Editor's note: David Buik has spent almost 50 years in the City of London, as an investment banker and broker. He is a partner at BGC Partners and a frequent media commentator on financial matters.
CNN – He may be an octogenarian but anyone who underestimates Rupert Murdoch’s business cunning and prowess does so at his or her peril.
He is probably at his most dangerous when his back is against the wall.
I enjoyed his interrogation at the Leveson inquiry and he was in imperious form when being interviewed Wednesday in the U.S. on his plans and aspirations for his media and publishing enterprises. As the old expression goes: “There’s life in the old dog yet!”
"Uncle Ru" has been deeply and irrevocably in love with newspapers since he left his mother’s womb and under the watchful eye of his father, Sir Keith, he cut his teeth on all journalistic branding irons.
Editor's note: David Buik is a veteran commentator and partner at BGC Partners.
London (CNN) - How ironic that it should be exactly three years to the day that Hank Paulson, then the U.S. Treasury Secretary, allowed Lehman Brothers to go to the wall, that an unauthorised loss of $2 billion from UBS’s investment banking operation in London should have been announced by CEO Oswald Grübel.
Paulson’s decision was inexplicable in the circumstances, having saved Bear Stearns and supported AIG, and it sent seismic tremors of fear through financial markets not seen since 1929. UBS’s loss has at least been declared, though the reason behind the alleged behaviour of 31-year-old Kweku Adoboli may take some weeks to manifest itself.
The UK Q4 GDP figures announced this morning were a shocker. However, the British economy scraped its way from recession in Q4 by its dirty finger nails. The median forecast of a 0.4 percent gain in GDP by the majority of renowned economists were rubbished and the official figure of 0.1 percent increase is a massive set back.
I wondered why Lord Mandelson was so guarded about the recovery, reiterating that it was so brittle. The services sector underperformed. It expanded by just 0.1 percent and not the 0.5 or 0.6 percent rise suggested by the business surveys.
With household incomes under pressure, credit in short supply and a major fiscal squeeze looming, the path to a full recovery is going to be a long and tortuous. I am in the minority that believes that GDP will grow by just 1 percent in 2010. Talk of an exit of quantitative easing, despite opinion to the contrary, is not only precipitous, but also folly in the current circumstances.
The auto sector did well thanks to a stimulus program, which may be fully utilised before too long.
Going forward, this recovery may well be achieved with high unemployment. Last month’s retail sales rise of 0.3 percent was disappointing. Going forward we’re all skint with taxation likely to increase and with less disposable income finding its way to the shopping malls. Retail is so important!
Perhaps Messrs Brown, Darling, Myners et all will desist from larruping the banks too much, whilst the economy is in such a parlous state. That does not presuppose that radical regulation is not a prerequisite ,as well as some taxation over a protracted period of time to ensure the taxpayer is repaid in full. The bonus culture is being altered. Few disagree with that philosophy.
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