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.
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.
Machines beat humans as Man Group stumbles 28 Sep 2011 The world’s largest listed hedge fund saw its assets shrink 8.5 percent in the current quarter, sending its shares tumbling. While its computer-driven trading fund is recovering, star managers have struggled. It’s a reminder that in volatile markets, fat fees are hard to justify.
Anna Nicole gives Wall St. a lift from the beyond 27 Sep 2011 The late Playmate’s U.S. Supreme Court case made it easier to shift suits from bankruptcy to federal court. That may help JPMorgan’s case over Lehman’s demise and ding the Madoff trustee’s search for redress. The centerfold may have given as much to the law as to Playboy readers.
Bank funding tightens noose around Greek necks 27 Sep 2011 As the country nears default, deposits are flowing out of Greek banks again. Worse, collapsing government bond prices are making it harder to borrow from the ECB. That leaves lenders dependent on the Greek central bank – increasing the strain on struggling domestic finances.
Latest tech valuation evokes bad dot-com memories 27 Sep 2011 Tumblr’s funding round values the popular blogging site at $800 mln. The service is growing fast, but there’s precious little revenue. While that makes profitless dot-coms relying on sales multiples look good by comparison, valuing eyeballs again is bad for tech.
China’s property market faces crisis of trust 27 Sep 2011 Hangzhou developer Greentown is under scrutiny for using trust structures to funnel debt into its projects. Trusts have spread rapidly to become a critical source of funding for property companies. But a crisis of cash flow, or confidence, could see a messy unravelling.
Spain should not rush savings bank sales 27 Sep 2011 The country’s bank rescue fund is preparing to offload a bust lender with the help of generous guarantees. But a deal would transfer any upside to buyers, while leaving the state on the hook for most future losses. With more bank nationalisations to come, Spain should hold on.
Global SWAT team needed to close tax loopholes 26 Sep 2011 Tax-based financing deals like those between U.S. and UK banks being targeted by U.S. authorities use legal mismatches to reduce tax bills. They are lucrative, but have no economic value. Such questionable arrangements might be best tackled in a focused multilateral forum.
Pro-cyclical Wall Street protesters missed moment 26 Sep 2011 Those marching against finance have failed to build on the rallying cry that began five years ago. Since the crisis started, shareholders and regulators have already pummeled the banks. These rabble-rousers should have arrived earlier - or waited for greed to truly return.
UBS shouldn’t wait to put Weber in the chair 26 Sep 2011 The former Bundesbank chief is not due to take over as chairman until 2013. But the rogue trading loss and departure of chief executive Ossie Gruebel has left the Swiss bank reeling. Provided his former employer agrees, UBS should put Axel Weber in charge as soon as possible.
Berkshire buyback a move best left to Buffett 26 Sep 2011 The Sage’s conglomerate has taken the highly unusual step of repurchasing shares, at up to a 10 percent premium over book value. It doesn’t mean it’s a strategy to be followed, though. If shares of other companies were truly undervalued, Berkshire probably wouldn’t be buying its own.
Equities’ hot money can draw comfort in cold stats 26 Sep 2011 Investors fear the worst, and may not snap out of their funk until prices touch rock bottom. So stocks could shed another 15-30 percent. But when the world economy eventually recovers, shareholders could kick themselves for not taking advantage of this year’s cheap prices.
Time to close China’s VIE loophole 26 Sep 2011 No-one benefits from the fuzziness around the VIE, a structure that lets foreigners take quasi-ownership of Chinese companies in restricted sectors like the web. Their usage is spreading. VIEs make regulators look weak, and investors risk losing their shirts. Clarity is needed.
Gruebel’s principled departure leaves UBS adrift 24 Sep 2011 The man brought in to save the Swiss bank felt the need to take responsibility for the rogue trader. But interim boss Sergio Ermotti only just arrived in April. If an estimable veteran like Gruebel couldn’t rid the deep rot from UBS, the future of the investment bank looks dim.
Misguided share buybacks at least help Wall Street 23 Sep 2011 Companies don’t often time stock repurchases well for their own accounts. But the roughly $500 bln expected this year couldn’t come at a better juncture for ailing investment bankers. IPOs and other new equity deals have slumped, so even paltry fees on buybacks will be welcome.
UBS, Yahoo and HP have made failure traditional 23 Sep 2011 The Swiss bank’s $2 bln rogue trading loss echoes its U.S. mortgage misadventures while persistent strategic drift led the two tech companies to chuck out their bosses. All three have self-images that are badly out of date. Few companies can recover from this cognitive disorder.
Meg Whitman is unjustifiable choice for HP CEO 22 Sep 2011 The former eBay boss only joined the tech company’s board this year. The feckless body has ousted three previous outsiders, damaging HP each time. Whitman’s experience in hardware and business software is limited. Her powers of persuasion will take HP only so far.
Fed’s Twist puts Wall Street in a spiral 22 Sep 2011 Extra stimulus pushed 10-year Treasury yields to a new low and could leave them under 2 pct for a while. That doesn’t just crimp interest margins for retail banks; it also squeezes already struggling debt traders. Financials now look nothing but a super-long-term investment.
Madoff trustee earning his eye-popping keep 22 Sep 2011 Irving Picard’s fees now top $224 mln, with the meter still running. Cleaning up the sprawling Ponzi scheme doesn’t come cheap. But it’s peanuts compared with the Lehman bankruptcy tab, and Picard is getting more than twice the return on the dollar. He could turn out a bargain.