A roundup of this week's other business news
Green shoot
Viewers of RTÉ's Aftershockmay be surprised to learn that there's an entire conference of economists calling an end to the Irish recession. In some rarefied circles, of course, the party never really stopped – they just turned down the volume. One such arena is the elite world of art investment, where headline auction prices have bounced back to record levels.
An Andy Warhol self-portrait sold by designer/director Tom Ford fetched $32.5 million (€25.8 million) at a Sotheby’s auction, well above its $15 million estimate, while an untitled 1961 Mark Rothko went under the hammer for $31.44 million, beating a $25 million estimate. The rich, it is fair to say, have recovered.
Shop talk
Sainsbury’s, the British supermarket and Jamie Oliver employer, has reported a 17.5 per cent jump in profits – aided in some small way no doubt by the custom of Republic-based cross-Border shoppers. However the appeal of cross-Border grocery hunting is likely to wane if the new Liberal-Conservative coalition fulfils economists’ expectations and hikes the UK VAT rate from 17.5 per cent to 20 per cent, which would almost entirely close the VAT differential between Northern Ireland and the Republic.
So some consolation for indigenous retailers, then, but Sainsbury’s chief executive Justin King is not so enthused. He has begged the new chancellor, George Osborne, for “lots of notice” before the VAT hike is imposed.
Status update
Attention please:David Cameron has banned new Lib-Con ministers from checking their smartphones around the cabinet table – so no playing Angry Birdswhile Vince is talking.
Heads they win:Goldman Sachs has recorded a statistically unlikely "perfect" quarter for the first time, making a trading profit every day of the first quarter.
Cash wads: Money exchange offices have stopped selling €500 banknotes in the UK, where they're almost exclusively used by criminals – a "mule" could swallow €150,000, apparently.
The question
Were the credit rating agencies culpable profiteers or innocent dupes?
Regulators are breathing fire upon the role of credit rating agencies in the global financial crisis, but were they knowing facilitators of legally dubious greed or too stupid to know what was going on? The major agencies – Standard Poor’s, Fitch and Moody’s – have been blamed for overstating the quality of now worthless securities. A US inquiry into whether eight banks misled the agencies to inflate the grades of subprime mortgage securities suggests that any criminal cases will target the banks.
It will be in the interest of these fee-collecting agencies to play dumb. Uncomfortable with the enormous power of the agencies in the euro-zone debt crisis, EU officials are openly objecting to the conflict of interest inherent in how they operate. The agencies may have been duped by the banks, but they were handsomely rewarded for their “don’t ask, don’t tell” attitude.
5,830
– Number of words in Facebook's privacy policy, making it longer than the US constitution, according to the New York Times.
Participating in the service is a choice.
– Facebook's Elliott Schrage has a clear "like it or leave it" message for users with privacy concerns.
