|Posts on Regator:||1820|
|Posts / Week:||17.4|
|Archived Since:||June 19, 2011|
The EU’s top financial regulator seems out of touch on banking reform. While his peers want lenders to keep more capital, Michel Barnier says the U.S. should give European banks a break. He thinks global teamwork can avert problems. History suggests that’s naïve.
Whether the Bank of Japan’s money-printing succeeds in engineering 2 percent inflation depends on wages growing by about 5 percent a year. Although Japanese workers haven’t seen such largesse for two decades, a weak yen and a tightening labour market could do the trick.
High debt didn’t deter buyers from Intelsat and SeaWorld stock sales. Now comes Qiwi, a Cyprus-domiciled, Russian payment system warning about risks from organized crime, the island’s bailout, money laundering and dual-class shares. It puts investor appetite to the ultimate test.
The Swiss engineer is buying Nasdaq-listed Power-One for $1 bln. The solar glut has spelt financial misery for many, although ABB says its target is in a sweet spot. ABB is being unusually acquisitive for a European blue-chip. It needs to show investors its M&A strategy makes sense.
The Blackstone founder’s $100 million donation for a Beijing study programme may not be wholly philanthropic - China lost much more than that investing in his buyout firm’s IPO. But improving links between Chinese and Western elites is a noble and necessary cause.
Excel errors overstated structured finance ratings, dented JPMorgan’s risk management and tripped up theories on fiscal austerity. PowerPoint, Word and Outlook also can obfuscate in myriad ways. The value of the U.S. software giant’s tools is undercut by the trouble they cause.
With financial woes hitting American cities big and small, urban revival requires attracting residents who prefer foot power to cars, says city planner Jeff Speck. A demographic bulge of “millennial” workers and empty-nesters want walkability. Build it, and they will come.
Fears for the wobbly world economy have pushed Brent below $100 a barrel. Cheaper energy helps industry. Better still, booming shale output, greater efficiency and the rise of natural gas as a rival transport fuel may keep the oil price subdued even as growth is stimulated.
Prime Minister Shinzo Abe’s economic policies are in for a drubbing at the fund’s spring meeting. IMF officials bemoan Japan’s “risky” fiscal stimulus while America grumbles about the yen. But Japan, which is one of the IMF’s staunchest supporters, was right to act.
Finance firm Royalty Pharma tried to use Elan’s $1 bln stock buyback to swoop up the entire company. But it devised a puzzlingly complex tender offer that ended up replacing a solid long-term shareholder with investors much more likely to demand a chunkier premium.
Who should lose money when banks fail? Talk of making deposits senior to bondholders might reassure savers rattled by the Cyprus bailout, and avoid bank runs. But it could lead to unhealthy arbitrage between loans and deposits. Vigilance is needed, and lots of capital.
Investment banker Marshall Nicholson has swapped his U.S. citizenship for a Hong Kong passport. Though family - and possibly tax - inspired the switch, it will go down well with mainland clients. For Western financiers seeking a local edge, it’s the ultimate display of commitment.
Dealmakers say tougher rules and enforcement are behind new data showing news is trickling out less often about companies for sale. Loose lips come with less chance of deals closing, but they also coincide with higher premiums. Some bankers will always fancy that risk-reward mix.
Financiers typically turn away fees as willingly as dogs give up steaks. But major banks are leery of financing bids for Freedom Group for fear of damaging their reputations. Making assault rifles has joined pornography on the list of activities with risks that money can’t hide.
An anti-corruption crusader and leading critic of Russia’s president faces an embezzlement trial on what many consider bogus charges. A 10-year jail term may follow. The absurdly heavy-handed treatment of a shareholder activist is a warning to Western governments and investors.
The yellow metal’s swift decline has left investors breathless. Though it’s not clear what sparked the selloff, stock-like ETFs which helped inflate the gold bubble have added to the selling pressure. It’s a reminder there’s a dark side to making illiquid assets easier to trade.
It’s hard to see value in the sector despite shares being savaged. Miners’ earnings will be crushed as high costs meet falling prices. Management has few levers to pull. Gold’s peculiar dynamics mean that closing unprofitable mines may have only a muted effect on the market.
A strong currency and stagnant home market spurred companies to a record number of foreign purchases last year. Domestic stimulus and the yen’s slide have prompted dealmakers to pause. But Japan’s ageing, shrinking population means corporations must still hunt abroad for growth.
The safe-haven metal has suffered a dramatic reversal. It is an extreme case because for a decade it benefited from the U.S. housing bubble and then QE. Gold at a tipping point offers a lesson investors should know. Markets are distorted by excess liquidity, corrections will come - and hurt.
The buyout giant is eyeing the high-tech bookmaker. A 35 pct premium would imply a 1 bln stg bid. Betfair has had a terrible run since floating. But its luck may be about to change. A turnaround strategy is in place. Persuading key investors to fold now might be tricky.