Year: 2009

Dollar politics underpin China’s IMF plea

16 Sep 2009

The Middle Kingdom has a wary relationship with the fund, which frowns on Chinesestyle trade imbalances and lends where China wants to have influence. But a stronger global voice would add prestige. Moreover, as a currency issuer, the IMF could help chip away at the greenback.

LSE squares up to the competition – at last

16 Sep 2009

The London Stock Exchange is paying $30m for a specialist IT firm based in Sri Lanka. The deal is bigger strategically than financially. It shows that new CEO Xavier Rolet is ready to act to raise the LSE s competitiveness, and is alert to the huge threats facing the business.

Lame-duck EU Commission hampers European business

15 Sep 2009

José Manuel Barroso is set for a second term as European Commission president in spite of his mixed record. He will need to get to work fast. With serious decisions needed on Opel, bank bailouts and financial reform, Europe can t afford to have its executive body in limbo.

US bond market may take a battering in coming months

15 Sep 2009

August US retail sales were strong, and producer prices jumped. Strong commodity and energy prices may boost reported inflation in the coming months, while retail sales could also improve. Both will be flattered by 2008 comparisons. A rough time for government bonds could follow.

Uncle Sam will struggle to lock in Citi profits

15 Sep 2009

With its $45bn injection now worth $53bn the US is naturally thinking about crystallising gains. But liquidating such a huge overhang would hammer Citi shares. And anyway it's still on a big hook with the bank s balance sheet.

Darling right to crack the whip on living wills

15 Sep 2009

The UK chancellor is keen that plans for the easy demolition of banks don t drift. Lenders fret that overhauling legal and business structures would cause massive hassle. But that s all the more reason to start the job now even if the gains end up being comparatively modest.

UniCredit may not be ready to decline government money

15 Sep 2009

The Italian bank will soon decide whether to participate in a governmentrun recapitalisation. Like its peers, UniCredit might prefer to be free of state funds. But eastern Europe s recovery is still uncertain and regulation is in flux. It should probably take the money.

UK spending cuts are as recessionary as inevitable

15 Sep 2009

Gordon Brown is set to echo the opposition Tory party by admitting that spending cuts are essential to bring the UK s deficit under control. But unions warn that cutting publicsector jobs will resurrect the recession. The snag is that the politicians and unions are both right.

Sprint isn’t Deutsche Telekom’s only US solution

15 Sep 2009

The German telecom group looks set to solve its UK woes through a joint venture with a larger rival. Copying the trick in the US with troubled Sprint Nextel would be riskier. But it doesn't have to do that. DT's position in the US isn t awful and there are other ways to change.

Borlaug’s accomplishments teach timely lessons

15 Sep 2009

The father of the green revolution exemplified many virtues of the modern economy. Imagination, technology and globalisation enabled the agronomist s ideas to feed half the world. And this huge social return on investment was earned without worrying about profits.

UK bank stakes don’t suit quick-fire retail offer

14 Sep 2009

Allowing small investors to buy the UK's stakes in Lloyds and RBS may have some cosmetic political attractions. But the disadvantages outweigh the benefits for now. Selling to institutional investors looks like a wiser plan A.

Cerberus finds a deal that isn’t for the dogs

14 Sep 2009

The investment firm got creamed on its Chrysler and GMAC bets. But its buyout of drugs company Talecris is shaping up to be a hit. The pending IPO could give it a return 24 times its original investment. Private equity can still be a jackpot.

Postcard from Dalian

14 Sep 2009

Overlooked by a colossal mockBavarian castle, the second home of the World Economic Forum is sparkly, modern, and an example of how China is still hooked on the wrong kind of growth. Trade sanctions may make things worse. John Foley explains.

StanChart and Liverpool FC make an unlikely pair

14 Sep 2009

The emergingmarkets lender has almost no UK business, but it s paying a nearrecord sum to get its name on the premiership team s shirts. Sure, Asia loves football and Liverpool. But it s hard not to worry that StanChart s crisisproof performance has gone to its head.

US needs explicit ends for implicit guarantees

14 Sep 2009

The government has made progress winding down a plethora of programmes enacted to stabilise the financial system. Yet it s reluctant to extinguish them entirely in case the crisis reappears. The longer these promises remain, the more rancid they may become.

Heidelberg gets creative to conclude restructuring

14 Sep 2009

The Mercklecontrolled building group is close to completing a textbook restructuring of its E12bn debt pile. Using some unorthodox techniques, Heidelberg plans to raise capital and transfer ownership from the indebted family to institutions without selling at a deep discount.

SEC can prove its worth over BofA row

14 Sep 2009

A judge has rejected a lame settlement that glossed over missteps by the bank s bosses. Whether or not it wins, the US regulator could do shareholders a favour by going to trial. That would help expose what really happened, and who if it wasn t Ken Lewis was responsible.

Abandon GDP; abandon GDP-substitutes

14 Sep 2009

France asked Joseph Stiglitz to investigate confusion over the value of GDP. The Nobel economist concluded GDP is flawed and alternative techniques for counting economic wellbeing have problems. He should have gone further saying the whole measurement effort is pointless.

Obama branches out from Wall Street blame game

14 Sep 2009

One year after Lehman s bust, the US president spread the blame beyond financiers. That s partly politics given Obama s overstuffed agenda. But he s right that a collective failure of responsibility took place. Remembering that will help avoid, or at least delay, a repeat.

Cadbury defence highlights Kraft similarities

14 Sep 2009

The UK confectioner has lambasted its unwelcome suitor s record and model. But historically, neither company has much to boast about. Cadbury has streamlined faster, but a tieup might not hurt its prospects. The critical issue is synergies and how their value is shared.

Credit crisis tell-alls look like new mini-bubble

11 Sep 2009

Journalists, exbankers and even officials like Hank Paulson are flooding the market with books on the meltdown. The info glut will make it hard for a new Barbarians to emerge not to mention for publishers to earn back their advances.

Brazil deserves policy prize for recession-handling

11 Sep 2009

The country s quarterly growth and modest yearly GDP decline make it among the best performing big economies in the downturn. With high real interest rates and a small budget deficit, Brazil followed monetary and fiscal policies at odds with the global consensus. They worked.

Should gold miners hedge?

11 Sep 2009

With a newish CEO, Barrick has decided the expensive answer is no , partly because the yellow metal s buoyant price has gold bugs clamouring for exposure. Yet investors seem to reward protection when prices weaken. When that next happens, it may test the company s conviction.

Dubai’s trophies are now lead weights

11 Sep 2009

The emirate used to savour trophy investments Cirque du Soleil, GLG, Standard Chartered, Perella Weinberg and Barneys. Now they could all be sold as part of the restructuring of government vehicle Istithmar World. These days, cash takes precedence over cachet.

Geithner exaggerates US government retreat

11 Sep 2009

When is a lapsed guarantee really an extended guarantee? When the US Treasury secretary says Uncle Sam s commitment to backstop money market funds is about to expire. The formal guarantees end next week. But it will be a while yet before the Feds let a big fund break the buck .

EDF/Veolia merger idea deserves short shrift

11 Sep 2009

France is tapping up the boss of Veolia, Henri Proglio, to run state power group EDF. He may look like the best candidate on paper, but the government shouldn't let him resurrect his loony idea of merging the two companies.

BofA wrestles with Merrill culture clash

11 Sep 2009

The investment bank has been rejigged under exGoldman star Tom Montag. Rainmaker Andrea Orcel will be Montag s wingman alongside three coheads running the unit. This looks like a way to assuage egos and fudge three banks management styles. It s unlikely to last.

Spanish banks come public with capital needs

11 Sep 2009

Facing a domestic market in recession and a regulator which wants stronger balance sheets, the banks have been quietly raising capital for months, but through the backdoor. Banco Popular and BBVA have each taken E1bn directly from the markets. There could be more to come.

US neglect of free trade endangers world recovery

10 Sep 2009

Obama's new duties on steel pipes suggest he isn't standing up for free trade. That s a pity; global trade is still down 20% and each new barrier hinders its recovery. The world needs freetrade cheerleaders to prevent creeping protectionism and its negative economic effects.

Suntory is ideal buyer for Blackstone’s Orangina

10 Sep 2009

The Japanese drinks group may reportedly pay over $2.6bn for the iconic French juice brand. Suntory would be the fourth owner in eight years. Orangina might not be growing fast but, with the Japanese drinks market shrinking, its privateequity owners may well get a fizzy price.