It is not all that long ago that the big credit crunch banks were being lambasted in some quarters for their plans to invest heavily in Chinese banks, and that at least one pundit was predicting “The Coming Collapse of China”. How things change! Now it is the titans of Wall Street and the City that have faced collapse, and western government intervention that has saved (we hope!) the financial system. Today’s Telegraph carries a nice quote from Martin Sorrell, Chief Executive of WPP:

“This [rescue] is a form of state directed capitalism which is more akin to the Chinese model than it is to our own.”

Indeed, it was never in much doubt that the Chinese would bail out their own banking system in the event of a crisis – and they did when faced with triangular debts (the model for our own, latest crash?) and non-performing loans (NPLs) via the set up of the asset management companies (AMCs) and Central Huijin. Read more »

For the past year, I have been predicting (wrongly) that the art market will correct. It defied the financial odds in part because the crisis hadn’t reached the super-rich and because a fresh wave of oligarchs and Middle Eastern sheiks hoisted their bidding paddles to save the day.

Now, art may be imitating life in the collector’s market, yet another sign that spending by the super-rich is suffering. Read more »

Associated Press

Sallie Krawcheck

Private banks like to say they put their clients first. But the resignation of Sallie Krawcheck from Citigroup shows that products often get first priority.

An article in today?s Wall Street Journal by my colleague David Enrich says Ms. Krawcheck–probably the highest-ranking woman on Wall Street–resigned over a spat with Citigroup CEO Vikram Pandit. Ms. Krawcheck was a fierce advocate for her clients, demanding the Citigroup reimburse wealthy clients who were sold bad investments like Citigroup’s in-house hedge funds and auction-rate securities.

“Ms. Krawcheck grew frustrated with Citigroup’s efforts to push the investment bank’s products through Smith Barney and the private bank, according to people familiar with the matter.”

Her opponents say Ms. Krawcheck was too provincial, focusing too narrowly on her own clients at the expense of the larger bank. And Citigroup has been better than many firms in reimbursing clients for their losses from hedge fund investments and purchases of auction-rate securities. At a time when Citigroup’s balance sheet is stretched, such measures are especially praiseworthy. Read more »

In a Smart Company article by James Thomson called MP renews calls for investigations into mistreatment of Bakers Delight franchisee, he quotes:

NSW parliamentarian Joanna Gash has renewed calls for the Australian Federal Police to launch an investigation into accusations Bakers Delight and ANZ bank colluded to put a franchisee out of business.

Quoting emails between the franchisor and the bank, Gash alleges:

On Monday, Gash revisited the case in Parliament, producing emails from Bakers Delight chief financial officer Richard Taylor and ANZ executives that she says shows “plans had been conspired to terminate Ms de Leeuw’s franchise well ahead of time”.

The bank and franchisor deny all the allegations.

This is the first public AUS public allegation of the key franchisor:franchise banker relationship that I identified and wrote about in a 2005 paper for Industry Canada called Franchising Opportunism [free download]. Read more »

If you want to know what is really worrying the wealthy these days, consider the case of Bruce Smith.

The co-founders of medical-equipment maker Boston Scientific Corp. were forced to sell 31 million shares collectively through last Friday, according to the company. The shares had been pledged to “collateralize a loan,” the company said. Yesterday Peter Nicholas, one of the company’s co-founders, reported the sale of another $2.7 million in company stock, again from margin calls. Read more »

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