Geithner should communicate like Buffett 2 Mar 2009 The US Treasury secretary needs to be held accountable by taxpayers for using their money to subsidise AIG, Citi and the rest. Fielding questions on conference calls would seem an impossible logistical task. However, the Sage of Omaha may have a way forward.
Private equity pays for its sins 2 Mar 2009 Candover s layers of leverage have forced it to back out of its latest fund, sack staff and cut asset values by 50%. Terra Firma s hubristic EMI buy is wiping out five years of the firm's fees and causing a E1.3bn impairment. Both firms seek absolution one may not get it.
US to stump up more for expanding AIG black hole 2 Mar 2009 The struggling insurer reported a $61.7bn loss, the largest ever. US authorities aren t going to repeat the Lehman experiment with letting a key institution fail, so more losses just mean more taxpayer support. This collapse is still being badly managed.
AIG’s PR army could irk taxpayers 2 Mar 2009 The allbutbankrupt insurance giant employs four public relations firms. Private jets, golf days and lobbying are out for recipients of government rescue funds. Some taxpayers and their representatives in Congress could see PR in the same category.
PC makers face long-term decline 2 Mar 2009 The number of PCs sold this year may fall 12% according to a new estimate, and prices are tumbling. Worse still, virtualisation and the rise of ultracheap models mean PC makers' problems won t lift when the economy recovers.
BofA might need to match Citi’s $50bn equity swap 2 Mar 2009 That would put its common equity ratio on a par with its rival s. Sure, BofA has a bigger cushion against losses. But it also has a larger balance sheet, meaning, despite boss Ken Lewis s protestations to the contrary, BofA may have to follow Citi s ignominious lead yet again.
HSBC’s $18bn cash-call defensive, not offensive 2 Mar 2009 The lender suggests that its $17.7bn rights issue will help it make opportunistic acquisitions. But the cashcall should be seen mainly as plugging holes, current and future. HSBC s latest results show deterioration in the US and, worryingly, in the bank s Asian growth engine.
AIG’s toxic spill still isn’t contained 2 Mar 2009 The insurance giant got less onerous terms on its bailout package and is hiving off businesses. But even as it tries to wind down bad assets, its plans for isolating the financial products division the main source of its $99bn loss in 2008 are still clear as mud.
US stocks are cheap – if the economy isn’t broken 2 Mar 2009 With the Dow below 7,000, the market is cheap relative to its early1995 valuation adjusted for changes in nominal GDP if the prospects for growth are as good as then. But a stimulusinduced return of inflation or crowding out of investment would change the picture.
China bondholders get lesson in crisis capitalism 2 Mar 2009 The government is backing a cash boost to Asia Aluminium but only if the troubled metals group buys back its offshore bonds at a pittance. Such rough treatment could deter foreign investors into Chinese firms. But with the economy slowing, the authorities may not care.
Capital hike turns HSBC from canary to parrot 1 Mar 2009 Two years ago, the UKlisted bank s woes were an early sign of the subprime crisis. Now, it is set to raise £12bn. HSBC is strong enough to get the money without state help. But the need to follow the capitalraising crowd suggests the crisis has entered an ugly new phase.