Korea elects investor-friendly president 14 Dec 2007 Lee Myungbak won an emphatic victory on December 19. His Grand National Party is traditionally probusiness. His likely policies: deregulation, tax cuts and a new canal, as well as ending antichaebol regulations. The stock market seems ripe for rerating.
Dithering Darling should scrap CGT reform 14 Dec 2007 The UK Chancellor has made a pig s ear of his attempt to reform capital gains tax and the latest delay to revealing his final proposals only compounds the mess. At a time of financial stress, business needs clarity on tax. If Darling can t deliver, he should back down.
After his U-turn, King heads the right way 14 Dec 2007 The Governor of the Bank of England has been weakened by his policy Uturn. But his proposals now are sound. King denies a turf war with the Treasury. The government should listen to his ideas to strengthen the UK s financial architecture.
Rentokil slump shows danger of past success 13 Dec 2007 Shares of the support services firm fell 22% after a fourth quarter profits warning. Problems in parcel delivery were the trigger. But this falling star continues to drop. Investors have now given up their last shreds of confidence that the company can provide defensive growth.
Merrill vents on Sports Direct, at last 13 Dec 2007 The investment bank s retail analyst finally said aloud what many inside the bank have no doubt been thinking about the UK retailer. His sell rating won t undo the damage from being associated with the disastrous IPO, but sometimes a holler just feels good.
Credit crunch vindicates GE model 13 Dec 2007 Investors yawned at Jeff Immelt's forecast of 10% EPS growth in 2008. But with the prospect of recession ahead and continuing uncertainty in credit markets, that might be a pretty good performance. And it may vindicate GE's diversified portfolio.
Green muck could fuel your car 13 Dec 2007 The ethanol industry turns cheap food into expensive fuel. It isn t particularly effective at fighting global warming either. Icky algae is far more effective at turning sunlight into energy. All it needs is some power plant emissions and a bit of technological progress.
Dow makes first, easy step toward transformation 13 Dec 2007 The US chemical group gets $9.5bn for putting most of its struggling basic plastics group into a 50/50 joint venture with Kuwait. Basic chemicals, in even worse shape, still needs a fix. Even after the Kuwait deal, more than half Dow s revenues will be under pressure.
Alitalia isn’t worth much after all 13 Dec 2007 Air France has offered just E240m for the government s stake in the Italian airline half its last quoted value. At least that beats rival bidder Air One, which bid close to zero. The Prodi government has only itself to blame for turning the auction into a farce.
Telecoms’ hefty fibre investments paying off 13 Dec 2007 Investors are starting to realise telecoms' multibillion dollar investments in highspeed fibre optic networks might be a good idea. Verizon and AT&T, which are furthest along in their rollouts, are pummelling their cable competition. It s about to get far worse.
Does Dick Fuld deserve his bumper pay package? 13 Dec 2007 The Lehman chief Wall Street s longestserving looked overpaid in 2006. But this year he largely steered the firm clear of the woes that humbled many rivals. And Lehman s still expanding to boot. True, $50m still looks punchy, but it s hard to argue with his performance.
Rewriting history, for immortality’s sake 13 Dec 2007 Alan Greenspan and Sandy Weill are worried about their legacies. Rightly so. The dangerous implications of their past decisions are becoming all too clear. But as retirees albeit influential ones they can't do much more than offer a bit of revisionist history.
Liquidity drive is regrettable – but necessary 13 Dec 2007 The coordinated global effort to keep money markets open for business courts moral hazard and creates the groundwork for future inflation. But it is preferable to a shambolic freezeup. Unfortunately, the authorities may have to do more to counter the banks flight from risk.
The time is now for Northern Rock 13 Dec 2007 The stricken UK lender s board won t decide its fate until February. That s too long for suitor Luqman Arnold. Why should he wait or anyone else, for that matter? Uncertainty is toxic for shareholders, depositors and taxpayers alike. UK authorities can end it, and should.
Lufthansa gets to first base with JetBlue 13 Dec 2007 The German airline s $300m investment in the lowcost US carrier gives JetBlue a muchneeded infusion of cash. It's a relative snip for Lufthansa, at a historically low price. But even if it works as a financial investment, it's unlikely to stay that way for long.
Edwards converts to old-time populism 12 Dec 2007 John Kerry s former running mate is economically left of other Democrats. He will close the US payments deficit through trade and energy policy, return capital gains taxes to 28% and increase the top marginal tax rate over 50%. Economically risky, but you know where he stands.
Giuliani offers a muscular alternative 12 Dec 2007 The former NY mayor s record and policies offer tight spending controls and fiscal discipline. His ideas on health and education also sound cheap and effective. His temperament and foreign policy views could however damage his economic record through international adventurism.
Social networking gets a jolt of reality 12 Dec 2007 Classmates Media has canned its IPO. The flotation had little chance. After all, the company wasn't really a social network. But it did claim to be and others in the sector should take note. If sanity has set in, the valuations of real social networks could be headed lower.
Obama’s fiscal ideas move beyond class warfare 12 Dec 2007 While left of Clinton on Iraq, on economics the Illinois senator is more centrist; his healthcare mandate would be universal only for children. He believes in targeting government and business fraud, and directing tax relief to those who have benefited least economically.
Fed’s loan auctions limited, useful and risky 12 Dec 2007 Teaming with Europe and Canada to offer loans at rates that should beat Libor could tide banks over. But the moves are too small to solve interbank liquidity problems. And a bank facing an unexpected crisis might mop up the loans, engineering a de facto Fed bailout.
Axel Springer back to square one 12 Dec 2007 The German publisher s efforts to diversify have been a disaster. Potential losses from its failed Pin postal venture look to have forced a cheap sale of its 12% stake in broadcaster ProsiebenSat. After five years, Springer chief Mathias Doepfner is back to where he started.
China may be close to a credit crunch 12 Dec 2007 Retail sales were up 18.8% in the year to November, suggesting the Chinese savings rate may be declining. That could spell trouble for banks, which need those savings to finance rapidly expanding lending. With the central bank draining liquidity, money may tighten fast.
Sell-off sweetens Starbucks’ rich valuation 12 Dec 2007 A combination of higher commodity prices, stiff competition and analyst downgrades has been a bitter brew for Starbucks' shareholders. The coffee chain has lost 40% of its value this year. But the selloff has made its stillrobust valuation a bit easier to swallow.
McCain is economically the root-canal candidate 12 Dec 2007 The Arizona senator is likely to increase taxes, particularly through capandtrade emission permit sales and reduce domestic spending, particularly on healthcare. He wants to reduce the deficit while maintaining a strong security posture. Fiscal conservatives, here s your man!
Hedge funds face financing squeeze in 2008 12 Dec 2007 Most hedge funds managed to survive the credit crunch in 2007 in reasonable shape. But next year will be much tougher as prime brokers scale back cheap funding. The answer is to secure longerterm financing but for many it may already be too late.
Romney tells primary voters what they want to hear 12 Dec 2007 The former Massachusetts governor s economic proposals form a Conservative wishlist. However he s changed his views before; in Massachusetts he failed to restrain spending and instituted a universal healthcare mandate. Also, his best ideas seem very unlikely to pass Congress.
Fannie Mae and Freddie Mac should be privatised 12 Dec 2007 The US mortgage giants have outlived their public usefulness. They ve also proved themselves no more prudent than competitivelydisadvantaged freemarket rivals. Their subsidies should go, and they should be left to live or die on level terms with other financial institutions.
Hillary is not just another Clinton 12 Dec 2007 The former first lady and NY senator seeks to appeal both to the left and to fans of her husband s administration, which risks obfuscating her precise positions. However she s well to the left of her husband on trade, taxation, fiscal management, healthcare and the environment.
LBO IPOs get boost – just when needed 12 Dec 2007 Fresh data shows European privateequity backed IPOs outperform other floats contravening conventional wisdom. One can quibble with the result. But as the credit crunch forces private equity to tap public markets for exits, this shot in the arm couldn t come at a better time.
Fred Thompson’s arithmetic doesn’t add up 12 Dec 2007 The former legislator and Law and Order actor s spending plans differ little from current policy. However his tax plan would yield far less revenue than the current code, because it gives a calculation option to the taxpayer.