US Senate passes Tarp with side of sausage 2 Oct 2008 After the shock rejection of Paulson s $700bn bailout, the wide Senate majority offers some succour to investors craving action. But the House could still say no again. The bill is weighed down with a barrel of pork and last week s rescues show other solutions are possible.
M&S showcases woes facing UK retail 2 Oct 2008 The retailer s results were less horrible than feared, but the whole sector is looking at the worst Christmas since the 1970s. Highend food and midmarket clothing are especially squeezed. Stores will rush downmarket. But tighter consumer budgets always mean retail pain.
Europe must allay bank deposit protection fears 2 Oct 2008 Savers are nervous. Separate government actions to safeguard deposits can cause capital flight and curb competition. The immediate solution is for Europe s leaders to declare that deposits are safe.
Crisis calls for deposit guarantees 1 Oct 2008 Right now, even the whiff of a suggestion that deposits aren t rock solid can lead to a run on a bank. US and British authorities need to stop dithering and follow the Irish and French by guaranteeing virtually all deposits, argue Hugo Dixon and Rob Cox.
GE’s infusion doesn’t address structural problem 1 Oct 2008 The $15bn, including $3bn from Warren Buffett, puts to rest any liquidity concerns following its last profit warning. But investors are still left with a blackbox attached to an industrial group. The capital should be used to shore up GE Capital in advance of a divorce.
BSkyB gets off lightly where it counts 1 Oct 2008 It could have been a terrible week for the British satellite broadcaster, but it didn t turn out too badly. Sure, it has been told to reduce its 17.9% stake in rival ITV. But Sky is only being asked not forced to give rivals better access to its most valuable content.
Limit stock exchange closings to disasters 1 Oct 2008 Russia closed its stock exchange three times in recent weeks to stem price declines. That s not seriously out of line the NYSE has circuitbreakers too. But they should be used sparingly. Price discovery needs to be as continuous as possible for markets to adjust.
RBS struggles to ward off naysayers 1 Oct 2008 The Fortis rescue and Irish deposit guarantees have spooked shareholders. CDS spreads have also widened. On the other hand, RBS says depositors are moving money its way, and the UK may give more help to the industry. But there s still more that RBS can do for itself.
Europe doesn’t need a common bank bail-out fund 1 Oct 2008 French president Nicolas Sarkozy is trying to rally his EU colleagues around a unified response to the financial crisis. The approach is welcome, but some of his ideas aren t practical and others outright dangerous.
Olivant’s woes show need for stock ownership reform 1 Oct 2008 The activist investor thought it owned a 2.78% stake in UBS. But it was lodged with Lehman Brothers, and now can t be found. Olivant can t vote the shares. Others are likely to face similar problems. The rules should be tightened up.
How can Gordon Brown save HBOS deal? 1 Oct 2008 The UK PM is desperate for Lloyds purchase of the wobbly lender to go ahead. But he s only planning to raise deposit guarantees to £50,000. That could be too little too late. Temporarily scrapping the cap would be a better solution, not just for HBOS but for the whole industry.
Fat finger fiascos flourish in volatile markets 1 Oct 2008 Google s stock swung $200 per share in minutes yesterday due to erroneous orders . Such errors can be expected in small and illiquid stocks. But automated strategies now direct huge pools of money. Throw in market panic, and problems can beset even market giants.
Failed $12.8bn road deal bodes ill for US infrastructure 1 Oct 2008 Thanks to dithering by Pennsylvania s lawmakers, the $12.8bn offer by Spain s Abertis and Citi to operate the state's Turnpike has slipped away. The fact they couldn t even muster a vote on this pot of gold could present problems for other US infrastructure deals.
MIG’s firepower likely to spark Greek bank mergers 1 Oct 2008 The Athenslisted buyout group has wellheeled backers, banking experience and is targeting a segmented market. Raising a fresh E5bn could get the M&A ball rolling fast.
Mark-to-market accounting shouldn’t be scapegoated 1 Oct 2008 Authorities on both sides of the Atlantic don t want banks to have to recognise losses so quickly. This won t reassure investors, any more than the shortselling ban did. Clarity, and the rapid recapitalisation of banks with weak balance sheets, is needed not obfuscation.
Buffett’s investments aren’t regular stock tips 1 Oct 2008 Sure, the legendary investor's multibillion dollar bets on Goldman Sachs and General Electric are good for sentiment around those companies and generally. But Buffett's deals earn 10% every year even if the companies' common stock never gains much.