Mervyn King once harboured ambitions to be the next Jim Laker: “I was taught to bowl — slow left arm – at Old Town primary school [in Hebden Bridge, Yorkshire] by the headmaster, Alfred Stephenson. During the morning break, he would mark the wickets in chalk in the playground, and draw a small circle exactly on a length. If we could pitch the ball within that circle, he would give us a farthing. As we improved, and the payout of farthings increased, the morning break became shorter and shorter — my first lesson in economic incentives, or what is known in the trade as moral hazard'.”

* Business Secretary Lord Mandelson is full of praise for the Cobra emergency room in Whitehall, where the new National Economic Council sits. Appearing before Select Committee MPs yesterday, he disclosed that the walls are lit up with City prices and currency movements. “It has every relevant market movement projected on the walls,” said Mandelson, lost in wonder.

* Is Andrew Capon of State Street Global Markets feeling all right? Explaining a fall in investor confidence, he writes: “Generally, human beings and other animals live in a state of homeostasis. They regulate their external environment to maintain this happy state of equilibrium. However, change can occur that is beyond their control. When a grazing deer is suddenly confronted with a hungry tiger, it triggers an instant physiological response and a binary outcome: fight-or-flight.” Andrew, time to turn off the lights and lie down.

* An insight into the property market: developers have been offered a Belsize Park flat, which was priced at £600,000 last year, at £400,000 for cash. They have the money on deposit but aren't paying — they think prices need to fall 50% from their peak.

* “Property market. What property market? There is no property market.” A London agent sums up the state of play.

* Red faces at Reuters when an arresting headline broke over its newswires: “Bank of America acquires culture of corruption in Merrill Lynch purchase, warns former Merrill star player.”
Er, but no story followed. Then came an urgent note from the Bangalore equities newsroom: “Please ignore alert on Bank of America as it was sent inadvertently.” Move your operations to India at your peril, Reuters.

A risky history for McCain

* It gets worse for John McCain. Financial writer John Waggoner has just published a new tome, Bailout: What The Rescue Of Bear Stearns And The Credit Crisis Means For Your Investments, in which he traces the origins of the current meltdown.

Waggoner recalls the collapse of the US Savings and Loans firms at the end of the 1980s, when they made “progressively riskier loans, often overlooking such niceties as the borrower's capacity to repay those loans [which cost the US Government $1 trillion]. The failure of Lincoln Savings led to five US Senators being rebuked — among them Senators John Glenn and John McCain.”

Relocating, but sitting tight

Sir Martin Sorrell, chairman of the Mayor of London's Business Advisory Council, is relocating his WPP advertising group to Ireland. Bizarrely, Boris Johnson is keeping him as chairman.
“I do think it is a very sad decision,” says Johnson. “But you have to look at the reality of the Government's long, agonising review, with a threat of new taxes on foreign earnings, which is driving business away. I will make sure Sir Martin's point about the injustice of excessive taxation of business in London is heard by the Government.

“Forty per cent of FTSE 100 companies are considering moving abroad because of this ill-considered measure. Rather than punishing Sir Martin, I will be making that point to make sure London is more competitive in the future.”
Steady on, Boris — 40% of the FTSE 100?

* Is this a trend? During the furore over Lord Browne's departure from BP, the oil giant's non-executives were separately advised. City Spy now hears that the British Airways board is so concerned about the corporate governance issues that it's considering receiving its own advice on the BA-Iberia merger...

Now Fred the Shred's at the cutting edge

Another dubious honour for The Shred. The former Royal Bank of Scotland boss, Sir Fred Goodwin, finds himself in the top five in Sweet & Maxwell's annual survey of the most high-profile FTSE 100 chief executives and chairmen.

Alas, the most high-profile are often afforded press coverage for the wrong reasons. So Sir Stuart Rose, controversially promoted to executive chairman of Marks & Spencer, tops the list with more than 1500 press clippings about him over the last 12 months.

BA's Willie Walsh takes second place with 1223 mentions — too many about Terminal 5, no doubt. Rupert Murdoch is third (1120 articles) — although he stepped down from the chairmanship of BSkyB late last year — and another controversial executive chairman, Michael Grade, boss of ailing ITV, is in fourth slot (1052 clippings).

Other notable inclusions are John Varley, CEO of Barclays, with 491 press articles — only just ahead of Bob Diamond, the investment banking boss and president of Barclays. The credit crunch means private-equity work has dried up, but so has the controversy surrounding it. Damon Buffini of Permira featured in just 62 articles this year against 415 the previous year.

* The giant new Westfield shopping centre that opens in Shepherds Bush next week has awarded Ocean Outdoor a £70 million contract to supply advertisements for the next 10 years. Westfield will need a serious marketing push to bring in the punters and get a return on its whopping £1.6 billion investment in the site, what with a recession looming. Among the wheezes being planned by Ocean Outdoor are three electronic digital screens that will sit in the middle of the Holland Park roundabout...

* It's the question that has the whole City agog. From The Lawyer: Which Herbert Smith lawyer threw a tantrum when he was disqualified from a conker tournament after his string broke?

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