They can dish it out at the International Monetary Fund, it seems, but taking it is another matter. The masters of "tough discipline" for the world's poorest countries are very much in the cry-baby class when anyone hits back, as was seen at the Bank of England last week. The story so far; Joe Stiglitz, then chief economist at the World Bank, tore into the fund's "stabilisation" policies in an article in New Republic earlier this year.
Among his many dicta was the claim that the IMF is largely staffed by "third-rank students from first-rate universities." Fellow economist, Rudi Dornbusch, defended the IMF with a follow-up letter, claiming that: "Today no finance minister will opt for the Stiglitz Clinic of Alternative Medicine. They have the ambulance rush them to the IMF." Professor Stiglitz was promptly hoofed out of the totally independent World Bank on the orders of Larry Summers, the svelte US treasury secretary. Come May 5, he was speaking at a Bank seminar on the future of the IMF and World Bank, repeating his criticisms of the IMF. During the Q&A, IMF deputy research chief Flemming Larsen rose to his feet, read out the Dornbusch letter in full and stalked from the room in high dudgeon, a "great moment", says our spy. Touchy touchy!
Almost as sensitive, in fact, as the City lawyers who these days pour over flotation documents, terrified of breaking one or other rule or regulation. A forest of "warnings to investors" accompanies any share offer nowadays, but the most unusual of the year to date must be the alert in the prospectus for XTL, an Israeli biotech company floating in London. Many of the senior executives are obliged to perform annual military reserve duty, it discloses, and were another Middle East war to erupt, they could be required to serve for "extended periods of time", which could severely disrupt the operation of the business. "The future of peace efforts in the region remains uncertain," it adds. "A state of hostility ... has led to security and economic problems for Israel."
Not only the lawyers are cautious these days. City analysts have long been famed for their reticence to come up with profit forecasts beyond a year or two, even for a rock-steady business such as a brewery or brickworks. Happily, there are one or two super-steady firms where earnings can be forecast as far out as 2010, one such being the extraordinarily sedate and well-established Lastminute.com, where Goldman Sachs, without any apparent irony, is forecasting profits into the blue yonder. The bad news? Losses until 2003. The good news? A dramatic shift into profit, with Goldman positing a very exact £126.4m in 2009. The worst news of all? Lastminute.com's last minutes are, if Goldman is right, at least a decade away.
Elsewhere in the wonderful world of flimflam.com, the high-street banks are (as usual) making fools of themselves in their haste to get everybody banking on the internet (allowing the bankers to close all remaining branches and make even more money). Halifax - once as reassuringly stolid as its toponymous home town - has scribbled out a cheque for half a million quid to buy the rights to Fat Boy Slim who, it is hoped, will tempt swinging young things to its Intelligent (sic) Finance offshoot. Meanwhile, adverts for Lloyds TSB's online bank are backed by the sensational sound of the Corrs, an Irish band far removed from the tasteful strings that used to herald the galloping black horse. There hasn't been such excitement since the Man from the Pru's happenin' hip talk back in 1997.
In another corner of the forest, Lloyds TSB - not content with one online service - is this summer launching another, evolvebank.com, aimed at customers likely to bank almost exclusively over the net. We say "almost", because Lloyds TSB is laying on a helpline to its call centre in Scotland. And the launch site for evolve? Er, Spain. Stand by for some interesting dialogue.
Partnership update (continuing our occasional series on the fate of "sensible" co-operation agreements signed by "modernised" trade unions). In April 1999, unions at Dagenham agreed a deal to "save" jobs by agreeing, among other things, to work extra hours when demand was heavy in return for a pledge from Ford to build the next-generation Fiesta at the Essex site. A union spokesman said the deal was the result of having "worked very closely" with Ford. The result of a year's-worth of such happy teamwork? All vehicle manufacture at Dagenham is to cease, with the loss of up to 5,000 jobs.
