French Bank Sale, AIG Flails
HSBC gets an intriguing offer for seven of its French banking subsidiaries. AIG posts the worst loss in its 89-year history. And cellphone makers care about your feelings
EWS AT A GLANCE
HSBC mulls French bank offer
HSBC, Europe’s largest bank by market value, said it is considering a $3.2 billion “firm cash offer” from France’s Banques Populaires for seven HSBC regional banking units in France. The 400 bank branches are mostly in the south of France. (MarketWatch) HSBC said the deal would free up some money to invest in emerging markets, where it is looking to earn about 60 percent of its pretax profit. (Bloomberg) Banques Populaires said the purchase was a “unique opportunity” to strengthen its own retail bank network, although the seven banks will keep their identities. HSBC-branded banks in France would be unaffected. (Reuters)
AIG books record loss
American International Group, the world’s largest insurer, reported a record $5.29 billion loss for the fourth quarter, after writing down $11.1 billion in derivatives linked to subprime mortgages. (Bloomberg) The results missed analysts’ forecasts, and AIG’s stock fell about 3 percent in extended trading. (MarketWatch) Analysts said AIG’s woes were part of the wider problems in the financial services sector, but that the insurer will face more trouble if the housing slump spreads to commercial real estate. “It would be folly to see the write-down as the absolute truth regarding their likely claims,” said Morningstar analyst Matt Nellans, “but it would be folly to ignore it.” (Reuters)
Dell reports weak quarter on ‘conservative’ spending
Dell Computers reported a 6.4 percent drop in quarterly profits, to $679 million, despite a 10.5 percent rise in revenue. Both results fell short of Wall Street expectations. (AP in Yahoo! Finance) Dell blamed the results on “conservative spending” by consumers and continuing costs associated with its ongoing efforts to turn around declining sales and market share. The costs include increasing customer service resources. “The pace of the turnaound is as slow as molasses,” said Pacific Crest Securities analyst Brent Bracelin in Portland, Ore. “It’s taking a lot longer than I would have expected, and the cost structure is a big concern.” (BusinessWeek.com)
Feelings are calling the shots
Cellphone makers have a lot riding on you picking their handsets, and they want to know what you’re thinking. And feeling. As the mobile phone industry becomes, like fashion and entertainment, driven by hit products, cellphone companies are relying more and more on focus groups, toll-free numbers to share emotions, and other ways of measuring consumer sentiment. Americans are buying new phones much more often, and they are fickle. “Our job is to be behaviorists and psychologists,” said Ehtisham Rabbani at LG Electronics. “We constantly have to be reminding ourselves that we tend to be geek types and our customers are not.” (The New York Times, free registration)
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
MOST POPULAR ON THE WEEK
- The U.S. Marines are developing laser weapons. Here's why.
- Why the Supreme Court is allowing Texas to hold an unconstitutional election
- 3 horrific inaccuracies in Homeland's depiction of Islamabad
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- Gamergate has backfired spectacularly on its nincompoop perpetrators
- 43 TV shows to watch in 2014
- 10 things you need to know today: October 20, 2014
- Why you should absolutely watch this confounding, wonderful World Series
- Rise of the machines
- Ban PowerPoint!
Subscribe to the Week