NZ Herald business editor at large

Liam Dann: Plenty of sideshows to global economic turmoil

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It's a bit grim out. Europe's on the brink again and according to the Reserve Bank the only reason we've got any bright spots on the horizon for our economy is because we had a leaky buildings crisis and an earthquake.

Never mind, the world of finance and business is filled with a weird and wonderful mix of news perfect for distracting us from the reality of a world mired in economic turmoil.

We can't really laugh at the Greek crisis because it is wrong to take pleasure in the misfortunes of others. Unless of course they are celebrities.

The bankruptcy of Shane Filan, 32-year-old star of Irish "boy band" Westlife is big news in the UK.

The Daily Mail reports that despite the group's selling 45 million records Filan is alleged to have amassed £18 million ($36 million) of debt.

Rather like the Irish economy Westlife had most of its success between 1998 and 2008 and appropriately enough it was property investment which was Filan's undoing. The Financial Times - in an valiant effort to justify its coverage of the story - highlights the soft British bankruptcy laws which have prompted the dual resident Filan to file in England rather than Ireland.

Also out of the UK comes news that BT (formerly British Telecom) has forked out £738 million for rights to 38 Premier League football games over three years.

Basically the phone company has signalled it is well and truly in the "content" game and is up for doing battle with pay TV network BSkyB.

Meanwhile Sky is taking on BT by growing its share of the broadband and home phone market, AP reports.

In New Zealand we can but hope we'll see that kind of competition come our way some time soon, though analysts in the UK reckon the only real winner has been the Football Association. Sky and BT have bid the price of broadcasting a Premier League game up to £6.5 million a game.

Another telco powerhouse revealed some big problems this week. The once mighty Nokia has announced it will cut about 10,000 staff worldwide and close plants in what must be worrying news for the Finnish economy.

The mobile phone business might be a growth industry but it sure is volatile. Just five years ago Nokia and Blackberry were untouchable in the smartphone market. Now they are struggling to survive. Apple rules and one-time purveyor of cheap stereos Samsung has become the major rival.

It doesn't seem so long since people were raving that New Zealand just needed one Nokia-style success story to transform our economy.

Meanwhile, on a positive note for the small northern nation, Rovio the Finnish gaming company behind Angry Birds has opened a Shanghai office and outlined plans for activity parks and stores across China.

Just goes to show that what New Zealand really needs is one annoyingly addictive smart phone game involving cartoon birds to transform its economy.

But, hang on. A new survey shows the video games industry is in trouble, too.

US retail sales of video-game hardware, software and accessories fell 28 per cent in May, AP reports, the sixth-consecutive month of decline.

We'd do well to steer clear of the car industry, too.

Over in Sweden receivers for ailing car manufacturer Saab announced they have a buyer.

A consortium of Asian investors is going to buy the assets with a view to getting into the electric car market.

Across the Atlantic big corporates continue to confess their sins before US federal officials.

Accountancy firm BDO USA admitted to criminal wrongdoing and agreed to pay US$50 million to the Government for its role in a tax-shelter fraud scheme.

Meanwhile, JP Morgan Chase chief executive Jamie Dimon told the Senate Banking Committee that executives responsible for US$2 billion of losses may have their pay docked.

Dimon was being grilled by senators over the big derivative trading losses the bank revealed last month and used the opportunity to back away from his original dismissive comment that analysts' concerns were a "tempest in a teapot".

US giant Coca-Cola is going to start selling in Burma after the White House gave the all-clear for US companies to resume trading with the Asian dictatorship.

The end of the trading ban follows reforms in Burma and leaves just Cuba and North Korea on the United States Government's business blacklist.

Presumably after Coke, comes blue jeans, McDonald's, Harley-Davidsons, rock 'n' roll and, hopefully, democracy.

Which brings us back to the birthplace of democracy - Greece. And there's no getting away from the fact that it will be all eyes on the Greek elections which take place tomorrow night (NZT).

- NZ Herald

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NZ Herald business editor at large

Liam Dann is business editor at large at the New Zealand Herald. He has been a journalist for 20 years, covering business for the last 14 of them. He has also worked in the banking sector in London and travelled extensively. His passion is for Markets and Economics, because they are the engine of the New Zealand economy. He hosts The Economy Hub video show every Thursday.

Read more by Liam Dann

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