The Business News Source

History tells us that the housing market cycle begins in London. Last year, while London and the South East saw only modest prices rises, areas such as the North East enjoyed a boom - classic final throws of a bull run. Now, it’s gone the other way. Is it possible, that this time, we have missed the downturn altogether, and that we really are at the beginning of a new boom? Is it really possible that the great house price-crash of the second half of this decade, will be consigned to the dustbin for false economic projections?

The latest data from Hometrack would suggest this is the case. House prices rose 0.6 percent in July, says Hometrack, taking the annual rate up to 3.2 percent, that’s the highest rate of annual increase for 18 months.

Examine the data more closely, and you see the signs of a new cycle written all over it. Prices in London soared by 1 percent, but in the East Midlands prices were static, with the area recording zero inflation, while Yorkshire and Humberside saw a modest 0.1 percent rise. […]

for more click here to Investment and Business News  

Inflation in the Land of the Rising Sun seems to be settling in nicely. It seems strange to celebrate rising inflation, but in Japan, prices going up is like a breath of fresh air - after a decade of deflation. In all, consumer prices rose 0.6 percent in June, from 12 months ago. It was a similar story last month.

That’s hardly runaway inflation, but even so, it’s enough to make further rises in the interest rate likely to follow.

It’s an odd quirk of economics. For years, economists have been bemoaning the Japanese economic malaise, saying that if only the world’s second largest economy could shake off the demon of deflation, it could help propel the global economy forward.

Now this is happening, some are panicking. Why? Because it marks the end of the carry trade, where individuals and organisations borrow from Japan at rock bottom rates, and lend overseas. Some fear that as rates rise in Japan, we will see the end to cheap and easy credit, spelling doom for consumer spending, and house prices.

They are right to worry, and yet we shouldn’t all sell up just yet. […]

 for more click here to Investment and Business News 

Next month the IBM PC will be twenty five years old, this should be a time for businesses to reflect and celebrate how this bland beige box has transformed the way we work probably more than any other device before or after.

The IBM PC was not the first personal computer on the market – we’ll concede that honour to Apple (ignoring all the other minor manufacturers at the time of course) – though it was the first device embraced throughout departments and offices on a massive scale.

At the same time we salute what was probably one of the most misconceived adverts in history – in late August 1981 Apple computer ran a series of full page adverts in the Wall Street Journal with the headline ‘Welcome, IBM. Seriously.’ It is unclear whether Mr Job’s Apple Computer was being seriously naive or rather smug in its wording – we suspect the latter. How ironic that in a short time IBM would marginalise Apple as the leading provider to the market.

The history of the IBM PC is probably less interesting than its impact on the way we go about business today. There are now, today an estimate Billion PC’s being used in the world. With the so-called ‘Halo effect’ surrounding the PC the combined value of PC hardware and software firms on the stock market exceeds $500bn.

When originally launched, the IBM PC was seen as a standard, set by a blue chip with strong business marketplace domination. IBM’s biggest mistake – though it turned out to be a recipe for success in the end – was to use standard readily available components (unusual for IBM) and then release the schematics to anyone who wanted them - again IBM did this as a matter of course, because normally its chips were custom and only available to it – so releasing schematics didn’t matter – except in this case it was easy to copy. Once the ‘genie’ was out of the bag IBM reacted too slowly to suppress copying of its product and it effectively had to concede to the clones.

Of course the main beneficiaries of the clone market where Microsoft and Intel, both were, of course, happy to make additional revenue by selling components and software to others. Of course IBM, once again lost out because it didn’t own the DOS licence outright, nor did it have the foresight or will to bother negotiating any form of ‘exclusive’ rights.

That the PC democratised computing is in no doubt, it made access to software simpler and more affordable to all businesses, small or large. More importantly, the net benefit of the ‘cloning’ of the machines created a de facto standard allowing people to interact and share information easily for the first time.

In recent times the PC has become a commodity, with most of the innovation being on the software and services side, not the hardware.  Companies like Google or SalesForce.com have started a growing market for online services, ironically pushing the calculations and ‘machinations’ back onto a central cluster of servers rather than locally on the PC – ironically imitating the services of the mainframes that the PC was to replace.

Of course the byword of the day is convergence – as microelectronics moved relentlessly forward – the combination of mobile phone and web services, video and email on the phone may eventually change the way we work more than the PC.

Ironically it won’t be IBM that celebrate the birthday, it will be the Chinese firm Lenovo – IBM sold its PC business to Lenovo in 2004, it had actually never worked out how to turn a profit on the PC selling business.

A war of words has broken out between two normally happy partners, the Americans and the British. Just as politicians in the UK are just getting over the affair with the CIA allegedly using a Scottish airbase to fly prisoners onwards to secret prisons for so called ‘extraordinary rendition’ - someone blows the whistle on something, seemingly far worse.

As we mentioned in a previous article the USA has been financing the Israeli armed forces to the tune of at least $2bn in military aid each year. Well on the latest shopping list was a set of new laser guided and GPS Satellite guided missiles and ‘bunker busters’. The only problem was the delivery time - well the US administration fixed that by waiving the usual ‘Red Tape’ and allowing the goods to ship, pronto. The next problem was getting them over there in time to allow them to be used on the Lebanese.

Flying that many arms that far requires big cargo planes - and a refuelling stopover somewhere - hmm how about that place up in Scotland that the US used for ‘extraordinary renditions’ - ‘if we don’t tell the Brits, no harm done’.

Well the proverbial has hit the pan. Basically, unlike in the USA, reporting of the Israel/Lebanon war in Europe has focussed public opinion more on the fall out of the civilian population than the ‘war on terror’ element. As such the Brits and the Europeans see the war quite differently to the US - so making life difficult politically for the leaders in Europe, and in particular the UK.

Yesterday, in a shockingly frank manner, the UK Foreign Secretary, Margaret Beckett voiced her displeasure that the US had ‘mislead’ the UK in using the Scottish base as landing point. Mrs Beckett said: ‘We have already let the United States know that this is an issue that appears to be seriously at fault, and we will be making a formal protest if it appears that that is what has happened.’

In reaction Whitehouse spokesman, Tony Snow said ‘Apparently, the British foreign minister thinks the paperwork was not in order,’ said spokesman Tony Snow ‘The Department of Defense does,’ he added. ‘We’ll get it straightened out.’

The British government has been highly embarrassed by the event, on the one hand it is a staunch ally of the US, and on the other hand it has to deal with the growing dissent of the public perception of the war. Unfortunately, the British populous sees this as another example of US lack of tact. Adding as it does to a YouGov poll last month that sees 81 percent of the Brits feling that President George W Bush hypocritically championed democracy as a cover for the pursuit of American self-interests.

In fact, the summary from the YouGov poll rather shockingly pointed that most of the UK population now see America as a cruel, vulgar, arrogant society, driven by class and racism, crime-ridden, obsessed with money and led by an incompetent hypocrite.
This is worrying for the UK government, which has been in power long enough for its own popularity to be on the wane. Margaret Beckett knows this and is too senior and too experienced a politician to have gone ‘off side’ with the remark. The US administration needs strong allies, though using the UK as a aircraft carrier seems to have pushed even the usually sympathetic UK politicians too far this time.

We wonder whether the US administration has thought about the reaction of the world to this event. Even ‘those strange folks’ outside the USA are going to be able to figure it out - the ‘tenuous’ link of bombs from USA to Israel and onto Lebanon has now been spelt out quite clearly. The backlash in the UK over this event may grow - only time will tell.

Over the next month we’re hoping to expand our repertoire of comment and analysis. So we’re looking for any experts to add to our source on a regular or ad hoc basis.

If your article is submitted we will fully accredit you or your blog address in The Business News Source – if you’re interested please email the editor at the_editor@invbiznews.com along with details of the area you’re interested in contributing to – we’ll also be opening up more categories as time goes by.

Just a reminder that we have a house style and we will only submit articles that comply with our guiding principle - The Business News Source holds a view that, whilst not exclusively contrarian, punches through the hype seen all too often in the financial news today.

We welcome opinion based articles, though we will always seek to balance these view points over time, whether that applies to economic, stock market theory or technology for example (more BBC than Fox!)

We look forward to hearing from you all

The Editor