Rates decision over, it's time for RBA governor Glenn Stevens to party


So RBA governor Glenn Stevens took a chill pill and left interest rates unchanged for his last appearance at the board before retiring on September 18.

It has been an impressive innings from the man who famously told a parliamentary committee in February that the financial markets were “dropping their bundle” as global markets dived.

What if interest rates go up?

Even a small hike can have a big effect on the hip pocket.

“Taking account of the available information, and having eased monetary policy at its May and August meetings, the board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time,” said the Guv in his final statement from the big chair.

Was the boy from Sylvania Waters leaving the powder dry for his replacement Philip Lowe? Or was Stevens just saving his energy for his big farewell party on Tuesday night at the Museum of Contemporary Art?

RBA governor Glenn Stevens retires on September 18.
RBA governor Glenn Stevens retires on September 18. Photo: Glenn Hunt

The Reserve Bank was keeping details under wraps so we can’t say if our favourite punk rocker and RBA deputy governor in waiting, Guy Debelle, will do a few Pixies tunes for the crowd.

The good news is that fellow Sutherland shire resident – Treasurer Scott Morrison – will be attending.

We all know this would not be the case if it were a parliamentary sitting week.

As we count down to the big day – September 18 for those who have not been keeping track – CBD can’t wait to see if the RBA’s Twitter account welcomes new Guv Lowe with the same level of excitement with which it ushered in Australia’s new $5 note.

Illustration: John Shakespeare.
Illustration: John Shakespeare. Illustration: John Shakespeare

“Tilt the #new5 banknote to see the number ‘5’ change direction,” reported one of many frothy Tweets last month.

Legally speaking

One of the curiosities of reporting season was a line item by legal wreck Slater and Gordon about its expenses.

According to the company’s accounts, marketing and advertising expenses reached $136.6 million last year, more than doubling the previous year’s $56.3 million.

Given that the company lost more than $1 billion last year on revenue of $908 million, might this be a good way of winding back the red ink a little?

Well, the answer is they do a things a little differently at Slater and Gordon.

So while the company said there are “material marketing and advertising expenses to support the Slater and Gordon suite of brands, with brand awareness being a key driver of client inquiries,” it also said this expense item includes “new business acquisitions costs for Slater and Gordon Solutions (SGS)”.

“SGS acquires new business from strategic partners including insurance industry participants and claims management companies and seeks to turn them into successfully resolved outcomes in a relatively short space of time,” it said in its financial accounts.

Given that the acquisition of British firm Quindell almost led to the collapse of Slater and Gordon, we are not quite sure whether this explanation is more assuring than the idea that the firm actually blew the money on marketing and advertising.

CBD thought we should check to see what proportion of the $136.6 million worth of marketing and advertising expenses is actually spent on marketing and advertising.

“We wouldn’t disclose that,” said a spokesperson from the firm, but they assured CBD it is only a small portion of the $136 million figure.

Celebrity finance

Nobody does “random celebrity guest appearance at a finance forum” better than CLSA.

It has dragged in Hollywood veteran Drew Barrymore to be the big name drawing attendees to the 23rd CLSA Investors’ Forum in Hong Kong this month.

It follows a fine tradition at the forum, which has provided a platform for Hollywood heavyweights like Arnold Schwarzenegger and George Clooney.

And for real financial insight, Mike Tyson has also made an appearance.

For those wonks not interested in finding out about Barrymore’s life after movies like E.T. the Extra-Terrestrial, Nobel prize winner and economics guru Joseph Stiglitz will provide a welcome distraction.

Got a tip? ckruger@fairfaxmedia.com.au

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