Private MBS market may soon crawl out of bunker
The first big non-standard U.S. mortgage-backed bond issue in almost two years may be in the works. It will need to be squeaky clean with oodles of investor protection, and the seller may lose money. But the kudos of reopening a key market could be worth it. [Read more]
Providence's Kabel IPO puts just enough on table
The U.S. private equity firm has set a reasonable, but hardly generous, price range for the German cable operator's float. After flirting with a flaky secondary buyout, Providence needs investors back on side. And the rest of the industry will be crying out for a successful exit. [Read more]
How Europe can avoid hedge fund overkill
European leaders are finalising regulations on hedge funds and private equity. Despite some changes, the directive could still undermine the fund management industry and reduce choice for European investors. Here is some advice for Europe's lawmakers on how to limit the damage. [Read more]
Volcker rule 2.0 targets Wall Street conflicts
The latest proposal to limit U.S. banks' proprietary trading also targets underwriters' conflicts of interest -- perhaps especially Goldman's. Rebellious Democrats are pushing this tougher plan, but they may only succeed in undermining what little consensus exists. [Read more]
New look Coke bottler faces tough job in Europe
Coca-Cola Enterprises is selling its North American bottling business to Coca-Cola and becoming a European business. But while the new $10 bln firm can hope to cut costs and grow here and there, expansion may be limited by a lack of assets for sale. [Read more]
Some mega-fortunes come easier than others
Of the top 20 names on the Forbes rich list, half started out life pretty rich. It's no surprise -- money makes money and children can inherit entrepreneurial habits. That goes for the man at the top, Carlos Slim. But there are still opportunities for rags to turn into riches. [Read more]
BP deal confirms oil majors' resource land grab
The UK oil giant is paying $7 bln to expand its future reserves. The move into Brazil makes strategic sense and should provide high-margin growth after 2015. It underscores oil majors' dwindling options for growth: Exxon and Shell have also recently paid up for extra barrels. [Read more]
Chinese inflation could run out of control
If the rate could persist at February's 2.7 percent, China and the world might be better off. Rising prices and wages spur consumption and effectively revalue the currency. But it will be hard to keep inflation tame while monetary policy stays loose in an overheating economy. [Read more]
Asian spin-off may create more value for Pru
The $35 billion takeover of AIG's Asian operations has two charms: synergies and a possible re-rating of the UK insurer's business. But AIG may be getting most of the financial benefits. Pru could release value without the risks of a big merger -- by spinning off its Asian arm. [Read more]
New BofA chief talks well, must now walk
Brian Moynihan hit all the right notes in his first solo presentation to investors, putting relationships, risk management and cost controls ahead of rapid growth and acquisitions. That was hardly a difficult call. Now he needs to show he can put theory into practice. [Read more]
Citi's $2 bln preferred offering is an oddity
The bank said last year it would sell preferred stock, and investors are buying. The puzzle is why Citi should raise capital that's excluded from the strict metric shell-shocked regulators and investors now favor to gauge an institution's well being. It seems like a distraction. [Read more]
UK banks won't quake at new stress test
The UK regulator is imposing a new balance sheet test on banks, barely a year after the last health check. Lenders probably have enough capital to meet the FSA's modestly tougher doomsday scenario. The real problem is that some are still hooked on central bank liquidity support. [Read more]
RUSAL convertible bond would make sense
The Russian metals giant has around $13 bln of net debt -- even after raising $2.2 bln in its float. RUSAL has a plan for deleveraging, but debt covenants are a constraint. It should pursue a partial refinancing via a convertible bond while the market is favourable. [Read more]
Bad recession only dented quest for good looks
Americans were ready to delay surgery to make breasts larger and waistlines smaller, but couldn't resist the lure of fuller lips and fewer wrinkles. The tough economy in 2009 only brought a 2 percent cut in cosmetic procedures. Vanity spending seems to have become a necessity. [Read more]
Brown squanders chance to repair credibility
Turning points, crossroads, global storms: Gordon Brown used every cliche in a key speech on the UK economy. With an election to win, the premier was never going to unveil detailed plans for cutting the deficit. But he could have done more to show he appreciates the UK's plight. [Read more]
Glencore inches towards public life
The Swiss trader saw earnings fall 43 percent last year and has warned of a volatile recovery. With Glencore looking to an IPO, the statement is hardly auspicious. But one set of mixed results shouldn't derail Glencore's needed transformation to a new structure. [Read more]
Barclays' ambitions take another step up
The UK lender is mulling a U.S. retail banking acquisition. The prospect of hot-money taxes may have created an incentive to amass U.S. retail deposits following Barclays' Lehman buy. Either way, a community banking presence will help Barclays be taken seriously in Washington. [Read more]
Funding crunch points down for UK house prices
The downward turn so far this year is likely to persist. A funding gap for mortgage lenders creates a lack of finance for house buyers. Prices could fall substantially. Just how far depends on how successfully the authorities can buoy growth, inflation and earnings. [Read more]
China needs to rebalance banks and bond market
Many governments worry about having too many bonds to sell. Beijing has the reverse problem. A shortage of supply makes bond yields too low while banks lend too much and too carelessly to local governments. The solution to this problem is simple -- make bond issuance easier. [Read more]
Cisco's hype can't live up to Apple's
The network equipment maker promised an innovation that would ?forever change the Internet.? It turned out to be a faster router. The unsexy advancement probably will end up more widely useful than a music player. But Cisco could learn a little about buzz from the iPod maker. [Read more]
U.S. needs to lead, not hide, on free trade
Brazil's threat of tariff retaliation over American cotton subsidies is only the latest eruption of protectionism acts around the world. President Obama isn't doing much to quell such sentiment in the United States either. The omission could prove costly. [Read more]
Iraqi elections could kick-start oil efforts
Iraq is corrupt, violent, and lacks a solid oil law. But its crude is abundant and cheap to extract. If a stable regime emerges from the weekend's polls, foreign oil groups will consider investing more. The government's job will be to persuade them the risks are manageable. [Read more]
Dubai World creditors face painful choices
The conglomerate is close to a plan for restructuring $26 bln of debt and moving to a sustainable capital structure. If creditors want repayment in a hurry, they will probably have to take a savage haircut. But if they resist a deal, the process travels to uncertain territory. [Read more]
Weak pound still can't revive British exports
The UK's trade deficit for January wasn't bad -- it was dire. The cheaper pound gave British exporters the chance to employ the spare capacity in the economy that the Bank of England insists will help control inflation. If it exists, manufacturers are not using it -- yet. [Read more]
Wall Street hunting season looks less fertile
Traders are still fair game, but dealmakers are less so. Morgan Stanley recently nabbed two of them -- the sort of targeted sport more likely in 2010 than big forays. Cost controls and regulatory fears are holding back banks, while uncertainty is keeping bankers in hibernation. [Read more]
Yukos might yet cost Russia
Russian courts approved the dismantling of the oil company to pay back taxes. But it always looked political. Former Yukos shareholders are suing in international courts for as much as $100 billion. Russia probably won't pay up, but it could suffer if it becomes a scofflaw. [Read more]
Pru rights issue row misses the target
The insurer's $20 bln cash call is sparking controversy. With sovereign funds helping underwrite the deal, current shareholders fear they will miss out on lucrative sub-underwriting. But if rights issue fees weren't so high to begin with, sub-underwriting wouldn't matter so much. [Read more]
FTSE 100 looking increasingly postmodern
Another international business may float in London. Essar would join March's new arrival, African Barrick Gold, in London's blue-chip index. Interest from trackers, ETNs and ETFs helps ensure a warm welcome. Meanwhile, the index becomes ever less representative of the UK itself. [Read more]
Stock market rally celebrates bittersweet birthday
The world certainly looks less grim than it did a year ago, when stock markets hit crisis lows. But while growth has returned and profit news is mainly good, the rally in most big equity markets has stalled. For good reason -- the wounds of the financial crisis remain unhealed. [Read more]
Path to more loss-filled world is tricky
UK financial services secretary Paul Myners says market participants should start behaving like they have something to lose. But, as he admits, that new market psyche requires co-ordination from global regulators and company owners. A full conversion may require another crisis. [Read more]
An EMF could solve euro's principal conundrum
If the political obstacles for creating it can be overcome, a European Monetary Fund might be just what the euro zone needs. A fund run by stern central bankers who focused only on countries in difficulties could overcome the zone's structural lack of fiscal policy coordination. [Read more]
DC's fiscal judge could use greater detachment
The U.S. Congressional Budget Office was created to be an objective, non-partisan economic and budget advisor. But as the agency's clout has grown, so too have attempts to influence it. The CBO needs beefing up if it is to remain a relevant and trustworthy authority. [Read more]
U.S. housing giants are city-sized property owners
Fannie Mae and Freddie Mac owned some 131,000 homes at the end of last year, or the rough equivalent of the San Francisco housing market. It's the dark side of guaranteeing mortgages, and one reason why the government should work toward getting out of the business. [Read more]
UK listing would be brave shift for Essar
The family-controlled Indian conglomerate is mulling a London IPO of its power assets. That would bring some transparency to the secretive group and help Essar fund expansion at home. But with the company a relatively unknown quantity, it will need a flawless investment story. [Read more]
Board gender quotas not the way to go
Simply increasing the number of women directors risks producing a merely cosmetic change. Gordon Brown's threat to enforce increased diversity at the top is flawed. What boards need is a wider range of thinking, which would surely require a more equal balance of the sexes. [Read more]
UK banks' gilt-buying spree may not materialise
British lenders were expected to buy a large chunk of the forthcoming flood of UK national debt. But recent figures suggest some banks' liquidity buffers are already big enough. That means the government will need to find new investors - unless the regulator comes to its rescue. [Read more]
Web's the winner in New York TV Oscars showdown
Cablevision's 3 mln customers missed the start of the Academy Awards because of a fee dispute with Disney. The fast resolution shows how content and distribution still need each other. But such tiresome spats may hasten customer flight to the Internet -- even for live broadcasts. [Read more]
Periphery hard to save in euro slow zone
Greek budget cuts helped get a bond issue away, but salvation for the euro-periphery remains a huge challenge. Governments must balance budgets, stop soaring debts and help regain lost competitiveness - within a region that is growing slowly and still at risk of deflation. [Read more]
Yuan appreciation is still a distant move
China's central bank governor has acknowledged that Beijing must eventually end its special yuan policy - the clearest signal yet that the currency may be allowed to rise. But it would be wrong to expect change soon. Higher authorities still think boosting exports is a priority. [Read more]
Counterpoint: Resist inflation's siren seductions
Some pundits, including Reuters Breakingviews' Edward Hadas, argue that a spot of inflation could be just the remedy to bail out those who borrowed too much. But the flipside would be that savers would be robbed. This would be an extremely unhealthy lesson from the crisis. [Read more]
Rabobank takes lead in bank capital revolution
The Dutch mutual is to become the first lender since the crisis to issue contingent capital as a new security. These bonds can help banks strengthen their balance sheet by replacing hybrid debt. But investors and regulators will need persuading for Rabo's structure to catch on. [Read more]
Jamie Dimon needs an even better post-crisis
The JPMorgan boss has navigated the downturn well and put the bank in strong position to grow. But economic and regulatory concerns remain, and rivals have improved their balance sheets. JPMorgan has more work to do before investors will price the bank beyond its break-up value. [Read more]
Airgas legal bid fails, stalling tactic works
The gas company can't be surprised at failing to bar its former counsel at Cravath from representing hostile bidder Air Products. Even so, it stalled the takeover effort and put its one-time lawyers on the defensive. Airgas isn't out of ways to fend off Air Products, either. [Read more]
Wells Fargo thumbs its nose at pay restraint
Obama's pay czar is right to be annoyed by CEO John Stumpf's $21 mln of compensation. He's the only big bank boss whose pay surged. Yet Wells also benefited from the bailouts -- and its performance paled compared to the relatively parsimonious Goldman. [Read more]
Obama's bank tax could suffer unfortunate setback
Critics will seize on a government report that says the bank liabilities fee would be passed on to consumers and hurt small business. These side effects look small in the broader context. Taxing hot money is right, but the president's War on Wall Street just hit more resistance. [Read more]
American jobs picture improves - but still bleak
Employment declined by 36,000 in February, probably mostly related to weather. However temporary employment rose by 48,000, usually a good sign of new hiring. But with worker discouragement at record levels and wages stagnant, it's still grim out there. [Read more]
Prudential's Asian deal has painful precedent
The UK insurer's bid for AIG's Asian arm is not its first attempt to double in size. A 2001 offer for American General was billed as transformational, but plunging share prices invited a counterbid - from AIG. Pru shares have fallen again, but this time a rival bid is unlikely. [Read more]
Inflation doves may have a case
The IMF's chief economist alarmed some central bankers by suggesting that their target inflation rate should be as high as 4 pct. His concern about the "zero bound" looks excessive, but moderate inflation may be the least painful and most practical way to deleverage the world. [Read more]
Referendum need not mean death knell for Iceland
Icelanders are set to vote against a law to repay Britain and the Netherlands for bailing out depositors in one of its failed banks. That could delay a $5 billion IMF bailout and even lead to Iceland defaulting on its debt. But a deal is still possible even after a "no" vote. [Read more]
Spanish banks face looming bad debt spike
The Bank of Spain may force lenders to make larger provisions for real estate bought from developers. But refinanced loans pose a bigger problem. All told, Spanish banks face at least 23 bln euros of extra provisions. That's 41 percent of the amount they have set aside so far. [Read more]