Good morning

The headlines:

  1. Facebook analysts that shunned the crowd now look like heroes. Link: That’s one way of putting it. The other is: “And/or the herd look like idiots”. The stock is down to $31. 
  2. And a Facebook investor is suing Nasdaq over delays in the offering. Link: Obviously. But – if you didn’t manage to buy the stock at $42, and you bought it at $31 yesterday, then surely Nasdaq should be suing you for unjustified enrichment?
  3. And Morgan Stanley says it played by the rules. Link: Even more obviously. The losers are all “you didn’t put everything in the prospectus” and “you shouldn’t have made us buy it at such a high price”. The regulators are all “this is a concern for us”. My thought is: “if Morgan Stanley managed to get that price for an IPO on a company that lost the support of General Motor’s two days before the IPO and has been reporting lower advertising revenues because of people using their cellphones more – then I want Morgan Stanley to do my IPO – coz it sounds like they did their job to perfection”.
  4. JP Morgan losses become a tool for regulatory debate in Washington. Link: Also obviously. It really does seem like a day of stating the obvious. Big losses and big headlines are going to attract politicians like flies to a sceptic tank (pun intended). The question is whether the Volker Rule would have stopped this from happening? The answer, from what I can understand, is “no”. JPM was theoretically hedging its risk exposures – not trading for its own account. It’s the second that everyone is concerned about. As to how JPM managed to make such giant losses on a hedge (I mean – “making losses” is what they’re meant to be hedging against…) – that I don’t know.
  5. SAP buys Ariba. Link: Ariba ariba, andele andele. Ariba is being valued at $45 a share, and the deal is worth $4.3 billion. Ariba is an online-trading platform for businesses – so SAP is reaching for the clouds. For those who didn’t know, there is a race going on between SAP and Oracle (the business information system big boys). It may sound boring – but I’d think about putting my money in one of them. Why? One thing you can be sure of: there will always be transactions because people will always need things; where there are transactions, there are businesses because businesses will always adapt; and where there are businesses, there is always a need to account. In boom times, new businesses grow and old businesses expand – they’ll need to update and revise and implement new systems. In bust times, the old businesses fall away, and new businesses start to take over – they’ll need to update and revise and implement new systems. Accountants rule the world.
  6. Blackrock to sell bonds to buy back shares from Barclays. LinkBlackrock’n’roll. Barclays is selling ahead of a new round of Basel rules (Basel III), which would require the bank to set aside capital against their Blackrock investment.
  7. Tiger Brands prioritises African expansion. Link: It’s where the money is
  8. IMF tells the UK that it needs more stimulus. Link: And possibly some tax cuts. The answer is always stimulus. 
  9. The EU leaders have their 18th Crisis summit. Link: I’d get drunk at that party. Unless I were Angela Merkel. Because if she does, she might get taken advantage of by a socialist Frenchman and/or a band of unruly Mediterraneans. 
That’s all for now.
Have a good day.