Events, Dear Boy
It's interesting that no matter how infrequently I post, it's still possible for me to drop a decent-sized clanger with pretty decent regularity. I refer, of course, to the post below, where I confidently predicted that Barclays had lost interest in the idea of building up a US brokerage business, and that financing conditions for the Atlantic Yards arena were still benign.
So, that was about 1.5 clangers. Barclays, of course, has decided to double down its bet on a presence in the US capital markets by tearing a few strips off the Lehman Brothers corpse, although how the Lehman* purchase helps it build up a retail business in the US escapes me. It's clear that John Varley and Bob Diamond have decided to fling the money of the good depositors in the banks' UK operations at empire-building in New York.
The Financial News calls it "league table glory", which is a nice way of saying that the credit crunch sure as hell hasn't extinguished vanity and hubris in investment banking. But when you've just spent $1.75 billion on bits of a bank they couldn't give away last week, $20 million a year is a manageable burden, and I don't see why Barclays wouldn't be inclined to extend the naming rights deal if financing conditions stay nasty.
The .5 clanger is that financing conditions have headed south again. Now right now, investors love them bonds, and the "Barclays Center" (that dare not speak its name) would probably be financed using bonds. But the bonds that they love are mostly low-risk stuff, and highly-leveraged construction financings for speculative team moves don't count.
Developing. Right, I'm to check out the appeal. Seems a shame to miss it when I'm only seven blocks away.
* Note the singular. Only particularly dim UK journalists would ever be tacky enough to append an 's' to a firm when giving it a shorthand.