LONDON, England – Though I’ve lived in London for 18 years, I had never been invited to the historic Mansion House speech of Britain’s finance minister — or Chancellor of the Exchequer. It was well worth going last night given that it was the first speech by someone other than Gordon Brown, who had the job for nine years before he became prime minister last year.

And while the Mansion House speech is usually just a few brief words given before the great and the good of the City of London financial district, this time there was a lot to be said by the Chancellor Alistair Darling and maybe more importantly by the governor of the Bank of England, Mervyn King.

They talked about sub prime, Northern Rock and reforming the Bank of England so the country’s inflation target is not the bank’s only raison d’etre.

But, I’d rather write first about the pomp and circumstance of this very British of evenings.

It’s a black tie affair and hosted by the Lord Mayor of London. You may know that the square mile, known as the City, has its own mayor, police force, courts, cathedral (St. Paul’s) and is quite separate from Greater London, the City of Westminster (where the British government is based) and the Docklands area of East London where all those tall towers house American banks.

The Lord Mayor changes every year and likes to be considered at the unpaid CEO of the City. He (and it’s always a he) has lived in the Mansion House since 1753 and Invites the chancellor and Bank of England governor to speak yearly.

What I didn’t know was that the mayor has to be an alderman of a city ward and also a sheriff of London and he has to live in the famed court building, the Old Bailey before becoming mayor. I also didn’t know, and still don’t understand, why those gathered for the dinner have to greet the chancellor and governor with a slow clap on their arrival and departure (the kind that would be considered derisory at a sporting event).

London of course loves to call itself the financial capital of the world, which New York might dispute. But as the Lord Mayor’s office likes to point out, London has a 42 percent share of global equity trading, 70 percent of the global trade in international bonds, and is easily the world’s biggest in foreign exchange with about one third of that market. Then, greater London is home to a one third of the European HQ of the Fortune 500 companies.

The Lord Mayor also pointed out that one third of those working in London’s financial services sector is foreign born (its now jokingly known as the seventh largest French city).

Governor King gave the last speech and made the most headlines. He started by saying he would loved to have been able to give his speech from last year and that things could scarcely be difference from a year ago. He warned about inflation, house prices, unemployment and that the bank was not afraid to raise interest rates to bring inflation down. Many analysts think he’s talking tougher now hoping he doesn’t have to raise rates later.

Here’s hoping his Mansion House speech was enough for now.

LONDON, England – If you think the price of oil can’t go any higher, you could be disappointed. On Monday, oil shot up towards a $140 a barrel, a record, before settling the day at $134 a barrel.

Even word that Saudi Arabia would increase production wasn’t enough to keep oil from ratcheting higher. And even though it ended well off its high of the day, we’re still above $130 a barrel, with predictions it could hit $150 by year end, and eventually move to $200 a barrel.

Saudi Arabia has called a meeting for June 22 to help stabilize prices. But will that really make any difference. Barring some dramatic announcement, I’m skeptical. I’m in the camp that believes what’s going on in the oil market isn’t just the result of a weak dollar, or speculation. It’s based on the belief that there is a structural shift going on, based on a need for increased oil as developing nations continue to grow their own economies, and not enough supply.

You can point the finger at speculators, as many do, but they aren’t the problem. They just follow trends, they don’t create them.

Even a CNN quickvote shows the public is skeptical that a production increase by the Saudis will ease prices. 43 percent said yes, 57 percent said No.

Oil producers have lost control over pricing. And while high prices are great for producers’ revenues, they always worry that if the price gets too high, it could lead to a sharp slowdown in the global economy, hurting demand, and causing a sharp fall in the price of oil.

I don’t think that’s a worry for the oil producers right now. The bigger worry is their inability to keep prices from rising, and the political pressures that brings. That’s what’s triggering the upcoming meeting, the Saudis have to appear like they are doing something.

The problem is, the market has moved beyond their ability to control it.

Tell me what you think.

LONDON, England – Those fretting about a substantial downturn in the U.S. economy, need not worry. At least that’s the way Ben Bernanke sees it.

Bernanke thinks the risk of a “substantial downturn” has receded in the past month. The Fed chairman thinks that past rate cuts, Federal tax rebates, and record exports will be enough to keep the economy from any a sharp nosedive.

He’s not alone in his view. More than half of 48 private economists surveyed do not believe the U.S. economy is in or will enter a recession this year, that compares to 40 percent a month ago.

“The consensus now suggests the downturn in economic growth will be less steep than earlier feared, but the subsequent recovery to growth to its trend rate will take longer than hoped a few months ago,” according to Blue Chip Economic Indicators.

Here’s the breakdown. Third quarter growth at 1.5 percent, and fourth quarter at 1.2 percent. That’s weaker growth than previously forecast, but still not a recession in their books.

But for 2009, the group of economists think U.S. growth will be 1.9 percent, that’s the sixth month in a row that expectations have been ratcheted down.

As for inflation, they think it will average just 2.6 percent next year, compared to nearly 4 percent this year.

The group of economists also think the fed is done cutting interest rates which now stand at 2 percent, compared to 5.25 percent last September.

As to when the Fed raises interest rates, they think that won’t happen until second quarter of next year.

These guys get paid for a living to make predictions about the economy and interest rates.

Even if they and Mr. Bernanke end up being right, and the U.S. avoids a substantial downturn, it won’t feel like that to many Americans who are facing a fall in real wages, falling house prices, higher food bills, and record gasoline prices.

To them it feels like a recession, and in my book, that’s all that matters.

Tell me what you think.

NEW YORK – Mark your calendars. On July 11, Apple’s new 3G iPhone hits stores worldwide. (Well 22 countries at first, 70 by the end of the year.) If you believe the hype, this could be the device which really kicks open the door to Internet mobility.

Steve Jobs introduces the new iPhone 3G.

For those of you who missed the highlights, the phone, which was unveiled at Apple’s Worldwide Developers’ Conference, will be thinner, faster, and perhaps most importantly cheaper. Two hundred dollars cheaper!

During the presentation in San Francisco, Jobs admitted the first generation iPhone was too expensive for some customers. He said that about half of the customers who wanted an iPhone but hadn’t bought one said it was due to the high price. That has certainly been the case for me.

As a result, the new phones will sell for $199 dollars for an 8-gigabyte model, $299 for a 16-gigabyte model. (one note - in some cases the monthly service may be higher.)

Some say the price cut is a sign that iPhone sales have been disappointing. Maybe. But I give Apple credit for acknowledging it got it wrong and acting quickly to fix the problem.

The other major development is from the developers. Jobs and other Apple executives showed off some of the third-party applications that will be available in the iPhone software store on iTunes.

There was a blogging platform called Typepad, a friend finder social network called Loopt, medical apps, games … to name just a few. Many of the demos were met with applause from the audience, according to the bloggers who were streaming live from the event.

The other major announcement is that the Apple is now taking direct aim at Blackberry’s strangle-hold on the corporate market. The new iPhone will have push e-mail, contacts and calendars.

Jobs says 35 percent of Fortune 500 companies have participated in beta testing. This confirms what I blogged about a few weeks ago. Research firm, Yankee group and others have been saying that corporate IT departments are starting to take a serious look at Apple. If Apple is now reaching out to them and making inroads, this could be a lucrative new area for the company.

Interestingly, the reaction on Wall Street was very tepid. Apple’s stock dropped 2 percent. Some are worried the cheaper price will hurt profitability. Others are skeptical that Apple can take on Blackberry.

I don’t share their pessimism. Yes, there may be some who early iPhone buyers who may feel they overpaid now that the price has been slashed. And we have to see how all these new third-party applications actually work.

But the faster more powerful connection and the innovative programs being developed offer huge promise. I held off on buying one the first round, but at $199 my willpower is fading. Apple says it expects to sell 10 million this year. Are you biting?

CALCUTTA, India – I am in Calcutta, India, the city I grew up in and still call home. It was supposed to have been a busy day for me. I had meetings set up, errands to run, host a play date for my son, have lunch with friends. Instead, I’ll be at home all day. Today - and tomorrow.

Activists burn an effigy in Hyderabad against fuel price rises.

It’s not that I mind sitting at home all day. I am on holiday and more than happy to spend time with my parents, plod around the house and catch up with my cousins and niece who live down the road. That’s as far as I can go on Thursday as well as Friday.

There’s a two day bandh - a general strike called by the ruling Left Front on day one, and by the opposition parties the next day. That means cars aren’t allowed on the road, schools are closed, shops are shut, no businesses will trade, some flights to and from the city have been canceled.

The bandh is West Bengal’s answer to the hike in fuel prices. After putting it off for weeks, India’s central government sharply raised fuel prices on Wednesday. An extra Rs 5 per liter for petrol (up around 11 percent,) Rs 3 for diesel, Rs 50 for a cylinder of cooking gas.

That’s a steep rise. With global oil prices at record highs, the Indian government had to give in. As it is, fuel prices in India are heavily subsidised to ease the impact on the millions who live in poverty.

State-run oil marketing companies are hemorrhaging vast amounts of money - as much as a billion dollars a day, according to some reoports. Some folks say the price hike should have been even higher, to make the economics of $130 a barrel of oil work out. Thursday’s price hike was inevitable.

Fine, I get all that. I understand why the government had to raise fuel prices and I understand why people are upset. So, protest. Hold a peaceful rally somewhere and make your point. Tell the government you are angry, make your demands. But a bandh?! How does it help to bring a heaving city to a grinding halt for two days?

Not only is it a massive headache for calcuttans, imagine the financial cost to the city of two lost working days.

It makes no sense.

For a state trying to woo investors, attract multinational companies and project an image of a forward thinking business hub - a bandh is a giant step backwards. How can those calling the bandh not get that?

Let me know what you think.

LONDON, England – Let’s get away my steady diet of doom and gloom and talk about something else. Bribing kids, in this particular case, kids who are obese. Forget educating your kid about nutrition. Cold hard cash works best.

Should obese children be offered cash rewards to lose weight?

Yes

No

or see results

Scientists in Switzerland gathered data on more than 100 families. The families had at least one obese adult and one obese child. They had to follow one of four programs including motivational letters and different diets.

The final option was cold hard cash, bribing the kid — five euros for every kilogram they lost, and five euros each time they improved their body mass index score.

In the words of Professor Claus Luley: “We found that giving the money works in children. They were certainly eager to get their hands on the money.”

Now this little experiment got me thinking about the ethic of bribing kids to get them to do something.

Is it right for children to expect some sort of monetary or other material reward for doing something well? Or should a parent try and instill a sense doing something for its own sake, and that in itself is a reward?

In the financial world, bankers, traders, and others get performance related bonuses. So do sports stars, and people in sales.

So why shouldn’t a kid get a type of performance related bonus? What’s wrong with giving your kids money if they get good grades, or lose weight, keep their room clean, or whatever you deem is important?

Do such incentives for children teach them the wrong values, or is it really just a reflection of the way much of the world operates? In certain instances, I don’t have a problem with it.

I look forward to hearing from you, tell me whether you agree or disagree.

LONDON, England – There was something different about this protest. It just wasn’t what I expected from a bunch of truckers gathering in central London to protest the high cost of diesel.

It began in much the way I thought it would: truckers honking their horns, waving placards, holding banners that said, “OUT BROWN.” It looked like any other rally, any one of the colourful protests you frankly, see quite often on the streets of London.

Sharon Knight delivers her emotional speech.

Then the speeches began. I leaned in to listen. Not because of what was being said (diesel prices are too high, the government is no good, our industry is being wiped out etc etc) but because of who was at the podium, and the passion with which she spoke.

Yes, she.

I admit my surprise at seeing a lady in black patent leather stilettos lead the speeches at a truckers protest. I was even more surprised when Sharon Knight, part of a family run trucking business, couldn’t hold back her tears.

Diesel in the UK now costs up to $2.60 a litre. Guess what that translates into across the Atlantic? Roughly $9 a gallon! Almost half of that cost is tax imposed by the British government. Truckers are paying around 35 percent more to fill up their vehicles diesel from last year, forcing many to shut shop.

Sharon was one of the people who took a letter to Downing Street, calling on the government to help. Of course Prime Minister Gordon Brown can’t bring down the global price of oil, but what he can do, say the truckers, is cut taxes on fuel.

It’s getting late, Sharon told us. If the government doesn’t step in soon, many transport and haulage companies will be out of business. They’ll lose their incomes and a way of life. The only way of life many of them know. It’s easy to understand why Sharon couldn’t hold back her tears.

LONDON, England – There is real concern now about the impact that escalating oil prices will have on the global economy. London has been swamped by truckers and Barcelona by fisherman — all complaining about the rising cost of fuel. American car owners are demonstrating by cutting down on journeys to save gas. Politicians fear high oil prices will spark higher inflation in economies that are already slowing down.

But rising oil prices do not matter a jot to the global economy , at least in theory. Any changes in the price of oil have a neutral effect. The cost to those countries buying it is offset by the money made by those selling it. Overall the effect of a rise, or indeed a fall, in oil prices is nil. The cash is simply being shifted around the globe. It’s swings and roundabouts, as they say.

But if the U.S. economy goes down, surely it will take the rest of the world with it? Not according to Paul Donovan, Senior Economist at UBS. He points out that countries in the Middle East are consuming far more than they were 10 to 15 years ago, as evidenced by the huge building projects in Dubai.

“You are rebalancing power in the world economy, there is no doubt about that,” says Donovan. “It’s very disruptive but the net effect is simply to redistribute wealth from countries like the U.S. and UK to the Middle East or countries like Russia.”

In other words, Europe and America may be suffering but other continents are gaining, so no need to fear a global recession. The Middle East and Russia are strong enough to prop up the whole system. Do you agree?

LONDON, England – I just missed this wave when it first hit a few years ago. Four companies have been started that allow people to pitch up to any of their cars to rent on the spot, for an hour or for a week.

People all over London are now ditching the cars and joining car clubs to save money and only rent a car when they need it. Members pay about $100 a year and then go online to see if the car near them is available when they need it.

One company, Streetcar, claims a regular user can save $4,000 a year by not paying insurance, road tax, repair bills and not paying for the gas for the first 30 miles.

With gas prices here in the UK now topping $10 a gallon, membership is soaring.

Nationally, membership rose 22 percent in the first quarter of the year to 45,000 drivers. Car companies are also now adding vans because companies are clambering for the quick rental to take employees on day trips.

We interviewed a guy who ditched his Jaguar and now just rents a car when he needs it. He does it for green reasons. Ironically he agrees with other members who say they actually use public transport more because they don’t want to pay an hourly rate to pop to a shop. So they pay to drive … less.

This has caught the eye of local governments. A number of them in London have marked out spots for these private companies to park their cars. They see it as a way to cut down on traffic. One study claims that for every car share automobile, 20 cars are taken off the road. Families seem willing to attempt this system instead of buying a second car.

What impressed me was how the companies have been created around technology which was not widespread and reliable even five years ago or so. You can book your car through a secure Web site after you look on an interactive map to see what cars are available.

You can also pitch up to a car and use your mobile phone to send a text and then receive a confirmation back on your phone. The car is then unlocked remotely.

Why it seems to be working for busy people is this: We all know we are going to drive. It’s not much use taking a bicycle to IKEA. So this is a way to save money and cut down on our carbon footprint.

Watch my report

What do you think about car sharing?

LONDON, England – The car industry is to manufacturing what Madonna is to music. It is constantly having to reinvent itself to stay relevant, and has been pretty successful.

Chairman Ratan Tata poses next to the Tata Nano.

One of Madonna’s more memorable phases for me was when she was constantly stripping (well I was a teenager) and that seems to be the phase the car industry is going through now. All the big car makers seem to be coming up with stripped down versions of vehicles with none of the mod cons.

Italy’s Fiat is developing a new low-cost car. Its follows in the tracks of Renault with its Logan and Tata with its Nano. They are all betting on the fact that the no frills segment will grow significantly over the next few years.

The market for cars in the developed world is saturated so car makers are hoping to sell cars to those that haven’t got one yet in places like India, China and Brazil.

It’s a risk though. How easy will be it to get the price down far enough to tempt people to upgrade from their mopeds, rickshaws and tuks? The margins will inevitably be thin so sales will have to be large enough to bring in decent profits. Are larger vehicles the best solutions in those markets? And can you use the same model in several different markets — will the Nano work outside South Asia?

One interesting thought is there may also be demand in developed markets for low-cost cars as people tighten their belts and want to spend less on the initial outlay and running costs.

Do you think the car makers are right to bet on low-cost cars?