Blocking a deal isn’t always best antitrust answer 30 Sep 2011 When Live Nation merged with TicketMaster, the prognosis for competition in the live music and ticketing business wasn’t good. Concessions extracted by U.S. regulators seemed bitty. But nearly two years on, rivals are flourishing. Live Nation doesn’t look so dominant any more.
U.S. government has chance to borrow very long 30 Sep 2011 Thanks to the Fed’s maneuvers, Uncle Sam could sell bonds maturing decades from now at uncommonly low yields. Moreover, pension funds need the paper. The Treasury has kicked around the idea of 50 or 100-year bonds before. Maybe it’s time to actually issue some.
Insider traders pay too much for choosing court 30 Sep 2011 Uncle Sam rewards cooperation with milder sentences. But Galleon-related cases show that prosecutors’ targets are heavily penalized just for asserting basic trial rights. Judges should be wary of too big a difference - trials like Raj Rajaratnam’s bring needed clarity to the law.
It’s FTSE or bust for Russian miners in London 30 Sep 2011 Polymetal has become the latest to seek a full premium listing in London. The precious metals miner is upping its free float to get into the FTSE 100, expanding the universe of investors and boosting liquidity. It’s a reminder that the attractions of just listing GDRs are fading.
Euro zone-only Tobin tax could make sense 30 Sep 2011 Prompted by France and Germany, the European Commission has proposed a tax on financial transactions. It would be more efficient if it were implemented globally. But even limited to the EU or the euro zone, its benefits could outweigh the risks.
LSE-SGX move on metals exchange would make sense 30 Sep 2011 Joint bids tend to be hard. But the London and Singapore bourses may benefit by partnering in a possible $1.6 bln bid for London’s metals exchange. LSE gets a partner that already handles metals futures; SGX gets local know-how. That matters in a potentially hot auction.
World moves closer to 2008-style cliff 30 Sep 2011 Panic and credit tightening after Lehman Brothers’ failure moved the global economy from teetering to free fall. The euro debt crisis has stalled growth, but that does not make a new crash inevitable. Good thing. If one comes, it will be harder to cushion the fall than last time.
Cyprus might wind up with two foreign bailouts 30 Sep 2011 The island state could soon get cheap loans from Russia, whose citizens hold large Cypriot bank deposits. That would help Cyprus’ anaemic economy recover from an explosion in July at its main power plant. But if Greece defaults, its banks may need a euro zone bailout too.
Dodd-Frank’s latest dumb unintended consequence 29 Sep 2011 BofA is to charge $5 a month for debit cards to recoup fees lost as part of the financial reform bill. That seems high, but the rule was nothing more than a sop to retailers at the expense of banks. It fails to make the system safer and it’s now a quantifiable tax on consumers.
Brazil oil riches may sabotage infant firm policy 29 Sep 2011 The BRIC nation wants to build world-beating firms that do more than extract natural resources. Protecting embryonic industries created big winners in Korea and Japan. But unless Brazil can prevent its energy wealth inflating its currency, multinational wannabes could struggle.
BBC ersatz trader has serious markets message 29 Sep 2011 A clip of a trader admitting to dreaming of financial doom as a money spinner has spread like wildfire. The Gordon Gekko wannabe doesn’t work on Wall St but his vulgar amorality offers a description of trading that strikes a chord with a public still smoldering over bailouts.
HP’s lack of direction continues apace 29 Sep 2011 The battered U.S. tech firm, now led by Meg Whitman, has hired Goldman Sachs to fend off activists. And Oracle is baiting HP, suggesting its offer for Autonomy is profligate and the UK firm’s CEO forgetful, at best. An uppity investor with a strategy could be just what HP needs.
France and Italy sitting on share sale goldmine 29 Sep 2011 The halting of Spain’s giant lotto IPO doesn’t change the logic of further asset sales by euro zone members with high debt. It’s not just the peripheral countries. France alone could plausibly raise $50 bln from trimming its holdings.
U.S. money markets lose scale but not power 29 Sep 2011 This source of short-term funding is much diminished from the 2008 heyday, but they still have $2.5 trln to invest in debt. That is more than enough to keep bankers up at night, especially as low rates, European bank woes and lower corporate demand have made managers desperate.
India should step up privatisation 29 Sep 2011 New Delhi’s surprise rise in its borrowing target provides the perfect excuse to push harder on selling stakes in state companies. Market conditions aren’t great but, given the benefits to the economy of less state ownership, India should sell at almost any price.
ECB treats Berlusconi like little boy 29 Sep 2011 A letter from Trichet and Draghi in August told Italy’s PM how to run his economy, setting an end-September deadline. The implied carrot was that the ECB would buy Italian bonds. Given that Berlusconi hasn’t done all he was told to, it’s no surprise that bond-buying has dropped off.
Spain’s biggest IPO runs out of luck 29 Sep 2011 The 7 bln euro Loterias IPO has been abruptly pulled. Market conditions were tough, but political pressure and liquidity-starved banks may have dealt decisive blows. Though the cancellation will have a modest impact on state finances, it will reverberate. And it is shambolic.
Currency crossfire to hit emerging economies hard 29 Sep 2011 Money is flowing out of emerging economies. Countries that had complained about currency appreciation have had to prop up forex rates. Turkey and South Korea are vulnerable to hot money retreat. Poland and Hungary are caught in currency traps.
Tata’s Jaguar Land Rover journey needs direction 29 Sep 2011 Tata Motors is in no rush to replace its CEO, who stepped down on Sept. 9. It is not the only gap at India’s largest auto maker. Shares in the firm, which also owns Jaguar and Land Rover, trade at a big discount to peers. A new CEO might find value with more business integration.
UK bank reform shouldn’t forget living wills 29 Sep 2011 Ring-fencing retail banks, as the Vickers commission has proposed, may help tackle the “too big to fail” problem a bit. But resolution plans are a more important way of safely winding banks down. If Vickers’ focus diverts attention from this, it could be harmful.
Thomson at last sees fit to merge with Reuters 28 Sep 2011 Three years after uniting, the onetime rivals are forcing the professional and financial publishing arms together. The acquired Reuters side retained a certain clout in 2008, but has struggled since. The Thomson family now seems to be reasserting control to make the deal work.
Amazon and Apple’s historic paths collide 28 Sep 2011 The online retailer’s cheap new Kindle Fire tablet reflects the company’s roots - it’s a tool for the sale of content. Apple, by contrast, used music and movies to hook customers into buying its gadgets. The two currents are now clashing, and survival requires strength in both.
Auto workers adapt to life as Motown shareholders 28 Sep 2011 The new UAW contract with GM eschews the overly generous benefits of the past for more measured terms. Deals with Chrysler and Ford may be tougher. But Detroit’s near-death experience and the UAW’s stakes in two of the big three have taught the union the benefits of restraint.
Bank of England treads fine line on capital 28 Sep 2011 The central bank’s Financial Policy Committee wants UK lenders to boost their reserves without shrinking credit in the economy. Banks can square that circle by ditching trading assets and cutting bonuses. But to be effective the FPC needs more levers to pull.
Chilean Winter tests the country’s economic model 28 Sep 2011 Mass protests over education mask a deeper divide over the post-Pinochet preference for market-based, rather than state, solutions. The Chicago Boys got it mostly right, but not on education. Resolving the current dilemma may require fundamental philosophical reform - and money.
Shell, Total have little to lose staying in Syria 28 Sep 2011 The two oil majors are still pumping in Syria, in effect helping to finance the deadly crackdown on anti-government protesters. But while both companies could easily afford to make a moral point and pre-emptively withdraw from their investments, doing so might not achieve much.
Europe’s political left needs aggiornamento 28 Sep 2011 Financial crisis, government austerity and slow growth should be good news to the political left, which is out of power in the four largest European economies. But it hasn’t found plausible popular alternatives or benefited from the conservatives’ woes.
Stock market crash more likely than new recession 28 Sep 2011 One ratio of U.S. stock market value suggests it’s expensive compared to 1995, a middling year. Low interest rates and a weak dollar have boosted profits while rapid money growth has juiced valuations. More normal monetary policy could make the market crash - without a recession.
Turmoil leaves Asia Pacific facing dollar drought 28 Sep 2011 Strong government finances and exports in the region aren’t enough to offset the reversal of Western investment. While some countries can draw on huge reserves, others like South Korea and Australia are facing a dollar shortage and potentially destabilizing currency declines.
Gazprom raids escalate EU-Russia energy war 28 Sep 2011 An anti-trust investigation into the Russian gas giant’s European subsidiaries should be seen in the context of a wider diplomatic conflict. Moscow is obstructing the EU’s plans to import Caspian gas. It looks like the EU has found a way to retaliate. The row could worsen.