Any other business

Wednesday

Allister Heath

The economy in 2008: chilly showers but no hailstorms

Allister Heath forecasts that Britain’s economy will suffer less than America’s, but that homeowners and consumers will still feel the pain — and blame it on Gordon Brown First, the good news: there will be no recession next year in Britain. But while avoiding ‘the Big R’ will be some cause for celebration, the overall outlook for 2008 remains bleak. The economy will not shrink but it won’t grow by much either. And there will be plenty of pain to go round. House prices will fall noticeably, which means that most members of the property-owning majority will become poorer — the first drop in wealth levels in more than a decade.

Saturday

Martin Vander Weyer

<strong>Are markets becoming part of the problem?</strong>

‘Should we blame it all on City spivs?’ I asked a managing director of a famous investment bank at a pre-Christmas party. He had just told me – with the smile of a man who can look forward to yet another seven-figure bonus in a few weeks’ time – that his firm was still doing very nicely thank you. It was doing so, he continued in the same breath despite the fact that the economy was going to hell – and his forecast for the state of the nation’s, rather than his own, wealth in 2008 was as startlingly downbeat and bluntly phrased as any I have yet heard in this winter of doomsaying.

Paul Johnson

A cheer for the quetzal, a sigh for the heron

By far the most entertaining show in London is the comprehensive exhibition of paintings by Millais at Tate Britain. In addition to his genius for creating an image which remains in the mind — the surest sign of a great painter — Millais had a wonderful knack of portraying interesting subjects and objects and took immense trouble to get the details right. The most riveting item in the show is ‘The Ruling Passion’, originally called ‘The Ornithologist’, showing an old bird-fancier on his deathbed, surrounded by children mesmerised by his collection of exotics; it is one of the finest bits of painting Millais contrived to pull off. On the left sits a teenage girl — it was 1885 and the artist was 56 — with a Resplendent Quetzal in her lap.

Saturday

Martin Vander Weyer

Is there an alternative to nationalising Northern Rock?

Tuesday’s announcement that the Treasury will guarantee lending from other banks to Northern Rock is last ditch bid to avoid having to nationalise the bank. But in truth, most of the best options were closed off by inaction back in September. National Rock? With the announcement this morning of a further extension of the scope of the Treasury’s guarantee of Northern Rock liabilities, nationalization of the crippled mortgage lender looks an even stronger bet than it did yesterday. The guarantee, you may remember, initially covered only the £24 billion or so of retail deposits made before everything went pear-shaped and panic-stricken in September. Then the guarantee was extended to cover new deposits after that date and some wholesale deposits.

Paul Johnson

Rejoice but remember: the fear of the Lord is the beginning of wisdom

To open a newspaper today is to enter a world of such horror, cruelty, vulgarity and corruption that one cannot imagine why almighty God does not decide, here and now, to put an end to it. But God knows better. There are many fine people around, and beautiful objects, and worthwhile activities, and as the year comes to an end we ought to remember them and give thanks. Just as there are 12 days of Christmas, so there are 12 blessings and here is my list for 2007. By a curious chance they all begin with the letter ‘F’. First of all I give thanks for Family and Friends. Modern governments hate the family and seek to stamp it out. In China it is a criminal offence to have more than one child.

Martin Vander Weyer

The lord on the board and the gilded rogue

The last Lord Ribblesdale, who died in 1925, is remembered chiefly as the subject of a remarkable portrait, known as ‘The Ancestor’, by John Singer Sargent. For those who enjoy the byways of social history, this tall, unmistakably aristocratic figure in late-Victorian hunting garb is also remembered for other things: he was a celebrated amateur boxer capable, it was said, of knocking out any man in the House of Lords; he was a long-time denizen of Rosa Lewis’s louche Cavendish Hotel in Jermyn Street; George Bernard Shaw is believed to have used him as the model for Professor Higgins in Pygmalion; and he surprised London society in 1919 by marrying as his second wife the former Mrs John Jacob Astor, née Ava Willing of Philadelphia.

Ross Clark

Monopoly: the dangers of playing Gordon Brown’s special edition

There is one thing I have never understood about the property developers of 1930s Atlantic City. How come — at least to judge from the game they inspired, Monopoly — they never borrowed so much as a dime? Few provincial towns these days are considered so inconsequential that they have not spawned a special edition of the Monopoly board, featuring their own street names. But there is one version of the game you won’t find in the shops: the ‘Gordon Brown’s Britain’ edition. This is a game in which, unlike the original, you can borrow money — lots and lots of it. Until, that is, property prices collapse and you’re left in a credit crunch. Here’s how you play. All you need is an ordinary Monopoly set and a calculator.

Christopher Fildes

This party’s well and truly over

The old ones are the best, so allow me to remind you of Sibley’s Law. Giving capital to a bank (said that worldly banker, Nicholas Sibley) is like giving a gallon of beer to a drunk. You know what will become of it, but you can’t know which wall he will choose. By now we have some of the answers, and if the inundations are extensive, it was, after all, quite a party. At the head of the world’s biggest banking group, Charles ‘Chuck’ Prince was enjoying himself to the end — when his bank, Citigroup, admitted to losses of $11 billion, not counting the mere $42 million that he took with him when he was chucked out. Other banks’ chiefs have followed, and on Canary Wharf, where Citi maintains a 12,000-seat corral, there will soon be empty saddles.

Elliot Wilson

In Tianjin

The Wangdingdi market on the outskirts of this fast-growing port city in north-east China is an extraordinary sight. It might be the world’s largest bicycle market; it’s certainly the loudest. In the roiling heat of a Chinese summer, touts at the market gather in a liquid throng, moving like mercury, urging — sometimes almost rugby-tackling — you into their stalls. Each shop is virtually identical, smelling in equal measures of garlic, vinegar and armpits, and packed to the gills with every type of bicycle: some designed for the town; some for mountain trails; some, to judge by their battered appearance, for the scrapheap.

Tim Heald

In Budapest

Budapest is the only city I know where Gresham’s Law takes pride of place. On the Pest side of the Danube opposite the Iron Bridge, in a niche on the front of what is now the Four Seasons Hotel, stands a statue of the propounder of ‘Bad Money Drives Out Good’. His presence is a reminder that this old Eastern European city was a hub of capitalism before it became the drab communist capital that it was throughout most of my life. The hotel used to be the European headquarters of the London-based Gresham Life Assurance Company.

Stephanie Grace

In New Orleans

As New Orleans continues its slow slog towards recovery from Hurricane Katrina, the first signs of new life in still-devastated neighbourhoods have often been the markets. It’s fitting that the city that boasts America’s oldest urban bazaar — the newly refurbished French Market in the unflooded French Quarter — should see community markets as a vehicle for economic rebirth, as well as an answer to the absence of national retailers. In addition to several weekly markets that date back pre-Katrina, there are now regular farmers’ markets in the Upper Ninth Ward, Lakeview and Broadmoor, with more planned.

Martin Vander Weyer

Will the property market cause the next savings disaster?

‘How’s business?’ I asked the Mr Big of commercial property in a city somewhere north of Watford Gap last week. I won’t say which city, because this Mr Big is so big there – his logo is on office block after office block – that he would be instantly identifiable. ‘I’m a buyer for the first time in 18 months,’ he replied, rather to my surprise. ‘Prices have been at silly levels, but now they’re anywhere between 10 and 30 per cent off and we can see value. And before all this credit-crunch business the banks gave us a £400 million credit line at 20 basis points [that’s 0.

Saturday

Paul Johnson

From Renaissance Florence to Hollywood in only one contrapposto step

The other day I came across a clever book on the movie actor John Wayne. I forget the name of the author but it may have been Simon Louvish, who writes better than anyone else on the film-star world. This suggested that the secret of Wayne’s immense physical appeal was his instinctive contrapposto. When filmed standing he never held himself stiffly to attention, as Laurence Olivier and Clark Gable tended to do, but shifted his weight casually on to one leg. This is the posture adopted by both Donatello and Michelangelo in their splendid, and splendidly different, renderings of ‘David’. The concept of contrapposto is subtle as well as important, and goes right to the heart of aesthetics.

Matthew Lynn

The last Victorian bastion besieged

Matthew Lynn says London’s last 19th-century merchant bank, Close Brothers, is under threat of takeover by one of the modern breed of aggressive City traders, Andy Stewart Anyone approaching the headquarters of Close Brothers just off Broadgate in the heart of the City may be reminded of the words that open the Asterix books, about how one small village of indomitable Gauls held out against the invading Romans. In the last two decades, almost all the great names of what was once the Square Mile — the Flemings, the Kleinworts, the Schroders — have either been erased from the record books or reduced to nothing more than a couple of oil paintings and a brass plate inside a giant American, German or Swiss investment bank.

Allister Heath

Braced for a new oil shock? Relax, this isn’t the 1970s

Those of us born in the late 1970s have a great advantage when it comes to understanding today’s oil market: we cannot remember Opec embargoes, nor the double-digit inflation and bitter recessions they triggered. So while many of our elders and betters were predicting Armageddon as the price of oil climbed inexorably over the past couple of years, we younger ones took the surge in our stride — rightly, as it turned out. There is little doubt that the black stuff will soon cost at least $100 a barrel, while a litre of petrol routinely tops £1. But the British and global economies have changed so much over the past 40 years that they can now handle it.

Richard Orange

Winemaker to the maharajas

It’s not often your host has passed up dinner with Mick Jagger and the Maharaja of Jodhpur to take you to his country house for the weekend. But that’s what Rajeev Samant, the pioneer of India’s wine craze, lets slip as we begin the long drive north from Mumbai to his Sula vineyard. Samant has come a long way since he drove a battered old Fiat up this road in the early 1990s to become a farmer on a patch of his father’s land — a gigantic risk for a young man who’d just chucked in a lucrative job in California’s Silicon Valley. ‘Every day I thank my lucky stars,’ he says. ‘I mean, I live this rock-star lifestyle.

Saturday

Martin Vander Weyer

Time gentlemen please

Does anyone actually resign anymore? Nowadays a resignation is regarded not as a final act but as a temporary career break and that’s bad for business. Paul Gray – the former head of HM Revenue and Customs who ‘resigned’ two weeks ago after someone in his department posted the names, addresses and bank details of millions of citizens to another bureaucrat and it never arrived – has ‘returned to work for the government’, according to a Channel 4 News and The Guardian . The mandarin who fell on his sword has miraculously bounced off it again and into a £200,000-a-year post in the Cabinet Office, where he is said to be involved in a project ‘to develop civil servants’ skills’.

Paul Johnson

People who put their trust in human power delude themselves

One thing history teaches is the transience and futility of power, and the ultimate impotence of those who exercise it. That is the lesson of the current King Tut exhibition. No group of sovereigns ever enjoyed the illusion of power more than the pharaohs of the New Kingdom, especially those of the 18th and 19th dynasties. Rameses II spent much of his 66 years on the throne having immense images of himself displayed everywhere from Luxor to Abu Simbel, and many remain, chipped and crumbling. Nothing else. The point is admirably made in Shelley’s sonnet about him, ‘Ozymandias’. I once wished to recite it on a TV books programme. The celebrity in charge, a Rameses of his day, tried to stop me. But the show was live, and I have a firm voice, so I had my way.

Simon Nixon

The Liberal Democrats’ sound money man

I met Vincent Cable recently at a dinner party with a mixture of City and business bigwigs: a few FTSE-100 bosses, a smattering of hedge-fund tycoons, the odd private-equity baron. The Liberal Democrat Treasury spokesman was the only politician at the table and the debate inevitably focused on financial worries: the credit crunch, Northern Rock, the soaring oil price, foreign takeovers of British companies. There was quite a bit of hand-wringing by the business chiefs, but the shy, mild-mannered Cable gave as lucid and articulate a defence of open markets and free trade as I have heard from any political leader. It was impressive stuff — and afterwards I noticed that several guests went up to tell him so. Since then, Cable’s stock has soared in Westminster and the City.

Tim Price

The end of the world is nigh

For a solvent mortgage lender to require emergency government support on a huge scale suggests that all is not well in our financial markets. This understatement matches the gorgeously hubristic claim from ‘Chuck’ Prince of Citigroup, America’s largest bank, in July, that ‘as long as the music is playing, you’ve got to get up and dance. We’re still dancing.’ But by November Prince was gone, victim of a multi-billion-dollar write-down relating to losses in the mortgage market. Perhaps he now dances with Stan O’Neal of Merrill Lynch, America’s biggest stockbroker, who also resigned in November after giant mortgage-related losses.