BoI share issue first test for post-crisis Ireland 26 Apr 2010 The country's largest lender is seeking 1.9 billion euros from shareholders. Bank of Ireland has moved its worst loans to the Irish bad bank and is escaping with just a 36 pct state shareholding. If it can't raise private capital, that does not bode well for Ireland's recovery.
America’s ‘Garden State’ shows way to prune costs 26 Apr 2010 New Jersey isn t alone among U.S. states suffering severe budget problems brought on by the recession. But the new governor has taken on unions, suggesting tough spending cuts may be possible. If he succeeds, it could inspire the likes of California and New York.
Markets give Fed TIP on inflation expectations 26 Apr 2010 Soso demand for Monday's batch of U.S. inflationprotected bonds suggests price pressures aren't scaring investors. That gives the Fed cover for keeping interest rates low. One market measure, however, does suggest inflation is expected to rise just further down the road.
Weisel did well to stay independent this long 26 Apr 2010 The West Coast banker is selling his firm to Stifel for $300 mln. That s not bad considering how hard it is to build a small fullservice investment bank. It never matched Weisel's previous gig, Montgomery Securities. But at least he has found a more fitting new owner this time.
Could Greece follow Newfoundland’s path? 23 Apr 2010 Burdened with weak government, an overvalued currency and huge debts, the North Atlantic nation gave up economic and political sovereignty in 1934. Greece's situation is similar, though the IMF and EU will be more discreet and Athens may not get enough aid to prevent default.
Russia’s budget misses greatest health care need 23 Apr 2010 Putin has pledged to boost health care spending by $8 billion annually in the runup to key elections. The economic logic is shaky, and more money won't do much to cure Russia's health crisis. Prevention, not least a serious crackdown on hard alcohol, would be more effective.
Buffett uncharacteristically silent on Goldman 23 Apr 2010 His lack of public comment so far is surprising given his $5 bln investment and the latest talk that a Goldman board member may have tipped off an alleged insider trader about the deal. Maybe Buffett is wise to keep quiet. The bank isn t making itself easy to defend.
Virgin’s virtue in question after price-fix claims 23 Apr 2010 After grassing on rival BA for pricefixing in 2006, Virgin itself now faces similar allegations. The stakes are high. Virgin's brand is based on championing the consumer. Given its aim to move further into banking, and do more with coinvestors, Virgin needs a quick resolution.
Bailout money will buy Greece only a year 23 Apr 2010 The Greek prime minister's request for 45 billion euros from the euro zone and IMF should deal with immediate needs. But there's still no hard promise of cash for year two. And until Athens can show how its debt/GDP will fall, default fears will linger.
Weak UK recovery argues for consensus on cuts 23 Apr 2010 With the election near, each party will try to twist the meagre 0.2 percent firstquarter GDP increase in its favour. But the real lesson is that recovery is slow, making painful deficitcutting moves harder to avoid. With or without a majority, the parties should work together.
Gas sitting prettiest in fossil fuel love triangle 23 Apr 2010 Natural gas has rarely been priced so keenly. It offers three times more energy per dollar than oil, and is rivaling cheapbutdirty coal. Investors in shale gas may hope for higher prices but if that doesn't happen, gas could still gain by displacing its fellow fossil fuels.
Over-complex debt shouldn’t, and can’t, be rated 23 Apr 2010 Not only did the rating firms blessing of deals like Goldman s Abacus synthetic CDO create a distorted market. It was also impossible to analyze such instruments reliably enough to justify rating them at all. If sophisticated investors want them, they should do their own work.
Volvo’s earnings surprise looks like a one-off 23 Apr 2010 The Swedish truck maker blew through expectations with its firstquarter results. Improved earnings should put paid to worries about a cash call. But although demand in the battered truck market is improving, it's from a low base. And cost cutting will only get harder.
Spanish savings banks face capital conundrum 23 Apr 2010 Spain's economic woes have left its unlisted cajas in need of more capital, but with no obvious way of raising it. The Spanish bailout plan is temporary and expensive. There are ways to fill the hole, but not without putting the savings banks' unique model under severe strain.
Goldman suffers another thwack on Lloyds debt swap 23 Apr 2010 The embattled Wall Street bank held hybrid debt in the UK lender while also advising on how it should be exchanged. The charge that Goldman influenced the terms of the deal for its own gain looks off the mark. But it should have told Lloyds about the position, however small.
GM’s CEO is getting ahead of himself 22 Apr 2010 Ed Whitacre reckons the firm will be able to pay back U.S. taxpayers all their bailout money and maybe even turn a profit for them. That d be fantastic, but would require the automaker consistently earning $5 bln or more a year. Things at GM are improving, but not that much.
Fiat spinoff plan keeps bondholders in limbo 22 Apr 2010 The Italian auto group's plan to split trucks and tractors from hatchbacks and sports cars could unlock shareholder value. But Fiat is keeping its arcane share structure, and is dodging how to split its debt. Without further precision, it may be hard for debtholders to swallow.
Dynamic duo reunion could shake up tech banking 22 Apr 2010 Credit Suisse s George Boutros has signed up with his old pal Frank Quattrone at the advisory firm he set up in 2008. The boutique already has nailed down some big mandates. But together they once owned Silicon Valley, and look poised to grab more share from the big boys.
$11 bln U.S. telco deal is merger of necessity 22 Apr 2010 CenturyTel s deal to buy the similarlysized Qwest looks cheap. But the two telecom groups are suffering from shrinking businesses and, on Qwest s side, too much debt. Combining to prop each other up will at least keep reality at bay for a while longer.
Wall Street has most to fear from new bank taxes 22 Apr 2010 The IMF has proposed two taxes: a levy to pay for future rescues and a charge against profit and pay. Governments have not approved the plan and some details are vague. But using the IMF's own estimates, banks in big countries that pay a lot to staff look set to suffer the most.
Greek agony must galvanize the euro periphery 22 Apr 2010 Yields on Greek debt are soaring. The country needs rapid help from the EU and IMF. Yet whether it can avoid default is questionable. Other deficitridden euro zone economies risk suffering contagion and may be less likely to get EU aid. Greece s pain must spur them to selfhelp.
Volcano’s airline fallout starts toxic debate 22 Apr 2010 European law puts airlines like Ryanair on the hook for hotel costs for stranded passengers. The airlines think this case is special and governments should help them out. Ultimately, the bills will be paid, probably through both higher fares and some taxpayer contributions.
Essar Energy IPO raises governance issues 22 Apr 2010 The current board will be dominated by the Ruia family which will also retain a 75 pct stake. It's great that Essar Energy plans to appoint another independent director but unfortunate that this won't happen before the London listing.
Obama gracious in victory over Wall Street 22 Apr 2010 The tone of Thursday s speech was mild compared to his earlier fatcat rhetoric. Bank bosses even turned up after spurning Obama s last visit. With financial reform now seemingly assured of passage, the president only needed to make a strong closing argument and did.
Credit Suisse underwhelms with solid quarter 22 Apr 2010 The Swiss bank's shares dropped 3.5 percent after firstquarter earnings failed to match its rivals' forecastbeating results. But fixed income put in a solid performance. And despite a tougher regulatory climate, Credit Suisse is almost back to precrisis profitability.
Nokia stress-tests investors’ patience 22 Apr 2010 The Finnish handset maker's shares fell 15 pct after it slashed guidance and warned of delays to new smartphone technology. Nokia has failed to adapt to the way Apple's iPhone and RIM's BlackBerry have changed its market. Investors may not hang on for the promised fightback.
Property tax should target China’s empty nests 22 Apr 2010 Beijing is focusing on credit to curb bubbly house prices. But Chinese homes are financed mostly by savings, not debt. A proposed annual tax might restrain speculation, by introducing a cost for keeping properties empty. It won't cure China's property ills, but it's a start.
U.S. VAT idea looks moribund, but isn’t 22 Apr 2010 Washington's apparent noninterest in a valueadded tax would be more persuasive if accompanied by some alternative proposals. But other options for tackling America's debt overload are just as politically problematic. VAT is likely to be back after November's elections.
Asia’s banking pretender faces expensive slog 22 Apr 2010 ANZ Bank may bid for a $4 billion stake in Korea Exchange Bank in an effort to become a superregional Asian bank. Boss Mike Smith has so far been prudent. But going head to head with HSBC, Standard Chartered and China's megabanks is at best expensive, at worst foolhardy.
Ukraine’s new government makes progress 22 Apr 2010 President Yanukovich has traded a Black Sea naval lease renewal for a $4 billion annual saving on Russian gas. That should clear the way for a $12 billion IMF loan. But Yanukovich still has to face his biggest test: straightening up the deeply troubled domestic economy.