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Bob Diamond insisted that he did not feel “personally culpable” for what he said were the actions of 14 traders who manipulated the Libor rate
BOB Diamond yesterday told MPs
that he feared Barclays could have
been nationalised if the bank did not
reduce its Libor interest rate submis-
sions in October 2008.
At that time Barclays was reporting
funding costs at the top end of the
scale, even though other banks were
in much worse condition.
“They might say to themselves, ‘My
goodness, they can’t fund. We need to
nationalise them.’,” Diamond told the
Treasury select committee.
“We were desperate. We had £6.7bn
of equity being raised. If rumours got
on the market that we couldn’t fund
then maybe we wouldn’t have been
able to complete the equity raising.”
Meanwhile, in a sign of the strained
relations between Barclays and the
Financial Services Authority (FSA),
committee chairman Andrew Tyrie
revealed that the regulator had
expressed concerns to the board
about Diamond’s appointment as
chief executive in 2010. Then in
February this year – just four months
before the bank was fined £290m for
its role in the Libor scandal – the FSA
said the bank needed a change of cul-
ture, according to Tyrie.
“They felt there were some cultural
issues,” Diamond admitted, but
insisted these were related to mana-
gerial behaviour lower in the organi-
sation.
Barclays’ former chief executive
used his appearance to attack the
bank’s rigging of the crucial Libor
rate but blamed rogue traders, saying
he did not feel “personally culpable”.
He was also reluctant to expand on
the details of the crucial phone call
between himself and Paul Tucker,
deputy governor of the Bank of
England, made at the height of the
financial crisis.
Following this call Diamond’s right-
hand man, Jerry del Missier, got the
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MORE BARCLAYS: Pages 2, 3, 4, 6, 17
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BUSINESS WITH PERSONALITY
LONDON2012
…days to go
WIMBLEDON HOPEFUL SETS UP TIE AGAINST JO-WILFRIED TSONGA
See Pages 22-23
See Page 7
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impression that the Bank of England
was encouraging a reduction in the
Libor rate, even though Diamond
confirmed that was not his interpre-
tation of the conversation.
He could not explain how del
Missier, who resigned from the bank
just hours after Diamond on Tuesday,
had come to that conclusion.
But it was the banker’s claim that
he only became aware of the full
extent of the Libor-fixing scandal last
month that produced gasps of aston-
ishment in the committee room.
Labour MP John Mann came closest
to breaking Diamond’s resolve,
telling him: “You’re either complicit
in what’s going on, grossly negligent
or grossly incompetent. The buck
stops with you.”
However the former Barclays man
refused to comment on Mann’s sug-
gestion that he should waive part of
his pay-off, saying only that it was a
matter for the board to consider.
MPs were left disappointed by the
lack of answers produced during the
marathon session.
Committee member David Ruffley
MP told City A.M.: “For an intelligent
man he didn’t seem to be in control
of his organisation.”
DIAMOND FEARED
NATIONALISATION
Commons grilling of ex-Barclays chief also reveals the bank’s increasingly strained relations with the FSA
BY JAMES WATERSON
FORMER BANKIA BOARD AT CENTRE OF CRIMINAL PROBE
MURRAY INTO LAST FOUR
allister.heath@cityam.com
Follow me on Twitter: @allisterheath
G
E
T
T
Y
Row grows as chancellor
accuses Balls of Libor role
SENIOR Labour politicians fiercely
denied any involvement in the Libor
fixing scandal yesterday, after
George Osborne said those around
Gordon Brown “were clearly
involved” in rate rigging, and former
Barclays boss Bob Diamond said the
bank was in regular contact with
ministers.
Meanwhile Labour MPs said Bob
Diamond’s failure to answer all the
Treasury select committee’s (TSC)
questions showed the need for a
judge-led inquiry into the scandal,
while Tories insisted time is still of
the essence – a debate which will be
fully played out in today when MPs
vote on the type of inquiry to hold.
Osborne yesterday said he had his
suspicions that Ed Balls knows more
than he is letting on about why
Barclays entered falsely low interest
rates in its Libor submissions.
“My opposite number [Ed Balls],
who was the City Minister for part of
this period and Gordon Brown’s
right hand man for all of it so he has
questions to answer as well,” he told
the Spectator magazine.
But shadow Treasury minister
Chris Leslie hit back, saying the
chancellor was making “false allega-
tions with no evidence.”
“This is desperate stuff from
George Osborne – lashing out in a
BOB Diamond frustrated MPs
yesterday by failing to answer
critical questions and raising more
questions about the bank’s actions.
Treasury select committee (TSC)
chairman Andrew Tyrie called
Diamond’s recollections
“somewhat implausible,” and said
he hopes to speak to the Bank of
England’s Paul Tucker “very
shortly” to find out more details.
Tucker has asked the TSC to
question him “as soon as possible.”
Other members of the committee
were also disappointed with
Diamond’s answers, pointing in
part to “good media training”
letting him to avoid giving details.
“It was a real shame – he has not
done the bank justice by repeatedly
saying he loves Barclays and that it
has a great culture when all of the
evidence points to the contrary,”
Andrea Leadsom MP told City A.M.
“On the specifics of criminality,
that he was unable to answer why
no compliance officers picked up
the manipulation even when
traders were shouting about it
across the room when officers were
there is just incredible.”
David Ruffley MP added, “some
of his answers raise more questions
and I will be asking that former
chief executive John Varley come to
answer some of the questions that
Diamond wouldn’t.”
MPs furious at
slippery Bob’s
question dodge
Chancellor George Osborne said Labour MPs were “clearly involved” in the Libor scandal
2
LIBOR SCANDAL
BY TIM WALLACE
BY TIM WALLACE
To contact the newsdesk email news@cityam.com
W
HAT a shame. Yesterday’s
grilling of Bob Diamond,
Barclays’ swashbuckling
former boss, while not quite
a damp squib, did not really clarify a
great deal. There were some
intriguing revelations – including that
the relationship between the FSA and
Barclays had been bad for months and
that Diamond was worried that the
government would nationalise
Barclays in 2008 – but the clash was no
game-changer. This is a great pity. A
huge number of unanswered
questions remain – not least, why did
nobody in government, the regulators
and the Bank of England do anything
about Libor? They clearly knew that
something was up. And why did
Diamond really quit? Who told the
board that he had to go? What exact
powers did they use for that? As to
Diamond, his performance was poor.
EDITOR’S
LETTER
ALLISTER HEATH
Pity Osborne isn’t this passionate when talking about growth
THURSDAY 5 JULY 2012
There were inconsistencies in what he
said and it is unclear why he didn’t
know about the investigation in his
own bank.
The government hasn’t done as
badly as I feared it might on this. For
once, it has generally resisted the
temptation to engage in extreme pop-
ulism. That is the right decision: pun-
ishing wrongdoing is very different to
waging all out-war on the City and try-
ing to smash a key sector. That was
also Boris Johnson’s point yesterday.
There should be an unprecedented
crackdown on those who lie and cheat
– but that should not mean demonis-
ing everybody in the City.
A judge-led inquiry would drag on
for too long, cost a fortune and debili-
tate too many large institutions, ren-
dering them incapable of functioning
properly, hitting the supply of credit
and other services and destroying jobs.
There would be no guarantee that it
would come up with the right
answers, apart from on narrow
specifics involving wrongdoing; when
it comes to broader questions of eco-
nomics or policy, judges are not the
ones we should turn to for answers.
The government is also right to point
out that this crisis took place under
Labour; it is extraordinary how
Gordon Brown’s errors have been for-
gotten by so many.
But the government’s critique of
politics; for him, all of this is just a
game. He wants to hit Ed Balls where it
hurts, presumably to gain one or two
points in the opinion polls; he doesn’t
really seem to care how he does this,
what he sacrifices or what the side-
effects could be.
The reality is that the economy is
doing increasingly badly. GDP
probably shrank in the second quarter.
At this rate, it could even shrink in the
third quarter. This is a disastrous turn
of events. Why isn’t Osborne as pas-
sionate about trying to tackle this as
he is engaging in partisan politics?
Perhaps somebody should call for a
Leveson-style inquiry into why we are
now in a recession. I’m being facetious,
of course, but the chancellor now
needs to get back to his day job.
Labour’s record is extremely incom-
plete: partly because Osborne is contin-
uing exactly the same monetary
policy, conducted by the same person-
nel, he never highlights the role of
excessively low interest rates in
fuelling the crisis or the Bank’s failure
to fulfil its role as a lender of last resort
when liquidity dried up. Another,
increasingly baffling blunder, is that
the government ought to be much
more vocal in calling for alleged
wrongdoers to be prosecuted and, if
convicted, jailed. Traders who manipu-
lated Libor for their own gain ought to
fall into that category. The UK needs to
be very tough on law-breakers – in
every walk of life.
It is also extraordinary how much
George Osborne appears to be
enjoying himself taunting Labour and
trying to work out how to catch out Ed
Miliband. Osborne only cares about
frenzied way that demeans the office
of the Chancellor of the Exchequer,”
he said.
“It’s now increasingly clear that
George Osborne isn’t interested in get-
ting to the truth, only in playing party
politics.”
In parliament David Cameron
accused the opposition of trying to
avoid facing up to their own actions
when in government.
However, shadow chancellor Ed Balls
argued he was not in the Treasury in
the time period in question, while for-
mer City minister Lord Myners claimed
to know nothing of any discussions
about Libor manipulation.
Meanwhile Labour MPs said the best
way to fully investigate the Libor scan-
dal and the culture of the banking
industry was with a judge-led inquiry.
“To really get into the detail, the
nitty gritty, you need all day to inter-
view someone – which is performed
better by a judge than in the setting of
a parliamentary committee,” TSC
member John Mann told City A.M.
But the Prime Minister called for a
“swift and decisive” investigation in
parliament.
The new jobs website for London professionals
CITYAMCAREERS.com
WHAT THE OTHER PAPERS SAY THIS MORNING
THE RISE AND FALL
OF BOB DIAMOND
1996
Bob Diamond is appointed chief executive
of Barclays Global Markets.
1997
Barclays founds BarCap investment bank
from its Barclays de Zoete Wedd (BZW)
unit. Diamond is involved from the start.
2005
Barclays traders start to manipulate the
London Interbank Offer Rate (Libor) while
Diamond heads the British bank’s invest-
ment banking operations.
2008
Barclays refuses aid from the British gov-
ernment during the financial crisis and sells
shares to Abu Dhabi and Qatar instead.
Diamond heads up the purchase of the
North American business of collapsed bank
Lehman Brothers.
2011
Diamond takes over as chief executive on 1
January, three months earlier than planned.
He takes over from John Varley, who is step-
ping down after six years.
2012
The government orders a review into the
workings of Libor after Barclays is found
guilty of manipulating it and fined £290m.
Bob Diamond resigns on 3 July. Chief oper-
ating ofcer Jerry del Missier also resigns.
Diamond appears before the Treasury select
committee on 4 July.
VW to buy rest of Porsche for
€4.46bn
Volkswagen has agreed to buy the
remaining half of Porsche’s carmaking
operations that it does not already own
for €4.46bn. The two car groups
yesterday finalised plans to speed up the
creation of the combined car group. The
integration will take effect from 1 August.
Etihad to hold on to Aer Lingus stake
Etihad Airways is not willing to sell its 3
per cent stake in Aer Lingus, raising fresh
doubts over Ryanair’s takeover bid for the
Irish flag carrier. James Hogan, chief
executive of the fast-growing Gulf airline,
said that Etihad was backing Aer Lingus’s
current management and its strategy.
“We are not selling,” he said.
Fiat warns Italian plant at risk
Fiat’s chief executive said the carmaker
may need to close another plant in Italy if
he does not secure further cost-cutting
concessions from its workforce. Sergio
Marchionne’s warning came amid signs
that PSA Peugeot Citroën and Ford Motor
are also preparing to break Europe’s
longstanding taboo on closing car plants.
King of the pension funds to sign off
after investor piles in
The private equity entrepreneur Edi Truell
who founded Pension Corporation plans
to stand down after securing an
investment that values his buyout
business at more than £1 billion.
Malaysians win Battersea
It was confirmed last night that Malaysian
developers have bought London’s derelict
Battersea Power Station for £400 million,
dashing Roman Abramovich’s hopes.
Ulster bank customers still waiting
for problems to end
Royal Bank of Scotland has admitted some
Ulster Bank customers will continue to
face problems with their bank accounts
almost a month after computer glitches
sparked a crisis at the lender.
Italy’s deficit to double
Italy has almost doubled its deficit
forecast as Germany halved its,
underscoring the lag of “sinner states.”
Doubts Arise Over Proposal For EU
Banking Regulator
European leaders, who last week set an
end-year deadline to create a new
policeman to oversee Eurozone banks,
have set themselves a timetable that
officials admit they will struggle to meet.
EU Gives Universal Music More Time
Universal Music Group was granted more
time to respond to concerns from European
Union regulators over its proposed
acquisition of EMI’s recording arm.
PROTESTERS in Robin Hood costumes
chanted their disapproval, armed
police patrolled the corridors and
members of the Treasury select com-
mittee limbered up for battle.
The circus was waiting for its star
attraction – one Robert Diamond Jr. –
to kick off the greatest show in finan-
cial regulation history.
And then the questioning began.
Hamstrung by a format that gave
each of the committee’s 13 members
a seven-minute slot to impersonate
Paxman, we learnt a little about a lot.
Mostly we learnt that Diamond is a
very capable politician when it comes
to not answering questions.
Chairman Andrew Tyrie began with
the tone of a headmaster punishing a
former star pupil – not angry, just
incredibly disappointed.
Diamond gives
MPs a lesson in
evasiveness
But Diamond refused to dish the
dirt, infuriating the committee by
insisting on using their first names.
Labour’s John Mann responded by
adopting the role of the angry PE
teacher – “Why were you sneaking off
without permission, Diamond? And
what did you do with the school’s
Libor rate?”
“That behaviour was reprehensible,
it was wrong. I am sorry, I am disap-
pointed and I am also angry,” was a
typically detail-free response.
No one could doubt Diamond’s com-
mitment to the bank that sacked him
– he “loved” it. He loved how it is “an
incredible institution”. But most of all
Bob Diamond loved his £17m job at
Barclays “because of the people”.
You see, everything would have been
fine were it not for the “traitors”. The
traitors, Bob? That’s a bit strong. Ah,
it’s just the way he pronounces
“traders” in that monotone drawl.
Three painful hours later he was off,
still reeling from the revelations that
brought down his career, still refusing
to turn down a final payday, still fail-
ing to explain how the scandal
occurred on his watch.
THURSDAY 5 JULY 2012
3
LIBOR SCANDAL
cityam.com
Tyrie: “Did you receive a nod and a wink
from Paul Tucker”
Diamond: “He did not give an instruction.
He said there was a perception in
Whitehall that our Libor submissions were
high, relative to other banks’ submissions”
“There was absolute corruption in this
bank, with former staff asking their mates
at Barclays to alter rates for their benefit,
with traders rewarded based on the
profits of their own trading books, not
based on the bank’s performance.”
Andrea Leadsom, Conservative
On who the senior figure in Whitehall
is: “I would only be speculating and
it’s not appropriate to do that. Paul
didn't mention who he was referring
to. I don't know, senior people.”
Bob Diamond’s best quotes
Fallon: Were you shocked at senior figures
asking you to fiddle Libor submissions?
Diamond: I was appreciative that Paul
Tucker was trying to do his job, telling us
ministers may think we had trouble
funding.
There were two chief executives running
the firm over the period, and senior
managers were too frightened or
disinterested to speak to them. What
does that say about the culture at the
firm?
George Mudie, Labour Michael Fallon, Conservative
Andrew Tyrie, Conservative
“When I read the emails from those
traders, I got physically ill. It's
reprehensible behaviour and if you're
asking me should those actions be
dealt with, absolutely."
"I was not aware that Jerry (del
Missier) had a miscommunication
or a misunderstanding, Jerry didn't
say that to me."
"I don't know if Marcus (Agius) had
conversations with regulators, that is
a conversation for him to have with
you, I did not discuss that with him."
Sketch by
James Waterson
in Westminster
BANK of England deputy governor
Paul Tucker made a pre-emptive strike
to distance himself from the Libor fix-
ing scandal yesterday, asking to give
his own evidence to MPs on the topic
“as soon as possible”.
Before ex-Barclays boss Bob
Diamond had even appeared at the
Treasury select committee (TSC) yes-
terday, Tucker raced to clear his
name, saying in a statement he “is
keen… to clarify the position with
regards to the events involving the
Bank of England, including the tele-
phone call”.
Diamond revealed on
Tuesday a memo
recounting a phone call
with Tucker in 2008, in
which the Bank official
seems to hint he knows
of widespread fixing.
Yesterday he told the
TSC that Tucker
did not tell him
to alter his
bank’s submis-
Tucker keen to
give his side of
Libor phone call
BY MARION DAKERS
sions for the Libor, but had relayed
that “senior people in the govern-
ment” were concerned that Barclays’
figures were too high.
Diamond conceded that Barclays’
Libor submissions fell after Tucker’s
call, which he said was not recorded,
noting that this coincided with an
improving market.
While some market-watchers fretted
that Tucker’s involvement could scup-
per his chances of replacing Sir
Mervyn King as the Bank’s governor,
others noted the lack of a smoking
gun yesterday.
“Diamond seemed to show that the
motives [of the call] were pure,” said
Andrew Goodwin, economist at the
Ernst & Young Item Club. “There was a
risk of him saying something particu-
lary toxic, but it turned out to not be
the case.”
William Hill has suspended betting
on the next Bank governor until
Tucker gives evidence.
M
ICHAEL Fallon of the
Treasury select committee
voiced a question yesterday
that must be on many
people’s lips. After passing on Paul
Tucker’s message from the Bank of
England in October 2008, how did
Bob Diamond manage to know so
little for so long about the Libor
manipulation at Barclays that
followed?
Diamond dodged, “I can’t put
myself in Jerry’s shoes.” Jerry Del
Missier, Barclays’ chief operating
officer until the scandal forced his
resignation on Tuesday, has already
been investigated personally by the
FSA, which accepted his actions
were the result of misunderstanding
Tucker’s telephonic concern, taking
it as a nod and wink from the Bank
and Whitehall for a Libor squeeze.
But that doesn’t answer the
obliviousness higher up of what
went on thanks to his
misapprehension.
Yet the rest of the world is hardly
in a position to point fingers. An
article suggesting that Libor was out
BOTTOM
LINE
MARC SIDWELL
Paul Tucker wants
to give his evidence
soon
THURSDAY 5 JULY 2012
4
LIBOR SCANDAL
cityam.com
It isn’t just Diamond that missed Libor’s warning signs
of sync with other market measures
appeared in the Wall Street Journal
back in May 2008. It didn’t mention
Barclays – hardly surprising as the
evidence seems to show Barclays as
something of a holdout when it
came to underreporting its
borrowing costs, at least until
Tucker’s fateful phone call – but it
was on the money about Libor’s
problems. The world at large, it is
now clear, didn’t pay that story as
much attention as it deserved. But it
was enough to get the attention of a
group of academics, variously
specialists in derivatives accounting,
conspiracies and manipulations,
banking and credit risk.
The investigation of the team
showed even deeper grounds for
concern than the original article.
The draft study by Rosa Abrantes-
Metz, Michael Kraten, Albert Metz
and Gim Seow was posted by the
Social Science Research Network in
2008 (go to its website and search for
“Libor manipulation”). Later
versions were peer reviewed,
discussed at a 2010 conference and
published in January of this year by
the Journal of Banking and Finance.
The conclusions were not exactly
hidden.
While the study did not find a
smoking gun for effective
manipulation of the Libor rate, it
did identify “statistical evidence of
patterns that appear to be
inconsistent with those that are
normally expected to occur under
conditions of market competition.”
What’s rather more embarrassing
for all concerned is their observation
that “many of these markers were
readily available for review by
market analysts” at the time.
It’s easy to point the finger at the
man in the hotseat, and say “why
didn’t you know what was going
on?” Diamond has rightly paid for
that. But the larger question in this
scandal remains why everyone chose
to ignore a problem that, until the
CFTC cried foul, was apparently
hiding in plain sight.
Marc Sidwell is City A.M.’s managing
editor.
NEXT BANK OF ENGLAND GOVERNOR OTHER CONTENDERS
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Known by his
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The chairman of
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Analysts argue lawsuits from
Libor are unlikely to succeed
LAWSUITS against Barclays
linked to Libor-fixing are unlikely
to succeed based on yesterday’s
evidence to the Treasury select
committee, analysts have said.
Barclays’ finance boss has told
analysts that the bank has “not
suffered any deposit flight as a
result of recent events” during a
conference call.
And number crunchers at
Espirito Santo Investment Bank
said “the probability of any
litigation being successful
BY MARION DAKERS
against Barclays appears to be
quite low”.
They noted that civil law cases
would require proof that the rate
was in fact lowered – difficult to
show given that Barclays often
posted figures towards the top of
the pack of banks who submit
their rates, the analysts said after
a call with chief financial officer
Chris Lucas.
“In what may prove pivotal to
many litigation cases, none of the
authorities have accused Barclays
of any intention to manipulate
the ultimate Libor rates as a
result of conduct during the
financial crisis,” they added.
There are several class action
and individual lawsuits in the
pipeline linked to the Libor
scandal, involving more than a
dozen banks.
Most of the pending cases have
been consolidated before a
federal judge in New York, while
Charles Schwab has filed its own
case against the banks, claiming
it bought about $660bn of fixed-
rate and floating-rate securities
affected by the alleged Libor
manipulation.
DAVID Cameron yesterday weighed
into the debate over Bob Diamond’s
bonuses, arguing that the former
Barclays chief executive should not
be paid a golden goodbye.
Speaking before the Commons,
Cameron said it would be
“inexplicable to the public” and
“completely wrong” for Diamond to
receive a pay-off after resigning from
the bank, which was fined £290m
last week for rigging interest rates.
But he refused to support
Labour’s calls for a judge-led inquiry
into City “culture and practices”.
Cameron: no diamond pay-off
BY LAUREN DAVIDSON
Diamond could face having
millions of pounds worth of
unvested share awards annulled.
At the Treasury select committee
meeting yesterday, Labour MP
Andrew Love asked Diamond
whether he agreed there should be
recognition in his final pay off of
“what went wrong”.
The ex Barclays boss said that was
a question for the board, claiming, “I
have not asked them nor has it been
of interest to me.”
Labour MP John Mann said: “He
should get no pay-off, in fact he
should be repaying the bonuses that
he and his bank fiddled.”
THURSDAY 5 JULY 2012
6
LIBOR SCANDAL
cityam.com
The PM said the public would be baffled if Barclays’ ex CEO received a golden handshake
THE FOCUS on why nationalised
Spanish lender Bankia went ahead
with a stock market listing
intensified yesterday as the
country’s national court opened a
criminal investigation into the float
naming 33 former board members
as suspects.
The probe, launched following a
complaint by small Spanish political
party Union Progreso y Democracia,
accuses Bankia, its parent company
and 33 former board members of
fraud, misappropriation of funds
and the falsification of its 2011
annual results.
It is the third criminal
investigation into Bankia, but the
first to cite specific individuals
including former executive
chairman Rodrigo Rato, once head
of the IMF, as suspects.
Chief operating officer Francisco
Verdu, named as a suspect, resigned
following disclosure of the probe.
The other 32 had resigned shortly
after Bankia was bailed out.
Under Spanish law the crimes
carry jail sentences of up to six
Former Bankia
board focus of
criminal probe
BY KATIE HOPE years, but analysts yesterday said
convictions were unlikely.
The bank had to be bailed out less
than a year after its float, with
hundreds of thousands of Spanish
retail investors seeing their
investments all but wiped out.
The criminal probe means
attention is likely to turn to the
float’s advisers and underwriters.
Lazard, where Rato had worked
after leaving the IMF, and STJ
Advisors were originally appointed
to advise on the float.
The syndicate of banks selling
shares in Bankia’s initial public
offering was led by Bank of America
Merrill Lynch, Deutsche Bank,
JPMorgan and UBS. Other banks had
smaller roles.
A source at a bank involved in
the float said yesterday it had to
hand over files on the deal.
However, a banker at one of the
global coordinators of the float said
he believed they were safe from
legal challenges because risks were
explained to investors in the pre-
float prospectus. “It’s like attacking
the people who sold the tickets for
the Titanic,” he said.
THURSDAY 5 JULY 2012
7
NEWS
cityam.com
Q
How did Bankia come
about?
A
Formed in January
2011 from the
merger of seven small
regional savings banks (cajas) which
had lent aggressively into Spain’s
property bubble it became the
country’s fourth largest lender
overnight, with over 4,000 branches,
25,000 employees and massive
exposure to the property bubble.
Q
What went wrong?
A
It needed to boost the proportion
of its top flight, tier one, capital to
meet regulatory requirements and a
float was the quickest way to do this.
With little international appetite for
the shares, the bulk was sold to
Spanish retail investors, who saw it as
a safe investment, raising €3.3bn.
Q
What happened next?
A
In February, Bankia reported 2011
profits of €309m for 2011, but three
months later it reported losses for the
same period of €3bn. The government
took it over in May, injecting €19bn
after it became clear it did not have
enough capital to cope with the scale
of property losses. This forced Spain
itself, whose finances were weakened
by the downturn, to ask the European
Union for a bailout loan of as much
as €100bn to clean up its banks.
The rise and fall of
Spain’s Bankia
Q
A
and
THE SHARD, the latest tower to dominate London’s skyline, will be inaugurated today as it
celebrates its external completion at a record height of 309.6m. Lasers will beam from the
95-storey London Bridge skyscraper to buildings including the London Eye and Tower Bridge.
It was designed by Renzo Piano and developed by Sellar Property with the state of Qatar.
EUROPE’S TALLEST TOWER CELEBRATES OPENING
GROWTH in the all-important serv-
ices sector slowed to an eight-month
low in June, according to influential
survey data published yesterday,
undermining hopes that the econo-
my could come out of recession in
the second quarter.
Markit’s purchasing managers’
index (PMI) came in at 51.3 last
month – down sharply from 53.3 in
May, indicating a sharp slowdown
in growth in the sector and drop-
ping towards the 50 mark which
indicates “no change” in output.
New sales rose at their slowest
pace for 18 months, with the index
sliding from 54.8 to 51.3, and the
business expectations index also
slowed sharply.
The intensifying Eurozone crisis
and the lost day of work over the
Jubilee are both to blame in part,
BY TIM WALLACE
said Markit.
The weak reading comes on top of
this week’s gloomy manufacturing
and construction PMIs, which
showed output falling in both sec-
tors in June – leading economists to
predict another quarter of recession.
“These figures confirm our view
that GDP is likely to have contracted
in the second quarter,” said Nida Ali
from the Ernst and Young Item Club.
“The decline in business confi-
dence is also a genuine cause for
concern. The experience of last
autumn demonstrates how a deterio-
ration in sentiment can rapidly
affect activity, as it leads to compa-
nies placing investment and recruit-
ment plans on ice.”
However, employment still contin-
ued to grow in June, though at a
slower pace – that component of the
index declined slightly from 52 in
May to 51.7 in June.
THE BANK of England is already on course to
splash £325bn on asset purchases as it strives
to stimulate a flat and endangered economic
recovery. Yet many economists feel the
situation is bad enough to warrant even more
quantitative easing (QE).
David Kern of the British Chambers of
Commerce yesterday warned that more QE “is
not risk-free, and could be counter-productive”
by propping up inflation.
Yet seven of our MPC disagree enough to
vote for either £50bn or £75bn more asset
purchases to be scheduled for the coming
months. Last time around the Monetary Policy
Committee (MPC) voted 5-4 against more QE.
Today, the balance could tip in favour of
governor Mervyn King and his fellow doves.
BY JULIAN HARRIS
THURSDAY 5 JULY 2012
9
NEWS
cityam.com
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Weak service
sector knocks
recovery hopes
THE PROFITABILITY of British
companies slipped slightly in the
first three months of the year,
according to figures from the
Office for National Statistics (ONS)
released yesterday.
The rate of return on private
non-financial companies slipped
0.2 percentage points to 12.1 per
cent in the first quarter – the
lowest rate since mid-2010.
However, when North Sea oil and
gas firms are excluded, gross
trading profits grew 2.7 per cent.
BY MARION DAKERS Manufacturing firms remained
at the bottom of the heap for
profitability, with an unchanged
return rate of 4.9 per cent, down
from 5.4 per cent a year ago and 8.3
per cent in 2010. Services firms,
meanwhile, showed a 0.1
percentage point uptick to 15.7 per
cent in the quarter.
Ernst & Young figures for the
ONS paint a mixed picture of
corporate health: there was surge
in profit warnings at the start of
the quarter, at the fastest pace
since early 2009, which tailed off
rapidly by March.
A slowdown in profits at oil companies affected the overall figures
NEW8 FROM THE
C¡TY OF LONDON
ADVERT¡8EMENT
Lord Mayor Alderman David
Woouon (¡iclured) hosls lhe
annual Dinner lo Her Ma|esly's
}udges al The Mansion House on
Wednesday 11 }uly. The keynole
s¡eakers are Lord Mayor
Woouon, lhe Lord Chief }uslice of
Ingland and Wales, and lhe
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Chancellor.
The Cily of London Access
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from disabled ¡eo¡le or lhose
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Access Group needs
your views
News, info and offers at www.cityofIondon.gov.uk/eshot
Judges' Dinner
at Mansion
House
Discover the City's Livery treasures
}oin Sonia Solicari, Princi¡al Curalor al Guildhall Arl Gallery, on
11 }uly from 12.30 ÷ 1.15¡m for her lalk aboul lhe nev ßulcher,
ßaker, Candleslick Maker exhibilion. The shov, vhich
shovcases 850 years of Livery Com¡any lreasures, runs unlil 23
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Charity Band Night at
Leadenhall Market
Talbol Validus Grou¡ and lhe
Cily of London's Leadenhall
Markel, IC3, hosl a free Charily
ßand Nighl lhis evening (5lh
}uly) lo raise money for ßrain
Tumour UK and King's College
Hos¡ilal Charily. }oin lhe fun ÷
and lhe bands ÷ from 6¡m lil
lale. Refreshmenls vill be
available al lhis evenl.
ALLISTER HEATH | CITY A.M.
“Keep policy on hold – this crisis can’t be solved with increasingly ultra-loose monetary policy, and more QE could have negative side effects.
Rather, the onus is on the coalition to deliver the supply-side reforms that are needed to increase economic activity in the long-run.”
SIMON WARD | HENDERSON
“Hold Bank rate and refrain frommore QE but strengthen credit easing by extending termrepos fromsix months to three years. There is no
shortage of liquidity – real non-financial money is growing at its fastest pace since 2009-10, promising economic improvement by late 2012.”
GEORGE BUCKLEY | DEUTSCHE BANK
“The continued weakness of the UK’s economic recovery, partly the result of strong headwinds fromEurope, justifies a further £50bn of asset
purchases over the coming months.”
VICKY PRYCE | FTI CONSULTING
“Hold interest rates at 0.5 per cent but contemplate cutting themeven further next time. In the meantime engage in more QE. GDP will have
been subdued in the second quarter and the Eurozone crisis is far fromover despite some progress in the summit at the end of June.”
VICKY REDWOOD | CAPITAL ECONOMICS
“£75bn more QE. Inflation is falling as expected, the economy is in recession and the Eurozone crisis has not been fundamentally resolved. The
Bank of England should start thinking about buying private sector securities, too.”
TREVOR WILLIAMS | LLOYDS TSB
“Expand QE by up to £75bn. With clearer signs that inflation will fall belowtarget, and with growth slowing fast, the MPC should ease policy,
and possibly buy a wider range of securities. The governor’s push for more QE should not be outvoted this time around.”
HOLGER SCHMIEDING | BERENBERG BANK
“The apparent relapse of the Eurozone into recession as well as weaker data fromChina and the US exacerbate the UK’s pronounced domestic
weakness. With inflation receding slowly, the MPC can afford to do more. I vote for £50bn in additional asset purchases.”
GRAEME LEACH | INSTITUTE OF DIRECTORS
“The double dip recession, intensifying crisis in the Eurozone and anaemic UK money supply surely mean one thing: the need for a further
expansion of quantitative easing. It will be good to send a strong, positive signal with a £75bn expansion in asset purchases.”
ROSS WALKER | RBS
“While there are legitimate questions about the efficacy of further QE, it is the only monetary policy option that can be deployed immediately
to any significant extent. Credit easing measures may in time prove to be a more targeted, effective response. But for now, £50bn more QE.”
CITY A.M. | OUR SHADOW MPC VOTES 7-2 FOR MORE EASING
“I was more optimistic about the UK
economy before recent events occurred,
but Barclays has changed that. I’m
hoping as new regulation comes in we’ll start
to get trust back in the economy.
These views are those of the individuals above and
not necessarily those of their company
DAVID GOULD
METRO BANK

ARE YOU MORE OR LESS OPTIMISTIC
ABOUT THE UK ECONOMY THAN AT THE
START OF THE YEAR?
CITYVIEWS
Interviews by Polly Young and Jamie Sutherland
“I’m more optimistic but mainly
because my personal situation is
slightly better than it was then. I feel like
people are accepting the recession now and
starting to learn how to deal with it.”
SPENCER JONES
LLOYDS

“I wish I could be more optimistic but
the banking scandal has again rocked
my confidence. The Greek election
turned out alright, but that’s just pushing a cork in
for a moment – its going to explode off again.
OLIVER SCHOFIELD
RISCS

Profitability dips at UK’s firms
double savings in the
DFS summer sale
Deputy 3 seater sofa. Accent cushions not included unless otherwise stated. Credit subject to acceptance. Credit is provided by external finance companies as determined by DFS. 4 years interest free credit from date of order. Delivery charges apply. Sale price applies from
30.07.12 to 09.09.12. After sale price applies from 10.09.12 - see instore or online for details. Mobile charges may apply when calling 0800 110 5000. DFS is a division of DFS Trading Ltd. Registered in England and Wales No 01735950. Redhouse Interchange, Doncaster, DN6 7NA.
Visit your nearest store, order direct at www.dfs.co.uk or call free on 0800 110 5000 24 hours a day, 7 days a week
4 years interest free credit on everything
Or pay nothing until Easter 2013 then take 3 years
interest free credit
0
%
REPRESENTATIVE
APR
No deposit with 4 years interest free credit. 48 equal monthly payments of £12.47. Or pay nothing until Easter 2013 then 36 equal monthly payments of £16.63. 0% APR. Total £599.
sale
price
£899
after sale
price
£1199
Deputy
now only
£599
IN BRIEF
Clegg pushes co-op firm model
n Deputy Prime Minister Nick Clegg
yesterday unveiled a new professional
body - the Institute for Employee
Ownership – and a FTSE benchmark for
companies run as employee
partnerships, following a report on them
by employment lawyer Graeme Nuttall.
Aegis practises its French
nAegis has built up its French footprint
with the purchase of six companies
formerly owned by W Garden and
others, with assets worth €5m (£4m).
The acquisitions will merge into Aegis’
iProspect operations in France in the
third quarter of this year.
Advertising spend on the up
nAdvertising spend increased by 1.1
per cent in the first quarter of this year
despite economic turbulence, accord-
ing to the Advertising Association. And
the prognosis is positive, with expendi-
ture expected to improve over the rest
of the year, growing 2.5 per cent in
2012 and 4.4 per cent next year.
Canada boosts Travelzest’s profits
nUpmarket travel operator Travelzest
yesterday posted a rise in half-year
profits after a strong performance in
Canada. Pre-tax profit jumped to £1.9m
in the period, compared to £884,000 a
year earlier.
B
B
C
US technology giant Apple yesterday
lost a key London court ruling against
Taiwan’s HTC, just as reports emerged
that its hotly anticipated smaller and
cheaper iPad would be on sale by the
end of the year.
The production of
Apple’s latest iPad is
already under way,
according to the Wall
Street Journal. The new
model – nicknamed
the mini iPad – is
expected to feature a
screen that’s seven to
eight inches
diagonally, less than
the current 9.7-inch
version.
It is believed that
Apple could sell the
BY KATIE HOPE device for just $199 (£127) – less than
half the cost of the present iPad
which ranges between £399 and
£699.
Meanwhile, in the patent dispute
with HTC, the judge ruled that HTC
had not infringed four technologies
that Apple had claimed as its own.
The technologies included the slide-
to-unlock feature, which
the judge said was an
“obvious” development in
the light of a similar
function on an earlier
Swedish handset.
The ruling prevents
Apple from banning its
rivals products in the UK.
Apple declined to
comment yesterday.
The mini iPad is expected
to go on sale for just £127
THE BBC yesterday appointed an
insider as its new director general
who will take the helm when Mark
Thompson retires from the job
later this year.
George Entwistle, 49, pipped
other front-runners Caroline
Thomson, BBC chief operating
officer, and Ed Richards, boss of
Ofcom, to the post.
Head since last year of BBC
Vision, where he oversees all the
George Entwistle named the
fifteenth BBC director general
BY LAUREN DAVIDSON
major channels, Entwistle joined
the broadcaster in 1989 as a
journalism trainee.
Raised in Yorkshire and
educated at Durham University,
the former Newsnight editor can
take credit for introducing BBC2’s
The Culture Show but was also
responsible for the broadcaster’s
much-criticised coverage of the
Diamond Jubilee last month.
Entwistle will earn a yearly
salary of £450,000 – just two
thirds of Thompson’s £671,000 pay.
THURSDAY 5 JULY 2012
11
NEWS
cityam.com
Former Newsnight editor George Entwistle will take the helm this autumn
Independent Debt Capital Markets LLPis acting as theLeadManager onthis issue.
Pleaserefer totheinformationbooklet dated3July 2012andtheoffering circular dated29June2012(theOfferingCircular).
Primary Health Properties PLCis the legal entity that will issue the bonds andreferences toPrimary Health Properties in this advertisement are references toPrimary
HealthProperties PLC. Thecontents of this advertisement, whichhavebeenpreparedby Primary HealthProperties PLC, havebeenapprovedsolely for thepurposes
of section 21(2)(b) of the Financial Services and Markets Act 2000by Mirabaud Securities LLP which is authorised and regulated by the Financial Services Authority.
Independent Debt Capital Markets LLP (incorporated in England with Partnership No OC350101) whose registered office is 33 Grosvenor Place, London SW1X 7HY,
is an appointed representative of Mirabaud Securities LLP . This is anadvertisement andis not a prospectus for the purposes of EUDirective 2003/71/EC
(the“Directive”) or Part VI of theFinancial Services andMarkets Act 2000. Aprospectus has beenpreparedandmadeavailabletothepublic inac-
cordancewiththeDirective–pleaseseetheOfferingCircular. Investorsshouldnot purchaseanybondsreferredtointhisadvertisement except on
thebasis of informationcontainedintheOffering Circular. Investors mayobtaincopies of theOffering Circular onthewebsiteof theLondonStock
Exchange and in hard copy at the registered office of Primary Health Properties PLCat Ground Floor, Ryder Court, 14 Ryder Street, London SW1 Y
6QB. Before buying or selling the bonds you should make sure that you fully understand the risks, which are set out in full in the Offering Circular, and determine that
thebondsareappropriatefor you. PrimaryHealthProperties, Independent Debt Capital MarketsLLPandMirabaudSecuritiesLLPdonot providelegal, tax, accounting
or investment adviceinrelationtothebonds andarenot responsiblefor anyadviceyoumayreceivefromanythirdparty. Youshouldbeawarethat securities involvea
variety of risks andyoushouldseek independent adviceif inany doubt as tothesuitability of aninvestment inthebonds for your circumstances.
The information containedherein may only be released, publishedor distributedin the UnitedKingdom, Jersey andGuernsey.
The information containedherein is not for release, publication or distribution in or into the UnitedStates, Australia, Canada,
Japan, South Africa or in any other jurisdiction where it is unlawful to distribute this document.
Landlord to the NHS
Lead Manager: Independent Debt Capital Markets LLP
Formoreinformation, visitwww.phpgroup.co.uk
Important Information
Investors should note that the market price of the
bonds could fall belowthe face value during the life
of the investment. If you choose to sell the bonds
prior to the end of the life of the bonds you may get
back less than your original investment.
Furthermore, intheevent that PrimaryHealthPropertiesbecomes
unabletopayits debts infull or becomes insolvent, youmaylose
someor all of your investment. Thebonds arenot coveredbythe
UKFinancial Services CompensationSchemeintheunlikely
event of thefailureof PrimaryHealthProperties.
PrimaryHealthPropertiesPLC, oneof the
UK’slargest providersof modernprimary
healthcarefacilities, isofferingthe5.375%
bonds2019, availabletobuyuntil 16July2012.
Thebondspayafixedrateof interest of
5.375%per year until July2019. Interest is
paidtwiceayear inarrear inJulyandJanuary
eachyear withyour investment paidbackin
full on23July2019.
The minimuminitial investment is
£2,000 andbonds can be bought and
soldin multiples of £100 thereafter.
Investors can buy andsell their bonds in
the open market at any time (during
market hours andin normal market
conditions) andprices can be checked
on the London Stock Exchange website.
To buy the Primary Health Properties 5.375% bonds
2019, you need to contact your stockbroker or any
of the authorised distributors listed. If you are in
any doubt as to the suitability of the bonds for your
circumstances, you should seek independent advice
froma tax adviser and/or investment professional.
AuthorisedDistributors: BarclaysStockbrokerswww.barclaysstockbrokers.co.uk/
Investment-Choices/IPO/pages/at-a-glance.aspx | Killik&Cowww.killik.com/bonds
MirabaudSecurities www.mirabaudsecurities.com | Peel Hunt www.peelhunt.com
Redmayne-BentleyLLPwww.redmayne.co.uk/php | Selftradewww.selftrade.co.uk/php
WinterfloodSecuritieswww.winterflood.com
5.375
% per annum
Primary Health Properties
5.375% Bonds 2019
Mini iPad eyed
by Apple as it
loses HTC battle
THE SERVICE sectors of economies
throughout the Eurozone continued
to contract in June, according to data
released yesterday, although separate
figures showed wide differences in
levels of unemployment.
The Eurozone’s fall in total econom-
ic output eased slightly in June,
according to Markit’s latest composite
purchasing managers’ index (PMI).
Specifically, the data revealed poor
service statistics in the big four
Eurozone economies – Spain regis-
tered 43.4, Italy posted 43.1, France
jumped to 47.9, and Germany
slumped to 49.9.
All figures below 50 indicate eco-
nomic contraction. PMI correlates
closely with GDP, and since services
make up a large portion of these
economies, the negative figures are
ominous bellwethers for economic
activity.
Yet the bad news contrasted with
mildly positive retail results released
by Eurostat yesterday, which showed
volume of trade in the EU was up 0.6
per cent in May compared to April.
Services data
points to euro
area recession
BY BEN SOUTHWOOD
And separately, the statistics body
showed how unemployment levels var-
ied widely between Eurozone leaders
and laggards in 2011.
The statistics showed an astonishing
62.8 per cent rate of long-term unem-
ployment among the jobseekers in
Campania, Italy. This compares with
four per cent of those out of work
being long-term unemployed in
Aland, Finland.
There were also deep cleavages
between north and south in youth
unemployment. In the German region
of Tübingen just 4.3 per cent of young
people were seeking work, while
Ceuta in Spain had youth unemploy-
ment of 65.8 per cent.
France unveils tax raid on home
owners, energy firms and banks
FRANCE’S new socialist government
announced tax rises worth €7.2bn
yesterday, including heavy one-off
levies on wealthy households and
big corporations.
In the first major raft of
economic measures since Francois
Hollande was elected president in
May, the government singled out
large companies and the rich.
British owners of second homes
in France are set to be hit by higher
taxes on rental income and capital
gains tax on property sales.
BY CITY A.M. REPORTER
Overall, an extraordinary levy of
€2.3bn on wealthy households and
€1.1bn in one-off taxes on large
banks and energy firms were
central parts of an amended 2012
budget presented to parliament.
The law, which includes tax
increases on stock options and
dividends and the scrapping of an
exemption on overtime, should
easily receive approval by a 31 July
deadline after the socialists won a
comfortable parliamentary
majority at elections last month.
Hollande says the rich must pay
their share as France battles to cut
its public deficit from 5.2 per cent
of GDP last year to an EU limit of
three per cent in 2013 despite a
stagnant economy and rising debt.
“We are in an extremely difficult
economic and financial situation,”
finance minister Pierre Moscovici
said. “In 2012 and 2013, the effort
will be particularly large. The
wealthiest households and big
companies will have to contribute.”
A grim assessment of public
finances on Monday by the state
auditor warned that €6-10bn of
deficit cuts were needed in 2012
and a hefty €33bn in 2013.
Markit Eurozone PMI and ofcial GDP
2012 2010 2008 2006 2004 2002 2000
55
60
65
50
45
40
35
30 -3
-2
-1
0
1
2 % 50 = no change
GDP
PMI
THE TROIKA met in Athens
yesterday to check on Greece’s
progress with their austerity
package.
Christine Lagarde, head of the
International Monetary Fund –
which makes up the Troika along
with the EU and European
Central Bank – commented that
their purpose in Greece was not
to renegotiate the bailout deal.
This intention will not sit well
with the coalition government,
which seeks concessions to meet
its deficit targets, in exchange
for speeding up the privatisation
aspects of the deal.
Troika lands to
inspect Greece
BY BEN SOUTHWOOD
MARIO MONTI committed Italy to
budgetary discipline, in a joint press
conference with Germany’s premier
Angela Merkel yesterday.
Though the estimate of Italy’s
budget deficit for this year was
revised up to two per cent, Merkel
praised measures taken by Monti
since he took over from Silvio
Berlusconi. Monti touted the labour
reforms he managed to pass through
the Italian legislature.
Lombard Street Research said:
“The euro-establishment’s contempt
for Keynes is showing its inevitable
results: deficit ratios in Spain and
Italy are mounting, not falling.”
Monti-Merkel
show unity
BY BEN SOUTHWOOD
THURSDAY 5 JULY 2012
12
NEWS
cityam.com
Madagascar
Morocco
Western
Sahara
Zeeland
Netherlands 2.7%
Niederbayern
Germany 2.9%
Ceuta
Spain 29.3%
Murcia
Spain 25.4%
Andalucía
Spain 30.4%
Oberbayern
Germany 2.8%
Tirol
Austria 2.5%
Salzburg
Austria 2.5%
Canarias
Spain 29.7%
Réunion
France 29.6%
Unemployment figures vary widely across Europe
Got A Story? Email
thecapitalist@cityam.com
13
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THECAPITALIST
THURSDAY 5 JULY 2012
WHoLz ScoTTisH LoasTzn & CHiÞs
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London, SW1W 9LX
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Swedeland Court,
202 Bishopsgate
London, EC2M 4NR
020 7283 1763
Cabot Place
Canary Wharf
London, E14 4QT
020 7715 5818
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local products in a marketplace.
We’re reachingmore people
Our team is now able to directly reach more
poor people. We’ve built two new bank
branches in the south of Malawi so we are
nearer and more convenient to the poor people
we aim to serve.
We’re trainingpeople torungoodbusinesses
We are training and mentoring thousands of
entrepreneurs in simple business management
skills. Better run businesses mean more jobs
and more money in the pocket to feed and
educate children.
There is much more to do.
By the end of 2014 we aim for 26,000
households to hold savings accounts and
15,000 micro-entrepreneurs and farmers will
have accessed small loans creating and
sustaining 22,500 new jobs.
Our work is more than numbers though.
By giving people a hand-up, not a hand-out,
you have enabled poor people to take control
of their own life, to lift themselves out of
poverty.
A poor person holds their head a little
higher when they buy their child a school
uniform for the first time or put more food on
the table.
Thank you to the readers of City A.M. and the
UK government’s Aid Match for your support.
R
UTH runs the Yamikau Mulungu
corner shop, which opened in
2001 at the edge of Nsanje market
in southern Malawi. She sells a
range of groceries and small household
items.
Ruth recently took out her first loan
for £76. She used the loan to build up
her stock. She also decided to diversify
and buy some rice which she stores to
sell when there is a shortage. She has
finished repaying her first loan and is
keen to take another. Ruth feels that
her business has improved a lot since
taking out her loan. Buying more stock
has increased her profit which has
resulted in her feeling more confident
and able to make better decisions.
The City A.M. appeal is helping more
Malawians like Ruth to grow their
businesses and build a better future for
their families and local communities.
Proudly sponsored by
Opportunity International United Kingdom is registered as a charity in England and Wales (1107713) and in Scotland (SC039692).
How readers make a big difference
EDWARD
FOX
CHIEF EXECUTIVE
Opportunity International UK
Opportunity Malawi Client Ruth, with her daughter, Innocent
RUTH, THE HAPPY SHOPKEEPER
Opportunity International is doing great work
in making access to financial services a reality
for some of the poorest people in Malawi. The
generosity of the readers of City A.M., which
we're matching pound for pound, will help
create jobs and income for thousands of
people. I welcome Opportunity International's
decision to report to supporters on their
results six months after their appeal.
Andrew Mitchell,
secretary of state for
International Development
There are few things more pleasing than to
see people recover their self belief and their
self-esteem, to see them become
independent, able to feed their families and
support their loved ones through their work,
not by getting a handout. It is a privilege for
me to contribute to Opportunity
International’s development and success
Tidjane Thiam,
supporter of the City AM appeal and CEO of Prudential


CHRISTMAS
APPEAL
REVIEW
6 MONTHS ON
Matching your
donations with
IN BRIEF
Carillion in contract delays
nUncertainty caused by the Euro-
zone crisis has put the brakes on
some infrastructure projects in the
Middle East and Britain, support
services and construction firm
Carillion said yesterday. Carillion,
which maintains some of Britain's
railways and military bases and has a
strong construction presence in
Canada and the Middle East, said
market conditions in the first six
months of 2012 had been challenging,
although its pipeline of potential
work had grown to £35bn.
Bunzl is buoyed by acquisitions
nInternational distribution group
Bunzl yesterday said it had bought
MMH Holding and its subsidiaries from
Markus Meier, Daniel Meier and Reto
Hofmann. The firm said the acquisition
extends its reach in Switzerland, a
market it entered two years ago with
the purchase of Weita. The business,
which trades under the name
Distrimondo, reported revenues of
SwFr17.3m (£11.5m) last year.
Hunting is trading in line
n Energy services company Hunting
said yesterday that it is trading in line.
The company said it had been boosted
by a pick up in work in the Gulf of
Mexico as companies step up work fol-
lowing a period blighted by the
Deepwater Horizon BP spill. Hunting
chief executive David Proctor said:
“Trading in the first six months of the
year has been underpinned by strong
drilling activity in North America.”
G
E
T
T
Y
TULLOW Oil said yesterday said it
expected record first half revenues
but also revealed that it would be
hit by $440m (£281m) of write-
downs on projects.
Tullow said that it was on course
to record revenue of $1.15bn
(£734m) in the six months to 30
June, compared to $1.06bn the year
before.
The FTSE 100 oil explorer said its
first half figures would include a
$700m pre-tax profit related to the
disposal of two-thirds of its
Ugandan interests to Total and
China’s CNOOC for a headline
$2.9bn.
It said first-half net debt would be
about $700m, while capital expen-
diture on developments and explo-
ration came in at around $900m.
Tullow’s share of production at its
wells rose by three per cent to
77,400 barrels a day, and the firm
said its offshore Jubilee field in
Uganda was progressing well.
However, projects in Ghana and
Namibia were shelved triggering
Tullow is hit by
$440m charge
but sales surge
BY JOHN DUNNE
costly writedowns.
Chief executive Aidan Heavey said:
“The ongoing remediation of the
Jubilee field is progressing well and
significant exploration wells are
planned for the East African Rift
basins, the West African Transform
Margin and the twin basins in
South America in the second half of
2012.”
The company is scheduled to
release its first-half results on 25
July.
Shares in the firm closed 1.9 per
cent lower yesterday as investors reg-
istered their disappointment with
the writedowns.
Topps Tiles enjoys uplift in sales
despite a bank holiday setback
TOPPS TILES, the tile and wood-
flooring specialist retailer, yesterday
posted a sales rise in the third
quarter of the year despite seeing
trade disrupted by the diamond
jubilee weekend.
Sales at stores open more than a
year rose 2.1 per cent in the 13
weeks to 30 June compared with a
1.9 per cent decline in the same
quarter last year.
But this marked a slowdown
from the 4.5 per cent rise reported
for the first seven weeks of the
quarter, implying that like-for-like
sales fell around 0.7 per cent in the
last eight weeks.
KASMIRA JEFFORD
“We have had a double bank
holiday weekend in the
second half of the quarter,
which did bring down the
whole number,” chief
executive Matthew
Williams said, adding that
the group ended the
period in positive
territory.
“We are happy with
that number overall
and we are confident
that we are taking
market share in what
continues to be a
tough environment for
discretionary products.”
Williams remained wary
on the impact of the Olympics on
the business, saying it was likely to
have some effect but customers
were likely to delay home
improvement projects rather than
cancel them.
“We have strong plans in terms of
logistics to counteract any
effects of disruptions,” he said.
The retailer opened three
new stores in the quarter,
bringing its total estate to
323. It plans to open a
further three sites by the
end of its financial year.
Tullow chief Aidan Heavey has written down the value of some projects
Tullow Oil PLC
4Jul 28Jun 29Jun 2Jul 3Jul
1,420
1,440
1,460
1,480
1,500
1,520
p
1,502.00
4Jul
We remain positive on the company, which has an industry-leading
exploration track record and has consistently created value for shareholders. In
addition, we believe ownership of highly prospective assets leaves the
group vulnerable to bid speculation in a consolidating industry.
ANALYST VIEWS


The $2.9bn Ugandan farm-down has strengthened the balance sheet
and will help Tullow to finance its high impact drilling plans. Furthermore, its
exploration success continues with the most notable being the large
basin Ngamia-1 discovery in Kenya. Our recommendation is ‘Accumulate’.

Tullow has taken the opportunity to tidy up balance sheet asset values.
Of the $440m of write-offs, $80m of unsuccessful exploration was as expected
after dry holes in Sierra Leone, Cote D'Ivoire and Tanzania. Tullow trades
above the company's historical 15 per cent to 20 per cent premium. ‘Hold’.

WHAT IS THE OUTLOOK
FOR TULLOW IN 2012?
By John Dunne
JONATHAN JACKSON KILLIK & CO

TONY SHEPARD CHARLES STANLEY

SANJEEV BAHL NUMIS
Michael Williams says the
Olympics will delay sales
TAYLOR WIMPEY said yesterday
the UK housing market remained
“stable” despite wider uncertainty
in the Eurozone and the global
economy, as it continued to grow
sales.
In a first-half trading update,
Britain’s second largest
housebuilder said it sold 5,083
homes in the six months to 1 July,
up from 4,707 the same time last
year, with average selling prices up
from £168,000 to £175,000.
The average private net
reservation rate rose to 0.6 sales
per outlet per week from 0.56,
with the average selling price
rising to £175,000 from £168,000.
Homebuilders have been
benefiting from a shortage of
Taylor Wimpey predicts stable
outlook for UK house market
BY KASMIRA JEFFORD
supply of new homes in Britain in
spite of a weak economic climate
and the economy slipping back
into recession.
Chief executive Peter Redfern
said this tightness in supply had
helped offset the difficulty buyers
face in securing mortgages.
But shares in the company fell
almost three per cent yesterday,
with analysts saying that the tone
of the statement was more
cautious than anticipated.
Mortgage lending continues to
be restricted, although the
company said it was encouraged
by the introduction of the NewBuy
scheme.
Nevertheless, its order book
grew to £960m as of 1 July, up
from £932m a year earlier.
MORE: Page 20
▲ ▲
THURSDAY 5 JULY 2012
14
NEWS
cityam.com
Lord Sugar unveils set-top box
YouView after years of delays
AFTER years of delays, new set-top
box YouView was yesterday unveiled
by proud chairman Lord Alan Sugar.
A joint venture by the BBC, ITV,
Channel 4, Channel 5, BT, TalkTalk
and Arqiva, digital channel provider
YouView will allow the user to flick
back through seven days of missed
TV shows as well as browse extra on-
demand content.
But eyebrows were raised at the
retail price of YouView, which will
set the purchaser back £299 when it
BY LAUREN DAVIDSON
hits stores at the end of this month –
although broadband providers could
offer their customers a significantly
reduced price.
Lord Sugar said he expects this
cost to drop to as low as £99 in two
years, calling YouView just a
“carcass” of the product it will be
then, but the “next generation
Freeview” has suffered criticism.
Greenwich Consulting partner
Olivier Wolf said: “This was an
underwhelming launch coming two
years too late. Had this launched in
2010, the service would have been a
clear success... but today YouView
[lands in] a very different market.”
But YouView chief executive
Richard Halton said: “Has the
market changed? I don’t think
there’s a product out there that does
what this does. We’re blazing a
trail.”
The product is aimed at the 12m
or so Freeview households, not the
tech-savvy early adopters, he added.
The cost of the project has totalled
£70m so far – £10m per partner.
BRITAIN’S largest dry-cleaning
chain said it plans to shut around
100 loss-making stores by the end
of the year as it becomes the latest
casualty on the high street.
Johnson Services Group said the
move would leave it with 460
stores and affect several hundred
back office and warehousing staff.
It did not specify how many jobs
would be lost or the location of
the stores that will close.
The company said the shops
earmarked for closure suffered a
4.3 per cent fall in like-for-like
sales in 2011, while the continuing
Johnson to shut over a fifth of
dry-cleaning outlets this year
BY KASMIRA JEFFORD
shops like-for-like sales rose 0.3
per cent in the same period.
The move is part of a £24m
restructuring programme to help
increase profitability across its
dry-cleaning arm, which has been
hit by tough economic conditions
and the continued squeeze in
consumers’ disposable income.
Johnson has already closed more
than 50 outlets in recent years.
The company also supplies
workwear rentals, linen rental for
hotels catering and corporate
hospitality.
Executive chairman John Talbot
said these divisions continued to
trade well.
British Airways owner expects
Olympics to hit premium traffic
BRITISH Airlines owner IAG reported
a six per cent jump in like-for-like pas-
sengers numbers for June yesterday.
But the firm, which is running an
advertising campaign urging Britons
to stay in the country during the
Olympics, repeated its forecast that
the Games will dampen premium
traffic figures during the summer.
IAG said it carried 5.05m passengers
in June, up 11.6 per cent, or 6.1 per
cent once it strips out the boost from
new routes introduced during the
year.
Measured in revenue passenger
kilometres, traffic rose by an underly-
ing 5.9 per cent.
Group premium traffic grew by 5.3
per cent compared to the previous
BY MARION DAKERS
year, with 9.6 per cent growth in non-
premium traffic.
Custom from domestic passengers,
which includes Brits and Spanish fly-
ers using sister firm Iberia, rose 25.4
per cent on a year ago to 1.16m thanks
in part to new routes from Madrid
and the acquisition of BMI.
Iberia reported an overall 3.2 per
cent rise in revenue passenger kilome-
tres to 4.47bn, while British Airways
fared even better with a 7.1 per cent
like-for-like rise to 11.31bn.
But the group’s cargo operations
continued to experience weakness,
with cargo tonnes carried falling an
underlying 0.6 per cent to 507m kilo-
metres last month. The fall widens to
2.3 per cent in the year to June.
IAG’s overall load factor, a measure
of how full its flights are, rose an
underlying one percentage point to
76.1 per cent.
•Budget carrier Ryanair has report-
ed a 6.3 per cent jump in passenger
numbers in June compared to a year
ago. The Irish airline said it carried
7.79m passengers last month, on a flat
load factor of 84 per cent.
IN BRIEF
Etihad’s revenues take off
nRevenues at Etihad Airways were up
31 per cent in the second quarter as the
Abu Dhabi-based airline continued to
expand its its global network. The
unlisted airline, which recently picked up
a 4.99 per cent stake in Virgin Australia
and holds a minority stake in Aer Lingus,
said second-quarter revenue rose to
$1.25bn. It did not provide profit figures.
Passenger numbers in the quarter rose
34 per cent to 2.55m.
Unite calls off London bus strike
nThe Unite union yesterday called off
today’s bus strike, pledging to continue
negotiations over bonuses for drivers
over the Olympic period. Transport for
London intervened in the dispute
between the union and bus firms
yesterday, offering to give a 50 per cent
share of any extra revenues made during
the Games to bus staff, on top of £8.3m
offered by the Mayor. No decision has
been made on the strike set for 24 July.
Heggessey leads Boomerang MBO
nCardiff-based independent television
company Boomerang was the subject of
a management buyout led by former
BBC1 controller Lorraine Heggessey. The
£7.1m takeover will see Boomerang
become Boom Pictures, with ex Talkback
Thames boss Heggessey its executive
chairwoman. The deal has been
approved by 81 per cent of Boomerang’s
investors , who will receive 77p per
share, a 51 per cent premium on
Wednesday’s share price.
Betfair jumps on horse racing deal
nBetfair yesterfday signed a five-year
profit-sharing deal with British Racing
which will see the online betting
exchange hand over 10.75 per cent of all
its UK revenues generated from horse-
racing bets. The deal is in place of
Betfair’s current voluntary Horserace
Betting Levy, and will guarantee a
minimum of £40m of funding over the
next five years.
THURSDAY 5 JULY 2012
15
LONDONREPORT
B
RITAIN’S top share index edged
down in thin trade yesterday,
moving within a tight range as
investors awaited central bank
meetings today that many expect to
result in fresh economic stimulus.
A US holiday contributed to low vol-
umes across the market, at less than
half the 90-day daily average, with
many investors preferring to wait on
the sidelines ahead of the European
Central Bank and Bank of England
meetings.
“The market is lacking in a direction
at the moment and if you see some pol-
icy responses the market could possibly
continue this upward move but if you
don't, they may struggle to make fur-
ther progress from here,” said Chris
Beauchamp, market analyst at IG Index
in London.
London’s blue-chip index ended down
3.26 points, or 0.1 per cent, at 5,684.47
points.
British broker Icap, down 1.1 per cent,
was among the most actively traded
stocks, as investors sold out fearing it
could be dragged into the Libor scandal
that has already cost Barclays hundreds
of millions of pounds in fines.
ICAP has said that it has never been
involved in setting Libor rates, but
rather acts as a broker of cash deposits
and derivatives based on Libor. The bro-
ker also said it is co-operating fully
with the investigations.
A fresh batch of weak data gave
weight to those calling for fresh stimu-
lus, with the UK service sector expand-
ing in June at the slowest pace since
last October, especially as second-quar-
ter earnings hove into view.
FTSE ends flat in thin trade with US
shut and all eyes on central banks
BESTof theBROKERS
Britvic PLC
28Jun 29Jun 2Jul 3Jul 4Jul
p 340
320
325
330
335
310
315
305
303.50
4 Jul
BRITVIC
Numis rates the drinks firm “hold” and
has a target price of 320p. The broker
thinks the miserable weather has
dampened Britvic’s third quarter sales,
having endured the wettest June on
record, and reckons the firm will see a 2.1
per cent drop in revenues to £318.2m,
dragging annual growth to 0.1 per cent.
DASHBOARD CITY
YOUR ONE-STOP SHOP FOR JOB MOVES,
BROKER VIEWS AND MARKET REPORTS
cityam.com
FTSE
5,650
5,700
5,500
5,450
5,550
5,600
4Jul 28Jun 29Jun 2Jul 3Jul
5,684.47
4 Jul
Moneysupermarket Com Group PLC
28Jun 29Jun 2Jul 3Jul 4Jul
p 134
130
132
128
126
129.00
4 Jul
MONEYSUPERMARKET
UBS has upgraded the price comparison
site from “neutral” to “buy” and has
inched up its target price from 7.58p to
7.76p. The broker thinks the firm’s recent
acquisition of Money Saving Expert
reduces its reliance on Google for
customer leads and adds 16 per cent to
earnings.
Halfords Group PLC
28Jun 29Jun 2Jul 3Jul 4Jul
p 235
225
230
220
215
210
205
208.00
4 Jul
HALFORDS
Seymour Pierce rates the retailer “hold”
but has cut its target price from 270p to
220p. The broker now expects Halfords to
report a six per cent fall in like-for-like
sales in its first quarter update on 19 July,
and in the long-term is worried about
management’s track record of squeezing
costs too hard in order to hit targets.
Psigma
Psigma Investment
Management has
appointed Nina Krishna to
the newly-created role of
chief operating officer. She
recently worked as chief
operating officer for global
banking, markets and
private banking for HSBC in
Dubai. Krishna has 30
years’ experience in the
industry, and has held
senior roles at JP Morgan, UBS. She started her career at
Chemical Bank.
Just Retirement
The specialist life assurance group has announced the
appointment of Alex Duncan as its chief risk officer. He
joins from Old Mutual, where was most recently director
of finance capital, and where he was previously head of
UK acquisitions and head of corporate finance and
development.
UBS Global Asset Management
Malcolm Gordon has been named head of UK
institutional client relationship management at the asset
management branch of UBS. He joins from Hermes Fund
Managers, where he was head of client relations. Gordon
has over 17 years’ experience in the industry, including
eight at F&C Asset Management.
London Mining
The iron-ore resource company has appointed James
North as chief operating officer. He joins from BHP
Billiton, where he was general manager of its Newman
joint venture iron ore mines. North has over 20 years’
experience in mining and minerals, and has also worked
for Rio Tinto, BMA Coal and Mount Isa Mines.
Simmons & Simmons
The law firm has expanded its finance practice with two
new London partner hires. Alan Davies joins from
Linklaters, where he was a founding partner in its
derivatives and structured property group. Piers
Summerfield also joins from Linklaters, where he was a
managing associate.
Speechly Bircham
Rose Carey has been appointed head of the law firm’s
immigration practice. She spent the last four years at US
firm Squire Sanders, and has been a specialist
immigration lawyer for the past 10 years. Carey has
particular experience acting for high net worth
individuals and investors.
Impetus Trust
The venture philanthropy investment firm has appointed
Alan Morton as an investment manager. He was most
recently director of private equity for Prudential Asset
Management Singapore and Prudential Vietnam. Morton
previously worked for Silverfleet Capital Partners, the
London-based mid-market private equity firm.
WHO’S SWITCHING JOBS Edited by Tom Welsh
+44 (0)20 7092 0053
morganmckinley.com
SPECIALISTS IN GLOBAL PROFESSIONAL RECRUITMENT
CITY MOVES
To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com
in association with
International Consolidated Airlines Group
4Jul 28Jun 29Jun 2Jul 3Jul
152
154
156
158
160
162 p
159.20
4Jul
F
OLLOWING the ratification of
the US Constitution, Benjamin
Franklin quipped that “in this
world, nothing can be said to
be certain, except death and
taxes.” Due to the creative
jurisprudence of Chief Justice of the
Supreme Court John Roberts,
President Barack Obama can be
thankful that the death of his health
care reforms has been avoided.
By declaring the Affordable Care
Act’s individual mandate
constitutional, under Congress’s
power to “lay and collect taxes”
rather than its ability “to regulate
commerce,” the conservative Roberts
handed Obama an unexpected
political victory and an opportunity
to bookend a legislative saga that has
T
HE spotlight in the Libor rate-
fixing scandal has moved.
Questions are being asked about
the culpability of the FSA,
which may well have ignored
repeated warnings about Libor
calculations from market
participants. The role of the Bank of
England and the Treasury is also being
questioned.
Of course, regulators are not to
blame for the actions of those at
Barclays and elsewhere. However, we
need to question the narrative that
this problem all began with “deregula-
tion” and then the development of
“light-touch regulation” under Gordon
Brown.
Given the millions of paragraphs of
financial regulation and the existence
of more than 3,000 compliance offi-
cers at large banks such as HSBC, we
can dismiss the idea that we have light-
touch regulation. But, those who sug-
gest that there has been deregulation
are not wholly wrong. More things are
permitted these days – but those
things that are permitted are more
highly regulated.
FLY TO EDINBURGH FIVE
GET A TICKET TO ANYWH
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cityam.com/forum
The key question
is not how much
regulation there is
but who regulates?
In association with
THEFORUM
Twitter: @cityamforum on the web: cityam.com/forum or by email: theforum@cityam.com
Agree? Disagree? Got a sharp comment?
The Forumwants you to join the debate.
Top responses will be reprinted in The Forum.

16
THURSDAY 5 JULY 2012
PHILIP BOOTH
Trust has lost all of its value in our
state-regulated financial markets
The key question though is not how
much regulation there is, but “who
regulates?” Perhaps the most impor-
tant change in the 1980s was not
deregulation, but a move from regula-
tory institutions that emerged within
the marketplace to statutory regula-
tion.
When Elinor Ostrom, the late Nobel
Laureate, visited the Institute of
Economic Affairs last March, she was
interested in the analogy between
financial regulation emerging in the
market and community management
of environmental resources. She was
fascinated by the fact that, when the
stock exchange first started in a coffee
shop, those who did not settle their
accounts were put on a board under
the heading “lame duck”; the
exchange expelled people for bad
behaviour; and it made the rules for
companies that wanted a listing and
for individuals and companies
involved in trading. In order to prevent
conflicts of interest, on the London
exchange, companies could not trade
on their own book and also give advice
to clients. The motto became “my
word is my bond” and the untrustwor-
thy would not get business. This all
ended with a transfer of regulatory
authority to the state.
Other such mechanisms developed
in banking. Mutual societies, trustee
savings banks (TSB) and unlimited lia-
bility partnerships all developed to
promote trust in an era where there
was often no regulation and no protec-
tion. Trust and reputation were very
important when promoting a brand.
Governance mechanisms that led
firms to be technically inefficient were
often valued because they promoted
trust.
There is evidence that the develop-
ment of deposit insurance and the
greater government oversight of the
activities of financial institutions
undermined the attractiveness of
these institutions so that, when they
were free to turn into proprietary
banks, they did so. Some of these insti-
tutions were literally destroyed by gov-
ernment. The TSB had no defined
ownership, so had to be nationalised
in order to be privatised.
A reputation for prudence came to
have no market value and, naturally,
most institutions became big, remote,
shareholder-owned institutions oper-
ating at the level of maximum techni-
cal efficiency – nothing else mattered.
Of course, any institution that is “too
big to fail”, and which is therefore able
to take one-way bets with other peo-
ple’s money, also attracts exactly the
wrong sort of people into the industry.
We must reverse the trend. We
should abolish deposit insurance and
ensure that the providers of capital
suffer the losses when banks fail.
Prudence must matter when we
decide to whom we give our money.
Financial regulation must again be
allowed to evolve within the market. A
start could be made if politicians resis-
ted regulation of new sectors such as
peer-to-peer lending. Economist Tim
Congdon has also suggested that the
Bank of England could be the regula-
tor of the banking system on a contrac-
tual basis in return for lender of last
resort facilities: those not wishing to
avail themselves of that facility could
be unregulated. This may help too.
The polycentric institutions of gover-
nance that grew up in financial mar-
kets have been destroyed. Starting
again will be difficult, but the alterna-
tive of statutory regulation is not work-
ing.
Professor Philip Booth is editorial and pro-
gramme director at the Institute of Economic
Affairs and professor of insurance and risk
management at Cass Business School.
sapped much of the life out of the
President’s term. Having witnessed
various setbacks and controversies
over the past few months, Obama
needed this. But the Supreme
Court’s ruling may also be a
poisoned chalice.
The ruling hardly had time to
percolate before congressional
Republicans were accusing the
President of slapping $1 trillion
(£640bn) of taxes on Americans,
breaking a campaign promise in the
process. “It’s not a tax,” said the
Obama administration, “it’s a
penalty.” 60 per cent of the US public
agreed with the court: it’s a tax.
Early indicators showed Mitt
Romney, Obama’s presidential
challenger, gaining momentum
from the ruling, growing his
campaign fund by $6.7m from over
70,000 donors. A poll of likely voters
gave him a lead over Obama in 15
battleground states. In addition, 31
per cent of Republicans indicated
that they were now more motivated
to vote in November, almost twice as
many as Democrats. The jubilation
emanating from the White House is
slowly sapping away.
But the semantics of the
individual mandate are not without
risk for Romney. Mindful of the fact
he implemented similar health care
reforms in Massachusetts, his
campaign initially stated that he
agreed with the dissent of Justice
Antonin Scalia “which clearly states
the mandate was not a tax.”
However, clearly under pressure
from congressional Republicans and
the party’s base, Romney later
acknowledged that the “Supreme
Court has spoken… it is a tax.”
Romney will remind voters that this
is a much more than a health care
mandate, but a federal tax hike on
families, the middle class and, most
importantly, job creators in an
economic downturn.
Almost lost in the continued fall-
out from the Supreme Court ruling
was the news that US
manufacturing contracted at its
fastest rate since October 2001. A
revival had been central to Obama’s
re-election hopes. Whether these
figures are indicative of an
impending recession is open for
debate but if, as expected, the
Department of Labour releases a
disappointing jobs report tomorrow,
it will be yet another sign the
President is running out of room for
manoeuvre in his pursuit of a
second term.
Ewan Watt is a Washington DC-based
consultant. You can follow him on Twitter
on @ewancwatt
THE WHITE
HOUSE RACE
EWAN WATT
Obama’s healthcare victory could prove a poisoned chalice in November
TIMES
HERE FREE
*


2, we are rewarding passengers who fy fve return fights
o anywhere on our network. Register today at cityjet.com/freeflight
17
Systemic failure
[Re: Crisis threatens UK’s entire politico-
financial establishment, yesterday]
This crisis is not essentially about greed or
malfeasance by commercial banks, but
about the toxic environment created by
decades of misconceived policies by
governments, and enablors and abettors in
central banks. The Barclays’ affair is
potentially explosive, so let’s hope the
media start asking the right questions.
Before we can hope to get out this mess, it
must be fully explained how we got into it.
RichardArnopp
Any measure that can be manipulated will be
manipulated if there is a reward attached.
Libor is but the latest example.
HenkBakker
Scottish socialism
[Re: Would a vote for Scottish independence
be a boon for its businesses?, Tuesday]
The Scottish National Party argues that inde-
pendence would allow Scotland to “utilise all
the economic levers to provide the stable and
supportive environment Scottish businesses
demand.” But business conditions are most
stable when governments don’t interfere
with economic levers (like tax credits for
research, or changing the regulatory environ-
ment). And the stability of a non-interven-
tionist government is what businesses need
to grow and promote consumer choice.
Independence would swap light-handed
control from Whitehall with heavy-handed
control from Holyrood. Will Scotland also
take its own share of the debt with it?
AndrewBates
S
CIENTISTS at the European
Organisation for Nuclear
Research (Cern) announced
yesterday that they have
identified a new heavy
particle with all the properties
expected of the Higgs boson – first
predicted to exist in the 1960s. This
is not the first new particle that
experiments at the Large Hadron
Collider at Cern have discovered
since operation began in 2009, nor
(hopefully) will it be the last. So why
has this result got physicists and
others so excited? Why could this be
one of the most significant
advances in science in the last 40
years? And why did hundreds of
thousands of non-scientists connect
to the web (itself invented at Cern)
to watch the announcement live?
The goal of particle physics is to
understand the way that nature
works at its most fundamental level:
what are the basic building blocks of
matter and how do they interact? In
the 1960s and 70s, theoretical physi-
cists developed an astoundingly suc-
cessful standard model to describe
everything known about fundamen-
tal particles, and the forces between
them, and to make predictions that
could be tested. Experimental physi-
cists have been testing this model
ever since. So far it has proved a
highly accurate description of the
way the universe works.
The Higgs boson was the only fun-
damental particle predicted by the
standard model that had not been
observed. If it has been discovered, it
is confirmation that the theory is
correct. But that is only part of the
story. The Higgs boson is also a
direct glimpse into the underlying
structure of the theory, which other
particles (like electrons or quarks)
just do not provide. The work of
Peter Higgs and his theoretical col-
leagues did far more than predict a
TOP TWEETS
Bob Diamond: “I have an obligation to
140,000 people.” I’m sure shareholders will
say he has an obligation to them.
@Josh_CityIndex
The Libor problem isn’t banking, but how cen-
tral banks screw up everyone except cronies.
@DouglasCarswell
After Fifa placed England fourth in the world,
the Higgs Boson discovery isn’t the most
astonishing news from Switzerland yesterday.
@sixthformpoet
George Entwistle is to be the new BBC head,
despite the shambles of the Jubilee river pag-
eant coverage he was responsible for.
@Rich_rocks
As Barclays’ rate-fixing revelations continue
to emerge, should this be the end for Libor?
YES
There has to be a more honest and efficient way of establishing
market interest rates than having banks submit – whether
fraudulently or not – where they think they might be able to
borrow from or lend to their competitors, and then crudely
averaging the results. One answer might be to allow truly free
markets to operate. Firstly, take a blind sampling of actual trades
(a “mystery shopper”, if you will) drawn at random from any
number of executed transactions. They could be easily
anonymised to ensure confidentiality on both sides. Such
sampling should also be conducted by an independent
intermediary so as not to encourage gaming the system. But why
will nobody dig further, and ask why the Bank of England itself
should have a monopoly on fixing interest rates? It’s about time
we had a proper free market in the price of money.
Tim Price is director of investment at PFP Wealth Management.
Tim Price
NO
Philip Salter
Libor shouldn’t be scrapped. In fact, it can’t be scrapped. If
politicians and regulators try to step in, they will be altering
contracts worth hundreds of trillions of dollars, putting the whole
financial system at risk. A heavy-handed change will result in an
instant and colossal redistribution of wealth from one set of
contracting parties to another. The resulting systemic and legal
backlash would be swift and expensive. Nobody can disagree that
any criminality associated with this scandal needs decisive action;
however, in an effort to be seen to be getting tough on banks,
politicians and regulators must ensure that they don’t make things
worse. Libor could be reformed from within. Adding more banks –
Euribor has 43 versus Libor’s 16 – would be a start. For better or
worse, the global financial system depends upon Libor. Regulators
should leave the market to judge whether the index is still of merit.
Philip Salter is business features editor of City A.M.
RAPIDresponses
The Higgs boson
discovery is only
the first chapter
new particle: it explained why basic
forces (like electromagnetism) are
the way they are, and why particles
can have mass. This could be the
first direct validation of our under-
standing of some very basic proper-
ties of the universe.
Physicists have spent 40 years look-
ing for the Higgs boson. It was one of
the main motivations for building
the Large Hadron Collider. Now they
must study the new particle careful-
ly to really confirm whether its
properties are those that were pre-
dicted. Any discrepancy could be the
sign of a more fundamental, more
powerful theory lying beyond our
current understanding. The field of
particle physics could be analogous
to Christopher Columbus reaching
America and not the Indies: instead
of finishing the last chapter of the
standard model, the discovery of the
Higgs boson could be the opening of
a whole new world for exploration.
This discovery will not bring
cheaper energy or larger televisions,
at least in the foreseeable future.
Instead, it represents a triumph of
human intelligence in understand-
ing the secrets of nature, and
demonstrates that thousands of sci-
entists, engineers and technicians
from across the globe can collabo-
rate to produce a single, significant
advance in knowledge. We under-
stand more about the universe, and
perhaps our place in it, than before.
Dr Joel Goldstein is a reader in physics at
the University of Bristol and the Bristol
CMS group leader. http://cms.web.cern.ch
THURSDAY 5 JULY 2012
JOEL GOLDSTEIN
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19
TV & GAMES
cityam.com
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BBC1
SKY SPORTS 1
6.30pmLive T20 Cricket 10pm
Time of Our Lives 11pmRingside
12amPremier League World
12.30amT20 Cricket 2.30am
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World 4am-6amT20 Cricket
SKY SPORTS 2
3.25pmLive International One-
Day Cricket 11.30pmATP Tour
Uncovered 12amNRL Fulltime
12.30amSuper League’s
Supermen 1.30am-2.30amTime
of Our Lives
SKY SPORTS 3
7pmRacemax 8pmLive PGA
Tour Golf 11pmLive LPGA Tour
Golf 1am-3amEuropean Tour
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BRITISH EUROSPORT
7pmCycling: Tour de France 8pm
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Season Review11.30pmPress
Pass 2012 12amNBA Action
12.30amPremier League Classics
3.30amFriday Night Fights
5.30am-6amFIBA Basketball
SKY LIVING
7pmCriminal Minds: A district
attorney’s daughter is kidnapped.
8pmFour Weddings US 9pm
Battle of the Brides 10pmThe
Biggest Loser USA 11pmGrey’s
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Criminal Minds 1.50am
Supernatural 2.40amMedium
3.30amBones 4.20amAmerica’s
Next Top Model 5.10am-6am
Passport Patrol
BBC THREE
7pmDoctor Who 7.45pmDoctor
Who Confidential 8pmComing
Here Soon 9pmRussell Howard’s
Good News 9.30pmLive at the
Electric 10pmEastEnders
10.30pmDead Boss 11pmFamily
Guy 11.45pmAmerican Dad!
12.30amLive at the Electric 1am
Dead Boss 1.30amCherry Healey:
How to Get a Life 2.30amRussell
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Coming Here Soon 4am-5am
Cherry Healey: How to Get a Life
E4
7pmHollyoaks 7.30pmHow I
Met Your Mother 8pmThe Big
Bang Theory 8.30pmHow I Met
Your Mother 9pm2 Broke Girls
9.30pmDon’t Trust the B**** in
Apartment 23 10pmMidnight
Beast 10.30pmFacejacker
11.05pmAlan Carr 12.10amThe
Big Bang Theory 1amScrubs
1.30amHow I Met Your Mother
2amRules of Engagement
2.20amThe War at Home
2.45amDesperate Housewives
3.25am90210 4.05amGreek
4.50am-6amSwitched
HISTORY
7pmStorage Wars 7.30pmPawn
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9pmAx Men 10pmStorage
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American Pickers 1amStorage
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3amSwamp People 4amThe
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Pawn Stars 5.30am-6am
American Restoration
DISCOVERY
7pmBear Grylls: Born Survivor
8pmGold Rush 9pmFlintoff and
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Hunters 11pmDeadliest Catch
12amFlintoff and Dallaglio’s Big
Ride 1amAuction Hunters 2am
Auction Kings 3amAmerican
Chopper 3.50amIce Pilots
4.40amBear Grylls: Born
Survivor 5.30am-6amDestroyed
in Seconds
DISCOVERY HOME &
HEALTH
7pmSupernanny US 8pm
Secretly Pregnant 9pmUntold
Stories of the ER 10pmHelp! I’m
Turning Into a Giant 11pm
Secretly Pregnant 12amUntold
Stories of the ER 1amHelp! I’m
Turning Into a Giant 2am
Secretly Pregnant 3amWife
Swap 4amBirth Stories
5am-6amBirth Days
SKY1
7pmSimpsons 8pmFuturama
8.30pmThe Simpsons 9pm
Mount Pleasant 11pmA League
of Their Own 12amRoad Wars
1amCosta Del Street Crime 2am
Martina Cole 2.55amIt’s Me or
the Dog 3.45amEmergency
Animal Rescue 4.35amAirline
5.05am-6amSell Me the Answer
BBC2 ITV1 CHANNEL4 CHANNEL5
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6pmBBC News 6.30pmBBC
London News 7pmThe One Show
7.30pmCHOICE
EastEnders: BBC News
8pmTraffic Cops
9pmWhen I Get Older
10pmBBC News 10.25pm
Regional News 10.35pmQuestion
Time: 11.35pmThis Week:
12.20amHoliday Weatherview
12.25amSign Zone: Call Centres
Undercover: Panorama 12.55am
Sign Zone: Countryfile 1.55am
Sign Zone: Antiques Roadshow
2.55amSign Zone: Crime and
Punishment 3.40amSign Zone:
Great British Menu 4.10am
Sign Zone: Great British Menu
4.40am-6amBBC News
5.50pmWimbledon 2012:
Sue Barker introduces
further live coverage from
the All England Club.
8pmToday at Wimbledon:
Highlights of the women’s
singles semi-finals.
9pmHampton Court Palace
Flower Show 2012
10pmMock the Week
10.30pmNewsnight: Weather
11.20pmLondon:
A Tale of Two Cities
with Dan Cruickshank
12.20amThe Culture Show
12.50amBBC News
4am-6amBBC Learning Zone
6pmLondon Tonight
6.30pmITV News
7pmEmmerdale
7.30pmWho Wants to Live
Forever?: Tonight
8pmEmmerdale
8.30pmCoronation Street
9pmCHOICE Let’s Get Gold
10pmITV News at Ten
10.30pmLondon News
10.35pmBomber Command
11.35pmCaroline Quentin: A
Passage Through India 12.30am
Jackpot247; ITV News Headlines
2.30amWho Wants to Live
Forever?: Tonight 2.55amITV
Nightscreen 4.30am-5.30am
The Jeremy Kyle Show
6pmThe Simpsons 6.30pm
Hollyoaks 7pmChannel 4 News
7.55pmChannel 4 Presents –
London 2012: Jody Cundy
Part III
8pmCountry House Rescue
9pmMichael Johnson:
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10pm24 Hours in A&E
11.05pmGordon Behind Bars
12.10amRandom Acts 12.15am
4thought.tv 12.20amUndercover
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2.10amCashing in on the Games:
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Team3.35amAncient Egyptians
4.30amDeal or No Deal
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6.30pm5 News at 6.30
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The technology behind a top-
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The Hotel Inspector
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Fans’ thoughts on the latest
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5.10amHouse Doctor
5.35am-6amHouse Doctor
Fill the grid so that each
block adds up to the total
in the box above or to the
left of it.
You can only use the
digits 1-9 and you must not
use the same digit twice in
a block. The same digit may
occur more than once in a
row or column, but it must
be in a separate block.
COFFEE BREAK
Using only the letters in the Wordwheel, you have
ten minutes to find as many words as possible,
none of which may be plurals, foreign words or
proper nouns. Each word must be of three letters
or more, all must contain the central letter and
letters can only be used once in every word. There
is at least one nine-letter word in the wheel.
Place the numbers from 1 to 9 in each empty cell so that
each row, each column and each 3x3 block contains all the
numbers from 1 to 9 to solve this tricky Sudoku puzzle.
Copyright Puzzle Press Ltd, www.puzzlepress.co.uk
KAKURO
QUICK CROSSWORD
LAST ISSUE’S
SOLUTIONS
KAKURO
WORDWHEEL
SUDOKU
SUDOKU
QUICK CROSSWORD
WORDWHEEL
1 2 3 4 5 6
7
8 9
10 11 12
13 14
15 16 17
18 19 20
21 22 23 24
25
26
27
3 16 20
12 11 11
45
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10 12
15 11
14 27
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45
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8 9 17
6
9
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21
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29
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ACROSS
4 Footwear items (5)
7 Graceful animal (3,4)
8 Adam’s wife (3)
10 Composed (5)
12 Move to music (5)
13 Waste product
useful as a
fertiliser (4)
15 Ofcially forbid
something (9)
19 Alleviate (4)
21 Norwegian
composer (1843-
1907) (5)
24 Pasta in short tubes
with diagonally
cut ends (5)
25 ___ Baba, fictional
character (3)
26 Thick material with
a raised pattern (7)
27 Item of dining
room furniture (5)
DOWN
1 Makes tea (5)
2 Diversion (6)
3 Native American
tents (6)
4 Caused to procreate
(animals) (4)
5 Overt (4)
6 Snooze (5)
9 Overnight case (6)
11 Gardening tool (6)
14 Playing card (3)
16 Bird of prey (6)
17 Region between India
and Bangladesh (6)
18 Country, capital
Cairo (5)
20 Disease with
associated high
temperature (5)
22 Metrical unit with
unstressed-stressed
syllables (4)
23 Taunt (4)
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G R E E N S J Y
U D I N J U R E
A E R I A L G M
V T T O N G U E
A R S O N N L N
P R O F U S E
M A D S T R I P
U N R E E L A R
M I A S P I R E
M A N T I S L S
Y G S H E A R S
6 9 4 8 2 3 5 1
1 4 2 3 8 5 9 7
8 1 7 9 1
9 6 2 3 6 1
8 7 2 4 1 6 3 9 5
9 5 5 1
5 3 8 6 1 7 2 4 9
8 1 9 2 3 7
9 8 5 9 1
2 1 7 3 9 8 6 7
9 2 8 7 3 6 2 1
4
4
4
4
4
4
4
4
4
The nine-letter word was
CABINETRY
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BBC1 BBC2 ITV1 CHANNEL4 CHANNEL5
THURSDAY 5 JULY 2012
EASTENDERS
BBC1, 7.30PM
Kat tries to put the previous night’s
events out of her head, but her
mystery lover is desperate for another
romantic rendezvous.
LET’S GET GOLD
ITV1, 9PM
Andrew Flintoff is among the judges
of the competition taking place over
the next three nights in which sports
teams put their skills to the test.
THE HOTEL INSPECTOR
CHANNEL5, 9PM
Alex Polizzi helps more struggling hot-
els, beginning with a Birmingham nat-
urist spa whose owner insists she has
to strip off before she can start work.
TVPICK
THURSDAY 5 JULY 2012
cityam.com
20
LIFE&STYLE
WORDS BY
STEVE DINNEEN TECHNOLOGY
YouView.... Well, you might.
Will the belated arrival of the set-top box offer enough to convince people to fork out £300, asks Steve Dinneen
Google TV
Google TV has been something of a disaster in its native
US, with the major networks failing to back it. But a part-
nership with Sony will see the firm launch a UK set-top box
later this month – it could be the one to beat.
Freeview
Freeview might be a slightly spurious inclusion, but
YouView has to convince people they need to shell out a
pretty big sum to upgrade their current set-top box. Lots
will stick with what they already have.
Pay-TV vendors
Virgin and Sky in the UK are big rivals to YouView. If you
already pay over £50 a month for your entertainment
hub, you’re unlikely to splash out any more. It could,
however, give BT’s Vision service a boost.
Consoles
Microsoft (Xbox) and Sony (PlayStation) have already
worked out that the future of their consoles is to become an
entertainment hub. They offer access to streaming services
like Netflix –and a new generation is on the horizon.
nINTERFACE
The interface will look familiar to digital
TV users, with a list of scrollable channels
and an overlay onto live TV to let you flick
through the options. You are also able to
flick backwards in time (up to seven days
for BBC) to catch up on programs you
have missed out on. Questions remain
about how it will compete with the “home
screen” of other TV services.
nCOMPATIBILITY
The YouView service is not backwards
compatible with older set-top boxes – if
you want the new service, you’re going to
have to shell out. It is, though, compatible
with most modern TVs, so you won’t have
to run out and buy a new telly to go with
your new box. You will also need a
broadband connection.
D
igital TV service YouViewwas finally unveiled by Lord Alan
Sugar yesterday, albeit long after its slated 2010 release date.
The joint venture between the BBC, ITV, BT, Channel 4,
Channel 5, Arqiva and TalkTalk offers a host of catch-up, on
demand and streaming services and it promises more partners are
ready to join. But does it live up to the hype or is it simply too late to
the party to compete?
YOUVIEW’S RIVALS
GAME, SET-TOP BOX AND MATCH?
nOVERVIEW
The YouView box is a good one-stop-shop for getting all your catch-up, on
demand and streaming services. It doesn’t offer anything particularly new (most
of the services can be found on a laptop or your Xbox, for instance) but it’s a
slick and intuitive way of tapping into what is already out there. It is, however,
horribly late to the party and will face an uphill struggle to win over viewers who
have already invested in alternative products. The £299 price-tag will rule out 99
per cent of its potential audience. Let’s hope providers like BT can offer it for a
fraction of that or, better still, free when you sign up to their services.
nHARDWARE
The Humax DTR-T1000, to give it its full
name, has a 500GB inbuilt hard drive
that will allow you to store up to 300
hours of standard definition and 125
hours of high definition programmes. It
has an HDMI connection to provide the
high definition video and an ethernet
cable to plug into your broadband.
nCONTENT
Users will have access to 100 digital TV and
radio channels, with up to 300 more said to
be interested in signing up. It will include
stations such as 4oD (Channel 4’s on
demand service) and regional channels like
STV. Outspoken YouView critic Sky has
signalled it will add its Now TV service to the
venture at some point in the future.
nCOST
The box, manufactured by Humax, costs a
prohibitive £299. YouView chairman Lord
Alan Sugar says he thinks the cost will
probably drop to around £99 within a
couple of years. Service providers like BT
are likely to offer the boxes as part of TV
and broadband packages but pricing has
yet to be announced.
1
TBR Report – "IBM System x
®
x86 servers: Meeting the demands of today’s enterprises by combining value and support," January 2012.
2
Source: Intel
®
Performance comparison using SPECfp*_rate_base2006 benchmark. Baseline score of 267 on prior generation 2S Intel
®
Xeon
®
processor X5690 (3.46GHz, 6-core, 12MB L3, 6.4 GT/s, 130W)
based platform published at www.spec.org as of 6 Sept 2011. Estimated new score of 486 on 2S Intel
®
Xeon
®
processor E5-2690 (2.90GHz, 8-core, 20MB L3, 8.0 GT/s, 135W) is based on Intel
®
internal
measured estimates as of 6 Sept 2011 using two Intel
®
Xeon
®
processor E5-2690, Turbo Enabled, EIST Enabled, Hyper-Threading Enabled, 64GB memory (8x8GB DDR3-1600), Red Hat
®
Enterprise Linux Server
6.1 beta for x86_6, Intel
®
Compiler 12.1.
3
x3500 M4 supports up to 768GB of memory using 32GB LRDIMMs in its 24 memory slots. Previous generation x3500 M3 supports up to 192GB of memory.
4
Ships with 4 1Gb Ethernet ports standard and supports integrated slot-less 10Gb Ethernet with Virtual Fabric. Previous generation server includes two 1Gb Ethernet slots and requires use of a PCI Express slot
to support 10Gb Ethernet.
5
x3500 M4 supports up to 32 internal 2.5" HDD. Previous generation x3500 M3 supports up to twenty four 2.5" HDD.
6
Quarterly price quoted is based on IBM’s 0% System x Solution Finance offering (FMV lease). Terms & Conditions Apply: Offering availability subject to credit approval; for more details and full Terms and
Conditions please visit: http://www.ibm.com/financing/uk/lifecycle/acquire/xsolutionfinancing.html.
Rates and offerings are subject to change, extension or withdrawal without notice. Prices include VAT at a rate of 20%.
IBM hardware products are manufactured from new parts or new and serviceable used parts. Regardless, our warranty terms apply. For a copy of applicable product warranties, visit
http://www.ibm.com/servers/support/machine_warranties. IBM makes no representation or warranty regarding third-party products or services. IBM, the IBM logo, System Storage and System x are registered
trademarks of International Business Machines Corporation registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. For a current list of IBM
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ARSENAL captain Robin van Persie
has blamed a “disagreement” over
the direction in which the North
London club is heading for his
refusal to sign a new contract.
Van Persie yesterday revealed he
would not be extending his stay at
the club, making his exit inevitable,
and though it remains unclear if he
will be sold this summer or leave for
free upon the expiration of his
contract in 12 months time, his
departure would represent a
significant setback for Arsenal’s
hopes of once more challenging for
serious honours.
“As announced earlier this year I
had a meeting with the boss [Arsene
Wenger] and [Ivan] Gazidis after the
season,” said the Dutch striker. “This
was a meeting about the club’s
future strategy and their policy.
Financial terms or a contract have
not been discussed, since that is not
my priority at all.
“My goal has been to win trophies
with the team and to bring the club
back to its glory days. Out of my
huge respect for Mr Wenger, the
players and the fans I don’t want to
go into any details, but
unfortunately in this meeting it has
again become clear to me that we in
many aspects disagree on the way
Arsenal should move forward.
“As soon as Mr Gazidis is back
from his two-week holiday further
meetings will follow and I will
update you if and when there are
more developments.”
Van Persie’s future has been the
subject of intense speculation since
last year but only on Tuesday had
manager Arsene Wenger reiterated
his desire to see the double player of
the year remain.
“We want to keep Robin van Persie
at all costs, because we depend on
him offensively,” said Wenger, who
has already strengthened his squad
with the signings of Germany
forward Lukas Podolski and France
striker Olivier Giroud. “I have always
supported him, and I hope he will
end his career at Arsenal.”
A statement on Arsenal’s official
website, meanwhile, read: “We have
to respect Robin’s decision not to
renew his contract. We are confident
he will fulfil his commitments to the
club. We are planning with ambition
and confidence for next season with
Arsenal’s best interests in mind.”
Meeting told
Van Persie it
was time to go
BRITISH No1 Andy Murray has admit-
ted he will have to be at his best if he
is to advance beyond France’s Jo-
Wilfried Tsonga to reach the final at
Wimbledon for the first time in
his career.
World no5 David Ferrer had
already yesterday forced Murray to
perform to the peak of his powers
during his 6-7 (7-5), 7-6 (8-6), 6-4, 7-6 (7-
4) triumph, and it can only be hoped
that his previous fitness problems do
not reappear if he is to succeed
in reaching the All England Club’s
final and challenge for his first
grand slam.
After Ferrer had taken a tight
opening set, an admirably tenacious
Murray recovered to just edge the
three that followed with a hunger
that suggested yesterday’s valiant vic-
tory will not be the end.
Ferrer had last month beaten a
troubled Murray at the quarter-final
stage of the French Open when the
latter’s back problems undermined
his performance but, despite his
poor Wimbledon preparation,
Murray had predicted he would have
an advantage over Ferrer on grass
and so it certainly proved.
“[Tsonga’s] a tough match,” said
Murray. “He’s serving very well. I
played him in the quarters a few
years ago and it was again a very
tight match. I’ll have to play very well
to win that one. [Ferrer] was a very
tough match, a long match, there
were a lot of tight moments. I just
played a little bit better at the end of
the sets.
“He’s a great player, he’s ranked
five in the world and sometimes he
doesn’t get enough respect. I’ve
known him a long time. He’s an
unbelievably hard worker, and he
plays well on every surface. I knew it
was going to be tough.
“It was a huge match for both of us,
and coming off at such a critical stage
in the match as well. It was so close
and that fourth set, if I’d lost that it
was going to be a very tough fight.”
Tsonga himself also yesterday suc-
ceeded with a 7-6 (7-5), 4-6, 7-6 (7-3), 6-
2 win over Philipp Kohlschreiber, but
though the German 27th seed caused
the flamboyant Frenchman greater
difficulty than had perhaps been
anticipated, Tsonga regardless
R
obin van Persie’s decision to
announce his exit from
Arsenal was an interesting one
in terms of his timing.
He’s saying that he doesn’t believe
that the club’s going forward, but
they’ve just spent around £20m on
Lukas Podolski and Olivier Giroud, so
I don’t see what Arsenal are doing
wrong. They’ve just proven they’re
prepared to spend some money, and
they’ve done it early. Is he saying that
these players aren’t good enough?
I’m sure he’d like it if they were
spending £35m, £40m on a single
player, but Podolski and Giroud have
good goalscoring pedigree and,
though Arsenal won’t spend that
sort of money, it’s still early in the
transfer window. From the outside, I
don’t get why he thinks Arsenal’s
philosophy is not right.
I don’t like that he feels he had to
say that. Why didn’t he just speak to
Arsene Wenger quietly, and say ‘I
want to go’. No one would have
argued with that – why say ‘I don’t
agree with where the club’s going’?
Arsenal should sell him now,
instead of keeping him for one last
year. He may have been fine last
season, but Van Persie’s been injury
prone for years so there’s always that
doubt – he could stay and remain
unavailable. And every time he plays,
they’ll feel he’s unhappy, so they may
as well get £15m or so for him.
Either way, it’s all happening in
North London. Andre Villas-Boas has
been appointed as Tottenham’s new
manager, and this could really go
either way. He was a very expensive
purchase for Chelsea, while Spurs
now get him for free. He hasn’t done
brilliantly so far in the Premier
League, but he’ll have learnt a lot
about how to deal with the pressure
and of the pitfalls he fell into at
Chelsea. He needs to go into the
Spurs dressing room and say ‘I made
some mistakes at Chelsea and I’m
not going to make them here – this is
how we go forward together’.
Otherwise the players won’t trust
him. You can’t alienate too many in
your squad, that doesn’t lead to
success. His challenge is to get them
to buy into his philosophy.
The Tottenham job is certainly no
easier than the Chelsea job. It’ll take
a lot to get them to repeat last
season’s performance – if he can get
any more than that he’ll have done
magnificently. Their squad needs
improving – they need goals and
they need new central defenders,
and I also don’t think Villas-Boas will
want to use Harry Redknapp’s
previous 4-4-2/4-4-1-1 formation.
It’s been exhausting for me to see
what’s happening at my old club
Rangers. They’ve had to go through
this process knowing they wouldn’t
stay in the Scottish Premier League.
But they are going to have better
spending power than those they’re
playing against – they’ll be back in
no time, even though it’s been
torturous for it to happen.
If Rangers are off of the scene,
however, Sky could revisit the money
they’re paying for television rights.
It’s a huge gamble by some SPL clubs.
THURSDAY 5 JULY 2012
22
SPORT
cityam.com/sport
BY DECLAN WARRINGTON
@cityam_sport
remains confident that tomorrow’s
semi-final against Murray is a match he
can win.
“Andy’s one of the players I don’t like
to play because he returns really well
and he can play some really good pass-
ing shots,” Tsonga said. “He’s really
quick. It’s tough for me.
“But I beat him once [at the 2008
Australian Open]. And last time we
played together on grass, I had a match
point and it was really close. That was
last year in the final in Queen’s. I
will have a chance. At 100 per cent I
have maybe less than him, but I will
have some chances and I will try to
take them.”
In the other men’s semi finals, reign-
ing champion Novak Djokovic faces six-
time Wimbledon winner and world
No3 Roger Federer after both also
won yesterday.
Both were truly exceptional in their
respective victories, with Federer
Murray’s on
Tsong ahead
of semi-final
showdown
BY DECLAN WARRINGTON
FOOTBALL
COMMENT
TREVOR STEVEN
I can’t see what’s so bad about Arsenal
TODAY’S HIGHLIGHTS
Women’s singles
nA Kerber [8] v A Radwanska [3]
nS Williams [6] v V Azarenka [2]
Men’s doubles
nS Lipsky/R Ram v B Bryan/ M
Bryan [2]
World No4 Andy Murray is yet to advance beyond the semi-finals at Wimbledon, despite several
Robin van Persie is unhappy at Arsenal
23
Edgbaston rain halts England’s hopes of topping one-day rankings
YESTERDAY’S one-
day international
between England
and Australia at
Edgbaston was
abandoned before
the bowling of a
solitary ball
because of
persistent rain. The
original 2pm start
was replaced by a
28 overs match
planned for 6pm,
but further rain
also cancelled that.
The development
means England can
no longer win the
series 5-0 and
overtake Australia
at the top of the
world one-day
rankings.
South Africa’s Oscar Pistorius will become the
first double amputee runner at the Olympic
Games during London 2012
cityam.com
THURSDAY 5 JULY 2012
requiring just one hour and 32 min-
utes to beat Russia’s Mikhail Youzhny
6-1, 6-2, 6-2, and Djokovic needing just
a further 12 minutes to dismiss
Florian Mayer 6-4, 6-1, 6-4.
“I thought I played great out
there,” Federer said. “I’m extremely
happy to be back in the semi-finals
here at Wimbledon. I think it helps
when royalty [the Duke and Duchess
of Cambridge] shows up, and other
legends of the game come to see
me play.
“I think it’s inspiring. I’m happy
they came to support tennis and sup-
port me. It was very special.”
Djokovic said: “I am looking for-
ward to it. He is a great champion.
For me [Federer] is the ultimate
challenge.”
Jo-Wilfried Tsonga defeated Andy
Murray at the 2008 Australian Open
IN BRIEF
Millar makes Team GB Olympic squad
nCYCLING: Former drugs cheat David
Millar has been named alongside Mark
Cavendish, Bradley Wiggins, Chris Froome
and Ian Stannard in Team GB’s road cycling
team for London 2012. “We have selected
the five riders who we believe are on the
best form and will give us the fastest team
for the race, said British Cycling
performance director Dave Brailsford.
Cavendish crash prevents Tour victory
nCYCLING: Britain’s Mark Cavendish
crashed just 2.6km from the edge of the
Tour de France’s 214.5km fourth stage from
Abbeville to Rouen. Germany’s Andre
Greipel won with a sprint finish, though
overall Fabian Cancellara still leads
Britain’s Bradley Wiggins by seven
seconds.
Tottenham secure Sigurdsson move
nFOOTBALL: New Tottenham manager
Andre Villas-Boas has made his first
signing for the club in the form of Iceland
international midfielder Gylfi Sigurdsson’s
£8m arrival from Hoffenheim.
Results
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