In the US, I’m still holding out hope that university endowments will be taxed unless they can demonstrate that they’re actually spending their money on the public good. Thanks to the philanthrocapitalism blog, I now discover that a similar move is now afoot in England, which has told two independent schools that they will lose their charitable status unless they start educating poorer kids as well as those of the rich. The whines from the head of the Independent Schools Council are not very moving:
Warner Chilcott is paying $3.1 billion to buy the drugs business of Procter & Gamble. How much of that is its own money, and how much is debt? In the wake of the blowup of so many leveraged loans, one might expect the proportion of the sale price funded by banks to be low. After all, the banks don’t seem to be very keen to lend to anybody these days. But in fact, the banks are providing not half, not 75%, not even 95% of the total — they’re putting up a whopping 129% of the acquisition price.
Neil Unmack is constructive about Spain in general, and Spanish banks in particular: Santander knows its own loan book better than anyone, he says, and if it’s happy to buy back billions of euros of its own bonds at 82% of par, it probably knows something the market doesn’t.
It’s a sign of the severity of the financial crisis that Barack Obama is re-nominating Ben Bernanke as Fed chief now, in August, despite the fact that his term doesn’t end for another five months. It’s one of the few sources of potential uncertainty which the White House can address and resolve unambiguously, and it’s good that it’s happening.
The implosion in the enterprise value of Reader’s Digest is astonishing — from $3.8 billion two years ago to somewhat less than $1 billion now, depending on how much the equity of the new company will be valued at when it emerges from bankruptcy, and assuming, generously, that the new debt is valued at par. Chelsea Emery talked to lawyer Richard Mikels:
I’m in Zermatt, Switzerland, where I’ve been invited to attend a symposium on the second anniversary of the financial crisis. I’ve only been to one presentation so far, but I’ve already learned two things: (a) that a lot of private bankers in Switzerland have degrees from the country’s famed hospitality universities (service culture is service culture, I guess), and (b) I can actually comprehend the gist of a speech given in German, if the slides are in English, and the points made are conventional enough.