World Forex and Finance: September 2011

Friday, September 9, 2011

Ad agencies wrestle with talent shortage

AS MANY as 10 per cent of mid-level positions at advertising agencies are vacant at any one time, the first study of its kind has revealed.
Of the agencies surveyed, 80 per cent say they struggle with chronic talent shortages, particularly in account management and creative and digital roles. The shortage is most prevalent in junior (one to four years) and mid-level (four to seven years) positions.
Ninety-two per cent of agencies said that up to 10 per cent of positions remained vacant at any one time as they were unable to find suitably experienced staff.
The survey of about 20 per cent of the industry was conducted by the Communications Council in recent weeks and helps to explain why the ad industry is widely known for ruthless poaching.
Some staff hand in their notices and walk into more senior roles with competitors that offer up to $30,000 a year more, despite being underqualified for the jobs.

Times changing in race for survival

IS THE newspaper business in such bad shape that even The New York Times, that great American journalistic institution, will inevitably be forced out of business?
The director of a new documentary on the paper, Andrew Rossi, thought its death was a definite chance when he started filming in late 2009.
''Two weeks after I started shooting, the Times underwent historic lay-offs, eliminating 100 positions in their newsroom,'' he says. ''There was a sense of apocalypse.''

Changing newsroom ... a scene from Page One: A Year Inside the New York Times which examines the news business.

Rossi, a former digital cameraman and reporter with the New York Post and the TV news channel NY1, was given access to the newspaper's media team for Page One: A Year Inside The New York Times.

Bloggers must choose to be either constructive or cowardly

A few weeks ago, I wrote a column comparing two campaigns. I was interested in celebrating the one I thought was good. But in so doing, I was also critical of the other. I received a lot of feedback from people telling me they agreed, but I was also criticised by some for my criticism.
It made me reflect on the ''code of ethics'' (mine, and in general) for the review and commentary of the creative work of others.
When it comes to the creative side of our business it is all about opinion, so having a point of view is the lifeblood of what we do. But with this comes subjectivity - anyone can have an opinion, qualified or not. I cannot tell you how many times as a child I would listen to my dad providing a narrative on the ad breaks, telling anyone within earshot he could do better himself.
What are the rules for sharing our opinions on the work of others?
We could keep them to ourselves. Or share them only when we wanted to praise. It would reduce some of the negative energy on the planet. But might it also create a slightly anodyne world, a touch too sweet or, worse still, censored?

Bank of America may lop 40,000 jobs: report

Bank of America Corp officials have discussed slashing roughly 40,000 jobs during the first wave of a restructuring, the Wall Street Journal said, citing people familiar with the plans.
The number of job cuts are not final and could change. The restructuring aims to reduce the bank's workforce over a period of years, the Journal said.
The newspaper said BofA executives met Thursday in Charlotte and will gather again Friday to make final decisions on the reductions, putting the finishing touches on five months of work.
Bank of America could not immediately be reached for comment by Reuters outside regular US business hours.
Banks are shedding jobs worldwide as stricter regulations and a tough second quarter for trading income take their toll on investment banking units in particular.
Reuters

China inflation slows, eases pressure to cool demand

China's annual consumer price inflation cooled slightly to 6.2 per cent in August from July's three-year high, raising expectations that the central bank will hold off on further policy tightening amid worries about a global economic slowdown.
The consumer price index rose 0.3 per cent in August from the previous month, after a 0.5 per cent rise in July. The figure is not seasonally adjusted.
Giving a more detailed breakdown of the index, the bureau said food prices rose 13.4 per cent in the year to August, with non-food prices up 3.0 per cent.
In month-on-month terms, food prices rose 0.6 per cent, while non-food prices were up 0.2 per cent.
The producer price index rose 7.3 per cent in the year to August and was up 0.1 from July.
Reuters

Japan's economy shrinks as strong yen hurts

Japan's economy contracted more than the government initially estimated in the second quarter, adding to concern the stronger yen may derail the nation's recovery from the March 11 earthquake.
Gross domestic product shrank at an annualised 2.1 per cent rate in the three months ended June 30, more than the 1.3 per cent contraction reported last month, the Cabinet Office said today in Tokyo. The reading was in line with the median forecast of 21 economists surveyed by Bloomberg News.
Reports in the past week indicate growth in the world's third-largest economy may stall toward the end of the year.
Machinery orders, a leading indicator of capital spending, fell the most in 10 months in July and companies are also struggling with a yen near a postwar record, risking an erosion of oversea profits when they're repatriated.

Wealth fund would preserve golden era

It is maybe a considerable blow to our national pride that the Philippines boasts the world's biggest crocodile, but when it comes to the national accounts Australia can stand tall.
While other Western economies are ailing, ours is plodding along quite nicely at 1.2 per cent, according to the second-quarter gross domestic product numbers.
Mind you, that's well below the 3.2 per cent trend, and it's before August ructions on global markets and the recent slather of downgrades in Europe and the US.
Still, it surpassed expectations and sparked the strongest rise in the sharemarket in a year. Here was evidence, against the prevailing and bearish tide of economic punditry, that things were not too bad.
Really, not too much to whinge about - and certainly a superior performance to that of our peers.
It seems the clamour by sections of the media and business designed to talk down the economy and skewer the Gillard government had become a tad too infectious.
On the consumer front, the message from the numbers is don't expect a rate cut too soon, unless perhaps the global market ructions turn into a violent rout. The next relevant data point comes in late October with the consumer price index. Meantime, the jury is entirely out.

Quarterly GDP hours worked trend. Source: ABS

Amidst the mostly good news in yesterday's national accounts figures, there was one potentially worrying chart - the history of quarterly GDP movements plotted against the trend figure for hours worked.
Given today's uptick in unemployment, it was a very timely reminder of the labor force implications of even a mildly slower rate of economic growth.
Superficially, the chart above confirms what everybody knows about employment being a lagging indicator, but a closer look shows it's a little more complicated than that. Employment (or at least hours worked) lags more on the upside than it does on the down.
In the two major downturns this century, growth in hours worked dived pretty much in unison with GDP growth slowing and then overshot GDP into negative territory, taking several months to get back into the positive.

Beware those bearing property investment advice

Anyone, regardless of their experience and qualifications, can give you advice on how to spend a considerable amount of money to buy an investment property - and you could be left totally unprotected.
That’s the warning from Margaret Lomas, who heads up the Property Investment Professionals of Australia.
These people can also make a commission from the sale and charge you for their advice, but there is currently no legislation that offers any protection against shonky advisors.
By contrast, the finance investment industry is arguably over regulated.
“If you have $20,000 cash to invest, your financial planner will be regulated to the wall in regards to how they can advise you on its investment, but mention you are looking to buy $500,000 worth of property and every shonky man and his dog will come out of the woodwork to help you part with it – and you will be left stranded when it falls in a heap,’’ Ms Lomas said

Doing the biz in manufacturing and fast food

Once again it seems the small cap world provides a ray of light for investors with a tiny niche player roaring, or at least shouting, on the world stage.
It is hard to argue that there's a more troubled industry than steel manufacturing in the wake of BlueScope's announcement that it is shedding more than 1000 workers from its Port Kembla and Western Port operations, which makes the company's share price slide of almost 60 per cent in the past four months.
In contrast, the shares of Bisalloy Steel Group, another steel manufacturer, have climbed about 67 per cent over the same period. The rise is primarily due to investor optimism about a joint venture the company announced to manufacture its Bisplate steel technology in China with Shandong Iron and Steel, and then to sell directly into that market.
Bisalloy uses German technology and feed stock from the likes of BlueScope to make high-tensile quenched and tempered steel plate, or “Bisplate”, at Unanderra, south of Wollongong in NSW. It's a high-strength, lightweight steel that's used in the manufacture of things like large dump trucks, dragline buckets and cranes – all used in, you guessed it, mining.

Asian stocks inch up after China CPI

Asian stocks edged up as Chinese consumer price data soothed fears over inflationary pressures building in the world's No.2 economy, but the mood was cautious after Western central banks failed to offer any fresh stimulus plans to revive their sputtering economies.
The US dollar eased against a basket of currencies and US Treasuries slipped as markets reacted coolly to a $US447 billion jobs package plan from US President Barack Obama, who faces a fierce battle to win over Republicans which could revive fears of political paralysis in Washington.
Global markets have been dominated in recent weeks by fears of a US relapse into recession and Europe's snowballing debt crisis. Citigroup analyst Jonathan Stubbs said in a note on Friday that "recession appears to be a more likely outcome now in Europe and/or the US than 3-6 months ago".
Worries about the darkening outlook for the developed world prompted Asian central banks including South Korea and Indonesia to hold interest rates steady on Thursday, following similar moves by Australia, Canada, Japan and Sweden this week.
China's annual inflation moderated slightly to 6.2 per cent in August from July's three-year high, in line with market expectations and raising expectations that Beijing too will hold off from further policy tightening which could dampen its demand for commodities and other imported materials.
The MSCI's broadest index of Asia Pacific shares outside Japan rose 0.3 per cent, with the biggest regional gains in Australia and Taiwan , both heavily influenced by demand from China.

Global investors lukewarm on Obama plan

European stock index futures fell on Friday, following Asian markets lower, as a $USUS447 billion jobs package from US President Barack Obama failed to entice investors back into equities amid concerns that it could be hamstrung by political wrangling.
The euro languished near a two-month low against the US dollar reached on Thursday after the region's deepening debt crisis forced the European Central Bank to drop its tightening policy bias, a key driver in the single currency's rally this year.
Euro STOXX 50 index futures fell 1.1 per cent, with DAX and CAC-40 futures also in the red, and spreadbetters called the FTSE 100 to open down 0.3 per cent.
Asian markets were down around half a per cent, after see-sawing between gains and losses, while S&P 500 futures surrendered early gains and slipped 0.2 per cent.
"Obama's plan was in line with expectations, and US stocks are unlikely to rally on it," said Takashi Ushio, head of investment strategy at Marusan Securities Co. in Tokyo. "Uncertainty about the direction of the US economy remains."
Market confidence had been fragile after Western central banks failed to offer any clues on fresh stimulus plans this week, with a looming deadline for bond holders to decide on Greece's swap offer also adding to the nervousness.

German inflation at 2.4% in August

AFP
Inflation in Germany, the biggest European economy, stood at 2.4 per cent in August, driven up by higher energy costs, the national statistics office said on Friday.
Initial figures released late last month put the figure at 2.3 per cent, a 0.1 per cent drop on July.
The statistics office said that without increased energy costs, inflation would have stood at just 1.4 per cent for the month.
Source: The Age

Shell announces Guiana oil find

AFP
Shell has announced it has discovered oil about 150 kilometres off the coast of French Guiana.
The Anglo Dutch energy giant said in a statement on Friday that it was too early to put a figure on the reserves but said that the first results were "encouraging".
French Guiana is an overseas region of France located on the northeast coast of South America.

Source : The Age

In Unity on matters healthy, wealthy and wise

Australian Unity: the healthiest stakeholders are the directors.

HEALTH fund Australian Unity's first-ever remuneration report shows that it is certainly looking after the well-being of directors and senior executives.
Not that the mutual's earnings performance in the past year was shabby, or that it is not paying out ever-increasing amounts to its premium-paying members.
Australian Unity is also technically not required to even produce the numbers because it is not listed on the ASX. Chairman Alan Castleman and his board, however, have adopted ASX governance principles - which not only means a nice track record should the group actually decide to take the plunge, but Australian Unity gets an elephant stamp from Insider for electing to be more transparent than required.
Still, strip out the $1.2 million a year picked up by non-executive directors, and the total tossed to its five nominated senior management personnel rose from $2.9 million to $5.6 million - which is getting close to a near doubling in anyone's books.

Workers adjust beams of the Tribute in Lights on the tenth anniversary of the September 11 terrorist attacks. Photo: Getty Images

ANNIVERSARIES are hard to resist for most media outlets. The stories are evergreen, the advertising potential plentiful. But in documenting the 10th anniversary of the terrorist attacks of September 11, 2001, there is a fine line between commemoration and exploitation.
Mindful of this, television networks, magazines and others planning special coverage of the anniversary have weighed issues such as how much American audiences can stomach, and how much such a solemn occasion should be viewed as a business opportunity.
There are no uniform answers, and media outlets are approaching it differently.

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