Citigroup to buy Prudential's Egg for 575 mln sterling (Reuters)
Here's a blast from the past, from the days when banks felt the need to have unique and hip internet offerings that carried separate brands from the main division. Remember Wingspan? Well, Citigroup will buy out the assets of Egg, the internet banking branch of Prudential in the UK. Just in case you were wondering, it's still underperforming, and it's still unprofitable. Previous rumors of an Egg sale were denied, but you can insert your own pun about turning a rotten Egg into an omelette here ____.
Greene King toasts sales despite pub smoke ban (Scotsman.com)
Proponents of smoking bans in the US are gaining more ammunition, as UK pub chains continue to report good results despite the ban there. One chain, Greene King, claims to have seen a major boost, particularly in its locations that sell food, as well as those that have outdoor areas. Of course, as we're sure many ban advocates would agree with, profitability does not make right. Also, it's interesting to note the vertical integration of the UK alcohol industry. Greene King, in addition to owning a pub chain, also owns a line of beer. Sure, here you have your odd microbrewery with a bar attached, but nothing approaching a national brands, with its own line of pubs.
Tech Barons Take on New Project: Energy Policy (NYT)
We read somewhere that in Davos, at panel on the future of energy, it was pretty much all tech guys, like the Google guys waxing poetically about their vision. They were there along with venture capitalist Vinod Khosla, who is simultaneously investing gobs of money into ethanol while lobbying the government for ethanol subsidies. There's a few ways to think about this trend. For one thing, gas prices are expensive, so energy policy appears to be "messed up", if only by inference. Who are the big stars today that seem to know everything about everything? The Google guys, along with some Silicon Valley VCs. Then again, perhaps were entering a unification phase among technology, whereby formerly disparate disciplines like computing, energy and medicine are all merging, as people realize that they share a common substrate, that it all comes down to 1s and 0s, if you dig deep enough. Or maybe these guys just have a lot of money, and as rich people have always done throughout the history of time, they feel they have an important voice to lend to the issues.
Summers on the biology century (Information Processing)
While the tech crowd is focused on energy policy, Larry Summers apparently thinks the big work to be done is in medicine and the life sciences. Yeah, we didn't see that coming earlier. Sure, seems like we're on the cusp of some interesting stuff, but Summers' proposal that the government invest a lot more in this area seems to come out of nowhere. More importantly, it's not clear that things aren't working. Yes, plenty of layoffs at Pfizer, but, frankly, we'd be worried about any industry where a century-old behemoth weren't going through some major pains at this point.
Diamond District Struggles to Keep Up (AP)
New York is getting battered from every direction these days. In one area, Sarbanes-Oxley is sucking the life out of its most important industry, as it watches all the money get exported to London. And in another neighborhood, the Diamond District, the internet is taking it toll, disrupting the old channels and the old way of doing business. According to industry participants, the slowdown is quite noticeable. And it doesn't help that diamonds have taken a public relations hit over the years -- most recently with the release of Blood Diamond, the movie. So when Schumer and Bloomberg are done saving the financial industry, perhaps this will be the next area for them to work on.
Bernanke, Trichet May Find Cheaper Oil Raises Inflation Risks (Bloomberg)
Oil goes up, oil goes down. Economies race ahead, economies slow down. What's the problem? Well, lots if you're a central planner central banker. Falling oil prices, which were supposed to help "whip inflation now", may make things more difficult, as economies around the world are getting a fresh tailwind right at the exact time they were supposed to be going into a cooling off period. In other words, things aren't going exactly to plan. This still doesn't seem like a big problem, but if you're tasked with managing these things, as these central bankers are, then it can't feel good to have things out of your control.
Uncle Sam spoils dream trip to space (CNN)
There's the old line that the power to tax is the power to destroy. It even has the power to destroy dreams. A computer programmer who won a trip into outer space as part of an Oracle-sponsored sweepstakes has decided to nix the trip because it wasn't worth paying the $25,000 in taxes that would have come along with it. And this, you should note, was a life long dream of his, the chance to go into space. Weak.
Is the Fix Worse Than the Problem (NYT)
We wouldn't typically mention the week's Gretchen Morgenson column (sort of no point at this point, eh?), in fact, we wouldn't even read it most of the time. But when there's a New York Times floating around the brunch table, the business section always seems to migrate down to our end, as the other eaters snap up the Arts, Travel and Week In Review sections. And then once you have the business section, there's that painful moment when you realize you're gong to get sucked into one of her columns, ruining what had been a pleasant morning. This week's screed is actually not about executive pay directly, but rather about legislation that would curb executive pay, which she sees has having negative consequences for lower management, who might actually get hurt. The phrase she's looking for is "unintended consequences", which she should probably have plastered on her office door. While attacking this piece of legislation, she misses out on an enormous point, which is that the corpus of law regarding this stuff has basically formed a book of unintended consequences, and the more she champions doing "something", the more of these side effects we can expect to see.
Win a Nobel, live longer (Stumbling and Mumbling)
A researchers has shown that winners of the Nobel Prize have longer lifespans than their peers, longer, even, than others in their field who were nominated, but did not win the prize. The same effect is found to be true among Oscar winners, leading him to conclude the recognition of outstanding achievement, or more broadly status, confers on the individual something which keeps them going longer. That being said, this might not apply in areas of business, where CEOs routinely drop dead, as the stress of higher status posts seems to take quite a toll in the body. In the academy, it seems, the higher one gets, the more idyllic the lifestyle.