Fairy tales #1: This story claims that ads at the movies helps those companies advertising to sell things. Gee williker’s Batman, I never realised that’s why they advertised in movie theatres. Yes, Robin, they do, and that’s why the story got good play in the media — including the AFR (on the paid website). The study was conducted for Hoyts’ Val Morgan ad business by AMR Interactive. So, just another marketing yarn? Well, no. Hoyts is owned by Pacific Equity Partners which is busy trying to flog the business to anyone who will drop in for a chat. They bought the under-performer from West Australian newspapers and the old PBL.

Fairy tales #2: AMR Interactive used to be one of Pacific Equity Partners’ investments before being sold to John Singleton’s STW in 2006. The survey and the story reinforces the adage ‘beware of PRs offering gift stories’. Qui Bono, Robin, is the question here, who benefits from this research and its release? Two groups: Hoyts/Val Morgan, because more people might advertise through them in Hoyts theatres. And who in turn benefits if Hoyts’ in-theatre ads rise and revenue and profits likewise? Why, Pacific Equity Partners and their investors in Hoyts because they might snare a buyer or two and perhaps get a bit more than they were hoping for. Stories like this should be regarded as just part of the marketing campaign for a private equity flip or float. It is a bit like how all those stories about Myer came back before the float last year. Yes Robin, another fairy tale from the private equity jokers.

Solid indicator: There are plenty of indicators pointing to the strength of the rebound in the global economy, fitful as it might seem to those unemployed in the UK, Europe and US. But yesterday we got a very solid indicator from the heart of the global economy, and one that also confirmed it’s Asia dragging the world out of the hole, and China in particular, despite what all the experts might argue. FedEx, or Federal Express, is the world’s biggest biggest cargo airline and yesterday reported its latest quarterly profit, which more than doubled on increased shipments in Asia and Europe as businesses restocks and consumers spend more. FedEx and its larger US domestic carrier, UPS, are lead indicators for the global economy because they deliver goods ranging from machine parts to clothing to electronics.

Very solid figures: FedEx signalled the steepness of the recession, especially as its international parcel business and earnings plunged from late 2008 to the middle of 2009. Now they are surging. FedEx said third-quarter earnings climbed 146% to $US239 million; revenue rose 7% to $US8.7 billion. The key business is its overnight service which handles private as well as corporate business. Its earnings rose more than 600% to $265 million from $45 million. International priority volumes rose 18%, revenue jumped 49%, driven by higher demand from Asian customers where China is growing at more than 10% annually, and even Japan is seeing growth of 3% top 4%.

New Lehman bombshell: The Financial Times is reporting on its American website today that the US Securities and Exchange Commission and Federal Reserve officials were warned by a rival Wall Street bank that Lehman Brothers was incorrectly calculating a key measure of its financial health months before its collapse in 2008. The paper says former Merrill Lynch officials said they contacted regulators about the way Lehman measured its liquidity position for competitive reasons. The news comes a week after the special examiner’s report into the Lehman collapse revealed rorts and a $US138 billion con by Lehman over the three last reporting quarters of its corporate life. These included so-called Repo 105 transactions which were used to lower the bank’s leverage by not declaring the money borrowed under the repurchase agreement, which was used to repay debts. “In the account given by the Merrill officials, the SEC, the lead regulator, and the New York Federal Reserve were given warnings about Lehman’s balance sheet calculations as far back as March 2008,” the FT said. And that’s the big story from the report: the way so many red flags were ignored by regulators, especially the SEC.

Spot the basket case: Time for a central bank health check: America’s Fed is keeping rates low for an “extended period” as business investment and unemployment continue to do better. Housing is still at “depressed levels”, which was confirmation the American housing sector ISN’T recovering. Australia’s Reserve Bank has spotted housing here is now “very buoyant”, after being “fairly buoyant” in February, so rates will rise “gradually towards normal levels, and that it was timely to take another step in that direction” at the March RBA board meeting. Or as one of the bank’s assistant governors said this week: interest rates “will rise a bit further”. The Fed will stop one of its major stimulus programs at the end of the month — the purchase of mortgage-backed securities which has kept the housing sector on life support. The Bank of England is getting very worried that inflation is rising in Britain, just as it is falling in the rest of Europe and the US. And the Bank of Japan? Well this week it doubled its QE by expanding its three-month loan program for banks to $US222 billion, offsetting a couple of other credit measures ending this month. With deflation now running at close to 3% according to the country’s GDP deflator, anything to end the price crunch spiral will do.

Let them eat yellow cake: Buried in this Financial Times story on the changing habits of Iranian consumers was this little factoid on the health of Iran’s banking system: “Asghar Abolhassani, the deputy economy minister, said on Tuesday that overdue loans for the banks exceeded $45 billion for the year ending on March 20. That represents a 66% rise since the previous year — and a nine-fold increase since Mahmoud Ahmadi-Nejad won the presidency in 2005. He introduced populist economic policies, ordering banks to offer generous loans to the poor at low interest rates. Some reports suggest that 25% of all loans are now overdue, meaning that Iran’s financial system is technically bankrupt. Economists believe the banks could not keep their doors open without support from the central bank.” Not the best of jobs for a central banker…

Floating the Hindenburg AKA GM: More talk this week about a possible float of General Motors next year, with suggestions from the company that it could turn a profit towards the end of 2010. That saw a few hopeful bankers crunch the numbers on the back of an envelope: how, they asked, could GM raise enough to repay taxpayers who have sunk around $US67 billion into the business ($US60 billion if it repays all the $US7 billion in Tarp funds this year)? Given Ford, which is profitable and just been upgraded by ratings group, is valued at $US46 billion, GM has a long way to go. But US banks have always sold us on blue sky versus real value — just look at the whole sub-prime mess.

About time: Bloomberg reported today: “The Australian Securities Exchange will review share trading in Corporate Express Australia Ltd. to determine if the company should have disclosed a A$390 million takeover bid from shareholder Staples Inc., the Australian Financial Review reported, citing an unnamed spokesman for the exchange.” Crikey revealed it yesterday.