The rise and rise of young James: James Murdoch’s rise in the global corporate world continues unabated. The News Corp exec and son of Rupster, has been nominated to stand for election as a board member at the Sotheby’s auction house. The election is at the May annual meeting. He’s also a director of drug giant GSK (Glaxo). Can we expect to see a renewed interest in News Corp papers around the world in fine art and auctions? The likes of the Wall Street Journal, the Times, The Australian, etc, already carry extensive coverage of fine art, but now the Murdochian tabloids? You can see the headlines, “Caravaggio was a bugger?” in The Sun in London; “Rupert’s no one’s bunny”, says the Daily Tele in Sydney; “Warhol in Soup Can Scandal”, New York Post (Col Allan memorial edition).

Growth down under: Australia’s Gross Domestic Product was $1.2 trillion at the end of 2009, or just over $55,100 for every person in the country. Unlike other major Western economies, that’s the highest it has ever been. America, Germany, Japan, the UK, for example, all saw GDP fall in 2009. Real GDP rose +1.3% in year average terms, compared to the deep recessions in some of our major trading partners (America economy contracted by -2.4%, Europe by -4.0% , Japan – 5.1%).

Car sales down under: Reports on February’s car sales focused on the performance of Toyota, which again sold more cars here than any other producer. But the interesting point about the latest figures from The Federal Chamber of Automotive Industries was that car sales were higher than February 2009 (not hard, given that month was rotten) and January of this year. There were 82,219 passenger cars, sport utility vehicles (SUVs) and commercial vehicles sold in February, according to the chamber’s figures. Compared to January, there was a rise of nearly 10%, or more than 7300 units in February, a good sign that demand had not been soaked up by the tax break induced jump in sales from June onwards. The number of private buyers rose 9.3% in February, compared with a year ago, while business sales increased 22.7% and the number of vehicles sold to rental companies was up 175% (similar to the US).

Growth, American style: According to the US Federal Reserve’s latest Beige Book, the American economy improved in nine of the Fed’s 12 regions in January and February, but the very severe winter restricted activity in some eastern states. The Beige Book is a collection of anecdotes gathered from businesses in the 12 reporting areas. The Fed said that “in most cases the increases were modest”. Consumer spending increased in many regions, while commercial real estate and loan demand were “weak” and “hiring plans still remained generally soft”, and pressures on employers to raise wages were “minimal”. Non-financial services were “steady or improved” in the majority of districts, and manufacturing “increased further” in most areas. The report reflects information collected on or before February 22 will be used at the Fed Open Markets Committee meeting on March 16. The Fed said housing markets improved in some areas, were “weak or softened further” in three districts, including New York. The snow storms hampered markets along the east coast.

Value destruction US style #1: According to figures published by a strategist at a Hong Kong investment bank and reprinted in the latest edition of The Economist, the US economy grew by an average 1.9% a year from 2000 to 2009, the worst since the 1930s and well down on the 3.9% a year in the intervening 60 years. Non-farm employment FELL by 0.8% in the noughties, compared with a 27% growth in each of the six decades since the Depression. Growth in income and personal consumption in the noughties was also the lowest since the 1930s. That’s the reality for hundreds of millions of Americans. The noughties were also the decade when markets were believed to be efficient and credit was cheap and many people believed things had changed for the better. What’s the bet that the current decade will give the last one a run for its money in the dismal stakes. Who was President for most of the noughties? George Bush. This will be his enduring legacy.

Value creation, US style: According to this report, the Morningstar investment research company has come up with the biggest winners and losers among US funds managers for the past decade. The winners were the industry’s three largest firms; American Funds, Vanguard Group and Fidelity Investments, which Morningstar said created $US191 billion, $US189 billion and $US153.1 billion. Annualised asset-weighted total returns at the firms were 4.1% at American Funds, 2.9% at Vanguard and 2.1% at Fidelity. These groups, especially Vanguard, are low cost, index trackers in many cases. They had to withstand (like the losers), the tech wreck at the start of the decade and the credit crunch and recession at the end.

Value destruction, US style #2: Morningstar said the leading losers were Janus, with nearly $US60 billion in value destroyed for its investors, Putnam Investments, which shredded $46.4 billion of shareholder wealth in the period, while mutual funds at AllianceBernstein Holdings and Invesco Aim, a unit of Invesco Ltd lost shareholders $11.4 billion and $10.1 billion, respectively. Morningstar says these fund families were heavily invested in technology and growth stocks — the decade’s biggest wealth-destroying fund categories. All three also had management and governance issues during the decade. Large-cap growth funds lost $107.6 billion for investors while tech funds shed $62.8 billion of their money in the period. This is a good idea for someone in Australia to look at for our funds and their owners.

Value destruction, Australian style: What will be the ASX’s next move after querying Gunns, Toll Holdings and Nufarm about their lack of timely and adequate disclosure about very large falls in profit in their latest half years. That cost more than $1.3 billion in lost sharemarket value for shareholders in the three companies, with Toll holders the biggest losers. Toll and Gunns have claimed they sort of warned of tough times by pointing out how market conditions were soft and business was flat during the half. But neither company actually came out with a specific change to guidance and said things are going to worsen. Nufarm revealed it would report a first-half loss for the six months to January at a shareholder meeting this week. If the likes of the CBA can issue an upgrade warning ahead of the result, then Toll, Gunns, and Nufarm can issue a downgrade warning. After all Gunns and Toll balanced on December 31 and Nufarm on January 31. All companies operate ongoing financial reporting, so management and the boards can have an as up-to-date picture as possible. So they would have known in the month before they balanced that the half year was looking rougher than they had told the market. I bet all three will be quick to rush out a profit upgrade when any improvement appears. So what will the ASX do? Whip out the disciplinary lettuce and beat an apology out of the trio?