Tuesday, December 01, 2009


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Big global companies can be a bad thing.

"A succession of studies has shown that three-quarters of mergers and acquisitions fail to produce any benefits for shareholders, and more than half actually destroy shareholder value.

"Remember Quaker and Snapple, Daimler-Benz and Chrysler, Time Warner and AOL." -(Schumpeter: Food fight The Economist)

Big global companies can be a bad thing.

What do the following have in common?

Bank of America, Merrill Lynch, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley

Royal Bank of Canada

Barclays, HSBC, Royal Bank of Scotland, Standard Chartered

Credit Suisse, UBS, BNP Paribas, Société Générale, BBVA, Santander

Mitsubishi UFJ, Mizuho, Nomura, Sumitomo Mitsui

Banca Intesa, UniCredit, Deutsche Bank, ING

Aegon, Allianz, Aviva, Axa, Swiss Re, Zurich

They are the thirty financial groups on a systemic risk list

The Financial Stability Board (FSB), an international body of regulators and central bankers, has compiled the above list.

If there is a future financial crisis, the idea is to try to stop problems with one company leading to problems with other companies.

The firms have been chosen because of their international interconnectedness.

"One assumes these have been listed due to their size and importance, as opposed to currently being 'at risk' of collapsing?" (UK banks and life offices on systemic risk list News Money ...)

Big global companies can be a bad thing.

In the Financial Times, Dr A.Young writes (Our great companies are picked off one by one):

"For those of us concerned about the future of UK plc, the past few years have been a disheartening experience.

"One after another, an astonishing number of our great companies have been surrendered to foreign predators, with little more than token resistance by the boards concerned.

"The fund managers who generally decide such matters have shown scant regard for the country’s future, and seem more concerned to make a one-off capital gain, before moving on to the next target...

"Now we watch helpless as Cadbury, a 200-year-old iconic British company with a fine record of looking after its employees, becomes the latest target for foreign predators, absolutely desperate to get their hands on its well established and profitable range of products...

"Have we forgotten that foreign owners make decisions on future investment and employment in their own interest, not ours?"

Cadbury already has an American boss!

Todd Stitzer, boss of Cadbury, is an American lawyer.

"In 2007 he announced a four-year profit-boosting plan that involved cutting 15% of Cadbury’s workforce, closing some factories and shifting others abroad.

"Two years later he provoked a storm when he (temporarily) replaced some of the cocoa-butter in the company’s chocolate with palm oil." (Schumpeter: Food fight The Economist)

Image from tomlease_000

Big global companies can be a bad thing.

Exxon Mobil, and 23 other energy companies, are alleged to have funded 'false science' and orchestrated a massive publication relations and propaganda campaign, designed to mislead the public about the dangers of global warming. (Al Jazeera English - PEOPLE AND POWER - Corporations on Trial)

Chiquita, following a ruling by a US federal court, was fined $25million for funding a terrorist organisation. (Al Jazeera English - PEOPLE AND POWER - Corporations on Trial)


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