The Monday Briefing, written by Ian Stewart, Deloitte's Chief Economist in the UK, gives a personal view on topical financial and economic issues.
- We are launching our Christmas reading list today. Our eight choices offer an eclectic and thought-provoking break from the rigours of Christmas. All are available free and on-line:
- This Harvard Business Review article argues that refining our
ability to do apparently unproductive tasks, from clicking your
fingers fifty times or counting backwards from 100 in seven, make
us more resourceful problem solvers. The title alone,
"Building Resilience by Wasting Time", makes this one
page article by computer game designer Jane McGonigal worth
reading:
http://hbr.org/2012/10/building-resilience-by-wasting-time/ar/pr - The movement of goods relies on billions of pallets - movable
wooden platforms on which products are stacked in transit. This
article shows how the humble pallet changed the world and its
pervasive influence. IKEA, for instance, redesigned its
"Bang" mug three times, not for aesthetic reasons, but to
fit more of them on a pallet (4 pages):
http://www.slate.com/articles/business/transport/2012/08/pallets_the_single_most_important
_object_in_the_global_economy_.single.html - One of the biggest debates in economics is about whether
Western countries are doomed to a "new normal" of
permanently low growth. The pessimists believe we face a secular
stagnation in technology and innovation which consign us to
permanently sluggish growth. Professor Kenneth Rogoff, a leading
authority on boom bust cycles, argues that the real cause is the
hangover from the financial crisis – suggesting a brighter
long term outlook (2 pages):
http://www.project-syndicate.org/print/technological-stagnation-and-advanced-countries--slow-growth-by-kenneth-rogoff - The financial crisis has sparked a searching debate about the
role of the financial sector. In this speech the Bank of
England's Andrew Haldane says that the protests of the Occupy
movement and others have triggered a "fledgling financial
reformation" (11 pages):
http://www.bankofengland.co.uk/publications/Documents/speeches/2012/speech616.pdf - This list of 110 predictions should cheer up anyone who
believes in the transformational power of technology. Within a
decade the author sees people being fluent in any language using
instant translation, buildings repairing themselves with self
healing concrete and data being measured in zettabytes (7
pages):
http://www.popularmechanics.com/print-this/110-predictions-for-the-next-110-years?page=all - In this light-hearted article World Bank economist and James
Bond fan Jacques Dethier assesses the plausibility of various Bond
villains' money-making schemes, from Goldfinger's plot to
attack the US Bullion Depository to Max Zorin's plan to corner
the microchip manufacturing market (5 pages):
http://www.vulture.com/2012/11/which-james-bond-villain-plan-would-have-worked.html?mid=agenda--20121109 - The burgeoning area of "neuroeconomics" examines how
the anatomy of the brain influences the decision making of
supposedly rational economic agents. This article from The
Chronicle provides a fascinating account of how such insights could
add to our knowledge of how economies and markets work (6
pages):
http://chronicle.com/article/The-Marketplace-in-Your-Brain/134524/ - The launch of free, online courses by US Ivy League schools
such as MIT, Harvard and Stanford puts high quality education
within the reach of a vast new global market. This TIME Magazine
article looks at how online courses are redefining higher education
for students in developed and developing nations alike (9
pages):
http://nation.time.com/2012/10/18/college-is-dead-long-live-college/print/ - Finally, for anyone who fancies their chances as an economic
forecaster the Economic Research Council's economics
predictions competition offers a great way to hone your skills.
There are five questions covering UK growth, inflation, interest
rates and unemployment. The tie breaker is on Greek government bond
yields and the winner will pick up a case of Royal Tokaji wine. The
competition closes this Thursday, 20th December:
http://www.ercouncil.org/competition-entry/
MARKETS & NEWS
UK's FTSE 100 ended the week up 0.1%.
Here are some recent news stories that caught our eye as reflecting key economic themes:
KEY THEMES
- The number of people in work in the UK increased by 40,000 to 29.6m in the 3 months to October, its highest level since records began in 1971, according to data from the Office for National Statistics (ONS) – employment
- Eurozone finance ministers agreed on steps to appoint a common banking supervisor and enhance regulation of the European banking system – banking union
- Activity in China's manufacturing sector rose to a 14-month high according to preliminary purchasing managers data from HSBC – China
- Data from the 2011 Census revealed London is the only region in the UK where the number of cars and vans is lower than the number of households – Census 2011
- 74% of Italians believe Germany is showing "not enough solidarity" with the rest of the euro area according to a new Financial Time/Harris poll – eurozone fragmentation
- Figures from the European Automobile Manufacturers' Association show the UK was the only major car market in the European Union to expand in the 12 months to November – UK auto market
- The UK government lifted a ban on "exploratory hydraulic fracturing" – a controversial process for extracting shale gas – shale gas
- Darty, Europe's third-largest electrical goods retailer, reported half year losses of €11m and said its expansion in southern and eastern Europe "has been unsuccessful and expensive" – difficult markets
- Antifreeze supplier Kilfrost says it has seen an 85% increase in turnover of its products since August 1st compared with the same period last year, with sales boosted by cold weather – seasonal sales
- Inditex, the world's largest clothing retailer, reported a 27% rise in profits in the 9 months to October 31st, driven by international expansion in to non-European markets – diversification
- German luxury carmaker Porsche said it has already surpassed its record for most cars sold in a year, having sold 128,978 cars in the 11 months to November – Porsche
- Revised official data showed that the Japanese economy fell into recession in Q3 2012, hit by weak exports to China – Japan
- Pizza Hut Delivery, a subsidiary of US food firm Yum Brands, announced plans to open at least 100 new stores across the UK by 2014 – Pizza Hut
- Ratings agency Fitch maintained France's top "triple A" credit rating, the only major agency to still do so – France
- The UK Government announced plans to lend £20m directly to small businesses through Funding Circle, the online lending marketplace – peer-to-peer lending
- Google's top 10 "How to" searches of 2012 included how to "crochet" and "knit" at numbers 4 and 5 – recessionary clothing
- Flight booking website Skyscanner has reported a 41% rise in searches for one-way flights to Bugarach in the south of France, a place where some doomsday believers believe they can escape the "end of the world" – long stay holidays
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