Bizwatch

Bond Villains?
No one ever said bond traders were gentlemen. But even by the bruising standards of this market, the rapid-fire sale of 12 billion euros’ worth of European government bonds by a group of mainly London-based Citigroup traders last August was a shocker. Prices tumbled, and Citigroup promptly bought back 4 billion euros’ worth of bonds for a tidy profit. Citigroup, the world’s largest financial

INDICATORS
See You In Court
The deadline expired for a resolution between Fiat and General Motors over a disputed option for GM to purchase Fiat’s struggling auto division. The fight could now become a lengthy court battle.

Home Rules
Britain’s Financial Services Authority warned investors that a foreign takeover of the London Stock Exchange could dramatically alter the regulatory regime of its companies. The LSE late last month rejected a $2.4 billion bid from rival Deutsche Börse.

services company, says it broke no rules, but it’s under investigation by German prosecutors and British regulators, and the company has put the traders involved on leave of absence.

Last week European Central Bank president Jean-Claude Trichet called for a “thorough” inquiry, while newspapers published internal memos that discussed strategies to “kill off” rivals — one scheme was reportedly dubbed “Dr. Evil” by the firm’s staff, after the Austin Powers villain. Such language is typical. Bond trading “is like a blood sport,” says Cari Lynn, who spent two years trading and has just written a book about the experience, “and I’ve seen the blood.” The sums of money and risks are so great that they encourage extreme aggression, and if that means wiping out rivals — and a few investors — not even Trichet can change that.

Long Distance Calling
Talk about a coming-of-age story. More than 20 years after the U.S. telecom monopoly AT&T was forced to spin off its regional operators, Texas-based SBC Communications — one of the Baby Bells born of that breakup — last week agreed to buy AT&T for $16 billion. One possible reason: building international business. AT&T has pulled together a network of lucrative and loyal international business clients, points out Tim Dillon, principal analyst of European telecom services for Virginia-based Current Analysis. SBC, whose name is little known outside the U.S. , has dumped stakes in a string of European telecom operators over the last two years. So while SBC cheers the prospect of extending its reach, Dillon suggests it’s all about the name; SBC would be “crazy” if it dropped the AT&T brand from international services, he says. SBC, meanwhile, hasn’t ruled out keeping it. Now that’s showing respect for your elders. — By Adam Smith

Profits By The Barrel
Royal Dutch/Shell announced a 2004 profit of $18.5 billion, the highest ever for a British-listed company. That followed similarly upbeat earnings from ChevronTexaco and ExxonMobil, although in all three cases company stock barely moved on the day earnings were released; in Shell’s case, its announcement also disclosed a further reduction in the firm’s proven reserves. Another big oil firm, BP, is scheduled to announce earnings this week.