Buyout bigwigs get one-upped by community banker 16 Dec 2010 Well, not exactly. But John Kanas didn't just get a good price when he led the buyout of failed BankUnited from the FDIC. He and his team negotiated a 10 percent cut of the profit made by backers Blackstone, Carlyle and WL Ross. That should put nearly $100 mln more in his pocket.
Five principles for euro zone fiscal convergence 16 Dec 2010 The debt crisis has forced euro zone member countries to admit that they need closer fiscal and economic integration to avoid major destabilising shocks. It can't be done overnight, and they need to follow some basic principles to make it work, says Pierre Briançon.
Goldman trader’s fund will burnish HK’s creds 16 Dec 2010 The Wall Street firm's proptrading head is launching a fund in Hong Kong focused mainly on Asia. Raising $1 bln should be easy given his pedigree, and the recent performance of Asian hedgies. Hong Kong's aspirations to be a hedgefund centre have just gained a big boost.
Buyout barons seem to be getting pushy at the mall 16 Dec 2010 Revitalized by generous debt markets, private equity firms recently snapped up mall fixtures J Crew and Gymboree. So it makes sense they're window shopping teen clothier Aeropostale. But unlike J Crew, the board seems ready to put up something like a fight for shareholders.
Wall Street crisis panel never stood a chance 15 Dec 2010 Far from suggesting how to avoid another meltdown, the muchballyhooed U.S. attempt at a Pecora sequel seems to have produced mainly dissent. At least it only cost taxpayers $4 mln. Still, given how doomed the Financial Crisis Inquiry was from the start, even that's a waste.
Fed’s QE2 presses print red ink 15 Dec 2010 If Ben Bernanke were an investor, he'd be bummed. The first $116 bln of the U.S. central bank's $600 bln Treasury purchase program is down roughly $3 bln in value thanks to rising yields. The Fed's cheap funding makes outright losses unlikely, but there's still an image problem.
FSA U-turn on RBS report would be welcome 15 Dec 2010 The regulator is looking at publishing more details of its probe into the bank's collapse. The report will make embarrassing reading for some, but will also provide valuable lessons on the causes of the crisis. Other regulators can learn from the FSA's belated transparency.
Japan at last starts to gamble on growth 15 Dec 2010 Monday's 5 percentage point corporate tax cut is a shift from Keynesian to supplyside stimulus. It's a big risk, but policies austere enough to halt debt growth would be political and economic suicide. If the new approach fuels growth, it could end Japan's sick man status.
Privacy is the Person of Last Year 15 Dec 2010 Mark Zuckerberg has been crowned Person of the Year by Time. Julian Assange topped a reader poll. A certain arrogance and superior coding abilities aren't the only parallels between the Facebook and WikiLeaks bosses. Both are also leading the technological assault on privacy.
ACS’s new Hochtief bid is cleverer than it looks 15 Dec 2010 The Spanish construction group has upped its allshare offer for German peer Hochtief by 12.5 pct. It looks pointless. There are no rival bids, and the offer's still below Hochtief's share price. But the move may give underfire Hochtief managers a facesaving way to enter talks.
Simon’s offer is not enough to divert CSC 15 Dec 2010 The U.S. property giant's proposed 425 pence per share cash bid for the UK shopping centre landlord gives investors something to ponder. But it requires CSC to turn its back on a tempting acquisition. Unless Simon comes up with a better price, shareholders should push ahead.
Dynegy board can’t take much credit for Icahn deal 15 Dec 2010 The U.S. power group's directors have given a ready nod to three successively higher sale prices. But the rising payoff has more to do with squeaky wheel shareholders than with the board's negotiating prowess or the go shop option in an earlier deal with Blackstone.
Novartis throws in towel on Alcon minorities fight 15 Dec 2010 The Swiss drugmaker has upped its offer to Alcon's minority shareholders to $168 a share the same it is paying Nestle for its 77 pct stake. Alcon's independent directors have won their spirited fight. Now Novartis can extract the synergies it needs from the $52 bln deal.
Obama and CEOs finish year warmer but still wary 15 Dec 2010 Wednesday's chat with U.S. business leaders is a symbolic step for the White House. Although the coming Korean trade agreement and bipartisan tax deal will narrow the president's schism with CEOs, there's more to be done. Next up: corporate tax and more regulation in 2011.
UK’s best Plan B would be tax cut for low-paid 15 Dec 2010 Some UK officials are working on contingency measures in case austerity policies trigger a double dip. More money printing is to the fore. But the best stimulus would be tax cuts for the least welloff. Should a deficitridden government do that? That's why it would be a Plan B.
RenCap brain drain fuelled by takeover rumours 15 Dec 2010 A wave of departures at the Moscowbased investment bank is a sign of internal tensions as well as competition from expanding Russian rivals. Overtures from state giant Sberbank, which is eyeing the 50 pct stake of oligarch Mikhail Prokhorov, may explain the rush for the exit.
Banks not solely to blame for high cash call fees 14 Dec 2010 The body that represents big UK investors thinks better disclosure of rights issue fees and a bigger role for independent advisers will bring costs down. Its suggestions are sound especially as it admits shareholders could do more to reduce the cost of raising capital.
Lonely Fed dissenter may gain following in 2011 14 Dec 2010 Thomas Hoenig's campaign for tighter money during his year on the FOMC has been solitary. However, the Fed's latest $600 bln bondbuying program seems to have scored an own goal with bond investors. Hawkish Hoenig successors may find events in coming months help their cause.
UK faces inflation and cuts, and no respite 14 Dec 2010 Inflation is up at 3.3 percent, a tad more than expected, and it may go higher in January when VAT rises. It's hard to see how the Bank of England can print more money even if UK growth weakens a lot as government cuts and inflation eat into confidence, and house prices fall.
Trade should leave China and India both winners 14 Dec 2010 A mooted freetrade pact sounds like an unequal bargain, since it may at first increase India's ballooning deficit with its biggest trading partner. But as China outgrows cheap manufacturing, India helped by Chinese equipment and infrastructure should be a big beneficiary.
Is Wal-Mart pulling a Circuit City on Best Buy? 14 Dec 2010 Two years ago, the megaretailer's electronics push helped send Circuit City into bankruptcy and liquidation. Best Buy thrived for a time by nibbling on its rival's misfortunes. But its own falling samestore sales suggest it may be the next weak link on the retail food chain.
Markets nonplussed by Berlusconi survival, for now 14 Dec 2010 The Italian premier's victory in a noconfidence vote has averted a possible acceleration of the euro zone crisis had his government collapsed. But Italy needs reform, and that requires a stable government with a mandate for change. Until then, Italian spreads face volatility.
Easy money may allow PE to give ISS another spin 14 Dec 2010 Private equity firm Apax is mulling an $8.5 bln bid for the Danish cleaning group. That gives current owners EQT and Goldman an alternative exit to the planned IPO. A passtheparcel deal funded with boomtime levels of leverage may be hard for the sellers to resist.
Belgium’s fuse burns slowly 14 Dec 2010 S&P's negative outlook on Belgium reflects the crisis potential in a country with a worse debt burden than Ireland's. The difference between Belgium and the euro periphery is stronger exports. But a country with no government must tackle its politics and finances before long.
Goldman has chance to top off Wall St governance 14 Dec 2010 Whatever Goldman does, the rest of its industry often follows. So it may well be with the findings of the firm's Business Standards Committee, due next month. But on one key point the separation of the CEO and chairman Goldman is a laggard. Now it has a chance to catch up.
Russia should use WTO entry as reform booster 13 Dec 2010 The country is poised at last to join the World Trade Organisation. Entry has long been seen as a litmus test for Russia's reform progress, and would be warmly welcomed by foreign investors. But excitement may be premature. Internal reforms are needed to reap the full benefits.
Areva listing better late than never 13 Dec 2010 Paris had to agree on listing the nuclear plant maker next year to lure Kuwait into funding part of its 900 million euro capital hike. After five years of repeated blunders and turnarounds on its nuclear strategy, this may show that the government is finally learning. Hopefully.
Energy bankers may be 2011’s hottest commodity 13 Dec 2010 Folks in the oil patch know a thing or two about supply and demand. But they're not accustomed to being the commodity in question. Some of the world's cities may be overrun with bankers, but they're scarce in swampy, sprawling Houston given rising energy sector activity.
Does the European Central Bank need a bailout? 13 Dec 2010 News that it's considering a capital hike suggests that its own resources are stretched by bailing out governments and banks. That goes not just for the ECB itself but for other central banks, such as Ireland's, that are part of the European financial system.
Two years on, the Madoff affair’s mystery deepens 13 Dec 2010 The suicide of one of the incarcerated fund manager's sons, coming a day after the trustee for Madoff's victims sued an obscure Austrian banker in a red wig for $20 bln, highlights the central conundrum that continues to nag the case: How could just one man perpetrate such fraud?