Kathleen's Feed
Mar 5, 2013
via The Great Debate UK

If only more CEOs were like Andrew Mason

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By Kathleen Brooks. The opinions expressed are her own.

Groupon’s ex-CEO won’t be remembered for his stewardship of the internet deal company, but he is likely to go down in history as writing one of the best and most honest goodbye memos of all time when he was sacked at the end of last week.

Two things in the memo to Groupon employees announcing his departure stand out: humour and honesty. This has to be the best opening line in the history of the departure letter: “After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today.” How many times have we heard CEOs, politicians and other leaders use the “family” card to disguise the fact they have been unceremoniously dumped from their role of authority?

Feb 20, 2013
via The Great Debate UK

What the horsemeat scandal tells us about risk

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By Kathleen Brooks. The Opinions expressed are her own.

The developing horse meat furore is a keen reminder how companies need to always be on the lookout for the next big scandal that could rock their business. Take Findus, the frozen food company. It’s 100% beef lasagne, it turned out, was 100% beef free. The company who owns Findus –private equity firm Lion Capital – spent GBP 1.1 billion acquiring the firm in 2008.

The numbers may have added up when Lion did its analysis prior to the sale, but in hindsight it would have been more expedient to check the supply chain and ensure that Findus did what it said it did on the pack. The Findus brand has been in financial trouble for some time, including breaching debt covenant deals last year. However, through a complicated debt-to-equity deal with some of its lenders, Lion managed to hold onto the business. Maybe the effort wasn’t worth it. Lion will have to fight hard to dissociate its image form dodgy processed food companies flogging horse meat dressed up as beef to the unsuspecting consumer.

Feb 7, 2013
via The Great Debate UK

Hollande the Brave

–Kathleen Brooks is research director at forex.com. The opinions expressed are her own.–

The French President has been in the press a lot recently. Firstly, there was the triumph in Mali. “Vive le France!” could be heard in the streets and the swift removal of the Taliban from Northern parts of the country is to be lauded. But after a rousing welcome in Timbuktu, Hollande might find he has a chillier welcome closer to home.

Dec 6, 2012
via The Great Debate UK

Can we trust the Autumn Statement?

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By Kathleen Brooks. The opinions expressed are her own.

The Autumn budget is one of two scheduled statements the Chancellor gives each year to inform the public about tax and spend plans and provide the latest growth forecasts. These budget statements are useful not only for the public, but also for investors in our debt, rating agencies and global businesses. Hence they are a big deal, and it is important that they are accurate.

However, the latest statement delivered by George Osborne didn’t quite ring true. Let’s look at growth forecasts first. The Office for Budget Responsibility (OBR), who creates this forecast, revised down 2012 GDP for the second time to -0.1% from the original forecast of 0.8%. So rather than grow at a modest, but positive, rate the economy is now expected to contract this year. If you invested in the UK partly based on this data, you could be forgiven for being rather cheesed off that your investment had yet to bear fruit.

Nov 16, 2012
via The Great Debate UK

Imagining an election in the United States of Europe

By Kathleen Brooks. The opinions expressed are her own.

The aftermath of the U.S. presidential election has seen some tentative steps towards political harmony. After a bruising campaign with Democrats and Republicans at each others throats for most of the last two years, President Obama declared in his victory speech that there is no such thing as blue or red states, there is only the United States of America.

This is what makes America one country.  Different states may have various social and cultural attitudes, but at the end of the day each person identifies themselves as American, and they are proud. Likewise, the euro zone is made up of disparate member states with different cultures, attitudes and fiscal stances. But that is where the similarity ends. The U.S. presidential election was a stark reminder just how far we from a United States of Europe.

Oct 22, 2012
via The Great Debate UK

Can we trust economic data?

By Kathleen Brooks. The opinions expressed are her own.

China is often berated for providing unreliable economic data. Behind every release there are some who believe officials in Beijing have been at work to manipulate the data for the government’s benefit. But is China alone in this and can we trust the data coming from other economies in the West?

The Office for National Statistics (ONS) has a fairly patchy record at providing accurate data on the UK economy. For example, the first reading of Q2 GDP for this year was -0.7%, this was then revised up to -0.4%. A 0.3% discrepancy in a $2.5 trillion economy is no small chunk of change. The ONS even revealed that the Q2 data was more difficult to calculate than usual due to the extra Jubilee bank holiday and that GDP could be overstating the weakness in the UK economy.

Sep 6, 2012
via The Great Debate UK

How the government is really helping the UK economy

The government’s latest plan to boost growth by relaxing planning permission rules has attracted a mixed reaction. In fairness, allowing homeowners who have detached houses to build an 8 metre long-extension is never going to get the UK economy out of the bolt hole it has found itself in. Likewise, the perceived U-turn on the plan to build another runway at Heathrow is unlikely to happen in time for Cameron and Osborne to take credit for the growth boost.

But all is not lost for the government. All it needs to do is to continue its policy of gently loosening the Treasury’s purse strings. “But we are going through a period of fiscal austerity,” I hear you cry. Indeed that is what the government wants us to think, but the economic data just doesn’t support that assertion. The latest GDP data reported that government spending was flat in the second quarter. That is down from the large 1.9% increase in the first quarter. However the UK’s fiscal consolidation effort looks fairly meagre when you consider that government spending has only fallen once in the last six quarters.

Jul 2, 2012
via The Great Debate UK

Do women hold the key to having it all?

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By Kathleen Brooks. The opinions expressed are her own.

A hot topic at the moment is whether or not women can have it all, triggered by a thought-provoking article in U.S. magazine The Atlantic, written by the former first female planning director at the State Department, Anne-Marie Slaughter. The author had been a successful academic before she went to Washington to take up her post at the State Department. She left after two years to spend more time with her family, who were living in a different state in the U.S.

Slaughter, who has two teenage sons and, by all accounts, a loving and caring husband who she can rely on, felt that she could not have it all. She believed that the current way the economy and society is set up in America makes it incredibly hard for women to manage a family and a work life simultaneously. Bear in mind, Slaughter travelled to work five days a week in a different state while her husband stayed at home with the kids.

Jun 22, 2012
via The Great Debate UK

A practical way to save Europe

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By Kathleen Brooks. The opinions expressed are her own.

The bulk of reporting and analysis on the current state of the euro zone sovereign debt crisis has focused on the structural changes that Europe needs to make to survive. Closer fiscal ties, euro bonds, pooled tax revenues and a centralised spending authority have been bandied about.

A lot of people think that these changes are the only way to bring down credit risk and pull Spain and Italy back from the cliff edge they currently find themselves on.

Jun 19, 2012
via The Great Debate UK

Capitalism in the West and other myths…

The West’s claim to be a capitalist society has been eroded throughout the European sovereign debt crisis. If we were truly capitalist then the markets wouldn’t expect Germany to step in to solve the euro zone’s problems or to eradicate the excess debts of Europe’s periphery. The prospect of this safety cushion provided by Berlin has kept the euro propped up even though Spanish bond yields are hovering around 7%, even after it received the go-ahead to get a bailout for its banks.

The same is true the other side of the pond. Since the financial crisis, the central bank in the U.S. has stepped in to prop up stock markets and other asset classes with quantitative easing when volatility has spiked. Some people in the markets now just expect officials to step in and save investors when the going gets tough.