RAPID RESPONSES May 9, 2012 Facebook’s trials [Re: Is Facebook’s estimated market value excessively high?, Tuesday] Facebook is often compared to Microsoft. They’re both hugely successful companies that tens of millions use, but which few really love (in contrast to Apple). Facebook has shown impressive growth in revenues and profitability, but to become a $100bn company it must face two [...]
Spain is heading for a bailout that the rest of the continent will fund May 8, 2012 ANOTHER day, another U-turn in the Eurozone – although this time it may mark the Spanish government’s acceptance of the huge problems in the country’s banking system. The Spanish government announced on Monday that it will be injecting Bankia, the country’s third largest bank, with up to €10bn (£8bn) in capital, using the state-backed FROB [...]
It’s hard to make a deal when democracy keeps on changing the rules May 8, 2012 WHAT’S the deal? That is what any sensible person wants to know before investing or otherwise transacting. The terms may be stated but that is not enough. People also need to know that these terms won’t change on them. Between private parties, including businesses, this confidence is created by enforceable contracts and by reputation. A [...]
A Bank of Britain is the best way to build a Big Society May 8, 2012 HARD economic times call for bold measures. With evidence that the UK is back in a technical recession, we propose the creation of a Bank of Britain. This would be a citizen-focused bank, designed to advance the Big Society. The government has already launched Big Society Capital, with capital mostly provided by the big four [...]
How will Francois Hollande’s victory in the French presidential election affect the City? May 8, 2012 WELL Syed Kamall His greatest enemy is finance and his strategy for defeating it is taxing it to death. Francois Hollande has made quite clear how he detests bankers. He has also been shouting loudly about his plans to introduce a 75 per cent tax rate on all income above €1m and a unilateral financial [...]
RAPID RESPONSES May 8, 2012 King ducks charges [Re: Was Mervyn King powerless to stop the financial crisis?, Friday] Mervyn King is no lame duck regulator, but his arguments are certainly lame. The King-led Monetary Policy Committee set interest rates that were far too low for far too long. One key turning point was in August 2005. The housing market [...]
Folly which crippled Greece will be repeated in socialist France May 7, 2012 HOLLANDE’S victory was the most predictable election contest I can remember. No poll in recent months ever suggested that Sarkozy was in front. I have been keeping an eye on a US betting website – Sarkozy never traded above a 40 per cent chance of winning, and that was before Christmas. He was doomed. Of [...]
Shareholders are on the money in scrutinising pay May 7, 2012 AS LITTLE as a decade ago, few City-watchers would have cared all that much about the April AGM deluge, but not any more. In rising markets, short-term investors and speculators could ignore the niceties of shareholder democracy and vote with their feet. Several crashes later and investor uncertainty is manifesting itself through the ballot box, [...]
Raise our low interest rates now or this ticking time bomb will explode May 7, 2012 DESPITE the UK slipping back into “official” recession, the Bank of England should begin to start raising interest rates. The policy rate it controls has been historically low for several years, and is significantly below where it would be if it were allowed to reflect demand and supply. Almost all commentators claim to accept that [...]
As Facebook prepares to float, is its $96bn estimated market value excessively high? May 7, 2012 YES Aaron Padgham Based on 2011 earnings, an IPO at $96bn (£59.4bn) would leave Facebook trading on a price-to-earnings multiple of 96 times. A simple comparison shows that this towers above the more established technology giants of Apple (41 times) and Google (33 times), making Facebook’s shares some of the most expensive to be traded [...]