An entirely hypothetical situation I am thinking about raises the following parable.
A firm employs someone who earns $100,000 per year and he/she produces each year in revenues $400,000 – the value of their marginal product. There are no other significant variable costs. In the face of cost pressures the firm sacks him/her to save [...]
So Tom Albanese has been sacked (sorry, err, he “resigned”) as the CEO of Rio Tinto. He was only paid $7m in 2011 for his efforts at Rio Tinto so I guess there were warning clouds there. But after all, what did he really get wrong? Turning down BHP-Billiton’s 2008 3 share offer might have [...]
It interests me that BHP Billiton (the world’s largest coal exporter) is adjusting its port construction plans to account for the effects of climate change on ocean behaviour. They are also looking carefully at further investments in coal given they anticipate a movement away from coal. As a firm they are committed to addressing the [...]
Sociopaths who act only to enrich themselves at the expense of their clients? Surely not. Who could believe a disgruntled former employee?
This is particularly so given Goldman Sach’s enviable track record. A reputation they are continuing to enrich, if you can excuse a dreadful pun.
This is the Borowitz report that provides a [...]
BlueScope Steel seems to have some questions to answer. It recently announced a 4 for 5 issue of shares at 40 cents. As the ex rights shares have traded over the last few days for less than 40 cents the value of these rights is zero at present. As Bryan Frith points out in The [...]
Over the past 5 years US bankers have been paid $2.2 trillion. That’s roughly twice Australia’s GDP. It is an astounding amount that was not invested in productive assets but spent on fairly useless business executives who drove their firms – and the world economy – to the point of collapse.
This makes the rewards [...]
Potash or potassium carbonate has several industrial uses but is, in the main, used in agriculture. According to the Wikipedia entry: “Potash is important for agriculture because it improves water retention, yield, nutrient value, taste, colour, texture and disease resistance of food crops. It has wide application to fruit and vegetables, rice, wheat and other [...]
It is interesting to look at BP’s share price. Its above where it was last July though it has fallen markedly (by one-third) since the oil spill began in April in the Gulf of Mexico. Yesterday $11b was wiped off the value of the company as further efforts to stop the leak [...]
Here are the Terms of Reference for the Productivity Commission inquiry into executive remuneration in Australia. It is a sensible inquiry because remuneration practices are part responsible for the excessive risk-taking and greed that has led to the current financial mess.
My kneejerk reaction – the type of reaction that this inquiry hopes to [...]
Despite some silly protestations over at Catallaxy I think Peter Costello is quite right to oppose the deal by Chinalco to purchase key Rio Tinto assets. BHP-Billiton, for a time, valued Rio Tinto shares at somewhere north of 3.4 times the value of BHP-Billiton script. They are now trading at about 1.6 times a BHP-Billiton [...]
Maureen Dowd shows justifiable contempt for the greedy ‘masters of the universe’ who have destroyed the lives of millions – 80,000 extra unemployed globally in one day this week – and yet still cretins like former CEO of Merrill Lynch Mr. Thain – a man who in my view should be in jail – cries [...]
The real bonuses and the phoney profits have been a feature of Merrill Lynch’s US operations.
But ex CEO John Thain’s actions seem to me to show the moral bankruptcy of Wall Street. Merrill Lynch paid out $15 billion to executives in 2008 which just matched the controversial 4th quarter losses that Bank of America (its purchaser) have [...]
On July 14 2007 I tipped a possible takeover bid for Rio by BHP-Billiton. On November 8 that year it happened. I got it wrong however in suggesting it likely that eventually some sort of deal would be done. In dramatic news yesterday the 3.4 BHP-Billiton shares for 1 Rio Tinto shares bid was abandoned. [...]
I dont have time to comment on this review but as I have suggested in the past the future of Macquarie Bank and its ‘millionaire factory’ is being increasingly questioned. In my earlier post I noted that Enron analyst Jim Chanos described Macquarie as a Ponzi scheme.
Certainly the spinoff firms from Macquarie are not [...]
Fortune is one of those magazines I subscribe to with mixed feelings. On the one hand it caters to some the worst aspects of US consumerism and an almost adolescent worship of wealth. But it also provides a gritty and useful view of the world of business from a business rather than economics perspective. It’s [...]
Sovereign risk refers to the possibility that government can change legislation so that they can seize property without any possibility of adequate compensation.
Tony Harris in today’s AFR (subscription required) argues that no issue of sovereign risk arises because Tabcorp and Tattersall’s gaming licences were not renewed by the Victorian Government.
Gaming licences have a [...]
The Centro Properties Group hit a low of 42 cents on the market today, closing at 82 cents. They hit a peak of $10 mid last year. At these sorts of prices investors are signaling real concerns about the ability of Centro to survive. If you think that is an exaggeration you should join the [...]
China’s biggest steel-maker, the state-owned Baosteel, claims it is contemplating a bid in excess of $200 billion to top BHP-Billiton’s $125 billion bid for Rio Tinto. The claim is that this would ensure Chinese supply of iron ore. Of course, even if this is all just talk (Baosteel is capitalised at only about $40 billion [...]
This is weird – a rumour from the Wall Street Journal suggests that Rio Tinto may turn on its pursuer and attempt to takeover BHP-Billiton. This has intricate implications since Rio Tinto originally rejected BHP-Billiton’s offer to take it out on the grounds that the 3 BHP-Billion share offer for 1 Rio Tinto shares undervalued [...]
This conflict gets richer and richer, deeper and deeper. Recall that Visy has just been fined $36 million for colluding with Amcor to restrict competition within the cardboard packaging industry.
Visy’s Richard Pratt has been publicly disgraced but Amcor has not been levied with anti-trust penalties on the grounds that it blew the whistle first [...]