Year: 2009

Early elections won’t solve Greece’s problems

4 Sep 2009

A crippled political system is holding back urgently needed economic reforms. Prime Minister Karamanlis has called snap elections, but that s not likely to solve the problems. Neither left nor right have the mandate or the will to make the necessary but painful changes.

Moulton misses chance for dignified exit

4 Sep 2009

The Alchemy boss has always articulated difficult truths about private equity. His departure letter following a row over strategy and succession is typically frank. But a critique of the industry s failures would have been a better parting shot than settling personal scores.

China deals the dollar another subtle diss

4 Sep 2009

The People s Bank is investing $50bn in the IMF in its own currency. That won t topple the greenback, or buy more influence at the fund. But by insinuating the renminbi further into the global economy, China is gently pushing its slowburn campaign to unseat Uncle Sam.

Risky convertibles return to IPO market

3 Sep 2009

Las Vegas Sands borrowed $600m in a bond that repays in shares, after the casino operator lists in Hong Kong. This kind of illiquid paper has in the past burned lenders. And issuers can end up undermining their own investment case. Only hardened gamblers need apply.

Maersk goes shopping because it’s feeling blue

3 Sep 2009

The world s largest container shipping line is gearing up for acquisitions days after reporting a $548m firsthalf loss. But a $1.6bn share placing could point to deeper insecurity about financing and the prospects for the whole shipping industry.

Google’s Hollywood plan won’t end YouTube losses

3 Sep 2009

The search giant s internet video site generates huge amounts of traffic and costs. Revenues, though, are in short supply. An emerging plan to charge users to watch new films should help. But there s a big snag: viewers already have lots of attractive alternatives.

Hole poked in rating agencies’ lawsuit shield

3 Sep 2009

Rating firms use US free speech protections to deflect litigation. Now a judge has cast doubt on this defence by allowing a lawsuit over a structured finance deal to go ahead. If the case succeeds, the rating agencies may face a flood of suits they actually have to fight.

Excess money helps gold float

3 Sep 2009

Stimulative policies in a still weak economy give investors more funds than clear opportunities. Poor earnings crimp stocks, housing is in oversupply, and bond yields are low. But gold and silver are good hedges against either inflation or a new recession. The rally could go on.

Saudis join West with mind-boggling debt mess

3 Sep 2009

The Kingdom is adding its own chapter to the global financial crisis. Two prominent Saudi families are tangled up in a $20bn restructuring and an alleged multibillion dollar fraud. With a roll call of leading western banks involved, the story should be riveting.

EU big three’s bonus attack misjudged

3 Sep 2009

Brown, Sarkozy and Merkel have finally agreed a common line on bankers bonuses. But the new element a possible cap on total bonus pools is likely to have perverse consequences. There s a better way of addressing voter outrage at the return of megapay.

EU banks face conundrum on state aid approval

2 Sep 2009

The European Commission will insist on its pound of flesh in return for signing off banks bailouts. The 30 affected banks, including Lloyds, may be tempted to call Brussels bluff, but that carries significant risks. A proactive, speedy resolution might serve investors better.

National Express right to travel alone

2 Sep 2009

The struggling UK train and bus operator turned down what looked like a juicy offer from private equity, preferring to press ahead with a discounted rights issue. For this troubled company, the board s decision might look barmy. But rejecting the conditional offer was prudent.

AIG starts slowly in post-Lehman marathon

2 Sep 2009

The UScontrolled insurer has finally taken real steps towards recovery like finding a committed CEO. The stock has rallied. But actual progress is sluggish. Genuine health looks a long way off, says Lauren Silva Laughlin and any return to taxpayers appears even more distant.

Brazil’s populist oil plan little threat to majors

2 Sep 2009

Lula declared an independence day as he unveiled plans to retain more oil wealth. But unlike radical moves in, say, Venezuela, his changes merely bring Brazil in line with other oilrich states. And his contractfriendly approach reinforces the country s attractiveness.

Stimulated Australia might sail through crisis

2 Sep 2009

Australia is surprised to find it s winning. Big doses of fiscal stimulus and continuing Chinese growth have averted recession. Inflationary pressures are rising and the central bank may raise rates in October. But it has to keep half an eye on bubbly China.

BP discovers minor giant

2 Sep 2009

The oil major called a newly discovered field in the Gulf of Mexico a giant , which could hold more than 3bn barrels of oil. For both BP and the US, it s a lot better than digging dry wells, but this field isn t likely to be big enough to move the needle for either.

French bonus hard line may backfire

2 Sep 2009

Sarkozy isn t content with curbing bankers bonuses. He wants G20 countries to cap them or tax them. That sounds like excessive meddling, but in any case is unlikely to get US approval. Sarkozy should cut back on populism and work for a more productive international agreement.

Summer lull won’t let bankers off hook

1 Sep 2009

Brown, Sarkozy and Merkel have recently pitched in to call for regulation of bankers compensation and other plans to stop the sector running amok. The ideas aren t new. But world leaders seem determined to maintain momentum for reform in the runup to the G20 in Pittsburgh.

Ebay’s Skype sale eliminates vexing distraction

1 Sep 2009

Its purchase of the internet telecom firm was a strategic mistake from the start. Selling 65% of it at a betterthanexpected $2.75bn valuation frees the online auction company to focus on more important matters such as what to do with Paypal and its cashrich balance sheet.

Hong Kong heads for an IPO traffic jam

1 Sep 2009

Chinese firms plan to float as much as $6.4bn of new equity in Hong Kong in September twice the year s total to date. Some have waited a year for their chance. With Shanghai s markets falling and confidence fragile, issuers may have to scale back their expectations.

US should keep Bank of America in the penalty box

1 Sep 2009

The bank s fortunes have improved since it needed a second slug of taxpayer aid. But oneoff funnies aside, BofA has lost $5.7bn this year and isn t expecting a strong second half. The country s largest bank by assets isn t yet a good candidate for repaying Tarp capital.

Glencore could use new friends in wealthy places

1 Sep 2009

For the first time, the secretive Swiss commodities trader may offer equity to outsiders, including Temasek and the CIC. That would strengthen a balance sheet strained by helping 35%owned Xstrata raise capital. New investors might even support a takeover of Xstrata itself.

Lightbulb ban violates simple economic principles

1 Sep 2009

The EU ban on incandescent lightbulbs imposes substantial hidden costs on the economy. Fluorescent bulbs don t work as claimed and are difficult to dispose of. If the new bulbs were better, consumers would choose them naturally, and could be nudged to do so by a carbon tax.

Murdoch makes well-timed attack on BBC

1 Sep 2009

Twenty years after Rupert Murdoch attacked the BBC s public funding, a similar diatribe by son James has received a warmer reaction from peers. His target this time is the BBC s free news website whose existence makes it harder for all UK newspapers to charge for content.

Banks a long way from regaining the 3-6-3 model

1 Sep 2009

Commercial bankers modus operandi used to be to borrow at 3%, lend at 6% and hit the golf course by 3pm. Returning to that will be easier when base rates pick up. But regulatory pressure to build up deposits will keep the pressure on interest margins for some time.

Spain faces tough post-holiday comedown

1 Sep 2009

While France and Germany are showing signs of recovery, Spaniards don t have much to look forward to. GDP is down and some taxes could rise soon, as the government wrestles with a spiralling deficit. Hard decisions, like freezing government pay, are still needed.

Baker Hughes pumps up $5.5bn for BJ Services

31 Aug 2009

The US oilservices group is going back in time to acquire its onetime subsidiary. The deal highlights the extent to which technologies used to extract energy from unconventional or largely depleted fields have returned to the fore in a world of dwindling access to oil and gas.

Libertarian flag-bearer retreats behind US skirts

31 Aug 2009

A bankruptcy filing by media chain Freedom Communications, named in honour of the code of personal responsibility its founder championed, looks to be another blow to a philosophy now sidelined by massive US government economic interventions.

AIG, Feds should cast sceptical eye on insider bid

31 Aug 2009

The head of its aircraft leasing business reportedly wants to buy a chunk of its assets and set up a rival firm. The governmentcontrolled insurer should think thrice before accepting a potentially lowball bid from so conflicted a buyer.

Japanese voters decisively reject fiscal stimulus

31 Aug 2009

Premier Taro Aso and his oldline LDP policies of heavy infrastructure public spending are out. The victorious DPJ has promised a shift of 3% of GDP from infrastructure to tax transfers. That may produce faster growth, but deficits and public debt loom as threats.