With corporate balance sheets flush with cash, there has been a lot of talk recently about the potential for an M&A bonanza. This, of course, would provide opportunities for merger arbitrage hedge fund managers. Whether you consider their returns to be a fair compensation for long the successful completion of deals or the result of pure skill, research has shown that merger arb has produced positive returns over time.
Investment managers contemplating the mixed messages coming from US voters in America’s mid-term elections don’t know whether to breath a sigh of relief that the resulting political gridlock is going to make it tough for Democrats to launch new major (unfunded) policies or whether to bemoan the fact that the economy is in far too fragile a position to endure political paralysis.
recent article in the Financial Times’ asset management supplement spoke volumes about what's wrong with the industry it covers. The piece, "Bank-owned funds used as props", prompted FT Alphaville to run a parallel one headlined "Double agents in asset management".
A few weeks ago the price of gold touched $1380. Then, over the week of October 22 to October 28 the lustrous metal has been sliding backwards almost by the day, with a return to the high $1200s looking more and more possible. To be followed by what? The low $1200s? Or a zoom back to the high $1300s and beyond?
The famous dictum about the difference between pessimists and optimists seems to apply equally well to views about the global economy. In the eyes of Brian Moynihan, President and Chief Executive Officer, Bank of America, the glass is half full.
Quantitative Easing was invented by the Bank of Japan during the 1990’s. The idea is that the central bank creates money and buys bond assets from banks and other financial institutions. That puts more money in the hands of the banks which they can then use to create even more money.
The corporate governance model that existed before the crisis may not be entirely broken, but it is certainly in need of a major overhaul. In recent weeks there have been several initiatives intended to disassemble the stalled engine, take a long, hard look at the oily mess within and then seek to reinvent it as something that actually works.
I’ve always suspected one of the main reasons the UK economy is in a more parlous state than many of its peers was because of hubristic and self-delusional economic thinking inside Westminster and Whitehall during New Labour’s 13 years in power.
QFINANCE brings to you its top 5 financial news stories of the week, along with relevant QFINANCE articles and definitions to fill you in on background details. Stories this week include G20 currency war targets, UBS lobbying to end caps on bonuses, and revelations over the BP oil spill.
Clayton Holdings, a US firm based in Connecticut, which scrutinizes home mortgages for a number of clients, including investment banks and government agencies such as Fannie Mae and Freddie Mac, put the US financial press into a tizzy when former Clayton executives testified to the Financial Crisis Inquiry Commission (FCIC).