The Grangemouth pension strikers went back to work this morning. But don’t imagine we’ve seen the last industrial action of 2008.
Teachers, civil servants, Tube drivers — all are disgruntled.
They’re not alone. The economy’s hitting the skids, while the cost of basic necessities like food and energy are shooting up. Few people are especially happy with their lot right now. The ’feel good factor’ has deserted us.
There is an argument that when workers fear for their jobs they’re less likely to demand higher pay. But I don’t think that will hold. The only respite most people have when the cost of living goes up is to ask for increased wages. And if you’re a member of a union, there’s a good chance they’ll do that on your behalf. After all, that’s what unions are for. How bad would a union leader look if his members lagged behind those of other unions?
So while we’re all feeling the pinch, those who feel most secure in their jobs, and who have union representation, are in a position to do something about it. And most of those work in the public sector.
A lot will depend this summer on how much the Government stands its ground. Unfortunately the Government we have is led by Gordon Brown.
Brown has already shown a major weakness this month over the 10p tax rate (he even said ‘sorry’ yesterday while campaigning in Bolton). He knows a showdown with the unions would further alienate many Labour backbenchers, and could be fatal for his premiership. The unions know this too. They scent blood.
So, even though it’s a bad move for the economy, if push comes to shove I reckon Brown will cave in. There are angry times ahead for UK plc.
HBOS on the scrounge
HBOS has launched a £4 billion rights issue. The owner of Halifax will sell two new shares for every five existing shares, representing a 45% discount to current market value. The move is aimed at improving the bank’s Tier One capital ratio, which will now be raised to between 6% and 7%. Dresdner Kleinwort and Morgan Stanley will underwrite the new issue.
Chief executive Andy Hornby said, "We are planning for a more challenging environment and the proceeds of the rights issue should ensure that we benefit from strong ratios even if the macroeconomic environment deteriorates further."
HBOS also announced a £2.8 billion write-down. But it’s the bank’s economic forecasts that raise my eyebrows. HBOS predicts GDP growth of between 1.25% and 1.5%, low interest rates and house prices to fall by "mid single digits in 2008 and 2009".
How important these predictions were in determining a figure of £4 billion we don’t know. But they all add up to a big ‘if’. I’ve a nagging hunch we may not have heard the last of all this...
"Sack all oil analysts!"
"Oil analysts are so bad at their jobs, they should all be sacked," says our commodities man (and birthday boy) Garry White.
Talk about ingratitude. The incompetence of oil analysts is great news for Garry and his readers.
Take Deutsche Bank’s estimate. Three years ago it forecast that by 2010, oil would be at $24 a barrel.
The figure seems laughable now. In fact, it is laughable. I’m actually laughing as I write this.
As Garry explains in his piece today, oil analysts regularly lag the actual oil price. Which means investment banks often underestimate just how much money an oil company will make — leaving a great opportunity private investors can exploit...
11 o’clock tomorrow morning — make sure you check your email!
Frank Hemsley came through for me! Frank and I have been following at-home trader Robin Tracey for the best part of a year now. Frank managed to persuade Robin to share his trading strategy — with which I personally saw make him over half a million in six months — with some of his readers.
Because of the way Robin’s strategy works, there are only certain times when he’ll even consider letting new people on board.
I knew one of those windows was about to open, so I’ve been chipping away at Robin for the past two weeks. Truth be told, I was a bit jealous of Frank (call it professional rivalry). The readers he’d got in were already making money.
I wanted to give Fleet Street Daily readers the chance to try Robin’s remarkable strategy too.
Over the weekend I decided to launch a pincer movement. I got Frank to call him. I don’t know what he said, but it did the trick! When I spoke to Robin today he agreed to let some of my readers in on the action.
Tonight I’m having dinner with the man himself to seal the deal. I’ll send you an email tomorrow morning, 11am, with the full details.
Make sure you don’t miss it!
Until tomorrow
Ben Traynor
Find out the latest commodities news from Garry White here.
Discover the latest emerging markets news from Manraaj Singh.
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