Want a millionaire lifestyle? Go to a poor country 25 Jun 2008 Being a dollar millionaire in a rich country is worth a lot less than it used to be, thanks to grinding inflation. Falling asset prices don t help. But in developing countries, there are more fortunes to be made. And your money will go much further.
Halliburton rightly sent packing by UK courts 25 Jun 2008 The US oil services giant failed in an attempt to delay court approval for the sale of UK rival Expro to Umbrellastream a move that it hoped would allow it to reenter the fray. This was a clear attempt to circumvent UK Takeover Panel rules and the court was right to say no.
Carbon emissions projects ripe for ratings 25 Jun 2008 It s often cheaper to limit carbon emissions in poor countries than in rich ones. Yet many projects have disappointed, or worse, been scams. Independent watchdogs could provide a useful service to investors in these projects.
EU leaders should call Medvedev on his words 25 Jun 2008 Russia s new president has advocated strengthening the rule of law. This is exactly what the Russian economy needs. EU leaders are holding a twoday summit with Medvedev. They should ask him to do what he says. Whether he can deliver is the question.
Ireland’s recession a small post-miracle payback 25 Jun 2008 The Irish economy may contract this year. House prices are falling and government finances are in difficulty. That s tough, but will only erase a sliver of a generation s enormous improvement. Ireland s new challenge is to compete with other rich countries as a peer.
B&B should open its books to Resolution 25 Jun 2008 Most of the reasons B&B has given for not opening the books to Cowdery shouldn't be dealbreakers. The most valid concern is the certainty over Resolution s financing. But allowing due diligence is not the same as giving a recommendation and it might lead to a firmer offer.
UK short-selling rules could backfire 24 Jun 2008 Shortsellers usually keep their positions secret so they don t jeopardise their relationship with managements. But now the FSA has forced shorts out into the open, they are free to argue their case publicly. That s good news for price discovery, but bad news for the FSA.
Ratchets emerge dangerously in recent bank deals 24 Jun 2008 Capitalraisings by National City, Merrill Lynch and WaMu, among others, allow the retroactive repricing of shares if they raise additional cash. They have no lower price limit. This can be painfully dilutive to other shareholders, and could even turn into a death spiral.
US watchdogs don’t eat their cooking on ratings 24 Jun 2008 The SEC says money funds should be able to ignore credit ratings. They should do their own analysis. But even the Fed uses ratings. And many private investors aren t equipped to do indepth credit research. For now, regulators should focus on promoting competition among raters.
Anyone for a Hummer? 24 Jun 2008 General Motors is finally considering selling its gasguzzling equivalent of the Chelsea tractor. If Hummer is profitable, it could be worth as much as $600m. But with sales declining rapidly, GM should get shot of this pointless distraction no matter what the price.
The Fed’s call: flippers, financiers, or ‘flation? 24 Jun 2008 Bernanke et al aren t likely to dent fragile economic growth with a rate hike on Wednesday. But hints of what the Fed might do next will matter, especially the balance between propping up the economy, along with financial markets, and fighting commodityfueled inflation.
LSE left stranded by NYSE Euronext-Qatar deal 24 Jun 2008 The transAtlantic exchange will take a 25% stake in the Doha Securities Market to boost Qatar as a financial hub. The London Stock Exchange s unwritten agreement with the DSM is in tatters. More than ever, London looks to have missed the boat in global exchange consolidation.
Ore wars signal protectionist stand-off 24 Jun 2008 China s steel industry has effectively agreed to pay twice last year s price for its iron ore. It can afford to. But China will emerge more determined to hit the acquisition trail in an attempt to secure supply. Ugly protectionism is the likely result.
Cowdery should clarify plans for B&B 24 Jun 2008 The financier wants to arrange an alternative capitalraising for the troubled UK mortgage lender. The scheme would avoid a risky rights issue and promote banking consolidation. But questions remain not least how he can take effective control without making a full offer.
Nokia’s Symbian purchase swats Microsoft and Google 24 Jun 2008 The Finnish mobile giant will take control of the biggest smart phone software maker and offer its programs for free on an open source basis. This could make it harder for rival software groups to carve out a profitable niche in mobile.
BG wise to put squeeze on Origin Energy 24 Jun 2008 It makes sense for the UK gas firm to go hostile. The Australian target had originally given BG the comeon, which will make it tough to make an aggressive defence. The challenge will be to persuade both sets of shareholders that the $13bn deal makes sense.
Eurozone moves closer to inflation-led recession 23 Jun 2008 The latest surveys suggest minimal German economic growth, while France shrinks and Spain and Italy fall sharply. Rampant commodity inflation is making consumers poorer and businesses more cautious. The ECB won t try to support growth. It s set to raise interest rates in July.
Facebook’s taking a page from YouTube 23 Jun 2008 The social network has passed MySpace in global users and is rapidly expanding into new markets like China. Its growth strategy seems reminiscent of preGoogle YouTube build market dominance before building profit. But it seems to lack a similar endgame.
Don’t pity TPG’s underwater WaMu deal 23 Jun 2008 The buyout firm invested $2bn in the thrift at $8.75 a share. The stock is now at $6. That isn t as bad as it might seem. TPG has full antidilution protection if WaMu needs to raise more money. Shareholders should protest at tomorrow s meeting.
All-stock deals make unwelcome return 23 Jun 2008 Companies with overpriced stocks are often tempted to use it to buy cheaper competitors. Take Bunge s $4.4bn purchase of US agriculture group Corn Products. The deal looks slightly value destructive. So why do it? Well, Bunge s stock is up 50% over the past year.
What can Wall Street wring out of the bond insurers? 23 Jun 2008 Some underwriters of CDOs guaranteed by the battered monolines are negotiating to cancel the insurance. But how much should they demand to let insurers off the hook? Hard to say: the monoline guarantees have dropped in value, but the CDOs may be plunging too.
HBOS banks have options as rights crunch looms 23 Jun 2008 The UK lender will get its £4bn even if the shares settle below the subscription price. But a failed rights issue would unnerve savers and investors. Setting a new lower price would delay the issue, but underwriters could argue that is the lesser evil. The deadline is Thursday.
Crunch threatens UK even as sales goad the BoE 20 Jun 2008 UK retail sales reportedly boomed in May. But money growth, after some years of inflationgenerating laxity, is contracting sharply. Whether the central bank raises rates again or not, a bleak period lies ahead for growth, banks and public finances.
Shorting rules bungle has besmirched City 20 Jun 2008 The FSA is right to force the disclosure of short positions during rights issues. But the UK financial regulator made a hash of the rulesetting. It makes London look like an amateur market. The next step should be a proper consultation, and an end to rulemaking on a whim.
Underwriters out of the money on HBOS rights issue 20 Jun 2008 Think of the UK mortgage lender s £4bn rights issue as a put option. On the current share price, that put is worth £270m to HBOS way above the £160m underwriting fees. No wonder the FSA is so keen to prevent short selling, which would make the put even bigger.
Canadian court’s ruling keeps BCE on life support 20 Jun 2008 The Supreme Court ruling will allow the buyout of the Canadian giant to stagger on. But in some ways, it still marks the end of an era. The $52bn buyout was announced near the bitter finale of the LBO boom. Deals that big won't be seen again for years.
Founders need to know when to go 20 Jun 2008 Everyone has to go eventually. Monoliths like Microsoft afford their founders the stability for leisurely handovers. Smaller, fragile companies lack this luxury. Yahoo s implosion shows what can happen when a transition is mishandled.
UBS tax revelations add drama to crisis 20 Jun 2008 A former UBS private banker pleaded guilty to helping a client evade US taxes. It s not clear whether the Swiss bank was complicit or just had poor controls. Either way, the bad publicity adds pain to UBS's writedowns, layoffs and fund outflows.
UBS turns on clients in crunch strain breakdown 19 Jun 2008 The Swiss bank sued a highway services firm owned by Terra Firma and Deutsche Bank for blocking a sale of its buyout debt to infrastructure rivals. It s easy to see why borrowers balked even if courts ultimately disagree. The mess shows how badly relationships have unravelled.
Holier-than-thou CSX misses the point 19 Jun 2008 The US railway company is trying to fend off directors nominated by two activist hedge funds. RiskMetrics is now backing four of the dissidents five nominees. By slinging mud at the proxy adviser s analysis and judgment, CSX is again avoiding the real governance issue.