Liquidity drought could save venture capital 6 Jul 2009 New data show VCbacked liquidity fell 80% over the past two years. That s starving all save the bestconnected, like Netscape founder Marc Andreessen, who just raised $300m. Ironically, this thinning of the ranks is just what the VC industry needs.
Derivatives exchange rules may tip US/Europe scale 6 Jul 2009 The EC and the US Treasury are pushing new regulations for unlisted products. Both are being cagey about whether they ll force these derivatives onto exchanges. If they do they must coordinate their rulemaking carefully to avoid a flurry of jurisdiction shopping.
India’s budget stores up trouble 6 Jul 2009 It's hardly alone in spending to stave off decline while promising discipline later. But the budget misses reform opportunities and will strain India s reserves and credit. With a 1980s retread finance minister, there's a risk of a return to statist policies and low growth.
G8 can weep together, or fight together 6 Jul 2009 The rich country leaders who will gather in Italy this week all face the same hardships financial meltdown, crippled economies, risky bailout plans and widening deficits. They could simply commiserate. Better to listen to the rest of the world and fight off protectionism.
Rogue trader exposes fickle oil market 3 Jul 2009 How can a small trader drive up the price of a barrel of crude by $2.50 in under an hour? By putting a big bet on oil futures in the early morning. The market proved easy to move. At least traders PMV didn't lose much in unwinding the trade.
European airlines could be next to raise capital 3 Jul 2009 Air France has already tapped the market. Lufthansa and British Airways could follow. Both will struggle to finance capital expenditure programmes organically, and their debt capacity may soon be exhausted. Something has to give.
Subprime victims may have found their whipping boy 3 Jul 2009 Stefan Ortseifen won't get investors blood boiling like a Bernie Madoff. But the exCEO of Germany s IKB is the first big bank boss to face jail time on charges linked to a lender s collapse. His name doesn't have world recognition. But he may have to do as subprime s bad boy.
Where is Anglo’s Cynthia Carroll? 3 Jul 2009 The South African miner s CEO might be expected to lead the opposition against Xstrata s hostile stalking. But she has been strikingly absent from the public eye. With Carroll under a cloud even before the proposal, silence is a peculiar defence tactic.
China pushes envelope for oil 3 Jul 2009 First Iraq, now Argentina. Chinese energy groups are hunting for oil in risky places. That s good for countries with resources to sell. But it s unwelcome competition for the oil majors. At least in Argentina, a deal for Repsol s assets could make sense for all sides.
Do US bank regulators want private equity capital? 3 Jul 2009 It's clear the system needs it. And private equity wants to provide it. But FDIC s latest proposals for allowing LBO firms to dive in look too restrictive. Compromise will be necessary for the two sides ever to meet.
Dexia mostly out of monoline woods 2 Jul 2009 The BelgianFrench bank has closed the sale of FSA, its troubled US monoline insurer, for $817m. Dexia is keeping FSA s $17bn portfolio of toxic assets. But after losing E3.2bn last year, the bank is making money in the first half. Cautious confidence in its future is justified.
German tinkering doesn’t fix sputtering bad bank 2 Jul 2009 Banks will now be allowed to use older valuations when shifting toxic assets off their balance sheets. Investors got excited, hoping the new rules would create extra capital for the likes of Commerzbank. But that doesn t look likely. The banks still have all the risk.
Another story of regret involving Lear 2 Jul 2009 No, not Shakespeare's play the US car parts maker s bankruptcy. Shareholders will probably get nothing, after turning down a generous offer from Carl Icahn two years ago. They thought Lear's CEO had a sweet deal; but next time they should know to focus on what they are getting.
Italy’s wage rises don’t belong in the eurozone 2 Jul 2009 The folks in Rome don t seem to know about the recession. The wages of Italian government workers are up 7%. That s worse than a joke. For Italy to stay in the rigid eurozone, it has to learn selfcontrol. That means wage cuts when necessary. Now is the right time to start.
UK’s off-balance-sheet liabilities crash home 2 Jul 2009 The government has renationalised a failing rail franchise, sold in a flawed auction, while delaying the partprivatisation of the useless postal service. Both moves reflect current economic reality and past bad policy. The pressure on public finances is only going to intensify.
US payroll data suggest recession is worsening 2 Jul 2009 June s job losses were greater than those of any month of the 200102, 199091 or 198082 recessions. Even discounting possible noise , this shows the recession is not yet bottoming. Stocks, budget estimates and bank stress test assumptions may all have been too optimistic.
Morgan Stanley coming out on top in Mitsubishi JV 1 Jul 2009 So far, the Wall Street firm is getting the better deal from the tieup: $9bn of capital and access to the Japanese bank s balance sheet. Sure, Mitsubishi s in the money with its investment and needs to put deposits to work. But does it want to be a junior partner forever?
Bischoff is unimaginative pick for Lloyds chairman 1 Jul 2009 The UK bank needs a tough cookie to lead its board a candidate untainted by the crisis who can defend its interest amid intense EU scrutiny. The name in the frame exCiti chair Win Bischoff is certainly high profile. But a better candidate may be someone more upandcoming.
Junk-rated borrowers flex their muscles 1 Jul 2009 Lenders are supposed to be calling the shots these days. But some borrowers are using the spectre of the $460bn of loans that mature between 2011 and 2014 to get creditors to agree to new terms that may not always be in their best interests. Dwight Cass explains.
US consumer watchdog will have stretchable leash 1 Jul 2009 Obama s proposed Consumer Finance Protection Agency won t have the broad, unchecked power that bankers feared. But it could still make their lives difficult, especially if the president appoints antiWall Street militants to the board. That s a significant risk.
Evercore shouldn’t get greedy with GM 1 Jul 2009 The boutique is asking for a $15m success fee for its advice to the bankrupt carmaker. That s on top of some $24m GM already paid. But the bankruptcy overseer has reasonable objections. The government did most of the legwork typically left to an advisor.
Equity buyers should hope for duller times 1 Jul 2009 The last quarter was exciting in a good way the best gains for equities in two decades. A solid recovery is now priced in. But if the crisis takes another lurch downwards, it is likely to do so dramatically. Even the wall of cheap money would struggle to absorb the shock.
Online skirmishes pave way for US sales tax war 1 Jul 2009 Virtual retailers Amazon.com and Overstock.com are scaling back in states that demand they collect sales tax on some purchases. While this won t dent their revenues much, it foreshadows a larger clash over taxing internet commerce. Cashstrapped states are firing the first shots.
Goldman laments life on the cover of Rolling Stone 1 Jul 2009 The firm tried ignoring the glossy s shrill case that it caused all kinds of plagues, including the housing crisis. But now, in reacting, Goldman sounds too dismissive. Sure, it isn t pulling every string. But it s powerful and makes tons of money and mistakes. It s fair game.
M&S’s better trading doesn’t get Rose off the hook 1 Jul 2009 The UK retailer s sales are declining at a slower pace. That feels like an achievement mainly because sales were falling so rapidly last year. Moreover, the whole sector is benefiting from warmer consumer sentiment. Boss Stuart Rose would be wrong to think the pressure s off.
California’s promises might trade at a discount 1 Jul 2009 The Golden State is short on cash so it plans to issue IOUs instead. The last time it did so, most banks accepted the scrip at face value. This time, in light of the state budget woes and economic crisis, banks may demand a discount hurting anyone paid with these promises.