Global Investing

from MacroScope:

Scams from Abuja to Reykjavik

It suffered the collapse of its currency, economy and banking system so being invoked in a version of the notorious Nigerian email scam is one of the smaller humiliations endured by Iceland.

The confidence trick, which has roots in the 18th century, usually involves an email from someone claiming to be either a deposed African dictator or a Nigerian lawyer, promising a sum of money in return for help to access a substantial fortune.

But the latest spam email making its rounds purports to be from Iceland, one of the highest profile sovereign casualties of the global financial crisis. This version of the email is supposedly from a "devoted christian (sic)" from Iceland", a widow seeking help to access $6 million in a Canadian bank left to her by her husband who worked for an oil giant for 19 years.

Besides the grammatical errors, the email stretches credulity with the notion that the widow's husband would have chosen to park his savings at a Canadian bank rather than the Icelandic ones that would have -- at least until their collapse late 2008 -- offered interest rates in excess of over six percent.

These high-flying banks, which once took in so-called Icesave retail deposits in London and Amsterdam, are now at the centre of a dispute that pits the North Atlantic island nation of 320,000 people against Britain and the Netherlands.

from MacroScope:

The word on Gordon Brown from Cayman

Gordon Brown is truly having a rough time. Rebuffed by the United States, International Monetary Fund and others for floating the idea of a tax on financial transactions at this weekend's G20 meeting, he has now got short shrift from the Cayman Islands.

McKeeva Bush, the veteran Caymanian politican who is now premier of the British Overseas Territory, popped in to the Reuters London headquarters for a chat this week. His main concern was to explain plans for making the islands an easier place for financial services personnel to live in. He would like some of those 8,000 hedge nearly 10,000 funds that are registered there to be more than just brass plaques. But, when asked, he also had time to dismiss the idea of a transaction tax out of hand.

"That's an old hat. I have been hearing about it for 25 years. It's just not practicable. It will not work."

from DealZone:

GM’s Opel Surprise

"You wonder if your chance will ever come or if you're stuck in square one."

When I heard about GM keeping its Opel unit, that line from a song by British band Coldplay came to my mind. After all those long nights of paltering on job cuts and money, GM was having a change of heart.

The sale of Opel to a group led by Canadian car parts maker Magna -- announced in September -- was widely considered a done deal. Turns out, it was less done than more. Citing improving business conditions and the strategic importance of Opel, GM decided it would be better to alienate the German government that provided it with a loan to sweeten the sale of the unit to Magna than to lose the business. GM said it would repay the rest of the 1.5 billion euro ($2.2 billion) bridge loan if Berlin requested. The loan helped save Opel from being sucked into GM's dip into bankruptcy this year.

"This is a black day for Opel," an employee, who declined to be named, said in front of the company's headquarters in Ruesselsheim, near Frankfurt. German government officials were said to be seething, as were the Russians, who's Sperbank had tied up with Magna to do the deal. But not all of Europe was angry. British unions welcomed the news. "It is fantastic news for the UK and right that General Motors does not break up its family and instead retains ownership of (Opel sister brand) Vauxhall," said Tony Woodley, joint general secretary of the Unite union.

from Commentaries:

Don’t hold your breath for European flotations

COLOMBIA/A web-based survey of more than 40 European institutional investors by investment bank Jefferies shows most -- 83 percent of those who responded -- are not expecting a re-opening of the IPO market in the UK and Continental Europe before the middle of 2010.

 

Only 23 percent of the analysts, portfolio managers and dealers surveyed reckon the IPO market will re-open by the end of this year.

Seems the world is still split on what type of companies will be floated though:

A dish best served cold

Alain Grisay, the softly spoken CEO of F&C Investments, was in a wry humour at F&C’s annual press seminar for European journalists on Thursday.

Fresh from his bout with the UK’s Treasury Select Committee on the causes of the banking crisis, and enjoying a respectable set of fourth quarter figures, Grisay is in the rare position of having come through the storm with his house intact. “We have just gone through an unrequested market stress test that confirms our model works,” he said. “We were able to report resilient results for the year and took the market by surprise.”

His company has been viewed as boring in the past by market commentators, but Grisay observed drily that in some quarters F&C is now viewed as a “must have”.

Who gets the last laugh?

Public critisicm may be heating up against banking executives being rewarded with huge bonuses despite taking too much risk (especially ex Merill Lynch head John Thain who requested a bonus and spent $1,405 on a garbage pail during a $1.22 million renovation of his office).

However, there are smaller fish who are being rewarded after doing something similar — taking too much risk and choosing the wrong bank in which to put their deposit. We’re talking about those who deposited in the collapsed Icelandic bank Landsbanki.

Around 300,000 British savers had accounts worth some 4 billion pounds in Landsbanki’s online savings provider Icesave, which offered competitive interest rates of up to 7-plus percent.

Please put a penny…

Britons are not only having to contend with a pound falling to near parity with the euro and hitting multi-year lows against the dollar, they are also now being weighed down with change.

The country has long been one for coinage. The smallest note is for five pounds, which earlier this year was worth about $10 and is now around a mere $6.50. No equivalent of the paper dollar and hence lost of change.

Now, however, pockets are filling up with more pennies than usual, courtesy of one of Prime Minister Gordon Brown‘s economic stimulus plans. Brown cut 2.5 percent off value-added tax. So now a £3.50 film rental costs £3.41 and a $2.15 coffee is £2.09. Lots of increasingly worthless coppers floating around — unless of course deflation joins the party.