If Greenspan is upbeat, is it time to worry?

BE reassured. US Federal Reserve chairman Alan Greenspan says the economic effects of any war with Iraq will be negligible.

Exploiting to the full his mastery of obfuscation and evasion, Dr Greenspan has been telling Americans there is little to worry about - unless any conflict drags on for too long. And surely this wise old bird must be right, mustn't he?

Well, just bear a few things in mind. The US stock market is now at the same level it was in the immediate panic-stricken aftermath of the terrorist attacks a year ago. Since then, we have had scandals such as WorldCom and Enron. And the price of oil in the US on Friday night nudged $30 a barrel.

This is not an economically robust environment. Yes, if the US economy were motoring along, any short-term war-induced spike in the oil price might not present too much cause for concern.

But that is not the case. The economy is already fragile. It is susceptible to shock.

In his more candid moments, Greenspan has admitted that his job is to use his influence to raise doubts when others are being unreasonably optimistic and to sow the seeds of optimism when those around him are gloomy. He is performing true to form. Would the effects of a war - even a short one - be shrugged off by the US, the world's economic powerhouse? Of course not. Don't be reassured by Greenspan. Be sceptical.

Woolies' mess

The saga of Kingfisher over the past year has shown just how messy a tidy-up can be. Hiving off Woolworths was a spectacularly ill-tempered and clumsy affair - it wasn't even clear until the last moment exactly what would be bundled up with the business, let alone who would run it.

Then, six months ago, came the launch of phase two, with Kingfisher starting the tortuous process of taking full control of B&Q's sister company in France.

That part of the process is now virtually complete - even if there is still a mountain of work to be done in putting the theory of management control into practice. (Indeed, Kingfisher's chief executive Sir Geoff Mulcahy had to cancel a sailing trip round Sardinia last week because he was up to his ears in the B&Q/Castorama melee.)

But even with Woolworths now on its own, and even with the integration of the DIY businesses under way, it will still be months before Kingfisher even begins to tackle seriously the next element in its corporate-reconstruction - the separationof its electricals operation.

It is now six months since Francis Mackay, the jolly and down-to-earth chap from catering group Compass who took over as chairman of Kingfisher in January, unveiled his plans for the group. Under the none-toomodest title, 'Our vision for the future', he said the company should be split into two independent pan-European businesses - DIY embracing B&Q here and (principally) Castorama in France, and then electricals, including Comet in the UK and Darty in France.

Few quibbled with the theory. But since then, the original idea that the reshaping of Kingfisher would culminate in the triumphant listing of the electricals business in Paris next spring has looked increasingly far-fetched.

Since Mackay unveiled his grand vision six months ago, retail stocks have had a lousy time. And, unless investors suddenly rediscover an enthusiasm for retail, the arithmetic of floating the Kingfisher electricals arm is troubling.

Put simply, the sort of value that the market would be likely to put on the electricals group would mean that the shareholders in the rump of Kingfisher would see an unpleasant dent in earnings.

Mere mischievous talk? Not really. Those at the top of Kingfisher justly insist that there are plenty of parties - particularly those who would like to buy the electricals operation outright - with a strong motive for disrupting a flotation. They also say there is a greater appetite for a flotation among French investors than among those in Britain.

But in truth, as long as retail stocks are out of fashion, shareholders in Kingfisher will be better served by a straightforward sale of the business. Mackay, who until now has insisted that a flotation is the best plan, may be forced to admit as much this week.

Clearly, Dixons has to be interested. If Comet could be offloaded to avoid competition concerns, it would love to get its hands on Darty.

What a piquant end to this story that would make. Last week, Dixons held a charming reception at Claridge's hotel in London to mark the retirement of Sir Stanley Kalms, the man who built it up to become such a powerful force on the High Street. In 1986, Mulcahy beat off a bid for his group from Dixons. Four years later, the Monopolies Commission blocked a bid for Kalms' Dixons from Kingfisher .

Now, with Kalms retired and Mulcahy saying that he will follow next year, their two corporate creations may finally tie the knot.