It is now widely believed that the 2008-09 global crash discredited the classical economic model of efficient markets beyond repair and that what is needed is a new vision. In fact the financier George Soros believes this so strongly that he has almost single-handedly funded a new body, The Institute for New Economic Thinking, or iNet, the governing board of which includes the Nobel Laureate economist Joseph Stiglitz.
Bringing to you the top finance and business news stories of the week. This week, Obama's State of the Union address and the politics behind the price of cocoa.
Truth is an emotion applied to a set of facts. President Obama stated early in his State of the Union speech: “Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again”.
In part one I looked at the argument that BP’s superior governance and more developed corporate social responsibility could keep its Russian joint venture partner, Rosneft, on the straight and narrow as far as taking an “environmentally sound” approach to drilling for oil in the Arctic is concerned. In part two, I look at environmental concerns and Russia’s track record on this front.
At QFINANCE we are always interested in major mergers and joint ventures so the BP-Rosneft deal announced on January 14 is a natural focus, particularly since it throws such a bright light on the issue of corporate governance. This issue has yet to unfold in its full glory, so to speak, but the constituent elements are fascinating from the outset.
India is in a state of high anxiety right now ... about the price of onions. One year ago, a kilo of onions - a staple ingredient of even the most basic Indian cuisine - cost 25 rupees in a typical street market. Today that’s soared 50 rupees ($2). Earlier this month the price briefly breached the 100 rupees per kilo barrier, triggering a national furore and banner headlines on the front pages of Indian newspapers.
We all knew that there would be many a twist and turn in the Euro sovereign debt crisis before it finally plays itself out, in whatever manner that might be. However, one of the bigger surprises in recent weeks has been Japan’s announcement that it would not only follow China in buying European bonds, but that it was planning to take up to 20% of whatever might be on offer if the European Financial Stability Facility starts to raise new funding.
Those engaged with the “soft” or agriculture related commodities markets watch the big, global weather patterns more closely than most of us. We’re all, of course, aware of global warming issues and the need for business to green up, but the more immediate weather cycles only impinge on the rest of us when a spate of disasters, such as the January floods in Australia, Brazil and Sri Lanka, hit the headlines.
Stewart Hamilton , Professor Emeritus at the IMD business school in Lausanne, wrote a prescient article about the accountancy profession 22 years ago. Writing towards the end of a decade that saw "Big Bang" and other deregulatory measures reshape the financial and corporate landscape on both sides of the Atlantic, Hamilton warned that the accountancy profession had embarked on a dangerous course.
Big oil and gas companies are being pushed into a dangerous corner by a combination of “resource nationalism” - which is excluding them from the low hanging fruit in easily accessible fields - and flawed metrics that investors and analysts use to gauge their performance.