WPP starts to feel the pain
Say what you like about WPP (and we do), it's so far shown an impressive ability to ride out the storm in the UK and US.
Boss Sir Martin Sorrell has invested heavily in the Far East in recent years and also diversified the company as much as he can away from cyclical old advertising.
But yesterday the company announced that growth in the first five months of the year was 4.5%, short of the 4.9% predicted by analysts.
Sorrell blamed slow growth in western Europe, which is fair enough.
The fear, though, must be that the Far East and India will slow too.
No one doubts that China and India will continue to grow but both economies are facing big inflation problems, compounded this week by the eye-watering increases in raw materials being demanded by miners Rio Tinto and BHP Billiton (there's globalisation for you).
All of a sudden putting up yet another skyscraper in Shanghai doesn't look such a good one-way bet and, if the construction and industrialisation boom there slows, so will marketing spending.
The sad saga of the mortgage banks
That wise old owl John Moulton of private equity firm Alchemy remarked on the radio the other day that what the City needed wasn't more regulation, just a stable banking sector.
And that's exactly what it doesn't have.
The roots of the problem go back to the privatisation boom of the Thatcher era, when building societies fell over themselves to become banks.
The trouble was they weren't very good at it.
Where once we had a three-tier system with clearing banks, investment banks and building societies which operated the housing market, we now have one where (with the odd exception like Nationwide), the big banks operate all three.
If you're a big bank like Royal Bank of Scotland or Barclays and you find yourself short of capital then you can tap your shareholders (for £12bn in the case of RBS) or overseas investors, £4.5bn for Barclays it announced today.
But for the likes of mortgage banks Bradford & Bingley and even the mighty Halifax Bank of Scotland (HBOS) it ain't so easy.
HBOS is struggling to get its £4bn rights issue away although the shares are on the up at last, boosted by the Barclays fund-raising.
There are still fears though of further nasties at HBOS as the UK housing market teeters on the top of a cliff.
B&B, which rushed into buy-to-let mortgages with the same mad enthusiasm as another former building society Northern Rock, built a mortgage book it couldn't finance, now has to choose between selling a quarter of the company for just £150m to US private equity firm Texas Pacific or another deal put forward by insurance magnate Clive Cowdery.
Cowdery is a smart cookie who spotted the potential in "closed" insurance funds (funds that had shut up shop to new customers as their owners weren't making any money out of them).
But Cowdery's Resolution company proceeded to make a fortune from them as, without the need for expensive marketing and administration, it could slash costs to the bone.
Now he wants to inject £400m into B&B and profit from another stripped-down financial institution with an awful lot of investors' money still in it.
At least B&B has options, which is more than can be said for all those former building society customers who have seen the value of their ‘free' shares practically disappear.
Owners bail out Chrysler with $2bn
I tried really hard this morning to find a story that wasn't doom and gloom -- and failed. We said on Monday it would be a bumpy week and it is.
Last year, Daimler Benz (Mercedes in effect) unloaded its troubled US carmaker to private equity operator Cerberus and you can hear the hound in question gnashing its teeth even on this side of the Atlantic.
Mercedes kept a stake and, for its pains, has been forced to contribute $1.5bn of a $2bn lifeline Cerberus needs to keep Chrysler going.
And Chrysler, historically the weakest of the three big US carmakers, isn't alone in its travails.
General Motors and Ford have lost billions over the last two years and the market for US cars is worse than ever.
GM is trying desperately to produce smaller, more fuel-efficient models while Ford has belatedly woken up to the reality that its successful European offerings like the Focus and Mondeo might be just what customers want in the States.
But there's at least a strong possibility that one or more of the US giants will go bust.
But the US government wouldn't allow it to happen, you say. Well, it might not have a choice.
After all, the UK used to have the biggest car industry in Europe and various governments made a complete mess out of trying to keep it going (latterly by not agreeing to our friend John Moulton's plan to strip down Rover to the MG sports car business).
If it happened here, it can happen there.
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