Baltimore yesterday confirmed that revenues for the fourth and first quarters had been overstated, took a massive £389m write-off of goodwill against recent acquisitions, announced it was getting rid of the bulk of its workforce, either through divestment or redundancy, delisted itself from Nasdaq and put one of its largest businesses up for sale. If Baltimore gets any more than a tenth of the £700m it paid for the business, it will be doing well. As kitchen sink clear-out exercises go, they don’t come much more impressive than this one.It seems scarcely believable now, but Baltimore Technologies was briefly a constituent of the FTSE 100 index. That few could figure out precisely what it was that Baltimore did, let alone who ran it, hardly seemed to matter. Was it the quietly spoken professor of mathematics, Henry Beker, with his algorithms and encryption codes, or was it the brash marketeer from Dublin, Fran Rooney? And what was it they were trying to sell anyway?So long as the share price kept rising, nobody seemed to care.

But then the music stopped, the technology bubble went pop, and it’s been downhill ever since. Both Messrs Beker and Rooney are history, and so, pretty much, is the company as well If it makes sales of £70m this year, it will be a miracle. Baltimore has had its 15 minutes of fame and it’s now back in the small caps, struggling, like everyone else, to survive.Mr Sander put forward a relatively credible strategy for achieving breakeven yesterday, but survival is still far from guaranteed. The future is bright, says Baltimore, citing IDC estimates that the market for internet security software will be worth $4bn annually by 2004, but you only have to look at the share price to see that no one believes this kind of long-term forecasting nonsense any longer.The reality is that even before the internet lost its shine, the high priests of the New Economy were finding it tough to persuade businessmen and bankers that the Web was secure enough to allow full commitment to e-commerce.

The technology meltdown has set the cause back years, if not decades. Meanwhile, all non-essential IT and software spending has been frozen throughout most organisations as the world economy slows. Hardly a happy backdrop to Baltimore’s recovery plans.Old King CoalThere’s not much left of the former British Coal Board – just 7,500 miners and 13 deep mine pits – but still it manages to gobble up truck loads of state aid and cling to some truly antiquated working practices. Last November, the now privatised British coal industry got another £130m dollop of taxpayers money. Has this helped matters much? Not by the look of it.According to the latest edition of UK Coal’s house magazine, NewScene, the company is still struggling both to dig the stuff out of the ground at a profit and to meet domestic demand.

In the first four months of this year, coal imports into the UK more than doubled, while production at UK Coal, the renamed RJB Mining, fell back sharply.UK Coal’s new chief executive, Gordon McPhie, has had the Bainies in and they’ve concluded that only a radical overhaul of working practices is capable of delivering the sharp reduction in production costs necessary to bring them into line with Australia and the US. The unions are already threatening to strike, but it doesn’t look as though they’ve got much of a leg to stand on. The miners sill occupy a special position in Labour’s folklore and history but, even for Labour, another bailout would be hard to justify when market forces are laying waste to so many other industries and jobs the length and breadth of the land.j.warner independent.co.uk. The dollar is falling – maybe not very fast, maybe not very far, but the peak of seven weeks ago seems unlikely to be matched this cycle. The weakness in the US economy that encouraged the Federal Reserve to cut interest rates yet again will inhibit much of a rebound for many months at least. The dollar is falling – maybe not very fast, maybe not very far, but the peak of seven weeks ago seems unlikely to be matched this cycle.

The weakness in the US economy that encouraged the Federal Reserve to cut interest rates yet again will inhibit much of a rebound for many months at least.
But what does this mean for us? For most of the past five years, sterling has been quite closely linked to the dollar: it stuck in the range between $1.50 and $1.60 until speculation of early euro entry after the last general election knocked it back to $1.40. It has recovered a little since then against the dollar but has come back against the European currencies. As holidaymakers in France are discovering, the pound may still be worth more than FF10 on paper but, by the time you have converted the money and paid the commission, there is no longer much headroom.The first thing to be clear about is why sterling has been relatively strong for the past five years. It has been the combination of net capital inflows and a current account that has been broadly in balance. The inflows have been attracted by generally faster growth than all other large developed countries bar the US.You can see this pattern, together with a forecast from HSBC, in the left-hand graph below, which plots UK domestic demand against that of the other Group of Seven countries. If the forecast is right, demand here will carry on at around 3 per cent this year and next, whereas it will slow to an average of only about 1 per cent in the rest of the G7 nations. Insofar as capital inflows are attracted by the prospect of decent growth, this bit of the jigsaw seems in place.But if British consumers keep spending while other pull in their horns, might this not widen the current account deficit and lead to a run on the pound?Obviously there is a level of deficit that would be difficult to finance but there does not seem to be much evidence of that yet At the moment, the current account (i.e.