Year: 2009

Disney pays superhero price for Marvel

31 Aug 2009

The studio s $4bn bid for Spidey and Iron Man s parent comes in at a whopping 40 times forward earnings. Disney s desire to liven up its increasingly tired piratesandprincesses slate is understandable. But there are heroic assumptions embedded in this deal.

Cerberus hedge fund revamp extends its leash

31 Aug 2009

Big redemptions from Feinberg s funds almost consigned them to Hades. Its Chrysler and GMAC debacles sent investors running. Now Cerberus is offering lower fees in return for a longer lockup. That might ensure the funds survival if they manage to make some decent investments.

Lloyds can live without a bit of Widows

28 Aug 2009

There's little strategic or financial logic in the UK bank retaining ownership of the insurer bought for £6bn in 2000 and worth about £4bn now. But this is a bad time to try to sell the entire business. A partial IPO would be a logical move, if markets hold up.

Mark-to-market exceptions should be asymmetrical

28 Aug 2009

A BIS committee has offered guidelines for valuing financial assets part of the global retreat from pure fair value accounting. That s right: market values aren t always reliable. But the deviations are more dangerous when prices are too high than when they are too low.

Tribune bondholder fight no precedent for mega-LBOs

28 Aug 2009

Some of the newspaper company s creditors are fighting its bankruptcy plan saying Sam Zell s buyout should never have happened. Lenders to other LBOs could make similar claims. But Tribune s swift demise suggests its buyers were extra aggressive. Other cases won t be so strong.

How China made $300bn (almost) disappear

28 Aug 2009

Bank balance sheets have been helped by the slabs of debt shipped off to shell companies years ago. But the bonds they took in return are almost worthless. China s rapid growth and political will should keep the huge losses out of sight but it s a tricky balancing act.

China deflates a bubble – but the wrong one

28 Aug 2009

The 23% fall in stocks over the past month doesn t mean a return to normality. While valuations now look almost sane, share prices have a limited effect on China s economy. The real worry is real estate, a bubble that's bigger, harder to spot, and devilishly tricky to shrink.

Natixis rescue cleverly satisfies many agendas

27 Aug 2009

The hobbled French investment bank secured guarantees on E41bn of toxic assets. Natixis got a better insurance deal than European rivals and from its mutual banking owners rather than from the state. It s a big win for minorities and should modestly reduce moral hazard.

Slow growth puts UK fiscal gamble at risk

27 Aug 2009

Both the US and UK governments have bet on swift economic recovery. The odds are getting better that a strong US recovery will cut into deficits, but hopes of a quick UK turn are ebbing. The UK made its fiscal gamble at the wrong time. It is beginning to look a loser.

Excess finance is right target for top regulator

27 Aug 2009

The head of the UK FSA thinks the country s financial sector is dangerously overblown. That makes intuitive sense. Lord Turner would consider slapping a turnover tax on the City to cut it down to size. But more expensive capital requirements could be enough to do the job.

China can fracture iron ore oligopoly

27 Aug 2009

Vale, BHP and Rio control twothirds of the international trade, but the world isn t scarce of iron ore. China, the biggest importer, seems determined to diversify its future supply by investing in big projects. It is ready to spend enough to get what it wants, eventually.

Is the FDIC acting like a zombie bank?

27 Aug 2009

The US deposit insurer is running low on funds. It says there s no need to borrow cash from the Treasury. That may be true. But if constrained coffers are impeding a more aggressive approach to shutting bad banks, it should swiftly recapitalise.

Japan set for sensible but risky economic change

27 Aug 2009

The DPJ, likely winners in Sunday s election, wants to move 3% of Japan s GDP from public works to social spending. After two bad decades, Japan s voters seem to be ready to try a new approach. But the transition costs could further raise Japan s already excessive public debt.

Germany still far from healthy

26 Aug 2009

Government stimulus and a big fall in imports lay behind the return of quarterly GDP growth. But the decline from last year is the worst in forty years and almost twice as deep as in the US. Unemployment could rise further. The mood is better, but the economy still looks frail.

FDIC doesn’t kowtow to buyout brigade

26 Aug 2009

The US regulator did drop some of the more onerous restrictions it intended to place on privateequityowned banks. The minimum Tier 1 capital level will be set at 10%, rather than the mooted 15%. But that could still prove high enough to keep some buyout shops on the sidelines.

Big Beer tests Obama’s tolerance

26 Aug 2009

It s uncanny to see AB InBev and MillerCoors raising prices at the same time during a recession and while beer demand is slumping. With an 80% market share between them, it almost begs for an industry antitrust review.

Personal View: Healthcare may be Kennedy’s Compromise of 1850

26 Aug 2009

Like Henry Clay, Edward Kennedy was a flawed but hugely important US legislator, more so than several presidents. Like Clay s nationalism, Kennedy s career embodies a questionable principle, that of government as provider. Obama s health plan may end up as Kennedy s legacy.

Poker leader folds but stakes remain high

26 Aug 2009

World Poker Tour led the game s popularity surge a few years ago. Once valued at more than $500m, the company has just been sold for chump change. The buyer is UK s PartyGaming, which might be making a big new bet on legalised online gaming in the potentially huge US market.

Silly season dash for stock trash turns absurd

26 Aug 2009

The biggest winners in the recent US stock rally have been shares of shaky companies. The rationale is that firms like Fannie Mae and Citi offer geared bets on economic recovery. This dubious idea has now become farce.

Sarkozy’s lonely bonus crusade faces uphill battle

26 Aug 2009

The French president has forced domestic banks to agree to tough restrictions on bankers bonuses. He wants France to show the world the way, but the campaign won t go far unless other countries follow suit. That looks unlikely. The G20 meeting in September could be decisive.

Fee deferment should be more rule than exception

26 Aug 2009

Some Wall Street banks are setting aside a portion of IPO fees in recent US Reit deals. They only collect in full if the company performs after a year. This better aligns bankers incentives with those of investors and should be a new standard in securities offerings.

Bernanke gets rewarded for bravery in defeat

25 Aug 2009

The Fed chief failed to see danger in an inflating credit bubble. But he was radical when the crisis came. Now he will get a second term, enough time to see whether his policies actually work. Investors will like the continuity. And he will be around to take the glory or shame.

Where are the bond vigilantes when you need them?

25 Aug 2009

The latest US government estimate adds another $2 trillion to the projected 10year budget deficit. That s with unrealistic assumptions on growth, inflation and healthcare costs. Since officials won t enforce fiscal and monetary discipline, the bond market will have to.

Deutsche Bank tests market mercy

25 Aug 2009

The market cursed the German bank last year when it broke convention by not calling a bond as expected. Now Deutsche has surprised again, leading a charge of new Tier1 issuance. Retail investors are the target. But a high yield may help institutions forgive.

Wanted: the Ben Bernanke of 2002

25 Aug 2009

As a Fed member, Bernanke argued against popping supposed assetprice bubbles. But he made an exception when the rapid growth of credit pushed up house prices. As Fed chairman, he seemed to forget this lesson. A return to an earliervintage Bernanke would be welcome.

Lloyds should shrink its risky-asset insurance

25 Aug 2009

The UK bank probably doesn t need its current doomsday insurance from the state. Replacing it outright with a mega rights issue seems hard, even with bank shares soaring. A halfway house reduced cover and a smaller capital increase looks increasingly viable, says George Hay.

GM’s latest Opel dance plays with German nerves

25 Aug 2009

General Motors is hinting it may keep its European division after all, if it can t get better terms from prospective buyer Magna. But after months of tough negotiations, the US stateowned car maker should realise it can t afford to antagonize Germany s government and unions.

US home price increases may not stick

25 Aug 2009

For the first time in three years, values rose in most major American cities. This good news might be fleeting. An $8,000 government credit has goosed demand, and a large shadow inventory of houses may be sitting on the sidelines.

Index sale could bag Murdoch $860m

24 Aug 2009

That would be a welcome chunk of change for News Corp, which reportedly wants to offload the stock market index business it picked up when it bought Dow Jones in 2007. But the price tag pales in comparison to the value destroyed since CEO Murdoch closed the deal.

Goldman pokes itself in eye on stock picks

24 Aug 2009

Analysts giving a select group of clients shortterm trading ideas doesn t appear to break the rules. And it s no surprise that Wall Street firms want to keep their best customers happy. But there are ways of doing so that don t leave such a fishy smell.