Monthly Archives: May 2009

John Gapper

My FT column this week is on the New York Times: Read more

John Gapper

All the signs are that the global economy is recovering from the precipitous drop we have experienced in the past year. Jean-Claude Trichet, president of the European Central Bank, is hardly a professional optimist but he now expects a gradual economic recovery.

Meanwhile, various companies are becoming cautiously hopeful about the future – or at least that the worst is over. Carlos Ghosn of Renault/Nissan joined the club today, predicting that Nissan will return to profit in its 2010 fiscal year, which runs to March 2011. Read more

John Gapper

I have some small insight into Barack Obama’s well-received comic speech to the White House Correspondents Dinner in Washington on Saturday night since I was there. More specifically, I was sitting near Larry Summers, who is director of the Council of Economic Advisers, when he was singled out by Mr Obama.

The general practice is that news organisations invite outsiders to join them and, while some go for Hollywood stars, the FT tends to be rather serious and invite business executives and officials. So he was at one our our tables. Read more

John Gapper

Well, it looks as if I was wrong about one thing in my column on capital ratios last week – tangible common equity is not the new tier 1 capital after all, at least as far as the Federal Reserve goes. The Fed prefers something called tier 1 common.

I do not pretend fully to understand the difference – both tangible common equity and tier 1 common equity are a tighter measure of capital strength than tier 1, which was originally adopted in the 1988 Basel Accord. However, tier 1 common is a bit looser than tangible common. Read more

John Gapper

There are many contenders for the most disastrous enterprise in the financial crisis: Fannie Mae and Freddie Mac, Lehman Brothers, Merrill Lynch, AIG etc. For my money (literally, since I am a US taxpayer) it is hard to beat General Motors.

GM is still in intensive care, relentlessly absorbing public money with no obvious end in sight. Banks may be starting to look a bit healthier, but GM keeps on getting sicker. Read more

John Gapper

Stephen Friedman picked his moment to resign as the chairman of the New York Federal Reserve. If you want to minimise the headlines, what better moment to make an announcement than when the bank stress tests are disclosed?

Mr Friedman says he stayed on the NY Fed board despite Goldman becoming a bank holding company out of a sense of public duty, but his decision is “being mischaracterised as improper”. Read more

John Gapper

Perhaps I am missing something in Rupert Murdoch’s remarks about the Amazon Kindle, but he appears to be ignoring the facts on the ground.

Mr Murdoch, owner of newspapers including The Sun, The Times and The Wall Street Journal, expressed confidence News Corp could make money out of consumers’ appetite for reading news on mobile devices, but said he did not believe in the Kindle model. “I can assure you we will not be giving our content rights to the fine people who created the Kindle.” Read more

John Gapper

It strikes me as foolish for Microsoft to attempt the sort of trick reported in the FT today with Windows 7, its new operating system:

Microsoft’s rivals claimed PC users who upgrading their machines to the new operating system have Microsoft’s own Internet Explore 8 set as their default browser, even if they were previously using a different company’s software. Read more

John Gapper

My Thursday FT column this week is about the US bank stress tests and Basel: Read more

John Gapper

Another day, another Kindle press conference. Here I am again at a New York launch event for a new Amazon device, only three months after the arrival of the Kindle 2.

This time, Jeff Bezos of Amazon has just enthused about the Kindle DX, which sounds like a small car but is in fact a large screen version of the Kindle electronic paper reading device. Read more

John Gapper

I reflected the other day on whether the job of the golf caddie could be split into two separate tasks. In the same vein, I was intrigued to read this morning about how James Patterson, the best-selling author, has a factory of writers who pump out fiction under his name.

This seems similar to Damien Hirst, the British artist who copied Andy Warhol’s notion of the art factory and employs a team of assistants to manufacture works of art under his name. Read more

John Gapper

Warren Buffett provided a notably honest explanation this weekend for why Berkshire Hathaway remains a conglomerate, which is an unpopular form of corporate structure.

On paper, Berkshire makes virtually no sense as an operating entity – it combines everything from insurance and reinsurance to steak houses and confectionery manufacture. Probably a better way to regard it is as an insurance company that invests its cash in portfolio companies as well as securities. Read more

John Gapper

I note from this Financial Times story that Germany may require the Fiat-Opel-Chrysler auto group that Sergio Marchionne is attempting to assemble to be headquartered there.

This is one of the 14 criteria mooted by Frank-Walter Steinmeier, vice-chancellor and foreign minister, for any bidder for Opel – currently the European arm of General Motors – to obtain financial support from the German government. Read more

John Gapper

Goldman Sachs makes much of its ability to navigate deftly and legally all the conflicts of interest inherent in being a full-service investment bank – and one that is supported by $10bn of US government capital – but it has a struggle to convince others.

The latest evidence of that is a long piece in the Wall Street Journal this morning about Stephen Friedman, the former Goldman senior partner who chairs the New York Federal Reserve’s board of directors. Read more

John Gapper

There are no prizes for guessing what Amazon plans to announce this week at a press conference to which I received an invitation by email this morning. It seems highly likely to be a larger-sized Kindle designed for reading newspapers and magazines.

As the New York Times reports this morningRead more