Monday, October 13, 2014

Global oil takes a tumble; UK shopping levels lowest since 2008; Big salaries as ammo in startup talent war

1 Global oil takes a tumble (BBC) Global oil prices have fallen again amid worries about slow global growth and reports that key oil producers want to maintain current output levels. Brent crude fell to a near four-year low of $87.74 a barrel earlier, before recovering some ground to $88.46. US light crude oil was down $0.93 at $84.76, close to a two-year low.

Weak economic growth will cut demand for oil. Saudi Arabia has indicated it could cope with lower prices. Last week, the International Monetary Fund shaved its forecast for global growth for this year from 3.4% to 3.3%. It said overall global growth would be held back by weakness in Japan, Latin America and Europe, with any recovery in the advanced economies "weak and uneven".

Although some members of the Opec oil producers' cartel are pushing for production cuts to take the oil price back to the $100-a-barrel level, Reuters reported that Saudi Arabia had let it be known informally that it would be unlikely to push for a cut in production to boost prices even if they fell to $80 a barrel. Oil prices have fallen 20% since June.

The other more dramatic development has been the growing extraction of shale oil in the US, which has increased the country's production of oil significantly. The International Energy Agency has forecast that the US will soon overtake Saudi Arabia and Russia to become the world's biggest oil producer.


2 UK shopping levels lowest since 2008 (Larry Elliott in The Guardian) The weakest underlying performance by high street and online stores since the depth of the 2008-09 recession provided fresh evidence on Tuesday of a slowdown in the economy. An unusually warm September, the continued weakness of spending in supermarkets and a dip in the rapid growth of internet sales meant spending dropped sharply last month, the British Retail Consortium said.

In its monthly health check conducted jointly with KPMG, the BRC said total sales were 0.8% lower in September 2014 than in the same month a year earlier. The year-on-year drop in consumer spending was the most pronounced since December 2008, apart from months affected by the timing of Easter.

The chancellor, George Osborne, said last week that the problems of the eurozone were already having an impact on the UK economy, and the Bank of England is also detecting signs that the rapid pace of growth seen since the spring of 2013 will not be maintained. Mark Carney, the Bank’s governor, said that stalling growth in the eurozone would be only one of the factors that would affect the timing of an increase in interest rates but accepted that slower global growth would bear down on inflation.

Helen Dickinson, the director general of the British Retail Consortium, said: “In September, we saw the lowest retail sales figures since December 2008, excluding Easter distortions. This can be attributed to a number of factors including the continuing decline in food sales. Furthermore, there was exceptionally low demand for items such as boots and coats, resulting in the lowest fashion sales performance since April 2012. However, demand for big-ticket items continues to be strong, with furniture outperforming all other categories.”


3 Big salaries as ammo in startup talent war (Kristen V Brown in San Francisco Chronicle) In Silicon Valley, talent is everything. Some companies hand out lavish, $20,000 bonuses or all-expenses-paid vacations to anyone who can point them to the next coding genius. Others hang out at tech company shuttle bus stops, hoping to snag talent from Facebook or Google as engineers line up for their morning commute.

Weeby.co in Mountain View, however, is wooing workers not with stock or perks but with higher salaries. The company is offering potential employees a chance to pull in $250,000 a year (plus equity, of course). That’s well above the going rate at startups, where software engineers make an average of $100,000 to $150,000 a year, according to financial management company Wealthfront.

“There is a philosophical approach in startups that you’re changing the world, but if you want to work here you’re going to have to take a pay cut,” said Michael Carter, 29, Weeby’s CEO. By asking people to forgo higher salaries in favor of equity, startups fail to attract a broader variety of talent — say, people with kids who can’t afford the financial risk, Carter said. Instead those employees decide to work for bigger companies.

Weeby is also instituting a coding test that all candidates must pass in order to land an interview, a move meant to ensure that the company emphasizes technical chops. Carter is fond of saying that the difference between a startup that booms and one that busts is often the technical talent it manages to attract. Like everyone else, he wants the best.

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