Americas

Washington may finally take up mortgage reform

21 Dec 2012

Assuming Congress settles the deficit debate, housing finance should be its next stop. Lawmakers have postponed reforming the government’s role in funding home loans for four years. Some hurdles still remain. But economic, regulatory and political obstacles are dissolving.

Latam minority investors strike back against Enel

21 Dec 2012

The Italian utility tried to foist overvalued assets onto shareholders of Enersis, its Chilean unit, as part of an $8 bln capital hike. Minorities rebelled and with regulatory help forced Enel to restructure the deal. It’s a small but significant victory for Latam shareholders.

Upward U.S. GDP revisions explain a few surprises

20 Dec 2012

The boffins’ first stab at the Q3 growth rate was 2 pct; the third and final estimate is a much healthier 3.1 pct. That makes unexpectedly good jobs figures seem less odd and may help account for Obama’s win in November. Stronger growth makes the fiscal cliff less scary, too.

A guide for the perplexed: U.S. MBS lawsuits

20 Dec 2012

Banks, trustees and even investors had a hand in the debacle surrounding repackaged home loans. With lawyers running up against post-crisis filing deadlines, the last lawsuits are in sight - but the end of the fallout is years away. Breakingviews explains where things stand.

NYSE’s Niederauer takes ICE-cold shower

20 Dec 2012

The Big Board’s agreed $8.2 bln sale to ICE stacks up financially and strategically. But NYSE is fetching a quarter less than its new owner offered in a joint bid with Nasdaq last year. With its shares lagging the exchange sector since then, capitulation was the CEO’s best option.

Fed’s foreign bank crackdown is price of stability

20 Dec 2012

Forcing overseas lenders to properly capitalize their U.S. arms is necessary to protect the local - and global - financial system. The Federal Reserve’s unilateral approach could prompt others to follow suit. But fears that fragmentation will stifle global banking are overblown.

It’s 20.12.2012; and it’s the end of a magical era

20 Dec 2012

One doesn’t have to be a Mayan to believe that tomorrow represents a numerological end of an era. It may not mark the end of the world - as some users of the Mesoamerican Long Count Calendar suggest - but after a fertile period for adorable dates, we are now entering a desert.

Mini-Berkshire shows it’s hard to beat the master

19 Dec 2012

Markel models itself after Warren Buffett’s company. The $4 bln insurer aims for smart underwriting, picking stocks and adding long-term value. It has even got into reinsurance and owning businesses. But performance isn’t as impressive as Berkshire given its far smaller size.

$2.3 bln Brazilian insurer IPO looks too pricey

19 Dec 2012

That would value the unit state-owned Banco do Brasil wants to hive off at 12.5 times earnings - richer than rivals. BB Seguridade may be a good business. But it will remain majority-owned by a bank that does the bidding of an interventionist government. That warrants a discount.

Growth outlook gives U.S. stocks edge over Europe

19 Dec 2012

On dividend yield and price-to-earnings measures, European shares look attractive - at least compared to the other big, mature market across the Atlantic. But that ignores superior growth potential in the United States. Savvy bargain-hunters will see that better value lies to the west.

Ethical economy: Greed, justice and deception

19 Dec 2012

“Greedy” has become a common insult since the financial crisis. But admissions of greed remain scarce. That’s because people see their own immoderate desires as a virtuous search for justice. A humble examination of the flaws in prosperous societies is required to find the truth.

U.S. government GM sale is more noise than motion

19 Dec 2012

The Detroit automaker’s bosses will be glad to lose the “Government Motors” moniker in a year or so – not to mention restrictions on their pay. But industry-wide worries, not Uncle Sam’s stake, are weighing on the stock. Treasury could have waited rather than take a $5 bln loss.

Sulzbergers will make headlines in New York Times

18 Dec 2012

Next year will be pivotal for the family that controls the Gray Lady. The Ochs-Sulzbergers have loyally seen the paper through dark days. With the Times on sturdier financial ground, it’s time to find a safe custodian like New York’s billionaire mayor before the moment passes.

Mobile advertising will boom in 2013

18 Dec 2012

Internet firms moaned for years that users were spending lots of hours on the Web, but marketing dollars weren’t following from print and TV. Time and the growth of broadband have closed this gap. The boom in smartphones now provides similar fuel for mobile advertising.

Animal spirits will stir buyout barons before CEOs

18 Dec 2012

Megadeals have been in short supply for both since 2008. But corporate bosses keep getting rewarded for modest acquisitions while Glencore and HP are warnings against going big. For private equity, though, cash stockpiles and cheap money will be catalysts for a bolder 2013.

Market signals turning point in U.S. gun debate

18 Dec 2012

Private equity isn’t known for squeamishness - or for dumping promising investments. So it’s significant that Cerberus is selling firearms maker Freedom Group following the Newtown school atrocity. Gunmakers’ shares are plunging, too: big money is betting on tougher restrictions.

Jefferies puts Wall Street’s dilemma in a nutshell

18 Dec 2012

The firm reported record annual revenue but only a paltry 8 pct return on equity. CEO Richard Handler, like bosses of larger rivals, wants to improve on that. He has a tax-efficient merger on the cards to help. But without an upturn or big cost cuts, others won’t be so lucky.

Rising US inequality shows need for fiscal reform

18 Dec 2012

A Reuters study shows tax changes and federal outsourcing have helped funnel income to the well-off at the expense of the poor and middle class. Such polarization can slow economic growth and fuel financial instability. Restoring some balance would be both just and rational.

Grains are the commodities to watch in 2013

18 Dec 2012

Iffy global economics make it hard to gauge the outlook for copper and iron ore. Grains are different. Stocks are low and the drought that hit harvests in 2012 has continued. Low rainfall is also hitting river-borne U.S. trade routes. Expect prices to stay high.

Congress should push for mandatory gun insurance

17 Dec 2012

Firearm ownership is a U.S. constitutional right. But it comes at a cost. Requiring liability coverage could pass legal muster while helping to compensate victims. The market might also do a better job than politicians at keeping the most dangerous weapons from unstable hands.