Europe needs a more sober approach to wine reform 6 Nov 2007 The Old Continent produces too much poor quality wine and is losing ground against New World rivals. The EU has some good ideas. But the best way to help the industry compete would be to let the market replace a quasimedieval business model.
King points finger at Darling over Rock 6 Nov 2007 The BoE boss says the Chancellor made final decision not to back a takeover by Lloyds TSB. Darling may be to blame for the fiasco but so was King and the FSA. It s hardly surprising that all three are trying to pass the buck.
Tchenguiz fails to turn bricks into gold 6 Nov 2007 The UK property whiz looks to be nursing a £180m loss after his Sainsbury adventure turned sour. That follows hard on his failure to clinch a property deal with Mitchells & Butlers. It's not just the financial hit that's painful. Tchenguiz's ability to pull off similar deals may be hampered after campfollowers also lost a packet.
UK property funds could escape the worst 6 Nov 2007 When German commercial property weakened in 2005, withdrawals from investment funds had to be blocked to stop a stampede for the exit. The UK property market is weakening, but funds aren't likely to need such extreme measures, thanks to more trustworthy valuations.
Grumpy old men keep creeping out of retirement 5 Nov 2007 Hank Greenberg is the latest deposed boss to rattle the cage of his former employer, AIG. Who s next? Sandy Weill? Jack Welch? It s easy to see why these former CEO superstars would want back in the game. Investors shouldn t hold their breath for a geriatric rescue.
Bischoff now most powerful Brit on Wall St 5 Nov 2007 The appointment of the former Schroders boss as Citi interim CEO makes him arguably the most influential Brit in global finance, if only for a short while. Not that Bischoff, born in Germany, is that British. But neither are many of the other candidates.
Bankers should take their cue from supermodel 5 Nov 2007 Gisele Bündchen earns a Wall Streetsized $30m a year. Make that E21m. The Brazilian beauty is reported to have demanded eurodenominated contracts. Wall Street stars and other international types would do well to mark their pay to this (super)model.
Dear Hank, please come to Citi 5 Nov 2007 Could Citigroup chairman Robert Rubin, formerly of Goldman Sachs and the US Treasury secretary, be thinking about persuading fellow Goldman alumnus and current Treasury boss Hank Paulson to replace Chuck Prince? If he was, this is what he might say.
Rubin shouldn’t be just interim chair at Citi 5 Nov 2007 It would be good for Citi s investors if the roles of chairman and CEO were split permanently. What s more, if Citi and Merrill lead the way, the trend could take off more widely on Wall St.
Chinese bubble has South Sea Company feel 5 Nov 2007 Why can PetroChina s market capitalisation climb to $1 trillion? Because the Chinese government limits the float and bans buying foreign shares. It is following the practices of the 1720 South Sea Company. They worked back then for a while but led to a 105year bear market.
Hollywood writers unlikely to get a happy ending 5 Nov 2007 The brains behind Hollywood s hits want more money. But they don t have much leverage. Stoppages are influential if the disruption cuts deep into an employer's business. But even a monthslong strike would take less than 1% off the industry's annual revenue.
Citi needs a plumber with a taste for dismantlement 4 Nov 2007 Chuck Prince took over amid regulatory tumult, but gave the impression he hadn t mastered Citi s complexity. The bank needs a confidenceinspiring leader unwedded to Sandy Weill s legacy of expansion, with an understanding of the waterworks of finance, like John Thain, and a willingness to take them apart.
Cheyne £101m payout shows poor timing 2 Nov 2007 Sure, it doesn t look good when a hedge fund pays fortunes to its staff shortly before investors in one of its funds are wiped out. But Cheyne is on safer ground than most. Its investors have generally done well; the losers have been bondholders who should have known the risks.
ACS founder is the problem, not its directors 2 Nov 2007 Five independent directors are to resign at ACS amid boardroom rancour and a withdrawn $6.2bn management buyout offer. They tried to run an auction, but the company is fraught with conflicts that are of the founder s doing. Shareholders should take it out on him.
Receding liquidity keeps shaking markets 2 Nov 2007 On Thursday it was the US stock market that felt the pain. But troubles are rotating credit, money and currency markets take their turn. The underlying problem is a global financial tidal change from ever more to ever less liquidity. It is leaving a lot of boats stranded.
Could US mortgage debacle cost $1 trillion? 2 Nov 2007 That s more than pessimists are talking about, but it s not impossible. Start with the market s expected 50% loss on subprime mortgages. Add in 30% losses on other unconventional loans, and an extra $100bn caused by falling house prices. The sum is a round trillion.
Japan’s GCA bets on better M&A market abroad 2 Nov 2007 Crossborder M&A activity between Japan and the US is booming. So it's natural for dealmakers on both sides of the Pacific to want a bigger piece of the action. But Japanese M&A boutique GCA's $780m purchase of Savvian looks like a case of GCA going overboard.
Corporate earnings games show a diseased system 2 Nov 2007 A study by consultants REL shows that US companies manipulate their fourth quarter earnings. Talk about shortterm thinking. But analysts and boards expect no less. The consultants suggest rolling 12month targets. But lower CEO pay and better job security would help more.
Google gangs up against Facebook 2 Nov 2007 The search giant s plan to capture social networking could be a game changer. By leveling the playing field with developers, it s backed Facebook into a corner. This is a battle of attrition the smaller company will find daunting.
World economy stalling as dollar spreads slowdown 2 Nov 2007 The hope has been that the world economy could shrug off housinginduced frailty in the US. But the precipitous slide in the dollar is bolstering US exports and spreading weakness elsewhere, especially in Europe. Global growth is stalling.
Two ways for Barclays to settle investor nerves 2 Nov 2007 The UK bank s shares have slumped 12% in two days on fears that Barcap is sitting on big undisclosed credit losses. So far Barclays' response has been unconvincing. It needs to come clean on its exposures; and CEO John Varley should be the one to do the talking.
Accountants face a sort of soft-drug dilemma 1 Nov 2007 No, it s not that the beancounters have been smoking something. It s a question of reported earnings the E in PE ratios. Academic accountants want prohibition, but users argue that regulation keeps these misleading numbers under some control. A black market would be worse.
US stockmarket gets credit fright 1 Nov 2007 Financials exposed to the credit crunch were particularly savaged during today s stock plunge. In light of mounting revelations of the extent of mortgage CDO losses and Citi s capital issues, that makes sense. What s curious is why it took so long.
Jimmy Cayne’s foibles spark up Wall Street 1 Nov 2007 The Bear Stearns boss was reported by the WSJ to have smoked pot while offduty at a bridge tournament. While it may have the industry atwitter, this would be no big deal on its own. But combined with his golfing and playing cards during the firm s crisis it raises questions about his overall judgement that Bear s board and its shareholders must consider.
Citi may be forced into a breakup 1 Nov 2007 The bank s board and CEO Chuck Prince have long resisted such a move, even though it would have unlocked value. But now they may have no choice. The bank s capital ratios look to be inadequate and that s before considering the $80bn in its SIVs and any further credit problems. If it comes to a firesale, Citi s board will have to put new management in place.
SatNav war destroys E3bn of value 1 Nov 2007 The bidding war between TomTom and Garmin for digital map provider Tele Atlas has sunk both suitors' shares by more than the total price they are expected to pay. That's not as illogical as it first seems. Because of the industry's dynamics, both winner and loser will get hurt.