This is the text of a talk I gave to a seminar hosted by the Reuters Institute for the Study of Journalism in Oxford on October 22nd

The company’s earnings beat forecasts and it increased its 2011 earnings-per-share outlook but it faced a high hurdle after recent strong reports from Oracle and Accenture, and analysts focused on slower expansion in key regions and businesses.Further stoking worries about IT spending, business software maker VMware Inc posted quarterly profit above expectations but warned of uncertainty among some of its corporate customers in Europe.”We have seen a bit more scrutiny and higher levels of approval required. Particularly with larger deals where they would go for CFO and CEO approval, where in the past we may not have seen those approvals to be necessary,” said VMWare Chief Financial Officer Mark Peeking.IBM, an information technology hardware bellwether with a global clientele, said total services signings — an indicator of future growth — climbed to $12.3 billion in the third quarter, in line with expectations.”The growth rates IBM experienced in each of the regions — Americas, Europe and Asia — are all decelerating and the public sector is exhibiting no growth,” said Shebly Seyrafi, an analyst at FBN Securities. “I wouldn’t say we’re falling off a cliff, but there is a slowing in IT spending.”Revenue rose 8 percent to $26.16 billion, marginally softer than the average forecast of $26.26 billion.Buttressed by recurring revenue that helps keep IBM’s results steady in strong and weak economies, its shares have outperformed the market and hit a record high on Friday. They are up about 28 percent this year versus the Standard & Poor’s 500 index’s 4 percent dip.On Monday, International Business Machines Corp’s stock fell 3.7 percent to $179.70 in extended trade after closing down 2.1 percent on the New York Stock Exchange.”The company exceeded published expectations, but the underlying expectations were even higher,” Annex Research analyst Bob Djurdjevic said. “Investors who have been very bullish on IBM are probably taking some profits now.”RISING CLOUDU.S. economic concerns and a worsening European financial crisis have hurt consumer demand. Companies such as IBM that sell hardware and software for data centers powering the Internet have remained resilient.IBM said revenue from cloud computing in the first nine months of this year was twice as much as in full-year 2010.Adjusted for currency, IBM’s revenue from the Americas rose 6 percent in the quarter, with Europe, Africa and the Middle East flat, and Asia up 1 percent.IBM also derives a major portion of its revenue from government spending and the financial services industry — both hit hard by widening fiscal deficits and crumbling markets, respectively.IBM has consistently beaten Wall Street forecasts. In the second quarter, it trounced expectations with signings of new business surging 16 percent. At the time, that stellar performance raised hopes that 2011 would be a good year for overall tech-spending.On Monday, it raised its full-year diluted earnings forecast to at least $13.35 per share, from its prior estimate of at least $13.25. Analysts had expected $13.32, according to Thomson Reuters I/B/E/S.IBM reported a third-quarter profit, excluding items, of $3.28 per share, up 15 percent year over year and above expectations of $3.22.”Whatever IBM could control, they did a great job. But they are not immune to macro conditions. Financial conditions are tough,” said Global Equities Research analyst Trip Chowdhry.”People don’t want to cancel projects, but projects are getting delayed. Sales cycles are getting elongated. New projects are getting smaller budgets.”Despite uncertainty in the fourth quarter and 2012, some portfolio managers remained confident in IBM’s ability to weather a tougher global environment.”IBM’s business has a degree of resiliency to it. The company has maintenance agreements that generate recurring revenue, giving us more visibility on future results,” Wirtz said.

Strong demand enabled the fund to reach its funding target in less than nine months, the group said on Friday.EQT planned to continue to make investments in the health care sector, which is increasingly being funded by private money in northern Europe as governments cut costs.In July, the fund purchased Swedish firm Atos Medical, which makes artificial voice boxes for people who have had throat operations and other prosthetic tools and had 2010 sales of 64 million euros.The Wallenberg family fund Investor AB [INVEb.ST] remains the biggest investor in EQT with a maximum commitment of up to 450 million euros, a spokesman for the fund said.Even though financing markets for leveraged buyouts have faltered in Europe, EQT said Scandinavian banks would likely be willing to lend for buyouts.”In the Nordic countries, financing is available with roughly around 50 percent leverage for investments between 1.0-1.5 billion euros,” EQT spokesman Johan Hähnel said. ($1 = 0.730 euro)

* Labor experts say airline complaint unlikely to succeed* Flight attendants’ strike halted by govt at last minuteOct 13 (Reuters) - Air Canada rubbed salt into the wound of its flight attendants’ union on Thursday, filing an unfair labor practice complaint just hours after the union was forced by the federal government to cancel a planned strike at the airline.In a submission to the Canadian Industrial Relations Board (CIRB), Air Canada accused representatives of the Canadian Union of Public Employees (CUPE) of bargaining in bad faith during the recent round of contract negotiations.The airline, Canada’s biggest, said representatives of CUPE had portrayed to Air Canada negotiators that they knew what needed to be included in a tentative agreement to win the support of the 6,800 flight attendants.As a result, Air Canada “revised its position to CUPE’s advantage in several key areas”, the filing said.However, CUPE members rejected the deal - the second time they voted down a tentative agreement - and instead issued notice of a strike that was due to start on Thursday, until the federal government stepped in to halt it.”Air Canada has been seriously compromised in its interests in consequence of CUPE’s inaccurate representations,” the airline said.It said it was seeking unspecified damages to compensate it for losses incurred as a result of the union’s actions.Union representatives were not immediately available to comment.Labor experts said Air Canada’s complaint was unlikely to succeed.”It can’t be bargaining in bad faith to put something to the membership and the membership rejects it, because that’s the point of putting something to the membership,” said Mary Cornish, a lawyer at Cavalluzzo Hayes Shilton McIntyre & Cornish in Toronto.Pamela Chapman, law professor at the University of Ottawa, said she knew of no case law precedent to back up Air Canada’s argument.The dispute between Air Canada and CUPE is already in front of the CIRB after federal Labour Minister Lisa Raitt asked the labor board to decide if a strike would damage the health and safety of Canadians. The referral suspends any labor action until the board makes a decision.Meanwhile, a small but noisy group of off-duty flight attendants and other supporters protested outside the constituency office of Raitt on Thursday, angry at her repeated intervention to stop strikes at the airline.Other unions and opposition politicians were critical of what they regard as an increasingly anti-union stance by the Conservative government.”No one wants a work stoppage, especially if you were planning to fly with Air Canada. But no one wants their rights taken away, either. The government should be protecting workers’ rights, not decimating them,” opposition Liberal Party labor critic Rodger Cuzner said in a statement.Air Canada still needs to negotiate new contracts with four of its five unions this year, including its pilots and maintenance workers.Air Canada’s stock was nearly 3 percent weaker at C$1.35 on the Toronto Stock Exchange on Thursday afternoon.

The company expects total construction cost to be about 90 billion yen ($1.17 billion), the daily said.The combined output capacity of the two plants will be 1 million kilowatts, which is roughly equivalent to a single nuclear reactor, the Nikkei reported.One of the plants, a 200,000 KW facility, will be built solely by Mistubishi at a cost of about 20 billion yen and is expected to be operational in July 2012, the daily said.The other, a 800,000 KW facility, will be constructed jointly by Mitsubishi, General Electric Co and an American developer, the paper reported.Mitsubishi will hold a 50 percent stake in this plant, which is expected to go onstream in August 2013, the Nikkei said.Both plants are to supply power to a major California utility for 10 years, the daily said.

** 99 Cents Only Stores said it will be acquired by affiliates of Ares Management LLC and Canada Pension Plan Investment Board for about $22 per share in cash, or $1.6 billion.** Jones Group Inc , a maker of clothing, shoes and accessories, is in talks to sell its stagnatin jeanswear division as it continues to shift its focus to its more profitable luxury brands for up to $400 million.** Sinopec International Petroleum Exploration and Production Corp (SIPC), a wholly-owned unit of state-owned Sinopec Group, has completed the purchase of an 18 percent stake in Chevron Corp’s Indonesian deep-water project for $680 million, a Sinopec official told Reuters on Tuesday.** Broadband technology and software provider ARRIS Group Inc said it is to buy BigBand Networks , a video networking service provider, for $2.24 per share in cash — a premium of 76 percent — to strengthen its networked video technology capabilities.** Payment processor Heartland Payment Systems Inc said its unit Heartland School Solutions acquired privately held School-Link Technologies Inc, for an undisclosed amount, to expand its market share in the school services payments industry.** Murata Manufacturing Co said on Tuesday it plans to acquire Finland’s sensor maker VTI Technologies for 20 billion yen ($261 million), including debt, as it seeks to expand in the growing market for smaller and low-energy sensors.** Eurasian Natural Resources Corp said it plans to buy the outstanding 75 percent of Kazakh coal producer Shubarkol Komir for up to $600 million plus assumed debt of about $50 million.** UK based holding company Chime Communications PLC said it will buy Gulliford Consulting Limited for an initial consideration of 2.5 million pounds ($3.9 million) in a cash and stock deal.

Using a handy graphic found in Mitt Romney’s economic plan, I’ve updated the Bernstein-Romer jobs chart from 2009 while also incorporating (in green) Wall Street bank forecasts (Goldman Sachs, JPMorgan) of where the unemployment rate might be headed. Two things jump out at me: First, of course, is the incredible underperformance of the $800 billion stimulus. Second, note where the Obama White House thought the unemployment rate would be in 2012  even if no stimulus: around 6 percent or so. Reminds me of how dismissive Obama’s economic advisers were in 2009 and 2010 of the thesis that downturns after financial crises can be nasty beasts. Maybe if they had taken the situation more seriously, they would have focused more on growth and jobs (and deep, permanent tax cuts) instead of healthcare and cap-and-trade.