China struggles to fine-tune stock market bubble 25 Apr 2008 Beijing was unhappy when the Shanghai market went mad on the upside in 2007. Now the government wants to stop prices from falling too far or too fast. Managing asset prices isn t easy just ask the Fed. Do Chinese authorities secretly long for the days of total central planning?
Financial woes finally hurting eurozone industry 24 Apr 2008 Producers like Peugeot are still prospering, but the latest surveys suggest a eurozone slowdown is imminent. The high euro is finally starting to bite the export trade, even in highly competitive Germany. With inflation out of control, the ECB won t provide rate cut relief.
Rare SEC success brings only slap on wrist 24 Apr 2008 The US regulator finally got some sort of win on market manipulation charges. It has been promising to crack down. But it only wrung some $150,000 out of the shortseller whose alleged rumourmongering temporarily erased $1bn of value. That may not be enough of a deterrent.
Leveraged loan sales highlight banks’ predicament 24 Apr 2008 Deutsche is unloading some $5bn of loans by lending to the buyers at a belowmarket interest rate. TDC is taking advantage of low debt prices by buying its own loans at a discount instead of paying them down at par. Lenders are paying now for their earlier credit exuberance.
Could Ambac’s stock ever pay off? 23 Apr 2008 The bond insurer s volatile shares plummeted nearly 40% after it revealed its latest big losses. Its executives admit there s no way to tell if the worst is past. So its stock is trading more or less like an option. A lot of stars have to align for that bet to pay off.
Are Moody’s margins still too fat? 23 Apr 2008 The rating agency s lucrative business during the structured finance boom delivered 50%plus operating margins. They have now deflated, but only to a stillhealthy 46% in the first quarter. With plenty of fallout still to come, it could be hard to stop them falling further.
GLG star’s defection leaves few winners 22 Apr 2008 Coffey will stay six more months at the UKbased hedge fund group before he sets out on his own. He loses $200m but has won concessions over his noncompete clauses. The bigger losers are GLG investors and shareholders and any hedge fund that ever contemplated going public.
UK Tories guilty of serious misjudgement 21 Apr 2008 Shadow Chancellor George Osborne decision to endorse the government's bailout of UK banks without even waiting to hear the details was daft. He has handed the government a blank cheque. Bankers will no doubt be grateful, but taxpayers may end up footing the bill.
Are big hedge funds better? 21 Apr 2008 The industry's total assets stayed flat in the first quarter, despite pulling in almost no new money. That suggests an overall return near zero but the typical fund was down 3%. So bigger funds must have performed better than average. Size appears to matter at least for now.
UK bank £50bn bail-out not as bad as feared 21 Apr 2008 There are enough safeguards in the Bank of England s bailout operation to ensure taxpayers aren t too badly exposed and that the banks don t get an entirely free lunch. But the scheme still looks misguided and there are a few questions of detail that need to be answered.
Should Bank of America cut its fat dividend? 21 Apr 2008 Ken Lewis is right to focus on steering Bank of America s domestic businesses through the credit malaise. Selling shares in China Construction Bank could also reduce distractions and boost BofA's capital. But with risks remaining, it could be prudent to trim the bank s payout.
Auction-rate mess threatens private bank cash cow 18 Apr 2008 A big advantage of private banking is its stickiness. Banks like UBS, JPMorgan and Merrill snare ultrarich clients in a web of trust, brokerage and estateplanning services. But the blowup in the $330bn auctionrate market has the carriage trade reaching for its buggy whips.
Apollo may need Black’s workout skills after Pik plays 18 Apr 2008 Apollo portfolio companies Berry Plastics and Realogy have stopped paying cash interest on their Piktoggle bonds. That looks ominous. Leon Black may need all his turnaround skills to keep them from slipping into death spirals.
UK bailout is huge yet may not work 18 Apr 2008 The Bank of England s £50 billion in special liquidity aims to avert a downward spiral of falling house prices and recession. It might not be enough to do that, yet the bailout will leave the government cashstrapped as the UK slides.
Flowers’s E1.1bn Hypo bid hardly the dream deal 17 Apr 2008 The German bank looks a better bet for the private equity firm than Friends Provident. Hypo is cheap and has a promising loan flow. But it s not ideal. Flowers is getting only 25%, and Hypo s discredited bosses will stay. Flowers may be feeling the pressure to do a deal.
WaMu votes show why broker voting must go 16 Apr 2008 Angry shareholders in the troubled US thrift jettisoned one director. Two more squeaked by only because brokers voted undecided ballots in favour of incumbents. The SEC needs to eliminate this ballotbox stuffing.
Will Asian entrepreneurs put profits over family? 16 Apr 2008 Not quite but generational transfers aren t the only route aging founders are taking with their businesses. The sale of Hong Kong s Wing Lung Bank is one such case. If this is more than a fluke, private equity and Asia s investment bankers have reason to cheer.
GLG defection threat tests institutional ambitions 16 Apr 2008 One minute star fund manager Greg Coffey was leaving to go it alone. The next he is staying but maybe not for long. GLG s listed equity was supposed to help it hang on to talent. The question now is whether it can help quickly fill any large gap.
Subprime bust mints new hedge fund billionaires 16 Apr 2008 Many top investors profited last year from the subprime bust. John Paulson made $3.7bn while Harbinger Capital s Philip Falcone brought in $1.7bn, according to Alpha magazine. But some of the usual suspects missed the credit boom and bust and missed the list.
Derivatives’ daisy chain is $455 trillion threat 16 Apr 2008 The ongoing breakneck growth in the derivatives markets, especially those involving credit, used to be cheered as a sign of bankers innovative acumen. But since the credit crisis exposed Wall Street s fragility, it s starting to look like an ominous development.