Paul Vigna and George Stahl discuss Xerox and its proposal to buy Affiliated Corporate Services and a report from the Chicago Fed that indicates economic recovery will be lumpy.
Archive for September, 2009
Economy, Mergers & Acquisitions, Tomorrow's News Today Video / Comments Off
Think of it as being practical and sending a message around the world.
China announced plans to sell CNY6 billion yuan ($878 million) of bonds in Hong Kong – the first time the Chinese government has sold yuan-denominated bonds outside of mainland China. A successful sale will likely mean more similar bond sales to come from the government.
The Chinese government has raised questions about the dollar’s role as a reserve currency and intimated that the yuan should be used for global trade as an international pricing currency. Selling a yuan-denominated bond outside the mainland is a first step toward seeing what kind of acceptance there is for the yuan.
Banks, Credit Crisis, Credit Markets, Economy, Federal Reserve, U.S. Treasurys, Uncategorized, United States, Wall Street, Washington / Comments Off
The language is not abundantly clear, in keeping with long-standing Federal Reserve traditions.
The author is not the best known policy maker at the U.S. Fed.
But an opinion piece in today’s Wall Street Journal by Fed Governor Kevin M. Warsh (who has served since 2006) has a message for the markets.
That message appears to be that despite extraordinary measures by the Fed and others to keep the U.S. economy from a worse downturn than we have experienced, there’s a sizable challenge remaining. It is, to interpret, to get the Fed at some point successfully back to more normal courses of conducting monetary policy and emphasizing its stalwart stand against inflationary pressures.
China, Consumer electronics, Initial Public Offerings, Internet / 1 Comment
When we think of public WiFi access to the Internet, little shops like Starbucks or Panera come to mind. Or perhaps the local library. But in China, it’s big business – both legally and illegally. The government in 2007, concerned about safety (some Chinese Internet cafes are said to hold 300 to 400 PCs) and worried teens might become addicted to playing games on computers, banned the openings of any new Internet cafes.
So it is with that in mind we look at Shanda Games, a Chinese online computer gaming company that went public today in what has become the largest IPO in the U.S. this year – it sold 83.5 million American Depositary Shares at $12.50.
Bank Rescue Plan, Banks, Credit Crisis, Credit Markets, Federal Reserve, Regulation, Uncategorized, Wall Street, Washington / Comments Off
If you were to choose one person most responsible for bringing 1970s-early 1980s rampant U.S. inflation under control, could you think of anyone other than Paul Volcker, who led the Federal Reserve during those years? Not very likely.
So the venerable Volcker, now 81, and an adviser to President Barack Obama, addressed the House Financial Services Committee Thursday on regulatory reform. (Go to House Committee Website here and click on The Honorable Paul Volcker to see prepared remarks).
Something doesn’t quite add up on China’s stock markets.
The first batch of 10 companies to list on China’s long-awaited, Nasdaq-style Growth Enterprise Market will raise a total of nearly $1 billion, more than double original forecasts because these companies are now valued more richly than they were. Not a surprise given the remarkable run-up this year on the wider Shanghai market.
Recently, though, Shanghai has wobbled, variously because of fears over how much liquidity GEM will suck out of existing stock markets, over corporate earnings in the second half failing to match stocks’ heady valuations, and over tightening credit conditions in China.
In the short-term at least, liquidity trumps economics as the most important driver of stocks in China. It’s a tap the government can turn off and on via its control of the banking system.
Auto Industry, Initial Public Offerings, Investing, Technology / Comments Off
It’s a company that was created in 2001. It has a limited number of customer. Much of its fortunes will be tied to financially-hobbled global auto business. And it has never had positive cash. Meet A123 Systems, a company investors apparently couldn’t get enough of in its IPO debut today.
The company’s 28.2 million shares were sold at $13.50 today – the size was increased from 25.7 million shares and the price talk was originally $10. It closed at $20.29 and more than 41.1 million shares changed hands – almost 145% of the original amount.
This all seems to be about the hope that this company will make the rechargeable lithium battery that automakers and consumers will want to power their cars. A performance like this from a company that has never made any money isn’t enough yet to declare that the froth is back in the financial markets, or at least the corner where IPOs get done. But it does bear watching.
Economy, Initial Public Offerings, Tomorrow's News Today Video / Comments Off
Eduardo Kaplan and Madeleine Lim discuss mixed economic data released today and how activity has heated up in the IPO market.
Bank Rescue Plan, Corporate Governance, Financial Markets, Regulation, Uncategorized, Wall Street, Washington / Comments Off
Former Securities and Exchange Commission Chairman Arthur Levitt had some sound advice today for the House Financial Services Committee.
On the thorny issue of how to fix the fact that now there are some financial institutions in the U.S. and globally that are simply too big to fail and so get propped up by governments, Levitt says the key is to better manage “the process of failure.”
Levitt, who is an adviser to Goldman Scahs and Carlyle Group and a director of Bloomberg LP, said in prepared testimony that if you cap a bank’s size to solve this problem, the banks will be “subordinate to those of other nations.”
As bankers brace themselves for higher capital requirements, curbs on bonuses, tougher regulation and continued pillorying as the bad guys of the global financial crisis, they are no doubt casting envious eyes at the Instituto per le Opere di Religione – better known as the Vatican bank. The Holy See has just announced a management reshuffle which is expected to lead to greater transparency in the IOR’s operations. But the IOR has a fair way to go. In the words of the Wall Street Journal’s Stacy Meichtry: “The IOR doesn’t administer loans or publish its financial results. Its clients are mainly Vatican officials, clergy and private individuals who are invited by the bank to open accounts. Located in a medieval tower inside the world’s smallest state, the IOR is regulated only by a small commission of cardinals who report to the pope.”