And then there was one. The US Federal Reserve and the Bank of England were on track to lift interest rates later this year, but last night the Poms pulled the plug on an increase in 2015 (and whipped us in the cricket) and hinted that it could now come in 2016. The Bank of England downgraded its short-term forecasts for inflation and became more cautious about the outlook for the UK labour market (which had been the object of concern for the members of the bank’s monetary policy committee pushing for a 2015 rate rise). But for a 77th month in a row, no move from the record-low official rate of 0.50% with a vote of 8-1 to sit pat. The bank released the rate decision, its quarterly inflation report and minutes of the August rate decision meeting all at the same time. Now for the Fed and the US jobs report for July tonight. Another 200,000-plus month will set in stone the September 17 timing for the rate rise — but if it’s a sub-200,000 figure? Decisions, decisions, decisions. — Glenn Dyer
Rio’s largesse. Instead of berating Australia for being uncompetitive, having nasty, demanding unions, weak-kneed politicians, and wanting to protect all things green against all things mining, Rio Tinto has taken to showering us with dollar coins — billions and billions of them. The big iron ore miner is borrowing heavily to keep increasing its dividend to shareholders (to keep them quiescent and happy and not thinking nicely of Glencore, the would-be tyre kicker). It’s also cutting its capital spending as well, and costs — the only thing increased in the June half-year report of any note was the interim dividend. Shareholders will be paid US$1.075 per share, which is exactly half the US$2.15 full-year dividend paid for the 2014 calendar year. That’s a fat increase of around 40% in Australian dollar terms. And before anyone chides Rio for lifting returns to shareholders instead of investing more, remember it (like BHP and other resource companies) is coming off the biggest investment boom in their history (and big losses for Rio as well), so it’s shareholders’ turn to smile, and not listen to a whinge from management and the board. — Glenn Dyer
Coal, oil, it’s all red to me. It’s not just the coal industry that is experiencing a spate of collapses, bankruptcies and multibillion-dollars losses. Oil is also starting to slide. Take the mid-level US oil and gas producer Samson Resources, which, if the Financial Times and other US-based publications are to believed, is about to go belly up, wiping out billions of dollars of investors’ money. In fact, some US$4 billion of investor funds made in a US$7.2 billion buyout of the company in 2011 by the legendary US private equity group KKR. While the timing of the collapse isn’t as yet known, Samson is expected to miss a debt repayment due later this month, thereby placing it in a position where it can slide into Chapter 11 bankruptcy. Samson’s situation is another reminder that failure can happen when commodity prices are under pressure, even when interest rates are at or near record lows. US oil prices fell under US$45 overnight and seem to be heading lower, and causing more pain for companies large and small (including BHP Billiton). — Glenn Dyer
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