For a man in charge of one of the world’s largest mining groups, Andrew Mackenzie seems curiously slow on the uptake. A share in BHP Billiton, the company he runs, yields almost 12 per cent at 640p, as it bounced off its lowest level for 12 years last week. Except, of course, that it doesn’t. If Mr Mackenzie really believes he can declare an unchanged interim payment next month, then his fellow directors might wonder whether he can do simple maths.

It has been obvious for months that BHP’s policy of “progressive” (ie rising) dividends is unsustainable. The Samarco dam disaster in Brazil presented a perfect opportunity for him to make a virtue of necessity by showing that BHP felt the pain of the victims. Yet the website still boasts about its dividend policy, despite the grim $7.2bn writedown of its shale interests in the US. The operational review merely hinted somewhat cryptically that “we are also committed to protecting our strong balance sheet.”

Protecting the balance sheet is surely a primary duty of any CEO, almost as important as keeping the shareholders informed about the business. Displaying that ability to state the obvious that marks so much brokers’ research, Credit Suisse now say: “We think management will use the upcoming interim results to put a line in the sand and reset the investment case.” Oooh, that’s telling them.

CS add that even a halved dividend would be uncovered by free cash flow at today’s prices for iron ore, copper and oil. The brokers suggest replacing part of the cash dividend with new shares. This would preserve the delusion that the payout was somehow being maintained, but in today’s panicking markets, few investors would be fooled by what is, in effect, a mini rights issue. BHP, which once considered itself the top dog miner, should suspend dividend payments until it is clear how much it can afford to pay. If that means Mr Mackenzie has to go too, it would be a just reward for failing to take the chance when it presented itself.

Carneyage in the markets

Michael Saunders, the veteran economist at Citi, describes the latest pronouncement from the governor of the Bank of England as a “fairly elegant swerve”. Please do not call it a U-turn, an embarrassing failure, or suggest that a decent period of silence would be welcome from Mark Carney when it comes to forecasting.

Six months ago, Mr Carney was hinting strongly at a rise in interest rates around now, saying that the decision would be thrown into “sharp relief”. Well, not so sharp and no relief would be a better description of where we are now. No rate rises today, thank you very much, or for some months ahead, at least.

Economic forecasting, like long-range weather forecasting, is an amusing diversion from reality. Every year the Sunday Times rates dozens of well-paid experts who have been trying their luck. The OECD, that Paris-based leftover from another era, propped up the table for 2015, scoring 2 out of 10. RBS came closest to the actual out-turn. After Mr Carney’s comments, they see no rate rises before next February.

As for the Bank, it is no more likely to be right than the other punters. Unlike them, Mr Carney has no need to offer us forward guidance. He has other problems at his Bank, and rather than having to execute elegant swerves as his forecasts fail, he could concentrate on solving them.

A more elegant swerve

Mr Carney’s predecessor is about to take on an even more daunting task than trying to predict interest rates – saving Aston Villa from relegation. They may have struggled past Wycombe Wanderers (at the second attempt) this week in the FA cup, but the football team of Mervyn King’s life are six points adrift at the foot of the Premiership. When governor, he organised a charity match between the Bank’s employees and some Villa veterans. Now it seems that he will be joining the board. His football management skills may not be particularly obvious, but nobody can claim that he lacks experience in dealing with crises.

This is my FT column from Saturday

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