Paris who gave her name as Laura. “The answer, really, is to exercise caution – great caution – while traveling here,” she added. Foreign governments advise citizens traveling to India to take precautions. But some tourists argue they are harassed even when they adhere to local customs and travel advisories. Others say the safety issue is not that bad.

“I don’t feel unsafe,” said Bethany Turner, an American tourist. “A lot of things are exaggerated in the media,” she added.“It creates unnecessary panic for those planning trips to India.” Ms. Turner, who is traveling with her husband, said she wasn’t aware of Tuesday’s attack, or of the gang rape in December, which pushed the Indian government to toughen laws relating to rape and other assaults on women.