Tag: Business and finance

6
Oct

Career breaks

FRANK LLOYD WRIGHT quipped that “the modern city is a place for banking and prostitution and very little else.” Little did the early 20th-century architect know how banks would flourish, hoovering up much of the world’s talent by the early 2000s. But this golden age is ending: bankers’ jobs are at risk from the digital revolution on the one hand, and falling profits on the other.

Nowhere have bankers fallen from grace with such a bump as in Europe. This week ING, the Netherlands’ largest bank, announced that up to 7,000 jobs would be cut in the next five years. Commerzbank, Germany’s second-largest bank, had already reported it would cut its workforce by 9,600, nearly a fifth.

Across Europe, bankers are packing up. In Britain more than 10% of bank jobs were cut between 2011 and 2015; in Germany the workforce has shrunk by around 20% since 2001. Since the start of the year Credit Suisse has got rid of…Continue reading

6
Oct

Active defence

WHEN firms merge, their bosses gush Panglossian jargon. So it was with the tie-up announced this week of Henderson Global Investors, an Anglo-Australian asset manager, and Janus Capital, an American one. Janus Henderson, as the combined business will be known, will become a “truly global” asset manager that will deliver “compelling value creation”, boasted its American half. Yet behind the boosterism lie the real fears of active fund managers: of losing business to passive ones—ie, those offering funds that simply track a market index. It is hard not to see the merger as, more than anything, a defensive move.

To be fair, the companies do have a strong business case for merging. Janus is deeply established in America and Japan. It is famous for having in 2014 hired Bill Gross, the “bond king”, when he abruptly left Pacific Investment Management Co, PIMCO, the firm he co-founded and turned into a giant. Henderson’s sales network is centred on Europe. The firms stand to gain more from selling each other’s products in new markets than they will lose from stepping on each other’s toes.

Moreover, the combined…Continue reading

6
Oct

Putting it all on grey

SHORTLY after Mark Frissora took over as chief executive of Caesars Entertainment last year, he paced the floors of his American casinos, with their rows and rows of idle slot machines, and grasped the scale of the existential threat that faces his industry. Casino customers are ageing, and younger people have little interest in taking their place. Mr Frissora called on his company to brainstorm a new “casino within a casino” to draw in millennials who grew up playing video and mobile-phone games.

Next door on the Las Vegas Strip, Jim Murren, CEO of MGM Resorts International, the city’s largest gaming operator, is making similar moves. Mr Murren has convened a committee of millennial employees to work out how to keep the business relevant to future generations. Both firms will soon open experimental spaces for young people, including new types of slot-machine games that test players’ skills as much as their wallets.

These offer a glimpse of a casino of the future that looks very different indeed. There are gravity-free rooms where you can literally climb the walls; LED screens that continuously change interior backgrounds; and…Continue reading

6
Oct

Autumn blues

QUEASY calm is unpleasant, but it beats sickening panic. Late on September 29th Deutsche Bank’s share price lurched downwards again, to a 34-year low, after Bloomberg reported that “about ten” hedge funds had switched some business away from the troubled German lender. That capped a stomach-churning fortnight, after America’s Department of Justice (DoJ) requested $14 billion to settle claims that Deutsche mis-sold residential mortgage-backed securities (RMBSs) before the financial crisis. Hopes that it might settle with the DOJ for $5 billion-odd, though so far unfulfilled, have since brought uneasy respite. On October 5th Deutsche’s shares were some 20% above their nadir.  

A swift, affordable agreement would end uncertainty about the bill and quieten chatter, pooh-poohed by government and bank, that the German state might have to prop up the country’s biggest lender. It would also buy breathing space….Continue reading

5
Oct

Peacocks of the sea

THE Monaco Yacht Show, which ran from September 28th to October 1st, is arguably the world’s most extravagant game of one-upmanship. This year more visitors than ever—34,500—came to gawp at 125 superyachts with a collective value of $2.7 billion, tied up in the principality’s Port Hercules. But the yachts were only the beginning. Monaco is essentially a bazaar for the 0.1%: everywhere you look there are hawkers in pop-up tents trying to sell things that you never knew you needed. There were submersibles that can take six people to the bottom of the ocean; armour-plated Land Rovers; jet-skis and 3D goggles; military-style helicopters and flying boats. Among the variety of servants for hire were armed guards and on-board DJs.

In this world, size counts for a lot. The bit of the yacht industry that has recovered most strongly since the financial crisis is the “monster yacht” segment. The Superyacht Intelligence Agency says 62 yachts of 70 metres plus were delivered in 2011-16. Another 59 are under construction, despite the fact that some of the usual big spenders have pulled in their horns a bit. The decline in the oil price has hit both…Continue reading

5
Oct

Your name will also go on the list

FIRMS must list foreign workers, blares the headline of London’s Times newspaper today after a speech from the Conservative government’s new home secretary, Amber Rudd. The idea, it seems, is not to list each and every individual but for companies  to list the total number of their foreign employees so that they can be “named and shamed”. 

Conservative Home Secretaries have a tradition of throwing red meat to delegates so it may be that this policy never goes any further. On the BBC’s Today programme this morning, Ms Rudd was emphasising that the policy was only “for consultation”, and if she consults business, she’ll probably get a pretty rude answer. Which business would want to be named and shamed at the top of the list, with all the potential for adverse publicity, demonstrations etc? It’s all a bit reminiscent of the first world war, when shops with German-sounding names had their windows broken and the Royal family changed its name from Saxe-Coburg-Gotha to Windsor.  

But this was not the only bad idea to come out of the current Conservative conference. First, there was the idea of Continue reading

4
Oct

Deutsche's dilemma

29
Sep

Fat help

BACK in Syria food was cheap, remembers Maya, as she sits cross-legged in the small flat she shares with her husband, their five children and another couple in Amman, Jordan’s capital. When she first arrived here, she had to cut back. But now, with her husband working and 20 dinars ($28) a month from the World Food Programme (WFP), a UN agency, she can buy the children a treat like fish or chicken.

Scattered across Turkey, Lebanon and Jordan are 4.4m registered Syrian refugees, 90% of whom, like Maya, live outside formal refugee camps. This makes it a logistical nightmare to get the traditional food aid to them—sacks of rice and pulses. The WFP, the world’s largest food-aid provider, has adapted: a decade ago, it doled out aid only in kind. Now just over a quarter of its aid globally is cash-based. Every month Maya gets a text message alerting her that her special debit card, which she can use only to buy food, has been topped up. The WFP reaches around 1.1m refugees like this in Jordan, Lebanon and Turkey.

This week saw the launch in neighbouring Turkey of the largest-ever humanitarian-aid project financed by the EU: a whopping €348m…Continue reading