JPM Beats Guanabara to the Dining Table in Race for EcoSecurities

A unit of JPM Chase has gobbled up EcoSecurities for £122.9 million after a takeover battle with a bidding rival by the name of Guanabara. "Eco" was involved in one of the world's first CDM (Clean Development Mechanism) projects.

Santander Mulls Brazil IPO, FOMC Upbeat

Santander has released details of its Brazilian unit's IPO which, if successful, will be Brazil's biggest ever, raising up to $7.3bn. Brazil Santander will be one of the world's top 30 banks.

In the US, FOMC is upbeat, holding interest rates low and extending its plan to buy back $1.25 trillion of MBS into Q1 2010. They announced the federal funds rate will be kept low (between 0 and 0.25%) for an extended period of time. FOMC meets eight times a year.

Microsoft Merges Multiple Times but Deals Lack Gusto of Google

In 2000, Microsoft acquired Visio (now integrated into MS Office), and 2001 Great Plains Software (an accounting solutions provider, whose product is now named Microsoft Dynamics GP).

More recently (October 2008) MS acq'ed Greenfield Online Inc for $17.50 a share. Greenfield is a provider of online survey solutions. In Aug 2007, it made a more heavyweight acquisition, Internet advertising platform purveyor AQuantive for $66.50 a share. AQuantive has now been rebranded Microsoft Advertising.

G20 Protests in London

The G20 summit (consisting in fact of 22 nations) was held at the ExCel centre in London's Docklands (which has parking for 4000 cars). The protests cost £7.5m to police, with an estimated 5000 protestors gathering outside the Bank of England and police erecting a "ring of steel" around the ExCel centre to prevent protestors entering the complex.

Sarkozy and Merkel (representing France and Germany) objected to the large fiscal stimuli propounded at the G20, stressing "red lines" needed to be drawn on remuneration (i.e. bankers' bonuses), banking transparency, hedge fund regulation and tax havens.

Russian president Dmitry Medvedev, who succeeded Vladimir Putin, and Argentinian President Cristina Fernandez de Kirchner, asked for more voting power for emerging economies. China floated the idea of a new global reserve currency based on IMF special drawing rights. Brazil's President Lula da Silva stated rich nations should accept responsibility for bringing about the crisis.

The summit lasted 7 hours, versus the 22-day meeting in 1944 at Bretton Woods, out of which the IMF and the current global financial system was born. It begins with a working breakfast for leaders, finance ministers and central bankers as well as a working lunch. Japan's PM, Taro Aso at the G20, was later replaced in September 2009, by Yukio Hatoyama.

UK's Debt Crisis: Almost 60% of GDP

Unemployment (and probably people entering education) has dented tax revenues. The August figures for the UK's public sector net borrowing totalled £16.1bn, contrasts with £9.9bn a year back. Overall debt is 57.5% of GDP, a sum of £804.8bn. £140bn is due to banking sector bailouts. This news has sent the pound to a four-month low versus the euro (1 euro is equivalent to 90p). The weakest the pound has been versus the euro was 97p (reached on December 30, 2008) i.e. parity.

Around Sept,Oct2008 (Lehman crisis) the euro was trading around 80p to the pound, fairly stable. Then from November, it went to 85 on its way to 95.

Great Edifices of Corporate Hubris

Article on the Lehman Brothers skyscraper with pictures.

Options Backdating and Forward dating Techniques

Joe Grundfest, professor of Law at Stanford Law School, divides the option backdating problem into three categories:

• Backdating - setting an earlier date on the option to guarantee a lower strike price, hence bigger payoff when exercised. Amnon Landan, CEO and founder of Mercury Interactive, was accused of doing this.
  
• Forward-dating, springloading, bullet-dodging - these unseemly manipulations may even be legal assuming the company followed disclosure rules. Forward-dating involves pricing an option at a future low point in the stock. "Springloading" means awarding options prior to good news, "bullet-dodging" means holding off issuing options until bad news has passed to get a more advantageous strike price.
  

Options may be backdated as well due to administrative mistake, but, hey, that's not interesting. This month, ex-COO of Monster, James Treacy, was sentenced to 2yrs for illegal options backdating.