Banks around the world have been raising capital in the last few months. If the market is efficient, then the cost of capital for these banks should tell us something about how risky they are. Based on the relative cost of capital of banks in the U.S. compared to those in France, Germany and Switzerland, the world's riskiest banks are right here in the good old USA. The safest banks? French ones.

How so? Here is the rough (due to different capital structures) after-tax cost of capital for the banks in different countries:

• U.S.: Morgan Stanley (NYSE: MS) is paying a 17% interest rate and Goldman Sachs Group (NYSE: GS) pays almost 17%
• UK: Barclays pays 16%; HBOS, Lloyds TSB; and Royal Bank of Scotland pay about 12%
• Germany: Commerzbank pays 10%
• Switzerland: UBS's interest rate is relative bargain of 9.9%
• France: BNP Paribas, Societe Generale, and four others pay the lowest rate -- 5% -- for their capital

Maybe there's some sort of trading opportunity to short U.S banks and go long French ones. C'est la vie!

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing, will be published by Portfolio on December 26, 2008. He has no financial interest in Goldman or Morgan Stanley securities.

Two organizations, one projection: a forecast of 86.9 million barrels of oil per day consumed in 2009.

The International Energy Agency and OPEC arrived at the same projection, suggesting that, in economist Peter Dawson's interpretation that "2009 is going to be a year of a slowdown in oil consumption growth, which is significant."

Moreover, Dawson is quick to highlight what's important in the above: slowing oil consumption growth in emerging markets. Oil consumption in the United States has been falling for more than two years -- it's projected to drop 3.1% in 2008 and another 2.3% in 2009. It's oil consumption in the developing world, primarily China and India, that really moves prices, Dawson said. Oil Monday closed up 52 cents to $115.11 per barrel.

'A small victory, that we'll take'

Right now it appears, for the first time in more than five years, consumption growth (not to be confused with a consumption decline) will slow, he said.

"It's a small victory, that we'll take, regarding the oil markets," Dawson said. "For the first time in a while we'll see some demand relief internationally, and that has to help lower oil prices."

A British trade group that reports on music retail has published new findings to Billboard Friday "indicating Britons buy more CDs than any other country, and are bigger consumers of legal downloads than any of their European neighbors." It's the fifth year the British have led CD purchases, buying an average of 2.3 CDs in 2007, while Americans only bought an average of 1.7 CDs. These findings come from the International Federation of the Phonographic Industry's new handbook out this week: the Recording Industry in Numbers.

Digital figures for British music downloads totaled $169.5 million in 2007, and were announced at the New Music Conference at London's Earls Court by the Entertainment Retailers Association Thursday. The association's chairman commented that British retailers offer "more and better music retailing than anywhere else in the world," but seemed to connect the higher CD and digital sales in the UK with consumers' love of music, rather than where the real strength of the report is: consumers apparent continued satisfaction with CDs and interest in downloads.

Even though this news indicates that CD sales are still steady, consumers buying an average of two CDs a year can hardly be that great for the music industry. In a market where CD sales continue to be seen as the lifeline of the industry, the reality of CD sales indicates how much digital downloads have to make up in order for some form of equilibrium in the industry. Clearly these numbers should force the industry to build up efforts to solidify and strengthen digital sales, but since it was put out by retailers, that group may resist such moves.

Cheerio! What to do if you're a 54-year-old former world leader, in good health, with Western sympathies? Days of leading a major country are behind you, but you're not ready to pack it in anytime soon. Link up with a major American corporation, of course! Tony Blair, who served as Great Britain's prime minister from 1997 through June of last year, has agreed to join with JPMorgan Chase (NYSE: JPM) in the role of part-time adviser.

The financial terms of the arrangement weren't disclosed, but one Manhattan recruitment consultant estimated in The Financial Times that Blair's fee would likely be more than $1 million a year (though that sum doesn't go quite as far in pounds these days).

After the massive announcement last week lowering the Apple Inc. (NASDAQ: AAPL) iPhone price and announcing the new models of the iPod family, MacWorld is reporting that the media giant is planning another announcement, this time in London on September 18. The event will take place at the Regent Street Apple Store and is by invitation only apparently.

The rumors about the event are centered around two things: the UK release of the iPhone, or an announcement that the iTunes Store will offer The Beatles catalog very soon. Once again, the speculations about Apple go straight for The Beatles, and once again the more likely reason is the most probable. But the report also indicates that "mum is the word" and that seems to be causing the most confusion. PC Advisor comments that the announcement for a UK carrier for the iPhone is hardly "mum" in the face of almost three months of U.S. sales.

Whatever the announcement is, we have another four days to continue speculating. Maybe we can all be shockingly surprised and see another new product or service released, but it just seems safe (considering the track record) that Apple is only going to announce a service new to the UK and not necessarily as exciting. In any case, while that is certainly not hopeful for UK residents at least they can be assured that any Beatles announcement should take place in London... or Liverpool.

Until then, "Your Mother Should Know" what the announcement entails...

Kohlberg Kravis Roberts & Co., reportedly has BCE Inc. (NYSE:BCE), the owner of Bell Canada, in its sights.

A deal for the telecom company would be worth about CAD$30 billion (over USD$25 billion), making it the largest acquisition in Canadian history and one of the largest buyouts ever, according to the Globe and Mail newspaper. KKR is looking for Canadian partners such as the Ontario Teachers' Fund since foreign firms are prohibited from owning more than 46% of a telecom company's voting shares.

Shares of BCE were up 12% pre-market trading. They have dropped about 4% this year.

KKR already has its hands full:

The New York-based buyout firm is part of the $45 billion TXU Corp. (NYSE: TXU) deal, the largest buyout ever. KKR also is among the companies in the hunt for Australian retailer Coles Group Ltd. Last month, it agreed to buy Dollar General Stores Corp. (NYSE: DG).

Apparently, there's no limit to the number of multi-billion acquisitions that KKR can juggle at the same time.

Citgroup Inc. (NYSE:C), which already plans to spend $13.4 billion for Japanese brokerage Nikko Cordial, now reportedly has its sights set on ABN AMRO Inc. (NYSE:ABN), the Dutch bank that's in discussions to merge Wit Barclays Plc. (LON:BARC).

If the Japanese deal -- which has encountered some opposition -- happens and Citigroup is able to outflank Barclays for ABN AMRO what will it do then? ABN AMRO has a market capitalization of about $80 billion. Nikko Cordial and ABN AMRO would be a lot for Citigroup to integrate at once.

Chief Executive Charles Prince, though, may have no choice but to take that risk.

Shares of Citigroup have risen only 4 percent over the past five years, underperforming its peers including Morgan Stanley (NYSE:MS) up 44 percent, Merrill Lynch & Co. (NYSE:MER) up 56 percent and Goldman Sachs Group Inc. (NYSE:GS), up 134 percent.

Even so, the prospect of Citigroup entering the bidding from ABN AMRO should worry Barclays. Other U.S. and financial services firms who are seeking growth overseas may enter the fray as well.

The ABN AMRO saga has just begun.

Barclays Plc.'s (LON:BARC)$80 billion deal to buy European rival ABN Amro Holdings NV (NYSE:ABN) will add to the pressure on banking and financial services sector stocks which have performed poorly this year amid concerns about the economy and the housing market.

A combined Barclays-ABN Amro would be a formidable competitor. There's little geographic overlap between the two banks and about the only area where there is duplication is in fixed-income investment banking, according to the Wall Street Journal (subscription required).

The merger would be the largest ever in the financial services sector and would create the second-largest bank in Europe, according to Bloomberg News.

This has not been a good year for financial services stocks.

Shares of Merrill Lynch & Co. (NYSE:MER) are down 12 percent, Citigroup Inc. (NYSE:C) is down 9 percent, Morgan Stanley (NYSE:MS) has fallen 6 percent while Deutsche Bank AG (NYSE:DB) has plunged 4 percent. Even Goldman Sachs Group Inc. (NYSE:GS) has only managed to gain 2 percent.

If these stocks don't start to perform significantly better, you can bet more mergers of the size of Barclays-ABN Amro will occur.

David Malpass of Bear Stearns wrote a great op-ed piece on how to interpret the trade deficit. The full article can be found on the Forbes Digital Rules blog.

Here are some some of his thoughts:

• The imbalance, the trade deficit and related capital inflow all link the faster-growing U.S. with other aging, slower-growing economies. They are a reflection of growth in the U.S., not weakness.
• Despite our trade deficit and other countries' trade surpluses, the U.S. economy has created 9.3 million new jobs since the 2001 recession, compared with 360,000 jobs in Japan and 1.1 million jobs in the European zone, excluding Spain.
• Speaking of Spain -- like the U.S., Spain (3.6 million new jobs) and the U.K. (1.3 million new jobs) also ran trade deficits and created jobs rapidly during these last five years.
  
• The recent upswing in the U.S. trade deficit partially reflects the shift in the demographics of the world's large economies. The under-60 population in the U.S. is expected to grow for at least 50 years, whereas the under-60 populations in Japan and Europe is already in a decline and China will also be in a decline within a decade.

We have blogged in the past on how the trade deficit has been misinterpreted by economic pundits for years. In my opinion, David Malpass is one economist who gets it right.

There were weekend reports out of The Sunday Telegraph stating that private equity firms are working to make a buyout offer for Time Warner's (TWX) British magazine unit called IPC.

The Telegraph article even states: A senior executive at one private equity group in the UK said yesterday: "There is a lot of attention being paid to IPC. People are seriously running the numbers."

The price tag for the IPC unit is said to be near $1.5 billion Pounds, or roughly $2.9 billion U.S. dollars.

IPC has such magazines such as Marie Claire, In Style, Loaded, Nuts, NME and Wallpaper. While this unit was not one of the ones officially put up for sale, Time Warner has already shown its plans for restructuring and focusing on core operations that will result in the sale of 18 magazines in the US.

The private equity groups that are said to be the most likely are Blackstone, Permira, Cinven, Carlyle and CVC. Back on September 20, there was an article in the New York Post stating that some 28 parties were interested in Time Warner's magazines unit.

One interesting angle of the private equity group bidding is that this may set the bar higher for the sale of Time Warner's non-core magazine operations in the US that it has already put in motion.

This potential UK sale of IPC could even have some indirect implications for its AOL U.K. unit, although that may be taking this situation one step further than the intent of the news over the weekend.