BUSINESS WITH PERSONALITY Issue 1,483 Thursday 6 October 2011 www.cityam.com FREE CAMERON’S U-TURN STEVE JOBS CRITICISM PROMPTS 1955-2011 A HASTY REWRITE P5 Steve Jobs has died aged 56 following a long illness Picture: REX ▲ TECHNOLOGY perfecting the best design and technology In his emotional letter of resignation, BY ALISON LOCK in its class. Jobs said he saw Apple’s “brightest and From founding Apple in 1976, he saw most innovative” days ahead. STEVE Jobs, Apple’s celebrated founder, the company go virtually bankrupt after US President Barack Obama expressed has died aged 56. he was forced out in a boardroom struggle his condolences, thanking Jobs “for the Jobs passed away late last night, just six in 1984. His return in 1996 was wildly work you make possible every day – weeks after he stepped down as the firm’s transformative, leading to him launching including ours.” chief executive. an unprecedented string of market-chang- Bill Gates, founder of Microsoft, said he Apple marked his passing with a tribute ing products including the iPod, iPhone would “miss Steve immensely”. on its website to a “visionary and creative and iPad. “The world rarely sees someone who has genius” and “an amazing human being”. The unparalleled success guided Apple had the profound impact Steve has had, “Steve’s brilliance, passion and energy to the summit of the S&P 500 and saw the effects of which will be felt for many were the source of countless innovations Apple briefly pass Exxon Mobil to join an generations to come. For those of us lucky that enrich and improve all of our lives,” exclusive club of just ten firms to reach enough to get to work with him, it’s been Apple’s board said in a separate statement. the top of the index, alongside the likes of an insanely great honour,” Gates said. “The world is immeasurably better Ford, General Electric and Microsoft. Jobs’ family said last night: “In his pub- because of Steve. His greatest love was for Apple was not Jobs’ only contribution to lic life, Steve was known as a visionary; in his wife, Laurene, and his family. Our the creative industries – he also founded his private life, he cherished his family. hearts go out to them and to all who were digital animation studio Pixar, which had “We are grateful for the support and touched by his extraordinary gifts.” huge success with films such as Toy Story kindness of those who share our feelings Jobs will be remembered as one of the and Finding Nemo. After Disney bought for Steve. We know many of you will most transformational business leaders in Pixar in 2006, Jobs took a seat on its board. mourn with us, and we ask that you recent times. He fought a long-running battle with respect our privacy during our time of Renowned for his forensic approach to pancreatic cancer, which forced him to grief.” designing and building each product and take two leaves of absence from Apple’s his hard-ball approach to suppliers and day-to-day running before he stepped back Certified Distribution developers, he was lauded for his genius in to the chairman’s seat in August. 01/08/11 till 28/08/11 is 92,745 FTSE 100 ▲ 5,102.17 +157.73 DOW ▲ 10,939.95 +131.24 NASDAQ ▲ 2,460.51 +55.69 £/$ 1.54 unc £/¤ 1.16 unc ¤/$ 1.33 unc 2 News CITYA.M. 6 OCTOBER 2011 New stress test Obsessing over the to cover banks’ UK’s GDP numbers bond holdings is a waste of time ▲ MARKETS EUROPE’S banking regulator began to look again at its tests of the strength of believed that GDP was up by a strong the region’s banks yesterday in two- 2.9 per cent year on year. The new data day crisis talks over the collapse of show GDP in that quarter rocketing a Franco-Belgian lender Dexia. bubble-like 4.1 per cent. Consumer Eurozone finance ministers asked spending has been revised up during the European Banking Authority to the boom years and cut since. reassess how well the banks would sur- So what are we to make of yester- vive a write-down in the value of their day’s cut to GDP growth in recent holdings of Eurozone sovereign debt EDITOR’S LETTER quarters, leaving Britain with a con- based on current market value. traction of 0.5 per cent in the fourth The EBA drew stinging criticism for ALLISTER HEATH quarter, growth of 0.4 per cent in the its stress tests in July, which showed 90 first quarter and 0.1 per cent in the per cent of Eurozone banks strongly IT is astonishing that anybody in the second? It is clear from today’s revolu- capitalised in a number of crisis sce- markets, think-tanks or politics still tionary changes that these figures narios, but did not test them for a col- takes the Office for National Statistics’ could easily be massively revised in lapse in the value of government debt. growth figures seriously. Yesterday’s the years to come. The huge attention It is now scrambling to rectify that, sweeping rewriting of history by our given to them by politicians and the and will model a writedown in the official number-crunchers shows yet media yesterday was misguided. They value of the debt from all peripheral again the stupidity of those who can’t be used to determine policy. As it Eurozone states to show how far banks obsess about whether growth is com- happens, I tend to believe that the sec- are really short of capital. It will pro- ing in at 0.1 or 0.2 per cent. ond quarter figures are roughly cor- duce a country-by-country breakdown The ONS has suddenly discovered rect – other, more accurate indicators of the level of new capital banks would that it missed tens of billions of suggest growth has ground to a halt. need if Greek bonds were written pounds worth of output during the And that is precisely the point: those down to current market values, the bubble. The cumulative gain in GDP of us trying to determine what is actu- Financial Times reported. from the first quarter of 2001 to the ally happening to the economy should The EBA’s move came as Allianz set fourth quarter of 2007 has been follow indicators that are much more out economic forecasts for 2012 based revised up from 17.9 per cent to 21.1 reliable than the useless GDP stats. My on the Eurozone shrinking as indebt- per cent. The ONS now believes GDP favourite include private sector ed nations left the union. It said the fell 7.1 per cent (not 6.4 per cent) dur- employment, the money supply, cor- shock could wipe three per cent off ing the recession (which ended in the porate bank deposits and purchasing German GDP and cost it a million jobs. Angela Merkel with Jose Manuel Barroso in Brussels yesterday Picture: REUTERS third quarter of 2009, three months managers indices. But whatever you earlier). Last but not least, the econo- do, stop obsessing with tiny, utterly my has bounced back 2.7 per cent unreliable and entirely meaningless since the recession, not 2.2 per cent. changes in quarterly GDP. The upshot is that economy is now More cash left thought to be 4.4 per cent smaller CABLE RIGHT FOR ONCE than it was at its peak, a larger black EVERY little helps. Vince Cable’s busi- Merkel backs hole which implies a larger structural ness department plans to make 36,000 deficit and a bigger problem for small companies exempt from having at the ECB amid George Osborne. to audit their accounts – a process These are massive changes. While that currently costs almost £10,000 the big picture may not have varied per year. It will also allow 83,000 sub- downgrades entirely (we still suffered from a mas- sidiaries to opt out. plan to prop up sive bubble that went pop), virtually While it doesn’t go that far, this is all of the detailed analysis that has nevertheless one of the few genuine ▲ been written about the economy over deregulatory measures taken by a gov- BANKING the past few years is now worthless. ernment that has otherwise contin- Far worse is that the authorities were ued to add extra red tape (contrary to AS GREEK protestors and strikers using wrong numbers that under- what it claims). For once, therefore, Eurozone banks returned to the streets of Athens in played the scale of the bubble when Vince Cable deserves to be congratu- fresh clashes with police yesterday taking crucial decisions. Take the fig- lated. I can hardly believe I have just Eurozone lenders fled to safety, using ures for the fourth quarter of 2007, written this – but I mean it. the European Central Bank as a safe highlighted by Citigroup: when the [email protected] house for increasing amounts of cash ONS first published the data, it Follow me on Twitter: @allisterheath ▲ BANKING she added. on Tuesday night, figures yesterday Her comments came as France’s showed. GERMAN chancellor Angela Merkel finance minister François Baroin Overnight deposits at the ECB rose WHAT THE OTHER PAPERS said she would support moves to admitted for the first time that private to €213bn from €209bn on Monday, plough fresh capital into the sector lenders to Greece may have to the highest volume since July 2010, as SAY THIS MORNING Eurozone’s banks if they had to write take bigger haircuts on their bond fear over another banking crisis grew.