Parivartan Information

New outfit Marlin PR is independent of the larger tech agency but is owned by Brands2Life parent company Fraser Scales Holdings.

Co-founders Giles Fraser and Sarah Scales poached Ogilvy PR account director Jenny Tod to head up a team of four at the start-up.
 
Marlin already counts Sony Professional Solutions UK as its first client, with Tod having worked on the Sony account at Ogilvy.

She and her team will focus on pitching for business in the tech, media and entertainment sectors.
 
‘We have often been approached by companies who want to benefit from Brands2Life’s style of PR but have been unable to take them on because they conflict with existing clients,’ said Scales.

‘Now, in such situations, we can point those clients towards an alternative option.’

Oil’s now around $114 after several weeks of coming down from the stratosphere. Some of this is a mirror of the stronger dollar, but some ain’t.

Crystal ball gazers (aka analysts) are still, most of them anyway, predicting that the price at the end of this year will be much higher than this. Goldman Sachs, who it must be said were one of the few to correctly pick how much the price would rise to its recent peaks,  reckon it will be $149 at year end.

News agencies are reporting that the consensus forecast is now around $125 by end 4Q 2008. A couple of months ago this looked conservative. Now it might be bold.

There is also a cogent view that the oil price could be below $100 by Christmas. It’s a volatile market subject to overreaction and over correction. But at $100 a barrel it’d still be double the early 2007 price, and would therefore still be “expensive” and in keeping with the ‘Peak Oil’ era.

Thing is that crystal ball gazers cannot pick sudden shifts in sentiment, of the type we have seen over the US, European, Australian and even Chinese economies. One (i.e. an analyst) would  have expected the dust up in Georgia, during which Western relations with Moscow got as chilly as Siberia in winter, to deliver a hefty spike in the oil price.

But it didn’t happen. The mood was too glum. Speculators had just finished unwinding positions based on stratospheric prices and weren’t inclined to jump into the market again given the cloudy conditions in their crystal balls.

So US retail sales in July fell by 0.1%, dragged down by a 2.4% fall in vehicle sales. In a world economy addicted to growth, this is bad news. We have become accustomed to steadily growly retail sales - sometimes strong growth, sometimes weak growth, but always growth.

US consumers keeping their wallets and purses in the pockets comes after the US government added $100 billion via low taxes to disposable income in the second quarter. The last set of tax rebates went out in the middle of July.

Thing is that people (i.e. analysts) were talking about decoupling of the world economy. They were arguing that China’s and India’s growth was sustain the rest of the world while the US fought off recession. Not so. Growth is slowing across Asia, because, doh, high growth in these economies is very dependent on exports.

You can see this in any nearby department store. I girlfriend of mine is heading off to China on a business trip this week. She has been shopping today for eight gifts to take to business associates. She’s not interested in nationalistic gift shop trash. But nearly everything she sees is made in China.

So now currency markets have caught the bug. We’ve seen some big changes in currency alignments over the past few weeks.

The US dollar has gained about 10% on the back of, um, hang on, isn’t it the US economy that is in the doldrums? It looks like the dollar has gained partly as a bounce back from an oversold short position. But a greater impact was a result of a sell off of the euro, which has probably been historically overvalued in recent times.

The European economy isn’t looking too flash; in fact it’s not easy to see reasons why the UK and Germany will avoid recession. The UK isn’t in the euro, of course, but it is a big player on the European scene.

The currency markets are reflecting the global creep of the impact of the credit crunch that started almost exactly a year ago.

The economic rise of India and China, and to a lessor extent, Russia and Brazil, had led some to argue that the world was no longer dependent on the US economy as the engine of world growth. Well, yes, perhaps it is not as central as it was, but it is still very important. And as any economist will tell you, what happens at the margin is critically important in determining prices.

Commodities are off the boil, thanks to the US. We watch with interest to see whether China pips the US for gold at Beijing.

Australia has long been known as the ‘Lucky Country’, sometimes with a sense of irony, sometimes because in so many areas it does not struggle with problems faced by so many other countries.

Over the past decade it has indeed been very lucky. The prices it has been getting for its mineral resources, especially but not only iron ore and coal, have been driven into the stratosphere by China’s voracious economic miracle.

A clear demonstration of the effect of this is the Australian dollar. When commodities are booming, so is the A$. It’s not far off parity with the US dollar and not far off being worth 50% of the British pound. In the 1990s, it was sometiomes around 60c and 35% respectively.

The resources boom has played havoc with the labour market in the land of Oz because the mines have been sucking in labour, at the expense of some other key, but more sedate, sectors of the economy.

Real incomes have soared, more than doubling since the early 1990s. Every home - or nearly every home - has an air conditioner and a large flat screen LCD TV. These are the fruits of the earth. (This is why some people use the ‘Lucky Country’ with a sense of irony, but I digress.)

In the past month or so, something akin to panic has set in among the political classes, with the Prime Minister warning last week that the Land Down Under may well be in for some tough times, and he evened intimated that he might have to use the R word. His Treasurer said it wouldn’t be helpful to use the R word but didn’t deny it might soon be an apt description of the state of the nation.

The consistent doom and gloom, higher interest rates and the sky high price of petrol has got to even the most insulated of Aussie consumers. Retail sales are out of bed, and everyone is now talking about official interest rate cuts sooner rather than later. Some speculate that even if the Reserve Bank cuts rates, the Commercial Banks holding the mortgages won’t cut rates to their customers because they are in worse shape than we were all led to believe.

When the Lucky Country is in trouble at a time when it can’t dig up its minerals fast enough to satisfy demand, we’re all likely to be in trouble.