Tonight:
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When commercial property prices crashed in the mid-1970s, in circumstances that were very similar to today, it took them years to recovery.
Prices then fell 40% or more in the depths of the trough, but they were still down 20 % or more in real terms at the end of the decade.
Some of the big insurance companies and pension funds were so badly burned it took them between 10 and 15 years to rediscover their enthusiasm for the asset class. The lesson was that deleverage takes a very long time — much longer than one thinks — to work though the system. But it has to happen because you can't have a healthy property sector when finance is dysfunctional.
This time recovery has come much more quickly, in fact too quickly for some tastes, because the banking sector remains in an awful mess, and there are in addition literally trillions of pounds and dollars of commercial mortgage-backed securities which will shortly have to be refinanced.
Yet with the publication of its figures today, Land Securities, one of our biggest property companies, committed to three speculative developments in London — one on Oxford Street and two in Victoria which collectively will add about 8% to its value — expressed confidence that when these are completed in 2012 and 2013, it will be nicely positioned for the upturn.
That does not mean it shares the confidence which City analysts in particular seem keen to stoke up. Indeed, chief executive Francis Salway seems to have been a little surprised by the levels of investor interest in recent months and the resultant bounce in prices. LandSecs has considered some selective buying itself — but not at these prices.
One can see why he might harbour doubts. It is one thing to take a view on the market in five years' time, it is another to think there will be no bumps on the way. He can be confident in the strength and security of his company without being equally confident about the wider property environment.
There is still too much unfinished business. Lloyds/HBOS and Royal Bank of Scotland each have about £90 billion outstanding in property loans, many of which are on properties which are well into negative equity. But the banks can't afford to recognise the losses, and are moving with painful slowness to come to terms with reality.
Until they do, and until they pull the plug on the legions of technically insolvent borrowers, it is hard to believe the market has seen the bottom.
Playing catch-up on bribery
When Labour came to power in 1997, it talked a lot about how it planned to clamp down on money-laundering and bribery, and promptly signed the OECD convention which committed government signatories to pass and enforce strict laws to that effect.
It moved on the former with a plethora of regulations which have certainly inconvenienced the innocent though they have probably done rather less to deter real money-launderers, while bribery for the most part continued to be governed by laws that have remained substantially unchanged since 1915.
But today with the Queen's Speech providing a timely reminder to all sitting members that it may have only a few months left in office, the Government seemed to signal that it has decided to play catch-up.
Not before time according to some observers, because Britain among developed nations has one of the lowest prosecution rates for the crime — France and Germany have far more.
Some may say that is because those countries have more to prosecute, but measures such as the transparency index, which plots the willingness of companies to pay bribes to secure business in international markets, suggest that the UK, while by no means the worst, cannot claim to be pure as the driven snow. It suggests some firms and sectors do have a case to answer.
There has also been a draft anti-bribery bill kicking around for some time, but in spite of the traumas of BAE
Systems, the case against Balfour Beatty and the saga at Siemens, most companies have not yet taken on board how much their life is going to change.
However, work by Will Kenyon of accountants PricewaterhouseCoopers highlights that as well as the expected prohibitions on giving and taking bribes, and a new specific offence of bribing overseas officials, the real shock for British boardrooms is a new corporate offence of failing to prevent bribery.
The defence that the people at the top in the UK could not possibly know what might have happened between their agent and a customer in a smoke-filled bar on the other side of the world will not of itself be enough.
There is a defence on these lines, but companies will have to demonstrate that they have “ adequate procedures” in place if they are to avoid liability or seek mitigation.
Appropriate procedures are not a matter of cobbling together a few backdated memos and finding a fall guy. Rather, companies will be required to demonstrate a continuum of culture and behaviour, a process going back over a period of at least 12 to 18 months.
So if Labour is serious about getting this on the statute book in the next few months companies had better look to their laurels, and the more they think they might have strayed in the past the more urgently they need to demonstrate that they have now installed processes to change the culture.
