TODAY’S FAYRE

TODAY’S FAYRE – Thursday 22^nd November 2012

“Love is like the wild rose-briar;
Friendship like the holly-tree.
The holly is dark when the rose-briar blooms,
But which will bloom most constantly?

The wild rose-briar is sweet in spring,
Its summer blossoms scent the air;
Yet wait till winter comes again,
And who will call the wild-briar fair?

Then, scorn the silly rose-wreath now,
And deck thee with the holly's sheen,
That, when December blights thy brow,
He still may leave thy garland green.”

Emile Bronte – poet & author – 1818-1848

Since Roman Abramovich bought Chelsea from Ken Bates back in 2003 for a purported pittance of £60 million, he has spent £75 million severing connections with 8 managers. The last manager to lose his job was Roberto di Matteo yesterday, despite winning two trophies during his brief stay, including the much coveted European Champions Cup. Abramovich can’t spell loyalty, friendship or continuity.  These three words are neither in his version of the Oxford English Dictionary nor are they prominent in the Russian equivalent. Why should he be able to spell those words or understand them?  He pays big bucks for success and the Russian Oligarch is not long in the patience department. So, whether all the bleeding hearts like it or not, when appointed, “you live by the sword; therefore you must be prepared to die by it!” 

You could fire me any time you like for a £3-£10 million severance package and I will go without so much as an apology of a protestation. I know 80% of the fans are up in arms at the treatment meted out to RDM, but when you are shelling out that kind of bounty, you can make the rules up as you go along. I understand that Rafa Benitez, who was the 1/8 on ‘jolly’ will step in to RDM’s shoes until the end of the season. By then Pep Guardiola may well be prepared ready to sign on for a rumoured £15 million a year.  We shall see.

"The truth that makes men free is for the most part the truth which men prefer not to hear." - Herbert Agar – journalist – 1897-1980

“You're only here for a short visit. Don't hurry, don't worry. And be sure to smell the flowers along the way.” - Walter Hagen – golfer – 1892-1969

The 4-day Thanksgiving holiday starts today, with the prospect of a decent Black Friday tomorrow. Positive Initial jobs claim data sent the Street of Dreams home purring. Volumes were very light – 20% below the normal daily average.  However the thought of lower gas prices, an improving housing market could be enough to send consumers down to the shopping malls in their droves. Certainly the likes of Apple, Amazon and Microsoft will be expecting bonanza sales, with the consumer’s insatiable appetite for tablets appearing to be limitless.  Wall Street only rallied by an average of +0.35% yesterday, but more than few ‘Buds’ that were poured down copious ‘Gregory Pecks’ on the way home tasted like nectar!  Turkey, pecan pie washed down with a decent Puligny-Montrachet beckoned! An improvement in consumer confidence could be a decent platform for stability. It was sad to hear that Hostess is about to make 15,000 redundancies.  The company currently runs 36 bakeries and 560 distribution depots in the US. Hostess has just over half the number of bakeries it had in the mid 1990's. Also outlined in the strategy are plans to close unprofitable retail stores and a switch of focus to the sale of discounted products approaching their ‘sell-by-date.’ That news and Best Buy’s $10 million loss were the only blips on yesterday’s horizon.

Asia’s trading session this morning was greeted with news that HSBC’s assessment of China’s manufacturing output was positive. It looks as though that after 13 months China’s manufacturing base expanded in November.  There will be official confirmation next week. Anyway markets in Asia responded in the affirmative with the NIKKEI adding 1.1% and the Hang Seng 0.5%.  As a result of these machinations we may just see a positive session in Europe today.  European ministers meet in Brussels today to agree its Budget.  Germany, Finland and the UK will be amongst the dissenting voices, who will reject any increase in the budget, the recommendation amounting to 1% of GDP for the region.  Let’s hope that PM Cameron, though the UK is a fully fledged member of the EU, but not of the Euro, stocks to his guns.  If individual countries are being forced to implement austerity packages, then there is no logical case for increasing the cost of red tape and bureaucracy!

Ahead of next month's Autumn Statement, there was further evidence of gloom for the Treasury yesterday, as Government borrowing rose by £2.6 billion in excess of what was expected - £8.6 billion as against £6 billion for the last month. Poorer corporation tax revenues have helped to create much of this black hole.

Rumours of plans to sell £800m of distressed loans, created from the remnants of Northern Rock and Bradford & Bingley (B&B) could be launched in the New Year. However the taxpayer may still be on the end of a substantial loss from bailing out these building societies/banks. AnaCap Financial Partners LLP, a private-equity backer of Aldermore Bank Plc, may be added to the list of Nationwide, JC Flower and Virgin Money, who are all considering bids for RBS 316 branches, which must go under a forced sale courtesy of the European Union.   The original price was £1.5 billion.  They may go for a knockdown price of £650-£800 million Reckitt Benckiser, the UK household goods titan has agreed to acquire Schiff, in a transaction valuing the dietary supplements maker at about $1.4 billion, topping an earlier bid from Bayer.  This expansion plan could be very complimentary and synergistic to RB’s current operations.

Mike Lynch, the former CEO of Autonomy was more than happy to stand his ground against the onslaught on the integrity of the software operator by Hewlett-Packard’s Meg Whitman.  HWP acquired Autonomy for £7 billion last year.  Mr Lynch told Jeff Randall in a Sky interview yesterday that Hewlett-Packard was in a mess and on the decline, when the business was sold.  My question to Mr Lynch is – why did you sell your operation to a business, which was in a parlous state. By doing so I would venture to suggest that you did not have your clients’ or some of your employees’ best interests at heart! It was your pocket that took priority! I am sure there is a logical reason for the sale, which has escaped me to date!

SAB Miller posted satisfactory first half year results today. Revenues of $3.2 billion were achieved with a dividend of 24 cents.  Sales in Latin America and Africa were positive but no quite as ebullient as a year ago in terms of growth. Europe was proving a bit a laggard. Graham Mackay the CEO accepted that the Chinese consumer was rather circumspect and were attempting to save more than they had.  However he was upbeat about the future.  Lager sales organically grew by 4%. Daily Mail reported full year revenues of £1.96bn just missing the forecasts but states that it is performing well and in line with its expectations

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