Journalists
Hugo Dixon founded breakingviews in 1999. He is editor-in-chief and chairman. Before founding breakingviews, Hugo spent 13 years at the Financial Times, the last five as head of Lex. He began his journalistic career at the Economist. Hugo was a Brackenbury Scholar at Balliol College, Oxford, where he gained a first class degree in Politics, Philosophy and Economics. Before that, he was a King’s Scholar at Eton College. He is the author of the Penguin Guide to Finance and Finance Just in Time. He was named Business Journalist of the Year 2000 in the British Press Awards. In 2008, he won the Decade of Excellence Award at the Business Journalist of the Year Awards. He is a visiting fellow at Oxford University’s Centre for Corporate Reputation.
The buyout titan is arguing it’s worth $12bn-$15bn as part of clever plan to merge with its European affiliate. But it may have been too clever by half. Based on a read-across from that affiliate’s share price, KKR is worth a lot less.
Breakingviews has intercepted an imaginary email to bank bosses from Tim Geithner, head of the NY Federal Reserve, in which he urges them to follow Merrill and hive off their dud assets in a “bad bank” – so that the Fed itself doesn’t end up holding the baby.
Well, the worst of the financial panic may be. But the global economy faces a slow grind and inflation trouble may just be beginning, say Edward Hadas and Hugo Dixon.
The Fannie/Freddie debacle is just the latest chapter. As the US Congress and various other official bodies around the globe debate what types of reform are needed, Hugo Dixon offers a blueprint.
Some sort of support was necessary given the domino effects that could have followed from the mortgage giants' collapse. But Uncle Sam has now underwritten these reckless lenders' activities without a clear plan to rein them in. The dollar and US Treasuries are likely to suffer.
Why has inflation returned to haunt the global economy? Will it accelerate – or be brought down by deleveraging and the credit crunch? Edward Hadas and Hugo Dixon provide some answers.
If the UK mortgage bank is downgraded again - and it is already on credit watch - the private equity group would be able to pull out of its deal to inject capital. All the more odd that B&B allowed underwriters to renege on an earlier deal to provide equity at a higher price.
This time it’s delaying the introduction of accounting rules that would have forced banks to bring $5tn of assets onto balance sheets. Addiction to accounting sleight of hand is one cause of the current crisis. Yet again the US has shown it lacks the will to clean its system.
Two limbs might need to be lopped off. One is the diseased $65bn of dodgy debt securities. Sadly, to pay for the hit, Lehman could also have to cut off its healthy fund management arm.
The Fannie/Freddie debacle is just the latest chapter. As the US Congress and various other official bodies around the globe debate what types of reform are needed, Hugo Dixon offers a blueprint.
Sure, if the bubble bursts, it will take some of the heat off inflation – allowing central banks to focus on fighting recession. But bursting bubbles normally cause collateral damage. It wouldn’t be surprising if the already crippled financial sector was in the firing line.
The Scottish bank needs a new chairman to restore credibility after its bruising rights issue. Philip Hampton, the Sainsbury boss, would do the trick. He is financially literate and wouldn’t easily be bullied by Fred Goodwin, the RBS CEO whose job is also on the line.
The fact that it is so hard to answer this question with conviction is the main reason bank stocks have tumbled and one reason why financial markets as a whole remain under pressure, says Hugo Dixon.
Barclays has pointed out that it told analysts last week that the core investors buying into its £4.5bn share issue received no differentiated disclosure above what was available to ordinary shareholders. We have accordingly clarified our view.