Americas

Goldman grail gets holier – but less rewarding

14 Nov 2012

The Wall Street firm named 70 new partners, the smallest class since its IPO in 1999. Goldman’s total headcount is shrinking and fewer of the old guard are moving on. While a partnership’s still a ticket to riches, lower profit means it’s tougher to achieve and less of a bonanza.

Law schools’ hard sell unseemly in soft job market

14 Nov 2012

The legal industry is hurting, the good old days might not return and two big firms are merging. Yet deans lure students in with scholarships and hints of an upturn. Schools can’t be blamed for trying to survive. But denying the profession has changed does students a disservice.

If only weed could inspire fiscal joint action

14 Nov 2012

Ideological foes Barney Frank and Ron Paul have passed the peace pipe for marijuana, together urging the feds to stay mellow about new decriminalization votes. Such kinship would keep a fiscal deal from going up in smoke. But anyone who sees similar common ground must be high.

Europe’s automakers given bad steer by France

14 Nov 2012

Insistence by Paris that Peugeot protect jobs in return for a bailout has understandably given GM jitters about a closer alliance. Europe’s car industry won’t be solidly profitable until capacity and costs are cut through mergers. Governments should help, not hinder, the process.

Ethical economy: The angel is in the detail

14 Nov 2012

Barack Obama will not solve America’s most profound economic problems. Mitt Romney couldn’t have either, and the Fed cannot wave a magic wand. Complex problems have only complex solutions, which are constructed by talented people who work in effective organisations.

Tesla’s risky vision puts Detroit to shame

13 Nov 2012

Elon Musk’s electric carmaker is racking up awards for its new sedan. The Model S has speed, looks and gadgets - not just batteries - to best gas-guzzling rivals. That’s better than Motown or Japanese makers managed. Tesla’s challenge is turning all that into consistent profit.

Lower courts Obama’s best shot at legal legacy

13 Nov 2012

They lack the Supreme Court’s cachet, but can be more influential. Appeals courts often get the last word, especially on financial regulation. And judges’ political leanings matter. With top court vacancies rare, putting allies on the benches below can shape the law for decades.

Investors’ hunger for yield feeds instability

13 Nov 2012

With bond buyers fighting for every basis point, highly rated companies and sovereigns are sensibly extending the duration of their debt. But what’s good for balance sheets looks bad for financial stability. The longer the bond, the bigger the loss when rates eventually rise.

Vodafone’s defensiveness reflects strategic bind

13 Nov 2012

The UK mobile group is hurting in Italy, Spain and even Germany. A non-controlled U.S. business now dwarfs everything else, yet is returning less cash than expected. Quick strategic fixes don’t exist. No wonder the dividend super-star is signalling caution over future payouts.

Microsoft succession glitch adds insult to injury

13 Nov 2012

The software giant has missed innumerable opportunities under boss Steve Ballmer - and its stock has been dead money for a decade. Losing a capable, if cranky, executive widely tipped to succeed Ballmer as CEO is one more sign that Microsoft’s future looks muddled.

Risky assets wobble may turn into a correction

13 Nov 2012

Money printing continues but fundamental fears are growing. The U.S. fiscal cliff, Japanese recession and a simmering euro crisis threaten. Markets stretched by QE may fall back. It looks like time for another rotation from equities and commodities into the dollar and safe havens.

Romney’s own “whale fail” hurt his chances

12 Nov 2012

Turnout for the U.S. Republican in last week’s election wasn’t helped by the crash of his campaign’s voter-targeting ORCA software. His supposed business expertise may have allowed common IT problems to creep in: the system was too centralized, too complex, and too little tested.

Sherwin-Williams deal colors Latam green

12 Nov 2012

The U.S. paint maker is splashing out $2.3 bln for Mexican rival Comex. Expected cost savings are worth about $500 million, and yet the market added almost twice as much to Sherwin-Williams’ value. It’s a testament to optimism about the region despite some signs of sluggishness.

AT&T is all dressed up with nowhere to go

12 Nov 2012

The telecom company had a $93 bln bid for Telefonica blocked by Madrid, according to a Spanish newspaper. The target has denied the story. But it’s a sign of the problem AT&T faces: a lofty stock multiple makes M&A tempting, but it seems shut out of both domestic and foreign deals.

IPO may be better option for Vivendi’s Brazil unit

12 Nov 2012

The French company is courting top names to unload GVT. But Telecom Italia and Brazil’s Oi can’t afford the $9 bln price tag. And Brasilia could deny Carlos Slim’s America Movil a bigger role. With a full sale tough to achieve, returning GVT to the market may make sense.

U.S. energy autonomy leaves climate threat intact

12 Nov 2012

Booming output from gas and oil-rich shale should see the United States become energy-independent by 2035, according to the IEA. The geopolitical implications are huge. But despite gas’s cleaner, reassuring profile, the window for fighting destructive climate change is narrowing.

Inequality hits home for Wall Street middle class

12 Nov 2012

Pity all those 30-ish Greg Smiths who entered the industry after the dot-com bust and tirelessly served MDs minting record bonuses in the leverage boom. Now comp is down and their bosses aren’t moving. Even Goldman’s partnership must make way for the new realities of finance.

Who would argue with a U.S. millionaire tax hike?

9 Nov 2012

OK, millionaires would. But selling out the 250,000 super-rich by taxing them at Clinton-era rates might be the political compromise needed to avert the fiscal cliff. It would only raise a third less than hiking rates on Americans earning $200,000 but snag 2 mln fewer taxpayers.

Not all internet investors are irrational fools

9 Nov 2012

The reaction to Priceline’s $1.8 bln deal for rival travel website Kayak is a case in point. With no synergies or obvious industrial logic, it’s nice to see Priceline owners thwack the shares for the company’s adventurism. Internet stocks shouldn’t be a free pass to get stupid.

Diageo pays heady price for Indian spirits

9 Nov 2012

The UK drinks group will get up to 53.4 pct of United Spirits for $2 bln. Despite a weakened seller, that’s 20 times historic EBITDA with few synergies. But the long-term logic adds up if it helps CEO Paul Walsh position Diageo as the leader in giving emerging markets a buzz.