Eos crash shows flawed flying model 28 Apr 2008 Before fuel prices rocketed and the banking business turned down, startup discount allbusiness class airlines may have had a chance. In tougher times, they are falling. Eos is the latest to run out of cash and backers. Bigger airlines are more suited for this niche product.
HBOS shows too many signs of governance failures 28 Apr 2008 The UK bank's cash call follows some pretty glaring errors in its treasury operations, wholesale funding, investments and a retail bank cock up. It raises questions about having a former retailer, Andy Hornby, as CEO and a board without much independent banking expertise.
Shareholders should make Nomura focus on Japan 25 Apr 2008 The brokerage's quarterly loss is the second in six months caused by its US operations. Ventures overseas have cost it dearly. Nomura should be a gold mine in Japan but now it's in danger of losing its domestic dominance. It should stop pouring money down foreign ratholes.
Buyout titans’ interest in banks may accelerate 25 Apr 2008 TPG, which recently invested $2bn in Washington Mutual, is discussing ties with Merrill Lynch too. Other big buyout groups are sniffing around financial firms but most have so far decided against pulling the trigger. They may not be on the sidelines for long.
Ericsson’s good news is relative 25 Apr 2008 Investors had low hopes for the Swedish telecom equipment maker s Q1. Ericsson beat expectations, and the shares have jumped. Yet they re still worth half what they were before last year s profitwarning, and there are plenty of reasons for caution.
Deripaska’s ambition inches forward 25 Apr 2008 Rusal, the Russian tycoon's aluminium company, has secured a 25% stake in fellow miner Norilsk, thanks to a spat between two other oligarchs. That's a small triumph. But Oleg Deripaska is still far from achieving mastery over Russia's huge metal and mining industry.
China struggles to fine-tune stock market bubble 25 Apr 2008 Beijing was unhappy when the Shanghai market went mad on the upside in 2007. Now the government wants to stop prices from falling too far or too fast. Managing asset prices isn t easy just ask the Fed. Do Chinese authorities secretly long for the days of total central planning?
Rare SEC success brings only slap on wrist 24 Apr 2008 The US regulator finally got some sort of win on market manipulation charges. It has been promising to crack down. But it only wrung some $150,000 out of the shortseller whose alleged rumourmongering temporarily erased $1bn of value. That may not be enough of a deterrent.
Leveraged loan sales highlight banks’ predicament 24 Apr 2008 Deutsche is unloading some $5bn of loans by lending to the buyers at a belowmarket interest rate. TDC is taking advantage of low debt prices by buying its own loans at a discount instead of paying them down at par. Lenders are paying now for their earlier credit exuberance.
DT shouldn’t be allowed to control OTE on the cheap 24 Apr 2008 The German telecom group is trying to cut a cosy deal with the Greek government that would allow it to take control of the former Hellenic monopoly with just 25% of shares. Once again political meddling threatens to deprive OTE minorities of the full value of their shares.
Ford’s credit edges ahead of GM’s 24 Apr 2008 The number two US car maker's surprise profit echoed the credit markets' view: For the first time in nearly two years, Ford CDS spreads have in recent days traded below GM's. Neither company is out of the woods. But Ford boss Alan Mulally is earning some credibility.
Financial woes finally hurting eurozone industry 24 Apr 2008 Producers like Peugeot are still prospering, but the latest surveys suggest a eurozone slowdown is imminent. The high euro is finally starting to bite the export trade, even in highly competitive Germany. With inflation out of control, the ECB won t provide rate cut relief.
Paraguay’s free energy offer is neat marketing 24 Apr 2008 The country's presidentelect, Fernando Lugo, is offering free electricity to foreign investors. That makes sense economically and suggests he welcomes the outside world. With energy prices high, it's also a clever marketing pitch to take to potential investors.
Reality mugs overoptimistic UK house builders 24 Apr 2008 The likes of Persimmon and Barratt hoped that a housing market rebound in the second half of the year would save them. But the latest news suggests things could get a lot worse before they get better. If house prices really tank, it may not just be banks which need rights issues.
Credit Suisse bites SFr5.3bn bullet 24 Apr 2008 The Swiss bank has reported its first quarterly loss since the credit crunch began. That s down in part to a firesale of risky leveraged loans and subprime assets. It s a shame CS didn t act before, when prices were higher. But at least the bank has kept a decent capital ratio.
UK shouldn’t be spooked by overseas tax exodus 24 Apr 2008 A string of UK companies including Shire, United Business Media and WPP are up in arms about proposals for taxing foreign income. The proposals clearly need more work. But their broad thrust is right and should create more winners than losers.
Gazprom muscles in on TNK-BP 24 Apr 2008 The Russian shareholders of TNKBP, the oil producer, may be giving in. Vedomosti, the Russian daily, has reported that Gazprom, the Russian energy colossus, could buy them out by the end of the year. It only took heavy pressure from the Kremlin and a police raid on the company.
Peltz wins control of Wendy’s – at a price 24 Apr 2008 It s not that the restaurant raider is paying a really juicy price for the burger chain. At $27 a share, or $2.3bn, it comes well below the $41 that Peltz once suggested he d pay. But in swapping Triarc shares for Wendy s, Peltz has had to cede his supercharged voting rights.
Silver loses some speculative sparkle 24 Apr 2008 The £4bn listing of Fresnillo, a Mexican miner, squeaked through at the bottom of its price range after silver prices fell sharply. The precious metal is a quirky reminder that speculative fever can cool almost as quickly as it ignites.
Could Ambac’s stock ever pay off? 23 Apr 2008 The bond insurer s volatile shares plummeted nearly 40% after it revealed its latest big losses. Its executives admit there s no way to tell if the worst is past. So its stock is trading more or less like an option. A lot of stars have to align for that bet to pay off.
Are Moody’s margins still too fat? 23 Apr 2008 The rating agency s lucrative business during the structured finance boom delivered 50%plus operating margins. They have now deflated, but only to a stillhealthy 46% in the first quarter. With plenty of fallout still to come, it could be hard to stop them falling further.
Policy-makers divide as UK heads down US road 23 Apr 2008 The minutes of the Bank of England s April meeting show policymakers split three ways. Meanwhile the Chancellor, Alistair Darling, is unwisely trying to persuade banks to pass on rate cuts. The UK s road is unhappy, and policymakers unsure.
Brown’s credibility is further shredded 23 Apr 2008 The UK PM's climbdown in the 10p tax row buys him time. But the episode has reinforced questions about this proclaimed conviction politician's ability to stick the course. At a time of economic crisis, that is really damaging.
UBS gets half marks on strategy and governance 23 Apr 2008 Plans to slim down the investment bank will cut risk, but they could end up falling between two stools. And the governance revamp still doesn t go far enough, though it s clearly an improvement on the old regime.
Korea’s chaebols should restructure like Samsung 23 Apr 2008 It is right to revamp itself following its chairman's resignation. Its governance structure reflects Korea s former capital scarcity. While the government s threat to the chaebol has lessened, in a capitalrich Korea they should voluntarily decentralise to maximise value.
Has Craigslist found capitalism? 23 Apr 2008 Its avowed noncommercial business model has decimated everything from newspapers to dating services. A lawsuit by Ebay, however, hints that the firm may be thinking like a capitalist. If so, rivals might have reason to rejoice.
Banks’ preferred issues are no boon for buyers 23 Apr 2008 Capitalstrapped banks have both regulatory and financial reasons to issue preferred stock. But investors should think twice before clamouring to buy an instrument that bundles some of the worst aspects of bonds and stock with few of their advantages.
Bank of England gives less away than the Fed 22 Apr 2008 The Bank of England s new programme allowing banks to swap assetbacked securities for government bonds is similar to one of the US Fed s liquidity schemes. There are some important differences, but broadly speaking, the BoE is being less generous than the Fed. That s wise.
RBS flunks board test 22 Apr 2008 The UK bank s giant £12bn rights issue will put it on a firmer capital footing, with a 6% equity tier one ratio. Its UK peers will be under pressure to follow suit. But the bank is only tweaking the board that got it into this mess.
Cloning set to become an investment opportunity 22 Apr 2008 Cloning seven sniffer dogs for Korea's Customs Service cost only $300,000. That's near commercial viability for animals with special characteristics, as well as millionaires' pets. Cloning could soon become a lucrative business.