Year: 2009

Online skirmishes pave way for US sales tax war

1 Jul 2009

Virtual retailers Amazon.com and Overstock.com are scaling back in states that demand they collect sales tax on some purchases. While this won t dent their revenues much, it foreshadows a larger clash over taxing internet commerce. Cashstrapped states are firing the first shots.

Goldman laments life on the cover of Rolling Stone

1 Jul 2009

The firm tried ignoring the glossy s shrill case that it caused all kinds of plagues, including the housing crisis. But now, in reacting, Goldman sounds too dismissive. Sure, it isn t pulling every string. But it s powerful and makes tons of money and mistakes. It s fair game.

M&S’s better trading doesn’t get Rose off the hook

1 Jul 2009

The UK retailer s sales are declining at a slower pace. That feels like an achievement mainly because sales were falling so rapidly last year. Moreover, the whole sector is benefiting from warmer consumer sentiment. Boss Stuart Rose would be wrong to think the pressure s off.

California’s promises might trade at a discount

1 Jul 2009

The Golden State is short on cash so it plans to issue IOUs instead. The last time it did so, most banks accepted the scrip at face value. This time, in light of the state budget woes and economic crisis, banks may demand a discount hurting anyone paid with these promises.

Argentine anti-market policies’ good run may end

30 Jun 2009

President Fernández' moderate defeat in midterm elections may force policy compromise. So may reality with wheat planting down 30%, her government s strategy of heavily taxing farmers and exporters may finally hit the economic buffers. Still, Argentina has had a great run.

Porsche’s family feud turns to farce

30 Jun 2009

The families which control the German sports car maker are supposedly working on a merger with Volkswagen. But they can t stop bickering. The basic problem is that Porsche doesn t seem to realize that E9bn of debt puts it on the begging end of the deal, even if Qatar helps out.

AIG shares rise 20-fold, but directors matter more

30 Jun 2009

The giant US governmentsupported insurer will again have stock trading in the $20s but only because of a reverse stock split. More importantly, a fresh slate of directors brings a range of potentially useful skills. With luck, they can help recoup taxpayers sunken treasure.

Ditching debt guarantees leaves many banks in a hole

30 Jun 2009

The likes of JPMorgan and Morgan Stanley have sworn off the FDIC programme that probably kept a number of banks afloat and may have saved the sector as much as $36bn in financing costs. But unguaranteed debt is still too expensive for most to fund their businesses profitably.

Fees trampled underfoot in Asian banking land-grab

30 Jun 2009

Korea's KB Financial decided to switch banks on its $2bn rights issue after a potential lowfee deal with four advisers fell through. Goldman Sachs and Morgan Stanley were content to snap up the barely profitable mandate. Wall Street's fight for Asian supremacy is getting brutal.

UK’s CMBS market on shaky ground

30 Jun 2009

Despite a 43% slump in commercial realestate prices since mid2007, asset valuations underpinning much of the UK s £42bn of commercial mortgage securities are flat or up. But many are out of date. Some investors are in for a nasty surprise when the numbers are updated.

Anglo American could be a mine of value

30 Jun 2009

The miner trades at a 15% discount to the sum of its parts. That presents an opportunity, as rival Xstrata has realised. If Anglo wants to stay independent, shareholders will have to be persuaded that it can close the gap on its own. Una Galani explains.

Tumbling UK needs to save – not spend

30 Jun 2009

Despite a government borrowing binge, the UK suffered the biggest GDP fall for half a century. Still, consumers managed to save less than in the last quarter. The UK can t begin a real recovery until consumers and the government return their finances from Neverland to reality.

Candover won’t clean up with diaper deal

30 Jun 2009

Nappymaker Ontex hit the skids after the LBO was loaded up with too much debt twice. Now it s on the block and trade buyers are interested. But even if Ontex achieves its mooted E950m valuation, this is one deal that private equity will be happy to kiss goodbye.

Can Iceland be saved?

29 Jun 2009

Boomtime services glut behind consultants’ merger

29 Jun 2009

Towers Perrin and Watson Wyatt rode the credit wave, advising companies on hiring and integrating staff and justifying boardroom pay. Advice on regulatory compliance and pensions is still in demand. But the $3.5bn deal is about cutting costs in recessionhit service areas.

Now could be the time to back Candover

29 Jun 2009

The UKlisted buyout group has ended talks on selling itself and is playing down an equity issue. But its latest fund still hangs in the balance. If investors bail out, Candover will be in runoff. At least chucking in more cash would give management an incentive to deliver.

Can financial products be regulated like drugs?

29 Jun 2009

The Bank for International Settlements says they could be overseen the same way, with safe ones widely available, risky ones doled out carefully and new ones subject to rigorous tests. The trouble is, safety can be hard to judge. BIS must also press for better disclosure.

Poetic rescue saves one small firm

29 Jun 2009

Publisher Salt thought reader involvement would keep it from going insolvent. The campaign has gone viral, and staved off a spiral, but who knows what the resolve meant? Before it prevails, Salt needs more cash and sales, but it s still among heartwarming tales.

US energy bill’s distortions exceed its benefits

29 Jun 2009

The WaxmanMarkey bill passed Friday by the House produces no net revenue, imposes a leaky permits regime that will result in scams, mandates new Federal building codes and risks a trade war. It s also unlikely to reduce carbon emissions much. As a candidate, Obama knew better.

The best play on a US car rebound is on the radio

29 Jun 2009

Even with a June bounce, car sales are unsustainably low. Yet the purest play on a US recovery may not be a car or parts maker. It's Sirius XM Radio the entertainment company with a chequered history that nearly went bust a few months ago.

Madoff sentencing ends chapter in book of swindles

29 Jun 2009

The epic, however, will continue to expand. The conman s symbolic 150 years in jail may deter some fraudsters. But while Madoff s scam was undone by the financial crisis, the sorry tale won t do much to avoid another. It only underlines what everyone should have known already.

Areva sells crown jewel to pay for France’s bungle

29 Jun 2009

The French nuclear group is set to agree the sale of its highly profitable electrical transmission division. The disposal became unavoidable after the government dithered over supporting Areva s $12bn capex program. It s another black mark for French industrial policy.

Italcementi lenders pour cement on themselves

29 Jun 2009

Bondholders claimed the Italian cement group s buyout of minorities in Ciments Français meant rates should rise on $500m of debt. Rather than risk a court fight, Italcementi called off the deal. That leaves creditors with the same rates and less chance of getting better ones.

Downturn could spur overdue UK mobile merger

29 Jun 2009

Deutsche Telekom s subscale TMobile UK unit is on the block and has caught Vodafone s eye. For around £3bn, Vodafone could become the clear market leader if the regulator goes along. But its rivals would also benefit. Few players would mean higher profits.

Jackson’s genius couldn’t support his lifestyle

26 Jun 2009

By the end of his life, Michael Jackson s annual income was $19m a fair reward for one of the most popular singers ever. But he couldn t keep up with the $300500m of debts run up over decades of extravagance. Millionaires can find it harder to cut back than ordinary mortals.

UBS pot calls Jefferies kettle black

26 Jun 2009

The Swiss bank has accused the US broker of unlawfully poaching 36 healthcare bankers. Ironically, Jeffries is building its way into Wall Street s big leagues the same way UBS did. It even hired a former UBS bigshot who once called Jefferies a low quality firm.

UBS raises SFr3.8bn without drama

26 Jun 2009

The troubled Swiss bank easily placed equity with a handful of its top investors. That s right not a Swiss taxpayer in sight. UBS will make a Q2 loss, but mainly because its own debt is being marked up. While big challenges remain, the foundation of a recovery is now visible.

Spain’s conquistadores invade China – politely

26 Jun 2009

Santander s reported foray into rural Chinese banking show Spanish banks are still welcome in the Middle Kingdom. Relative financial strength and access to Latin America are two reasons. It also helps that Spain s politicians are willing to play the diplomatic game.

Dealmakers have nowhere to go but up

26 Jun 2009

Two years after the peak, it looks like global M&A troughed in the second quarter. Withdrawn deals are on the wane and crossborder activity is on the rise. Bankers can hope emerging markets take the place of fallen barbarians. But even if deals return, fees might not.

Russian bank bailout plan is price of past errors

26 Jun 2009

The Kremlin will rescue the country s banks, endangered by a tide of bad loans. It s paying for the credit crunch and the financial system s longstanding inefficiency and corruption. The plan can work, but only if banks come clean about the true state of their balance sheet.