Category: General Business (Page 15 of 17)

WikiLeaks turns its sights on corporate American and the banks

WikiLeaks has created another firestorm with its latest document dump, this time covering tons of diplomatic files concerning international relations.

Corporate American now needs to brace itself as well – WikiLeaks is gearing up for massive document dumps involving a major US bank, revealing thousands of pages of corporate secrets. More document dumps from other corporations will follow. Forbes reports on the story along with an interview with WikiLeaks founder Julian Assange.

Early next year, Julian Assange says, a major American bank will suddenly find itself turned inside out. Tens of thousands of its internal documents will be exposed on Wikileaks.org with no polite requests for executives’ response or other forewarnings. The data dump will lay bare the finance firm’s secrets on the Web for every customer, every competitor, every regulator to examine and pass judgment on.

When? Which bank? What documents? Cagey as always, Assange won’t say, so his claim is impossible to verify. But he has always followed through on his threats. Sitting for a rare interview in a London garden flat on a rainy November day, he compares what he is ready to unleash to the damning e-mails that poured out of the Enron trial: a comprehensive vivisection of corporate bad behavior. “You could call it the ecosystem of corruption,” he says, refusing to characterize the coming release in more detail. “But it’s also all the regular decision making that turns a blind eye to and supports unethical practices: the oversight that’s not done, the priorities of executives, how they think they’re fulfilling their own self-interest.”

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Admire Assange or revile him, he is the prophet of a coming age of involuntary transparency. Having exposed military misconduct on a grand scale, he is now gunning for corporate America. Does Assange have unpublished, damaging documents on pharmaceutical companies? Yes, he says. Finance? Yes, many more than the single bank scandal we’ve been discussing. Energy? Plenty, on everything from BP to an Albanian oil firm that he says attempted to sabotage its competitors’ wells. Like informational IEDs, these damaging revelations can be detonated at will.

He jokes with the writer about calling these mega document dumps “megaleaks.”

The most interesting thing is this notion of “involuntary transparency.” In a time when huge corporations are amassing an incredible amount of power, Assange may have found the great equalizer. Corporations are generally amoral, and many of its executives are immoral, so now we the public will get a window into the workings of a company that blows past the carefully crafted public image. Can you imagine the frenzy this will create in the PR department of these companies?

Playboy has another tough quarter

Playboy has reported another quarterly loss, making things tough for Hugh Hefner in his bid to keep control of the company. He’s currently in a battle as the company is being pursued by well-funded buyers.

The latest figures come as the company’s future ownership remains in doubt. FriendFinder Networks, owner of Playboy rival Penthouse magazine and adult websites, wants to buy the company for $210 million. It raised $551 million in debt at the end of last month, a move that could give it the cash to follow through on the bid.

But Hefner, who owns 70% of the company’s voting stock, says he has no interest in selling. And he has proposed to the company’s board that he buy out the remaining stake in a deal that would value Playboy at about $185 million. A special committee of the company’s directors is considering the offer.

In the meantime, Playboy’s management is trying to transform the company from a publishing and TV business into a “brand management” company, leaning more on revenue from licensing out the Playboy name and bunny ears for a range of products.

FriendFinder seems serious here with all that cash. It will be interesting to see what other properties they pursue in this space.

Luxury sales are rebounding

Here’s some interesting news regarding the retail sector and the luxury goods market. Luxury sales are rebounding, which probably means consumer sentiment is ticking back up.

The luxury sector is rebounding better-than-expected this year thanks in large part to wealthy Americans replenishing their wardrobes after a year of self-denial and nouveau riche Chinese indulging in a worldwide spending spree, according to a new study released Monday.

Sales of designer clothes, fine leather goods, jewelry, watches and other indulgences around the globe is forecast to surge 10 percent to euro168 billion ($236.7 billion) in 2010, recovering from a disastrous 2009 when sales declined 8 percent to euro153 billion, Bain & Co. said in its annual review of the sector commissioned by Italy’s Fondazione Altagamma association of high-end producers.

Let’s see what happens this holiday season. If double-dip recession concerns are fading away, retailers might be in for a pleasant surprise.

Junk bond sales are booming

Here’s an interesting twist in the new reality:

With rising fears of a prolonged recession and stomach-churning moves in the stock market, corporate bond markets have performed so well this year they look like they’re part of a parallel universe.

Banks are reluctant to lend, but large corporations with the weakest credit ratings have had little trouble finding investors happy to hand over their cash.

Companies sold $24.6 billion in junk bonds in August, the eighth-best month ever for sales, according to Thomson Reuters data. Among those feeding in the market: Goodyear Tire & Rubber Co., Rite Aid Corp. and acquisitive power giant NRG Energy Inc.

So how is it that companies with bad credit find it so easy to borrow in this economy?

“A lot of that has to do with living in a world where investments pay less than 1 percent,” said Diane Vazza, head of fixed income research at rating agency Standard & Poor’s.

More and more companies are refinancing their corporate debt, getting rid of high-interest bonds in favor of a lower interest rate. In many ways this trend is a positive as companies lower their debt costs, having the exact effect that the Fed intended.

The battle regarding Elizabeth Warren

WASHINGTON - DECEMBER 10:  Panel Chair Elizabeth Warren arrives prior to a hearing before the Congressional Oversight panel, which was created to oversee the expenditure of Troubled Asset Relief Program (TARP), December 10, 2009 on Capitol Hill in Washington, DC. The hearing was to evaluate whether the TARP helping to improve the nation�s financial situation.  (Photo by Alex Wong/Getty Images)

Elizabeth Warren has been a hot topic on both Capital Hill and Wall Street, as many are waiting to see whether she will be appointed as the head of the new Consumer Protection Agency.

The New York Times has written an editorial supporting her nomination. Meanwhile, more Democratic Senators are lining up to support her. Meanwhile, Warren is reaching out to some Republicans and lobbyists.

Chris Dodd has expressed concern over whether she can be confirmed, but many liberals argue that a fight with Wall Street supporters would help the administration heading into the midterm elections and would help fire up the liberal base.

We think this is a no-brainer for Obama – appoint her already!

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