Americas

Chesapeake sets unlikely governance reform example

8 Jan 2013

The U.S. gas firm’s revamped board slashed CEO Aubrey McClendon’s bonus to zero and reined in other perks. They’re overdue steps for Chesapeake, which has a long way to go to restore credibility. Still, there’s hope for similarly abused shareholders elsewhere in the oil industry.

Oil barons and tech hipsters share a dark side

7 Jan 2013

They seem so different. But SandRidge’s CEO and some peers jet around at shareholders’ expense, while at Facebook and Google founder-bosses are insulated from owners by super-voting rights. Clubby boards also feature in both sectors. The oil business may prove easier to clean up.

Private lawyers could add oomph to SEC enforcement

7 Jan 2013

The U.S. regulator has scored big settlements from Wall Street banks. But a new study suggests shareholder lawsuits may do better, especially at pinning blame on individuals. Other government agencies find ways to co-opt private-sector legal talent. Maybe the SEC should try it.

Fed quandary shows finance lost in economic space

7 Jan 2013

The U.S. central bank says it’s concerned about the economic costs of money-printing. That probably means inflation. They should worry more. Extraordinary policies have distorted asset prices. After providing misinformation for four years, markets risk becoming irrelevant.

Sokol’s escape further fogs insider-trading laws

4 Jan 2013

Warren Buffett’s fallen deputy was a prime target after dealing in Lubrizol shares as Berkshire Hathaway mulled a takeover. Yet the SEC dropped its probe. Even with a broad insider-trading crackdown since the David Sokol affair was disclosed, the crime’s contours remain elusive.

Macondo spill cost Transocean more than money

4 Jan 2013

The U.S. oil services firm will pay Uncle Sam $1.4 bln for its role in BP’s Gulf of Mexico disaster in 2010. That’s a modest sum. But shares in the $18 bln Transocean have lagged those of rivals in the meantime as it avoided heavy investment. It has a lot of catching up to do.

Freer transatlantic trade a worthy G8 goal

4 Jan 2013

British PM David Cameron wants the group to start work on an EU-U.S. free trade agreement. Global trade deals are nearly impossible and bilateral ones tangle world commerce. But a pact between the two Western blocs could set new standards while also boosting the world economy.

Shareholder votes will be a feast for legal eagles

4 Jan 2013

Restrained from suing over securities fraud, lawyers are starting to prey on dodgy disclosure in corporate elections. Say-on-pay votes are popular, but anything needing investor approval is fair game. Starved of other business, attorneys’ hunger for these suits can only grow.

Google won’t evade rivals as easily as feds

4 Jan 2013

An extensive U.S. antitrust probe into the dominant search engine ended with a company promise to behave. The government’s case always looked shaky. If it couldn’t nail Microsoft, Google was a pipe dream. Just as well. For now, it’s still a problem for the market to sort out. 

Wall St could learn a thing or two from Detroit

3 Jan 2013

Both needed government aid in 2008. But it is the automakers that have restructured and become decently profitable in straitened times. Detroit’s Big Three still have work to do, but they have responded better. Motown’s chiefs can more easily justify big pay days too.

SeaWorld IPO may not make second investment splash

3 Jan 2013

Blackstone is ready to take public amusement parks it bought in 2009 from Anheuser-Busch for a headline price of $2.3 bln. Including dividends already taken, the buyout shop could end up trebling its money. But new buyers expecting similar returns should beware getting soaked.

Liberal economists aid Tea Party in cliff debate

3 Jan 2013

Government spending enthusiasts don’t mind high deficits and don’t like proponents of low taxes. But with the U.S. right more anti-tax than anti-spend, the result is a common acceptance of deficits. That makes budget deals easier, but promotes unrealistic expectations.

U.S. dollar may smile at end of 2013 ugly contest

3 Jan 2013

None of the leading currency contestants is pretty. Central banks across the globe seem willing to debase money with the printing press. The euro’s nerves have improved but the recession-hit zone is fragile. The yen wants to lose. The dollar and the pound may eventually come off best.

U.S. Congress will listen only to markets

2 Jan 2013

A last-minute, pint-size fiscal deal sets the stage for another cliffhanger in a few months. Worse, chances for deficit reduction are probably weaker now. In theory, everyone should want a broader plan but voters are too narrowly focused. Investors get the final word.

HP admits breakup is on the table

2 Jan 2013

The troubled $29 bln tech pioneer has maintained that splitting up would be a mistake. But in its new annual report, HP says it may sell assets. It’s a no-brainer for the board to consider a breakup. After all, the stock is trading far below the value of the company’s parts.

Old-school markets could return in 2013

2 Jan 2013

After five years of macroeconomic mayhem, the next 12 months may be more ordinary. Signs already suggest the focus will shift from central bank interventions and systemic worries like a euro or financial collapse to companies, deals and fundamentals. That would be refreshing.

Lehman could be 2013’s Humpty Dumpty

2 Jan 2013

Nomura has struggled with the defunct firm’s European and Asian operations. Barclays may offload the U.S. arm. So why not stitch Lehman back together? Plenty of sidelined Wall Street execs could run it. But funding looks difficult. It’s Wall Street’s problem in a nutshell.

Avis gives Zipcar a faster lane to profitability

2 Jan 2013

Selling to the mainstream car rental giant for $500 mln means a 32 pct loss for those who bought Zipcar’s shares in its 2011 IPO. But tapping into Avis’s underused fleet should boost the car-sharing company’s margins. And for Avis owners, cost savings justify the 49 pct premium.

Ethical economy: The world at work

2 Jan 2013

“The Family of Man”, a 1955 photography exhibit, spawned a best-selling book. The pictures of work are dated and misleading, but still bring out the timeless universality of the human condition. It’s a sobering theme for economists, who place too many hopes on technical progress.

Global relief on fiscal cliff misses the point

2 Jan 2013

The unnecessary fight over the U.S. budget ended with another messy and inadequate compromise. Other equally silly clashes loom. Investors may cheer, but their nail-biting was symptomatic of the world’s excessive dependence on dysfunctional American politics. That hasn’t changed.