It was windy across the economic landscape yesterday. Trees of hope were blown down, and old chestnuts dropped from their branches, leaving their flaws exposed.
The winds blew across stock markets – this time the Dow fell another 153 points, taking the fall this year to 1303 points (9.9 per cent), and 2423 points (17 per cent) down on the year-high set in October last year. The FTSE 100 was down 12 per cent from the year’s beginning and 16 per cent down from the seven year high set in July last year.
But look elsewhere, and the signs of storm damage were just as obvious.
Oil was up yet again, this time it was trading at $107.65 at the time we took our daily reading from the New York Mercantile Exchange. The black stuff is now up $8 this year, but then remember it started 2008 at an unthinkably high level – and is now around $30 up on the price seen last September, which at the time was a record.
Then take a look at that sector that did so much to push equity prices up last year, and at the same time sat in another storm, this time of controversy: Private Equity.
Profits at Blackstone were down by 90 per cent in the last quarter. It’s just the latest Private Equity firm to feel the pinch – but at least this time some sunlight seeped through the dismay. Referring to the credit crisis, Steve Schwarzman, chairman and founder said, “It is uncomfortable while we are in the midst of it, but it is during these disruptive periods that we can make our best purchases. It has created enormous opportunities to buy cheaply.”
Meanwhile, another storm blew through Marks and Spencer, as its resident Superman, Sir Stuart Rose announced a boardroom shuffle, and while the company was at it, revealed the little matter that its chief exec is being promoted.
Sir Stuart has long maintained 2009 will be the year he steps down as CEO, and much speculation has surrounded who his successor will be, how MS will cope without him, and whether Sir Stuart would stay involved, or perhaps fly back to the planet Krypton.
Now we know; Sir Stuart will continue to wear his Marks and Spencer underpants on top of his trousers while overseeing the MS story until at least 2011 – but in the role of executive Chairman.
Put all that news together and you have a dramatic wind, and yet we have not even told the half of it.
For yesterday also saw a tornado blow across the world of UK property market forecasting, as the Royal Institution of Chartered Surveyors revealed the results of its latest property market survey – and this time, trees of property market hope were left strewn across the economic drive. To find out why, read the next article.
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