Here’s what you may have missed in the business news last week:
- GlaxoSmithKline were accused of offering sexual favours. GSK sales went up by 20% in China last year. Which I know seems like “just a number” – but it is a little unusual when it’s almost triple the country’s growth rate. And it seems like the Chinese police were also a little surprised – and after some investigation, they’re saying it’s because GSK “used travel agencies as bribe conduits”, “gave executives sexual favours”, and “received illegal money transfers”. And all that boosted sales by $300 million? Sounds like a solid business plan. Totes worth the fine.
- Rudd made an Australian carbon tax promise to, um, help the little guy. Now that he’s replaced Gillard, Mr Rudd is busily undoing her work. On the carbon tax/clean energy front – he’s promising to allow the carbon price to float, meaning that, per tonne, the cost will drop from the current fixed price of A$25.40 down to ± A$6. The justification? To prevent the average Australian household from having to deal with higher electricity costs. Except, well, that money that was meant to be raised is now no longer going to be raised – so it means spending cuts in other areas. Sounds a bit neutral for the average Australian.
- Emerging market Central Banks continued to raise interest rates. As I wrote about in my “Risk On Risk Off” post, the global market seems to have developed cold feet: meaning that liquidity is leaving the Emerging Markets and returning to the “safer” and more Emerged Markets of the US and Europe. The liquidity issue is distressing for the smaller markets – for whom a rollicking exchange rate has a much more dramatic impact on life. So they (being India, Brazil, Indonesia, etc) have raised interest rates to encourage the global liquidity to stay.
- Microsoft and Blackberry engaged in price-cutting. Cheap Z-10s and Microsoft Surface tablets all round. My question: do you really want one if no one else seems to want one, even if they’re cheaper to buy? Especially when analysts use the word “shunned” to describe the market reaction to said product.
- South Africa’s Gold Mining Crisis continued. The wage talks began in earnest last week. The National Union of Mineworkers (NUM) demanded a wage increase of 60% for entry-level workers. The rival Association of Mineworkers and Construction Union (AMCU) demanded a 100% wage increase for entry-level workers. The Chamber of Mines, being the collective-bargainer for the industry, offered… 4%. And to be clear: even that 4% would give an unskilled first-time miner a higher salary than my first paycheck after five years of Commerce degrees. And that’s before their bonuses and overtime, etc. NUM called that offer an “insult”. Expect this to turn into a rant-post sometime this week.
- The Greek Parliament approved a firing plan. Not so unexpectedly… If Greece wants the next inflow of funds, she needed to put 25,000 public sector workers on notice of possible dismissal. Antonis Samaras seems to be running pretty thin on coalition partners… I can recall a moment not so long ago when he was making loud declarations against these sorts of actions, and abandoning the previous Greek PM (Evangelos Venizelos) in a sea of scathe. Karma, eh?
- Bank of America saved $1 billion. It fired 18,300 people, chased few mortgage home-loans (I’m not sure that they were directly responsible for this – the market arranged that for them by being better than the previous year), and stopped using so many lawyers. The lawyer fee alone was responsible for a half a billion saving.
- The City of Detroit declared bankruptcy. Which is what happens when the city can’t afford to pay pensions. Only, a State court judge has since declared the bankruptcy unconstitutional because it means that pensions won’t get paid. Seems that she may have overstepped her jurisdiction though (bankruptcies are a Federal court matter), so you might see her jailed for contempt. Drama.
- Google did not-as-well as expected. Because of mobile-advertising. Google can invent fancy glass and write algorithms that seem to know what I’m thinking before I’ve though it… But when it comes to mobile advertising, they hit a wall. The same wall that Facebook and Yahoo keep hitting. Seems a bit awkward?
- BP was told to shut up. BP asked a court to suspend the need for them to pay compensation for the whole Deepwater fiasco because they’re worried about false claims and they want an investigation to be completed before they have to continue making payments. Which is a bit confusing – surely BP can assess a claim on its own? Why yes – that was also the judge’s thought.
