Rio Tinto’s China deal a big win – for China 3 Dec 2010 The UK miner is teaming up with top customer and shareholder Chinalco to explore Chinese mineral reserves. It's a pioneering deal. Being first has option value for Rio. But by putting people and assets in the Middle Kingdom, Rio's giving the Chinese miner a new kind of leverage.
Exclusive: BarCap may become CoCo bonus pioneer 3 Dec 2010 The bank may issue these funky securities as part of deferred pay, a first for a global institution. By essentially forcing bankers to invest their loot as capital, this could minimize political opprobrium but only if regulators clarify the rules before the bonus round closes.
ECB’s Trichet keeps market guessing 2 Dec 2010 The markets wanted Europe's central bank chief to ride to the euro zone's rescue, bazooka in hand. But JeanClaude Trichet has announced no new bondbuying plan. Optimists will say he's being coy. But a better interpretation may be that he doesn't want the ECB to be sucked in.
Global yuan may not live up to the hype 2 Dec 2010 China's plans to make its currency a global lingua franca got off to a racing start in 2010, and the amount of yuan held offshore could easily more than double in 2011. But Beijing's fear of free capital flows may limit the yuan to being big rather than dominant.
Fed, WikiLeaks data underline market inefficiency 2 Dec 2010 Both could have caused turmoil if they had been made public in real time. But some financial and political insiders were at least partly informed. It's a reminder that even supposedly efficient markets can't reflect unknowns and that information is always unevenly distributed.
Spain’s plan B a step in right direction 2 Dec 2010 After saying no more measures were needed, the government is selling stakes in the lottery and airports, plus axing a jobless benefit. Madrid will be able to issue a third less new debt next year. Spain may be dragging its feet, but at least it is taking action.
RBS post mortem should be published 2 Dec 2010 The FSA says it can't publish the findings of its probe because of confidentiality laws. But the authorities ought to find a way round that. After all, publication of how both the bank and its regulators failed is essential to learn the lessons of the crisis.
Whole airline industry shakes in Rolls turbulence 2 Dec 2010 The aeroengine maker's reputational fug may deepen as new details of the Qantas engine explosion emerge. Though the nearterm financial damage to Rolls is unchanged, the industrywide finger pointing serves only to beggar civil aviation neighbours.
Euro zone will find no solution is painless 2 Dec 2010 The euro zone debt crisis is generating many ideas for possible solutions, from preemptive ECB financing to a massive increase of the European Financial Stability Facility funding or a joint euro zone bond. None of these ideas is guaranteed to succeed and all involve pain.
Pepsi gets the cream with $5.4 bln Russian deal 2 Dec 2010 The U.S. drinks and snacks company's deal to buy dairy group WimmBillDann is among the largest foreign investments in Russia. The country's nascent consumer market is still a draw. The acquisition isn't cheap, but Pepsi's experience in the region should help make it work.
Madoff trustee has nothing to lose gunning for JPM 2 Dec 2010 Irving Picard is suing the Ponzi schemer's bank for $6.4 bln. He's going after UBS and investors who profited from Madoff, too. With a giant hole to fill and a week left to file any lawsuits, he has to try everything to recover the victims' cash. He might even have some success.
IAC pays high price for Diller’s Malone divorce 2 Dec 2010 Getting rid of a controlling shareholder in the shape of John Malone should benefit shareholders of the Internet grabbag over time. But there's a high immediate financial cost to the deal and Diller increasing control in the near term just replaces one mogul with another.
Google’s innovation engine sputtering big time 1 Dec 2010 The search giant's willingness to spend $6 bln on a startup in a business with almost no barriers to entry is the most damning evidence yet. In the past, Google would've tried to create a Groupon of its own. But these initiatives rarely panned out. It now has to buy innovation.
Latest go-shops will invite more just looking 1 Dec 2010 The Del Monte and J Crew buyouts allow the sellers to suss out other suitors. But if history is any guide, investors shouldn't get too excited about sweeter bids. What's more, these two particular deals look priced such that more window shoppers will show up than buyers.
Euro zone shorting conspiracy doesn’t stack up 1 Dec 2010 Politicians are warning once again that short sellers are imperilling their finances. But the idea that hedge funds are culprits pales into insignificance beside other forces driving aversion towards peripheral euro zone debt.
China goes for dilute and rule in CICC stake sale 1 Dec 2010 Longawaited approval for Morgan Stanley's exit from China's top investment bank came with a twist. Buyers KKR and TPG must share the 34 percent stake with two other groups. That gives them even less influence than their predecessor just when CICC's growth is getting riskier.
Treasuries, bunds and gilts have further to fall 1 Dec 2010 Investors' love affair with government bonds is running out of steam. High prices, together with doubts about national debts and fears for inflation suggest even top sovereigns are heading for a fall.
Is Citi prepping for its next bailout already? 1 Dec 2010 Of course not but the U.S. megabank, whacked by most financial crises in the past 20 years, may be hiring President Obama's exbudget chief Peter Orszag. Having another line to the White House could be useful even in good times. And at least Orszag isn't another Bob Rubin.
Fed’s data dump holds important lessons for Europe 1 Dec 2010 The central bank detailed who borrowed what from its myriad lending facilities during the crisis. Banks, foreigners and industrial conglomerates lined up during desperate times to borrow some $3.3 trn. Europe may need to step up its firepower if it wants to stem its own crisis.
No quick fix for Carrefour fiasco 1 Dec 2010 Problems in Brazil have triggered the French retailer's second profit warning in as many months. The fresh setback may add to pressure for change, but kneejerk asset sales or boardroom upheaval won't help. Investors have little choice but to stick with management for now.
Don’t bet on euro implosion 1 Dec 2010 For the weaker members, the cost of leaving would exceed the cost of staying. And for the euro's French and German architects, the political will to keep it going is strong and unlikely to weaken. The ECB is on standby to assist. The euro may be crisisprone, but it will endure.
Toothless U.S. debt panel still defines debate 1 Dec 2010 The final plan from President Obama's bipartisan budget commission might struggle to persuade a majority of the panel itself, never mind Congress. That was always the probable outcome. But the blueprint does set the terms for what a budget deal might eventually look like.