November 5th, 2010
03:05 PM GMT
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London, England (CNN) - British Prime Minister David Cameron has spelled out an ambitious plan to support fledging tech companies in order to create a tech cluster called The East London Tech City. He was speaking before a very enthusiastic crowd of young entrepreneurs and older and wiser venture capitalists and bankers.

It seemed to me that the government is serious about making changes to the law and investing money in this venture. But even the PM freely admitted that Britain can't create a Silicon Valley at the moment.

From copyright laws to patent protection to the lack of risk taking in the culture, the country isn't a place where brilliant minds can take ideas to market, fail and then take another idea to market and fail again and then really take off.

As one young entrepreneur said to me, anyone who succeeds here is considered lucky or just privileged or in the end, is resented.


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November 2nd, 2010
11:05 AM GMT
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London, England (CNN) - I have just sauntered into BP's global headquarters in London for the third quarter results press briefing. I walked right past security, picked up my pass without showing I.D., and now I sit in reception.

The last time I was here was for second quarter results and this building was under siege.

From live trucks to top news anchors to protesters, to beefy security front and side, this building was surrounded. I couldn't get close to the front door.

Certainly the story has evolved and the media has largely moved on and there is an election in the USA today. When I was in America last week the BP stations I saw were busy; so much for a boycott. And no one I chatted to mentioned BP.

We will hear today the cost of the clean up and BP's plan for the future from new CEO Bob Dudley. A lesson perhaps to other companies that come under siege; a change at the top can be one of the key solutions to lowering the temperature on a story that takes on a life of its own.

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October 8th, 2010
03:04 PM GMT
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Within day of the Gulf of Mexico oil spill the question of who would pay for the clean up was clear - BP was legally responsible and said it would honor that commitment.

The same scenario seems to be the case in Hungary.

The firm, MAL Hungarian Aluminium appears to be liable for the clean up costs of the red sludge.

That's according to the European Commission. Environment spokesman Joe Hennon tells me that under normal EU laws, the operator "should be liable." He says MAL received a permit to operate the plant in 2006 and all the paperwork, on first glance, appears to be in order.

I could not reach the company to get a response. To be fair, the plant has been closed for the week and so no one is answering the phone.

MAL's website does have a statement apologizing to those who have been affected by this. It has also said that it will pay for funerals.

MAL's insurance company, Allianz Hungaria Biztosíto has been authorized to tell the media that MAL has an up to date insurance policy for "property and liability."

But spokespeople for Allianz say they don't have permission to reveal how much that insurance is for. The question many of us then had was what role would or could the EU play in this and is there a pot of money Hungary could tap into?

There is something called the "EU Civil Protection Mechanism" which coordinates disaster response among 31 European countries. It was used during last year's forest fires in central Europe but also tapped for things like the Haiti earthquake.

The 31 countries have been contacted, says the EU and those experts should be found quickly.

But the EU does not respond unless asked by the inflicted country. Hungary has now triggered the mechanism and has asked for a few experts in "handling toxic sludge, decontamination and mitigation of environmental damage."

It's not yet clear to me who pays for them and for any other use of the mechanism Hungary may require.

The Hungarian government said earlier this week the costs will be in the "tens of millions of dollars" but there will be homes that have to be knocked down, owners compensated and relocated. Then there are the health costs and any fines coming down the pipe. 

The EU says Hungary should recover its costs from the company. We are a long way from knowing that bill.


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October 1st, 2010
01:30 PM GMT
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Paris, France (CNN) - As I sit at Ford's massive stand here at Paris Motor Show, I can see new C-Max models, new Focus models, new Mondeo models, but not a single female model.

I can't remember Ford having the ubiquitous "pretty model" standing by its cars at the last car show either.

No matter, a 30-second walk to Chrysler proves it’s not just an “American” thing. There are plenty of young, tall and always female models in short blue dresses here. Then again, Chrysler is controlled by Italian car company Fiat. It does seem to me the Italian models (the ones made of metal) seem to always have the other kind of models standing next to them.

Now I'm at Alfa Romeo and the ladies are all in black with high heels and lots of bling. Across the way is Ferrari and, well, what can I say? At least there are no bikinis.

David Fitzpatrick, account director at automotive PR agency PFPR Communications, was recently quoted as saying that the “days of bikini-clad women on bonnets are long gone.”

Many women will be cheering that development, especially the ones employed within the industry. The question is whether carmakers are just moving with the times, or whether they are making a deliberate effort not to alienate female car buyers. In tough times for the auto industry, perhaps they should consider going one step further and dispensing with models all together. Just a thought.

Off to Maserati and well, for such a small brand there is a lot of media attention (could the red wine and chef slicing beef have anything to do with it?). At least here there aren't the living models standing quietly next to each car. So it appears not all Italian brands feel the need to accessorize their vehicles with women. Or maybe they are just on a break. I think I'll walk back to Ferrari.

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September 29th, 2010
07:50 PM GMT
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It's been customary of late for Mercedes Benz to kick off the Paris Motor Show (sorry Renault) the night before the doors open to the press.

Mercedes throws a little party at its Champs-Elysees showroom and on Wednesday night it was filled with guests and media.

The highlight for those of us still working is a quick interview - much quicker this time - with Daimler Chairman Dieter Zetsche who is in a buoyant mood and smiling broadly under his signature white handlebar mustache.

And why not? Mercedes sales and revenue have rebounded this year.

Zetsche admits luxury sales have been better than he could have hoped this year and says that Mercedes is increasing its market share within the segment.

At last year's show the luxury and super luxury makers were all cautiously optimistic.

After all, the high end of the auto market is not usually hurt by recession, given the rich don't suffer as much.

But like the airline industry, car makers have seen welcome sales increases, in part due to government support no doubt.

Zetsche notes that Mercedes, like Ford, cut costs enormously during the economic crisis, making it that much easier to post profits when sales increased.

This show is also about the electric car.

We will see mass produced models that are ready to hit the showroom rather than the concept electric cars that have been a staple at these shows for years.

The question is, will you the consumer buy one?

Zetsche told me it would be "optimistic" to say that Mercedes could see even five percent of it sales coming from its electric offerings by 2015, even though it plans to offer an electric version of most models.

Electric cars and electric batteries will be the talk here in Paris. It's not clear if enough buyers will want them though.

September 23rd, 2010
10:26 AM GMT
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London, England (CNN) – By the end of Thursday, Britain will have the ability to get four percent of its electricity consumption from wind, thanks in part to the addition of 100 turbines 11 kilometers off the coast of Kent.

The new site is Vattenfall’s "300 MW Thanet Offshore Wind Farm," a major renewable energy initiative spearheaded by the previous British government. It could supply more than 200,000 homes.

The four-year-old project has been delayed by two years, and at one point was owned by a hedge fund. But now, under Vattenfall, it’s ready.

It seems to me that Britain is getting less praise than Denmark and Germany, or less notice. And today changes that. Britain is so windy it’s estimated an offshore turbine in the UK generates 50 percent more power than a turbine in Germany.

Of the 16 offshore wind farms now under construction around Europe, half are in Britain according to the European OffShore Wind Industry.

That translates to much more wind farm capacity being constructed in the UK (2.4 gigawatts) during the first half of 2010 than the rest of Europe combined (1.5 gigawatts).

In total, wind is close to supplying energy to nearly three million British homes, according to UK energy association RenewableUK.

The challenge is to find places where locals won't complain, which is why offshore wind farms are so desirable. The wind there is also stronger.

Of course, the farther offshore you go, the more it costs to construct and carry power back to shore.

Thanet will not keep its crown as the world largest operational offshore wind farm for long though.

In late 2012 or 2013, the London Array wind farm - a project being funded by energy companies E.ON, DONG Energy and Masdar - is scheduled to start generating electricity just north of the Thanet site.

The owners say the 300 proposed wind turbines could become the world's first one gigawatt offshore wind farm.

When up and running, the London Array will go a long way to helping Britain reach the UK government’s target of providing 15 percent of its electricity from renewable sources by 2015.

How does that compare to where you live?

September 7th, 2010
09:33 PM GMT
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It's hard to know the sub-lead in this announcement after the surprising timing of Bob Diamond moving up from President to CEO of Barclays Bank from next March.

Is it that Diamond finally got the job? Is it that he took the London job even though he's rich, aged 59 and lives happily in New York? Is it that another American is taking the reigns at a top British business (BP, Burberrys, Pearson)?

Even though he lost out to John Varley for the top job six years ago, the older Diamond always seemed to me to be the head of Barclays anyway. You certainly saw him on television a lot more.

Why? Follow the money. Something like 2/3rds of Barclays business comes from his part – investment banking at Barclays Capital (known as Barcap).  And as president, he also oversaw commercial banking (companies) and the wealth management (rich individuals). He was even involved in the sports promotion and branding, whether its the Barclays Premiership (he loved handing over the Barclays trophy to his beloved Chelsea) or Barclays promotion of London's new bike initiative.

Diamond didn't have to deal with the more sedate Barclays retail operations in the UK and the credit card. Now he does.

Does Barclays become an investment bank with a retail arm? Or does it stay a big retail bank with lucrative add on?

Barclays said again Tuesday its not going to change its strategy of being a global financial giant just because its now run by an investment banker.

I have yet to hear any critical comments about his appointment. Of course his salary and compensation package was criticized by Peter Mandelson earlier this year when he said Diamond was the "unacceptable face of banking ... " because of his salary and bonuses (the numbers were disputed by the bank) and also his heady purchase of bankrupt Lehman's U.S. investment bank business two years ago at a steal (which has now landed Barclays in the middle of a lawsuit).

Diamond is certainly a high flier. He is certainly very wealthy thanks to his huge success at Barclays and doesn't need to work anymore. And now he is coming back to London where he will have to once again deal with the media and politicians picking over any bonuses he may get in the coming years (he did not take a bonus during the economic crisis).

Add to that, the UK is debating whether London-based universal banks (ie: Barclays, HSBC) should be broken up so the volatile investment banking arm (the 'casino side' as one politician here calls it) does not affect the retail banking arm. While Diamond and Varley kept Barclays away from government handouts during the crisis, critics say the investment bank has profited from getting central bank money at rock bottom interest rates.

Diamond will certainly become be one of the public players in this debate.

As one analyst told me: "He must really want this job".

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August 5th, 2010
01:50 PM GMT
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LONDON, England - UK banks are reporting better-than-expected half-year profits. The pound is up strongly against the U.S. dollar. Stocks appear to have restarted the slow but sure summer bump up. So, why shouldn’t London’s financial sector be in a better mood?

Square Mile Magazine celebrated its 50th issue by throwing an annual big party for bankers on Wednesday night in the heart of the Financial District, known as the City.

“We do these parties to give something back to our readers,” Editor Martin Deeson told me as a jazz band set up. “Bankers have had a tough couple of years, more unpopular than journalists the past couple of years. We want to make them feel good about themselves.”

More than 2,000 were expected on the night; to play a big of poker, to look at the latest Jaguar cars, have two free drinks (before having to pay their own way) or even get their picture taken on a pricey bed between two lively lingerie models.

So, is it a good time to be seen having fun again? Why not? The financial sector is something like 12 percent of Britain’s GDP. This is not just rich bankers spending their bonuses. These include insurance, private equity, law firms, management consultants, accountancy firms and yes all us journalists who cover all this.

To be fair, the people invited to the party were having a good time but it was not a $100 a bottle champagne night.

“It's better to keep a low profile, but a lot of people realize we work really hard, but this new tax that takes away 50 percent of our bonuses hits us quite hard,” argued Michael Bergman, a lawyer at Mint Equities.  “People here, they work hard, there is a high stress level, there is a high burn out level in the City and I don't see why people who stick with it shouldn't be well rewarded.”

I have to say the feeling from the thousand or so people there was cautious optimism about the economy, and I heard time and time again that the banks were hiring again. Still, it may be years before things "get back to normal."

Deeson said: "I think everyone knows that things have changed. It will be a long time before we go back to the boom time, massive bonuses, buying two Porsches, that kind of thing.”

Should it ever get back to those times again?

July 29th, 2010
03:15 PM GMT
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LONDON, England – I hardly go into my London bank branches. I don't even do much internet banking. Everything I do is through automatic debits and standing orders and automatic deposits. Then there is the occasional phone call. Britain's big banks have been shedding branches for this very reason. No surprise there.

So, why are there people wanting to start new banks and open new branches just after the worst banking crisis in decades?

On Thursday Metro Bank opened its first "store" (they like to call them that instead of branches) in central London.

Metro is based on the Commerce Bancorp model started in the United States in the early 1970s by founder Vernon Hill. He's also the man behind Metro and thinks Londoners want more branches (sorry, stores), longer hours and to be able to walk into the bank 7 days a week, 361 days a year (few 'bank' - aka public - holidays for his employees).

There are certainly some nice touches at the Holborn store; friendly staff, quick sign-ups for a new account, a coin-counting machine for the kids to put money into a new account and even hundreds of American-style safe deposit boxes. Hill told me one big advantage is that it doesn't have to deal with legacy technology.

More stores will open soon and they hope to have 200 in 10 years. Chairman Anthony Thomson says they want to grab 5 10 percent of London's banking market and says that would be enough to be lucrative.

People were lined up in front of the store before it opened and every teller was busy during the first few hours. People do seem to want a simple branch bank concept. But Metro does not appear to be trying to undercut the big boys – consumers groups have looked at the rates being charged for things like mortgages and credit cards and child accounts and while they are competitive, they are not priced to lure people in it seems. Its all about customer service.

Metro also promises to make loans to small and medium-sized companies near the stores.

Metro might have competition soon. Bank branches are being closed or sold off by state-owned Northern Rock, Lloyds and Santander and there is talk that other "community" banks will sprout up. Just when I got used to not finding a branch when I occasionally do need one.

June 10th, 2010
12:04 PM GMT
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As the 32 squads go at it on the playing fields of South Africa, we could not help but ask if economics plays a part in a country's success.

Who wins the economic World Cup?
Who wins the economic World Cup?

It's easy to say no straight away given that Brazil has won the trophy five times and until recently its economy was far down the 'developing' scale.

The United States and Japan on the other hand have never come close to winning, despite having the world's biggest economies.

Or perhaps, poorer countries have had the edge given that players coming from nothing, work harder at sport.

That of course doesn't fly when you look at the winning sides from Italy, France and Germany.

Someone joked to me this week that teams tend to win the cup during economic upheaval. Take a look at how well Argentina did during its era of hyper inflation.

Does that bode well for Greece or Spain?

So, over the course of the next few weeks throughout the tournament, we will take a look at whether the economy, GDP or wealth of a nation plays any part.

Each day we will preview the day's main match and profile each country to see who would win if economics played a role.

On opening day, we'll put Mexico and South Africa head to head and see who wins off the field when it comes to economic might.

Let us know what you think.

Please leave your comments below and let us know who you think would win.

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