大象传媒

The New Capitalism

• Robert Peston
• 8 Dec 08, 10:00 PM

The contraction of the world's developed economies that we're witnessing represents the end of an era. Taxpayers have been forced to support the banking system and the real economy on a scale we've never seen before.

For many years to come, what's happening will affect the relationship between business and government, between taxpayers and the private sector, between employers and employees, between investors and companies.

A new capitalism will emerge from the rubble.

Please click here [pdf] for my thoughts on how we got into this mess and what the re-made economy will look like.

UPDATE 06:41AM, 9 Dec: As edwddprice noted, the 拢9bn on page 6 was a typo. It should have read 拢9trn or 拢9000bn. It has now been fixed in the pdf.

UPDATE 10:18, 3 Jan: There's another typo on page 2 of the pdf. The word "current" should have been "currency" (goodness knows how I failed to spot that). So the correct phrase should be "the gross foreign currency liabilities of our banks".

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Superman Obama

• Robert Peston
• 8 Dec 08, 10:19 AM

During assorted meetings with hard-bitten business leaders and politicians last week, I was surprised by how star-struck they are with Barack Obama.

In these fraught economic times, the world needs a hero. And whether he likes it or not, the floundering global elite appears still to be looking west, and to the US president-elect in particular, for the white-hatted cowboy who'll save us all.

You can see these hopes and expectations in the way that stock markets soared across the world after Obama announced on US television that he plans to invest in US infrastructure on a scale not seen since the US highway-construction programme of the 1950s.

Although he gave more details of his proposals than is normal in these transition weeks - making it clear that his first priority is to stimulate economic activity and that reducing colossal US public-sector debt will have to wait - the reaction of stock markets is largely emotional.

As I write, the German and French markets are up well over 6% and the London Exchange is 4.6% higher.

Also, sterling has recovered slightly, which may be more rational in that the UK's vast and rising indebtedness looks trivial in absolute terms compared with the ballooning borrowings of the US. But sterling's resilience may not last, in that the more the US government under Obama has to borrow, the less appetite and capacity there may be among investors for the colossal sums our government has to borrow.

The big and obvious point is that an extraordinary, frightening responsibility is being placed on Obama. At a time when most would say that globalisation has undermined the power of most elected politicians, there appears to be a widespread belief that one newly elected leader will have near-magical powers.

And he looks strikingly relaxed, in spite of an economic reality that's dire.

Here in the UK, that's confirmed (yet again) by a this morning showing that the contraction of the UK's all-important service sector is accelerating.

The next big decision for politicians in the US and UK who actually have their hands on the reins of power, rather than one about to take over, is how to help the devastated motor industries.

What's being discussed in Congress looks awfully like direct state control of GM, Ford and Chrysler, as the price of any financial rescue.

Here in the UK, the Treasury and the Business Department are also assessing requests for loans from car makers.

I'm absolutely certain they - or rather we, as taxpayers - will provide succour.

What ministers and officials will wish to do is simply fill the financing gap created by the malfunction of the banking system and of financial markets, rather than propping up lame ducks.

Governments normally get these judgements horribly wrong - and doubtless you'll shout at me if I were to even suggest that this time it might be different.

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Shock Carphone resignation

• Robert Peston
• 8 Dec 08, 08:00 AM

There has been an by this morning.

One of its two founders, David Ross, has resigned as deputy chairman, following his disclosure to the mobile phone and internet group that between 2006 and 2008 he pledged 136.4m of his shares in the company as collateral against personal loans.

This is significant for two reasons.

First, under Stock Exchange rules, each time directors pledge shares in this way as collateral, their companies are supposed to make an announcement.

Ross failed to inform Carphone Warehouse that he had committed his shares in this way until 7 December.

It's not clear why he failed to keep Carphone in the picture in the appropriate way. Nor is it clear what kind of action, if any, will be taken by the Financial Services Authority, the City watchdog, against this apparent breach of the rules.

As I understand it, Ross feels he was guilty of an administrative oversight. But it's a pretty embarrassing oversight.

Second, although Ross has told Carphone that "none of these loans is currently in default", there is also an implication in the company's statement that he may at some future date be forced to sell some or all of the shares.

Carphone says that Mr Ross has "given an undertaking to the board to facilitate an orderly market, where possible, for any future disposal of shares in the company."

According to Carphone, earlier use by Ross of his shares as collateral means that 177m of his shares are pledged against loans, equivalent to about a fifth of the entire company.

Investors will therefore see this morning's announcement as raising great uncertainties about the future ownership of that fifth of the company - which at a time when life is so difficult for all retailers is something of a pain for Charles Dunstone, Carphone's chief executive, and his executive team.

It's also something of a personal shock for Dunstone. He was at school with Ross, or "Rosso" as Dunstone calls him. He founded the company with him. And it would be understandable if he felt a bit let down this morning.

UPDATE, 08:47 AM:

David Ross is a pretty well-known character on the British corporate scene. In May, the Mayor of London, Boris Johnson, appointed him to look after the financial interests of Londoners in preparations for the 2012 Olympics. Ross became the Mayor's nominee on the London Organising Committee of the Olympic Games.

He's also a director of National Express and Big Yellow Group.

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