Ground Floor: I do my grocery shopping in an automatic way, reaching for the products I normally buy unless something in particular catches my attention. I suppose marketing guys would like to know what that is - new packaging, a special offer, whatever - but the truth is, I'm not sure myself. What caught my eye on Sunday morning was that the bread shelf was filled with a different variety this time.
Organic, it said. Three times the price, I noticed.
I'm not against the notion of organic produce and I like the idea that the food I'm eating bears some relationship to a real-life product (as opposed to something dreamed up in a boardroom, like those disgusting-looking cheese strings) but I can't get my head around the idea of paying almost €4 for a small loaf of brown bread.
As I mulled over the lifestyle choice, I realised that I was wondering how organic the bread really was, and whether or not the healthy packaging wasn't really just a ploy to part me from more money than usual. I wanted to think that I might get something better than usual for my €4 but I didn't really believe it. I didn't believe it because almost everything we're sold these days seems to have a particular spin on it to make us feel that we're doing ourselves a favour by handing over our cash.
Lots of products 'may help to keep our hearts healthy' or 'may assist weight loss' or 'may turn you into Jennifer Aniston' but there's no guarantee. You can eat all the tofu you like but still not land Brad Pitt.
Does anyone believe what they're told anymore? In the fashionable investment boom times did we actually believe Jack Grubman or any of his cohorts of star analysts or did we simply want to believe? Did we believe Phua Young, the senior research analyst at Merrill Lynch who was charged last week with a range of violations which included making misleading statements and exaggerated claims about Tyco International.
If you remember, Tyco's former chief executive, Dennis Kozlowski, was perp-walked a few months ago and charged with stealing $600 million (€512.5 million) from the firm. Young apparently shared his analytical musings with Tyco management and a few close investment buddies before publishing them for the world at large. He gave Tyco glowing buy recommendations even when the firm was being investigated and the share price plummeted. He was fired April 2002. The charges against Young are that he didn't express his private concerns about the firm while he still rated the stock a buy. Apparently he had told people within Merrill that the firm's stock was overvalued and that its indebtedness was too high. He also said its planned spin-off of its finance unit wasn't worth the money they were looking for. But he didn't tell investors that. And so, like lots and lots of private individuals and pension funds, everyone got stung when Tyco shares fell off the cliff. And yet another batch of analysts' musings weren't worth the paper they were written on.
Nevertheless, it's extremely difficult for analysts to be critical of companies, even now. Eyebrows were raised in Irish financial circles when Merrion Stockbrokers rated IL&P a sell on the basis that it was under-capitalised. They were raised even higher when almost immediately the stockbrokers brought out a "correction and clarification" document stating that there were some errors in its original research and that it had understated IL&P's capital position.
The debacle (because it is a debacle, stockbroking companies don't want to issue flawed research) has taken away from the fact that the brokers have not actually changed their recommendation on the stock. They're still advising clients to sell. Or reduce, as they so delicately put it.
As investors, we want to be sure that the quality of the research we read is accurate, and IL&P were right to query incorrect numbers. But Merrion was being particularly brave in suggesting that all was not as rosy as it could be in the hallowed halls of the financial services company. Financial circles are small and participants have long memories when it comes to being dissed by someone else in the community.
However, the affair does highlight a sea-change in the type of information that is being produced and a willingness to challenge perceptions of weakness in companies which until now were never addressed.
A few years ago, in the teeth of research which would lead a broker to think that a company's shares were headed downwards, the recommendation would still be a 'hold'. The thought of someone suggesting that you sell, even if it is dressed up as 'reduce' is practically revolutionary.
Are we finally becoming more demanding of the information we receive in every sector of our lives? I certainly wasn't willing to believe the 'organic' label just because it said so.
Last year the Irish pharmacies ran campaigns to 'keep your local pharmacy' and told us that they were the lynchpins of the community, offering an unparalled service and barely making a profit on their dispensing activities.
As I pointed out in an article a few months ago, my nasal spray costs a quarter of the price in my local pharmacy in Spain as it does here. The claims of the industry were nonsensical and most of us knew it. Now, like the cost of everything, the high price we pay for our medicines is being questioned by a public fed up with being told that we're getting value for money.
With the euro continuing to hold its own against sterling and the dollar (despite some profit-taking), prices in the supermarkets should start to come down on those imported goods which seemed to escalate in price daily until now.
But how likely is that to happen in reality? I'm hoping that my attention will be caught next week by signs saying 'further reductions'. But I'm not holding my breath.
