BoE adds to doubts over UK 9 Jul 2009 The Bank has put back any pronouncement on quantitative easing until August. By adding to the UK s uncertainties, that is probably a mistake. The likelihood is that a weak economy will prompt the BoE to continue its moneyprinting policy. And that will bring heightened risks.
Citi tries to make nice-nice with its regulators 9 Jul 2009 The latest management shuffle brings Fleet s former president Gene McQuade in to run the core retail franchise answering critics of Vikram Pandit s lack of experience on that front. And the CFO who once called FDIC a tertiary regulator steps aside.
BAA still on a tightrope 9 Jul 2009 The UK airport group avoided a fire sale of Gatwick last week but the need for a quick sale remains. And even after BAA sells Gatwick, it will have to find extra cash to repay maturing debt. Shareholders, led by Ferrovial, could eventually be pressurised to put in more equity.
News Corp £1m gag claim raises awkward questions 9 Jul 2009 Rupert Murdoch has denied knowing that his newspapers coughed up to settle legal action over stories allegedly based on illegal reporting. If true, the claims pose difficult questions about who really runs News Corp. Murdoch s pervasive influence may even be at risk.
Indonesia hustles towards joining the Brics 9 Jul 2009 President Yudhoyono deserves his apparent reelection. He has done a sound economic job in a tough place. Indonesia's size and Islamic majority make it an intriguing potential addition to the quartet of Brazil, Russia, India and China. But corruption could be the sticking point.
Spy scandal puts Deutsche Bank bosses in hot seat 8 Jul 2009 The German lender has admitted to snooping on a former director and is still investigating other similar allegations. So far, it has handled this tricky affair well. But if similar espionage cases are any guide, the episode may hang over the top brass for some time.
Chinese settlement won’t end iron ore spat 8 Jul 2009 The resourcehungry nation might be ready to agree the same 33% cut in contract prices agreed elsewhere in Asia. But miners shouldn t expect China to stop fighting for lower prices. Price volatility is as old as the benchmark pricing system. China s determination is new.
China gambles trade relations with Rio spy row 8 Jul 2009 The arrest of Rio Tinto staff for alleged espionage risks being seen as retaliation for the miner's tough stance on ironore prices. Perceptions of heavyhanded, paranoid behaviour may reinforce economic sinophobia. China risks being viewed externally as another Russia.
G8 summits have outlived their purpose 8 Jul 2009 The meeting of the rich world s leaders in Italy should be the last. G8 summits have rarely produced anything of substance. With China and India missing, the group is now too small to do much. The G8 no longer serves a serious purpose. It should disband.
Meriwether demise would test investor forgiveness 8 Jul 2009 The legendary trader bounced back fairly promptly after his first venture, LongTerm Capital Management, went spectacularly bust in 1998. Now his latest hedge fund, JWM, may be closing. Investors might decide this second fall makes Meritwether untouchable. Don t bet on it.
Keeping hedge funds and private equity in check 8 Jul 2009 The EU wants to include hedge funds and private equity investments in its new system of financial regulation. The leading figures in those businesses aren t keen on the idea. Breakingviews.com writers debate this thorny issue.
Personal view: Pope offers healthy economic ideas 8 Jul 2009 It's easy to dismiss the Vatican's ideas on business as otherworldly. And it will be a while before broker notes discuss integral human development or the market's cultural configurations . But Edward Hadas argues that Benedict XVI's views deserve serious attention.
KKR/Bertelsmann music JV strikes the right note 8 Jul 2009 By joining forces, the buyout firm and media group can pounce on the choicest bits of the music business copyrights to artists songs. With the ructions of the recorded segment and the ownership of libraries like Michael Jackson s uncertain the timing looks impeccable.
UK plumps for regulatory fudge 8 Jul 2009 The old tripartite system for managing crises involving the Treasury, the BoE and the FSA is merely being retuned. And the government has deferred the question of how to prevent future bubbles. Unless momentum is maintained, it could end up wasting a good crisis.
Google goads Microsoft with operating system 8 Jul 2009 The search firm will take the software giant headon with a cheap alternative to Windows. Yet the operating system will only arrive in limited form by mid2010. Google s plan will be more effective at freaking out its rival than changing the software market.
UBS tax case now needs diplomats more than lawyers 8 Jul 2009 Switzerland says it will seize the bank s client information before it lets the US taxman get it. The threat raises the stakes in a looming court battle. The Swiss have made concessions on secrecy, but the US isn t relenting. It might be time for a US compromise.
Politics gets in way of UK bank regulatory reform 7 Jul 2009 A proper debate about the relative merits of returning bank oversight to the Bank of England or leaving it with the FSA is essential. But with a general election looming, the two options are too closely linked to the two main parties. That s a recipe for moralesapping inaction.
Rating boost would rightly reward Brazil’s strategy 7 Jul 2009 Moody s may bestow its investmentgrade blessing on the country, after similar upgrades by Fitch and S&P. That would reward Brazil s monetary and fiscal policies. It would also cement its status both as an example for other developing countries and as the best Bric investment.
US mobile crackdown promises iPhones for all 7 Jul 2009 That could be one result if antitrust investigations eliminate deals that restrict devices such as Apple s to one network. Mobile phone makers with hit products won t be happy. But the dominant network operators, Verizon Wireless and AT&T, have more to fear.
Riots may be deadly price of China’s growth 7 Jul 2009 Conflagrations that killed 156 people in Xinjiang had little to do with economic woes. Yet China s economic policy has everything to do with civil stability. Sadly, Beijing may not realise that the purblind pursuit of rapid growth makes unrest more likely.
Value of a Goldman education: three times salary 7 Jul 2009 That s what a hapless Russian computer programmer who allegedly tried to steal the firm s vaunted proptrading code was offered to defect. Nobody expects recruits to steal trade secrets, but the premium paid to leave Goldman suggests the expectation of some transfer of knowhow.
Private equity falls short of management boasts 7 Jul 2009 That s the conclusion of a new study that finds companies owned by buyout firms are about as likely to fail as nonbuyouts ignoring leverage. Add extra debt and companies are more likely to go under, of course. That s not a big endorsement for a struggling industry.
US efforts to vilify energy traders might backfire 7 Jul 2009 The new head of America s commodity markets regulator plans to hold hearings on whether the agency should limit the activities of traders to curb excessive speculation . But any rules born of such a simplistic view are likely to be harmful.
Second US stimulus may depress more than stimulate 7 Jul 2009 An Obama advisor warns of another big fiscal infusion. And the vice president says the US misjudged the downturn s severity. But stimulus must be financed somehow. Rising interest rates suggest the US is already taxing investor patience. Bigger deficits will send them packing.
Wall Street refuses to give up capacity 6 Jul 2009 Even when one investment bank flames out its embers spark new entrants that may someday also selfimmolate. In an echo of Barclays and Nomura s global ambitions with Lehman s detritus, Wells Fargo is giving Wachovia s alsoran securities arm a new lease on life.
In death, Jackson finds his financial way 6 Jul 2009 At the end of his life, the King of Pop was struggling to make his legend pay. But posterity is proving kinder. Jackson is set to join Elvis and the Beatles as a cashspewing cultural icon. Stars, unlike businessmen, can be more valuable when they leave the stage.
Securitisation market needs the right shackles 6 Jul 2009 As markets recover, the bogeyman of the credit crunch will return. Regulators should resist the urge to strangle any revival at birth. They should instead insist on two things: that buyers know what they re doing; and that banks aren t just dodging their capital requirements.
UBS looks stuck with old Paine Webber for now 6 Jul 2009 Attempts to sell the US brokerage seem to have faltered. Thanks to merging rivals, its competitive position has deteriorated and it lags UBS s core wealth management arm. New bosses are on the way. Their one aim should be to dress up the business for some potential future buyer.
World wrestles with personal information overload 6 Jul 2009 A UK company s shares plunged 40% after an internet provider pulled its targeted advertising platform. Privacyrights groups were delighted. But the twoway flow of internet information is too attractive for advertisers just to walk away. Selfregulation may be the answer.
Ford should raise more equity 6 Jul 2009 The carmaker has avoided a governmentfunded bankruptcy and is winning market share. But it remains highly leveraged whereas rival General Motors, after its quick bankruptcy sale, now has a light debt load. Selling shares would be dilutive, but would help Ford stay competitive.