It's that time of the year again - dark mornings, dark evenings and motorists who think that they need to have their rear foglights on at all times. Why they think this is the case, I just don't know, but every winter a bunch of people switch on the foglights as soon as the clocks go back and leave them on until March. It's bad enough sitting in traffic without the person in front of you thinking that they're doing you a favour by blinding you with red lights.
Don't these people realise that foglights are for use in fog? Or is it that they're driving around in a permanent fog themselves as they wonder if they should trade up for a bigger, more expensive car to crawl to work in? (In which case they're obviously TDs since they're the only people who know that it's their perfect right to drive to work and park directly outside the office. . . oh and get a mileage allowance as well, rather than having to pay the toll that they've suggested everyone else should have to pay to get into the city.) Most of Europe's traders didn't have to worry about lights, red or otherwise, on Monday because the continental Europeans (with the exception of the Germans) were all on holiday. I like the October bank holiday but it would be nice if it coincided with the Europeans. Days where most of the continent is off while we're at the desks are usually quite boring.
The main story in the market this week is, of course, European interest rates. The ECB is supposedly trying to be more open in its approach to the market by trying to let participants understand their thinking. Mr Wim Duisenberg, president of the European Central Bank, commented on Monday: "I don't know what the ECB council will decide November 4th, but I can imagine it". I know that he couldn't say straight out that they were or weren't going to raise rates, but these coy little innuendoes are irritating rather than informative.
Actually, I suppose it doesn't much matter what central bankers say - even central bankers like Mr Duisenberg who actively enjoy making woolly statements - because the market spends so much time analysing and counter-analysing their every word. A throwaway comment becomes a pearl of wisdom and a pearl of wisdom . . . we don't really get any pearls of wisdom, it's a throwaway society after all. Although the market is happy to deconstruct Mr Duisenberg's comments, his words still don't carry the same gravitas as those of Mr Alan Greenspan, chairman of the Federal Reserve. Somewhat amazingly, Mr Greenspan is the poorest paid of the world's central bankers which certainly doesn't reflect his influence on world markets. I'm sure, though, that when he gets to the after-dinner circuit he'll be hauling in the cash.
And he should be hitting the after-dinner circuit fairly soon, after all he's 73 years old and he was first appointed by Ronald Reagan back in 1987. (OK, I'm totally against ageism in work, but shoot me if I'm still worrying about the affect of rate hikes on the long bond when I'm 73!)
His chairmanship of the Fed runs out in June 2000, although he will remain on the board until January 2006. You'd think that the strain of presiding over an almost 10-year run of non-inflationary economic expansion would be taking its toll by now, but obviously the good times are less stressful than the bad and Alan is happy to soldier on for a bit longer.
Whether Wim Duisenberg finds the job as easy as Mr Greenspan is a different matter altogether. Given that Mr Duisenberg is a mere 64 years old, he could be around for some time yet - although the unseemly row between France and Germany as to how long he should actually serve means he's unlikely to be around as ECB president.
Mr Duisenberg had to agree to step down halfway through his eight-year term to make way for a French successor - but possession being nine-tenths of the law, and if he manages to allow the European economies to grow a little without turning it into an inflationary hotpot - Wim might be allowed to keep his job. However, if he does take early retirement (and it's interesting that central bankers don't retire at 65) he can spend more time on his US country music collection. It seems Wim is a little bit country in his tastes, though his biography doesn't say whether he prefers Tammy Wynette to Shania Twain.
A few frissons, too, in the UK Monetary Policy Committee lately. More than a frisson, in fact, because a row has broken out between the four non-executive members of the committee and the five permanent members. The non-execs are annoyed because they don't have allocated research staff unlike the permanent members and they don't think that's fair. The permanent members think it's perfectly fair, and Mervyn King, the deputy governor of the Bank of England, was quoted as saying that access to the bank's research economists was "not within the remit" of the non-executive members. Apparently they've now had to call in the chancellor, Gordon Brown, to mediate.
A row over researchers! If they can't agree on that, how the hell are they meant to agree on monetary policy? All central banks have the task of keeping inflation under control and adjusting monetary policy accordingly. So that they can keep a check on how things are working out, they watch various price indicators to monitor consumer prices and adjust for seasonal factors which might make different products more or less expensive at various points during the year.
I wonder how they feel, then, about the vending machine that Coca-Cola is supposed to be testing which raises or lowers prices depending on demand. The idea is that when a hot spell drives people to quench that thirst with multiple cans of Coke, the price will go up reflecting that demand.
And, presumably, when arctic conditions hit and people are tucking into hot whiskeys instead, the price of Coke will fall. But not as much as Coca-Cola's profits, I presume, which are down 13 per cent in the third quarter - the fourth fall in a row. There have been a number of executive changes in CocaCola lately and if this is the best they can come up with I'm sure Pepsi will be feeling pretty happy!
Sheila O'Flanagan is a fixed- income specialist at NCB Stockbrokers
