The Edge

Richard Northedge takes on corporate finance

Archive for August, 2008

Art for art’s sake

If a billionaire wants to buy two painting for £300m that’s his business. But how can UK galleries justify buying them for £100m (unless they are planning to flip them to the billionaire and keep the profit?).
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Who are the housebuilders fooling by refusing to cut prices?

There is a small oasis in the housing market where prices have not fallen. New homes. While other property prices plunge, builders refuse to cut theirs. Perhaps that’s why they’re not selling?
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Should the Olympians get money as well as Gold?

Would the Olympic athletes run faster or jump higher if paid? Would they train more intensively for a cash reward? There is a suggestion Britain should pay its medal winners money, with £20,000 for a gold.
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When pawnshops make sense

Pawnbroking is booming despite interest rates of 8 per cent – a month. A sign of recession and a haven for the feckless you may say – but think of it as banking and it makes more sense.
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BAA decision means no UK monopoly is safe

The Competition Commission has moved into new startling territory in ordering BAA to split up its airport business. Until now it has blocked expansion: now it is telling established businesses to shrink.
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What do you do with a problem like Woolworth?

Woolworth has emerged as the latest pension fund with a business attached but giving away the operating assets is no way out of the problem.
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There are no longer votes in taxing the rich

Ivan Lewis, a health minister in Gordon Brown’s government, is calling for a tax on the rich to subsidise the poor. Such a policy may have worked for Robin Hood but it would not work nowadays either fiscally or politically.
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What return from Olympic sponsorship?

Name the 12 primary sponsors of the Beijing Olympics. The only point of them handing over $100m each is to improve their brand awareness, so if you can’t name them now the starting gun has been fired, it doesn’t look like money well spent.
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If inflation seems high now, look what’s coming

The target for UK inflation is 2 per cent. In June it was admitted price rises had reached the 3 per cent trigger that requires a Bank of England letter. The July consumer prices index annual change exceeded 4 per cent.

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Recession must not be a private-sector affair

If we’re going to have a recession it must extend to the public sector. Corporations cannot be expected to take the strain while state employees are unscathed.
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