The U.S. power company once tried to buy Enron and eventually went bust after a spat with activist Carl Icahn. Two years out of bankruptcy, Dynegy is roughly doubling its business with two deals. They look sensible, but the lesson from the past is to avoid getting carried away.
Euro zone inflation is moribund. Investors are increasingly doubting Mario Draghi’s ability to boost it, according to normally quiescent market signals. That’s quite right, given how ineffectively monetary policymakers are addressing the problem.
Regulators are using the obscure law with longer deadlines to extract hefty penalties, including a record $16.7 bln from BofA. Even Countrywide’s Angelo Mozilo seems in their grasp. Aggrieved investors may be appreciative but it’s a dubious way to make up for a missed crackdown.
When they talk in Jackson Hole, central bankers will undoubtedly fret about prices. It’s a waste of time. Inflation and deflation rates are too low and stable to be a threat. The monetary authorities have more important worries: debt, reserves and managing rate rises.
The German semiconductor company is paying a rich 48 pct premium to snap up International Rectifier. The fit is complementary: its U.S. peer’s strength is chips that consume less power than the typical Infineon product. But top-notch execution is required.
Bank of Communications’ goal of compensating staff with shares sounds like progress. But as long as China’s lenders are state pawns, it’s unlikely that bosses will have much influence over valuations. At worst, dysfunctional banks with glum management could be the unhappy result.
Carl Icahn is the latest to buy into the struggling $14 bln car rental firm. Over nearly a century, automakers GM and Ford, an airline, a 1960s conglomerate, private equity and the public have owned Hertz. It’s a perennial investor plaything. Maybe Uber could even be next.
The private equity firm’s latest securitisation would normally require it to keep 5 percent of the risk. But Blackstone has found a way to outsource its equity sliver to other investors. The structure looks acceptable – but investors should be wary of copycats that might not be.
The dominant Chinese operator is using its $73 bln cash pile to hunt for growth overseas. The strategy has failed to create value for other telcos. Expansion may help to push Chinese technology, but rival governments may be wary about allowing China Mobile to take control.