German bank levy won’t create level playing field 30 Jun 2010 German and French plans to tax bank balance sheets are supposed to even things up with the UK, which has already taken the plunge. But because Berlin's levy is designed differently from London's it will more likely do the reverse. A common approach is looking increasingly remote.
Democrats shouldn’t count on Okun jobs surprise 30 Jun 2010 High U.S. unemployment hasn't provoked the White House into proposing a pricey plan to create jobs. One reason is Okun's Law, which predicts a jobs surge as growth picks up. Team Obama has been counting on the law working in this recovery. It's starting to look like a bad bet.
EU’s stealth bill gets tough on bank bonuses 30 Jun 2010 The European Union plans to ban banks from paying more than 30 pct of bonuses in cash, and cap payouts as a proportion of salary. The littlenoticed draft law is in line with G20 principles, but is much tougher than U.S. rules. Some provisions may also produce perverse results.
Lisbon block of Vivo bid leaves investors hanging 30 Jun 2010 The Portuguese government has used its golden share in Portugal Telecom to block Telefonica's 7.2 billion euro offer to buy out their Brazilian mobile joint venture. Its decision to overrule PT's shareholders is shocking. They must now hope the European Union will intervene.
Biotech billionaire’s deal lab scores again 30 Jun 2010 Patrick SoonShiong has had runins with minority shareholders in the past yet made them rich too. The sale of his Abraxis for more than $2.9 billion looks another happy ending for SoonShiong, and his backers. Even at the rich price, buyer Celgene may end up benefiting.
Swiss accept that they are frankly strong 30 Jun 2010 The franc keeps rising against the euro and the Swiss central bank has stopped resisting. It can probably afford to. Money expansion seems to have done its job. The economy is growing. Deflation risk has eased. Property prices are simmering. The Swiss safe haven looks just that.
Ford’s debt deal spreads the love 30 Jun 2010 The automaker is paying off $3 bln of healthcare debt early, soon after repaying a similar amount of loans. That keeps the union and the banks happy. And it s good news for shareholders, too. Using cash to reduce liabilities reduces the chances of a dilutive stock issue.
Friendly Cameron and King get mix right for now 30 Jun 2010 Is Mervyn King, the Bank of England governor, too friendly with the new government? His inflation critics may think so. But massive fiscal tightening threatens higher unemployment and depressed wages. Loose money looks more than a favour. And the UK's policy mix looks right.
TARP stays dysfunctional to the end 30 Jun 2010 The granddaddy of bailout funds started as a way to buy bad loans to save lenders, and is finishing as a way to buy votes to save financial reform. In between, the $700 bln program pumped capital into not just banks but also AIG and GM. It s a tale of toxic politics writ large.
State meddling warrants bigger Petrobras discount 30 Jun 2010 The Brazilian energy giant s ability to ferret out deepwater reserves is world class. But its capacity to withstand government designs to make it an instrument of social policy is questionable a risk amply highlighted by its upcoming $82 bln stock sale and capex plan.
Le Monde’s future not brighter with new owners 29 Jun 2010 The French newspaper is selling itself to a trio of businessmen with no media experience. They won staff backing by pledging not to take the tough measures the paper needs. So now the only way they can turn the paper around is by breaking their promises.
UK carbon bank looks too green for the times 29 Jun 2010 The UK government has produced a blueprint for its promised Green Investment Bank. But major state backing looks unlikely. Finding the 50 bln pounds a year supposedly needed to fund green business privately is a tall order. This green idea is likely to fade into insignificance.
Google tries to cling to China presence 29 Jun 2010 The search engine is making a lastditch effort to keep its Chinese licence. By no longer automatically directing users to its unfiltered Hong Kong site, Google is trying to comply with the letter of China's censorship rules. Its creative solution puts Beijing on the spot.
Not just anything can ride markets like Tesla 29 Jun 2010 The unprofitable electric automaker s public trading debut was a rare hit. That might embolden General Motors and others to push ahead with IPOs. But Tesla s a tech play in a growth industry it leads. Absent such a good story, or buoyant markets, the pace will be hard to match.
Spain’s energy shock redefines regulatory risk 29 Jun 2010 Madrid has scrapped a sensible hike in retail electricity pricing and launched a shock review of Spain's energy sector. This structurally flawed market certainly needs reform. But arbitrary action adds to uncertainty and deters equally needed investors and capital.
James Bond studio boss comes under fire 29 Jun 2010 It could make a great movie script. A maverick destroys value in every business he runs, but dissident shareholders are onto him just as he is about to lead one last big deal. Unfortunately for Pinewood chairman Michael Grade, he's in the starring role.
Banks should hope U.S. Democrats have Plan B 29 Jun 2010 The passage of U.S. reforms would force hard changes on big banks. But legislative failure suddenly less farfetched than it seemed might be worse. Democrats are racing to find 60 Senate votes. If they fail, the uncertainty, haggling and headlines could drag on into 2011.
Facebook friend gives it a rich $23 bln valuation 29 Jun 2010 That s what the stake increase by Elevation Partners suggests the social networking giant is worth. At nearly 30 times trailing sales, it s twice the multiple Google achieved when it went public in 2004. Investors look to be way out in front of Facebook s promise.
No easy exit from ECB’s easy-money era 29 Jun 2010 Banks must this week repay 442 bln euros of cheap money borrowed from the ECB a year ago. The central bank is easing the transition by providing more shortterm funds. The extent to which banks use these more expensive facilities will show how much they really need the money.
English individualism yields to German teamwork 28 Jun 2010 OK, so football isn't life. But the English football failure despite worldclass talent has the feel of a model gone wrong. Germany's players may yet fail, but the Rhenish system of cooperation has served them well. There may be a lesson here for the UK government.
Starbucks’ bars could stick 28 Jun 2010 The coffee chain is taking another cue from McDonald s, which turned from expansion to filling its restaurants during slow hours. Caffeine sells best in the mornings, and now Starbucks is gingerly experimenting with beer and wine in the evenings. It could prove profitable.
U.S. financial reform no longer a done deal 28 Jun 2010 Last Friday's 5 a.m. Capitol Hill compromise was meant to culminate months of hardfought wrangling. But Democrat Robert Byrd's death and Republican Scott Brown's wavering on a bank tax have put the proposal back in jeopardy. Obama has more work to do if he wants a bill to sign.
Weak U.S. recovery now best hope 28 Jun 2010 Rather than a bounce, most recent data indicate a slowing U.S. recovery, while the end of monetary, fiscal and housing stimulus also presages weakness. A doubledip is not imminent, but deep underlying problems mean low growth and perhaps inflation in the second half of 2010.
ECB serving as ATM for euro zone periphery 28 Jun 2010 The central bank's additional liquidity has largely gone to banks in Greece, Portugal, Ireland and Spain. The official support will last as long as markets stay closed. For the Portuguese, that could be years. The region could end up sharing the costs of the profligacy of a few.
Drilling deals dive past oil-spill calamity 28 Jun 2010 Crisis? What crisis? Oilmen showed no signs on Monday of being cowed by BP's woes and the resulting Gulf drilling freeze. Noble's $4 bln rig rental deal with Shell and its $2.2 bln purchase of FDR look like ballsy but not reckless votes of confidence in deepwater exploration.
G20 makes progress by standing still 28 Jun 2010 The Toronto summit lived down to carefully managed modest expectations. A firm agreement to disagree and delay may not sound like much. But global goodwill is withstanding a tepid recovery, market pressure and fiscal strain. If there is another crisis, the concord could be vital.
Greece has little to gain from bond gamble 28 Jun 2010 The plan to issue debt next month looks risky. Greece can count on its ECBfunded domestic banks to mop up the shorter maturities on offer. But if the deal gets away, it won t be proof that Greece has regained market confidence. And if it flops, it will be another big setback.
Banks have had a good 10 days 28 Jun 2010 Proposed new rules have been diluted or delayed both in the U.S. and at the G20. The regulatory process still has a long way to go and the world will end up safer. But Hugo Dixon guesses that the ultimate framework will only deserve 5 or maybe 6 marks out of 10.
UK pension rules are a charter for the rich 28 Jun 2010 The CEO of Man Group is collecting his defined benefit pension aged 50 while carrying on in the job. But UK public sector employees may lose their generous retirement perks and have to work longer. The reform of pension rules signalled in the budget is desperately needed.
Fitness First may fatten up on Asian obesity 28 Jun 2010 The private equityowned chain's idea of a Chinese IPO may exercise investor patience. Listed gyms have fared poorly, and Fitness First still carries heavy debts. But the rapid growth of Asian incomes and waistlines might make for a healthier second stab at equity markets.