Americas

Megastorm shows scope for U.S. infrastructure bank

31 Oct 2012

Any traveler knows America’s transport network is dilapidated. Now, devastation on the East Coast has underscored the lack of investment in defenses. Despite tight budgets, the world’s richest economy could afford more. A quasi-bank could provide the best bang for federal bucks.

Rare IPO find: luxury at a reasonable price

31 Oct 2012

Upscale U.S. furniture retailer Restoration Hardware is set to return to public markets after going private and thriving during the crisis. Despite concerns surrounding the co-CEO’s recent resignation, Restoration offers investors a taste of the high life at a fair value.

Israel may give Canada taste of own M&A medicine

31 Oct 2012

Potash wants to buy the rest of Israel Chemicals it doesn’t own. That would give a foreign firm control over one of the country’s few natural resources and a big role in the iconic Dead Sea. Canada has nixed such overseas takeovers for less - and may now be on the receiving end.

Uniting Calvin Klein’s top and bottom excites

31 Oct 2012

PVH shares surged on its $2.9 bln deal to acquire Warnaco, unifying the clothing designer’s licenses. But the  $100 mln of annual cost savings alone don’t justify investors’ titillation. They don’t even cover the premium. Investors are counting on more to come.

Ethical economy: Admit economic ignorance

31 Oct 2012

Policymakers may still sound sure and pundits admit few doubts, but most key questions remain unanswered, even though it has been four years since Lehman Brothers’ collapse blindsided economic visionaries. Unless a new Keynes comes along, expect more stumbling in the dark.

Disney puts faith and $4 bln in power of the Force

31 Oct 2012

That’s what CEO Bob Iger is paying for Lucasfilm - his latest attempt to purchase the creativity that Disney can’t seem to cultivate in-house. Like Marvel and Pixar, Lucasfilm’s returns remain on the dark side. But making at least three more Star Wars films may win over skeptics.

Storm dents Wall Street but spares U.S. election

30 Oct 2012

The force of Hurricane Sandy left much of Lower Manhattan dark and could cost $20 bln or more. Luckily for voters, the weather arrived a full week before the Nov. 6 vote. The pundits will spin it, but the political impact of chaos in mostly Obama-leaning states is probably small.

Ford’s Q3 power puts Europe woes in perspective

30 Oct 2012

The automaker’s North American unit had its best showing in at least 12 years. With core operations consistently profitable, CEO Alan Mulally has more than enough breathing room to fix the ailing European business. Even if that takes time, Ford still looks undervalued.

Apple infighting may be sign of golden age waning

30 Oct 2012

The company’s genius has been the smooth integration of art and engineering. Steve Jobs kept an uneasy peace between the two. With mobile software chief Scott Forstall out, design guru Jony Ive will rule over hardware and software. Apple needs mastery of both.

Petronas return may herald Canada M&A clarity

30 Oct 2012

Ottawa botched its initial veto of the Malaysian oil group’s $5.2 bln bid for gas producer Progress. Nerves over CNOOC’s bigger offer for Nexen played a part. Petronas is back, but if the government wants the benefit of the doubt next time it needs to make the rules less fuzzy.

Rule of law finally catches up to Argentina

29 Oct 2012

The nation exploited fuzzy language to stiff debt-swap holdouts. As Breakingviews predicted, a U.S. court ordered it to pay up, saying a promise to treat creditors equally is plenty clear. Rather than spark market chaos, the ruling sends the message that deal terms have teeth.

Frankenstorm is salient risk management reminder

29 Oct 2012

When it comes to natural disasters like the freak storm slamming into the eastern U.S., there’s no such thing as too much preparation. The same is true in business, particularly banking: calamities often strike without warning and there’s no such thing as too much capital. 

Hugo Dixon: World needs healthy capitalism

29 Oct 2012

The term “healthy capitalism” may seem an oxymoron. But health involves vigour, well-being and resilience. Capitalism can have all those qualities provided warped incentives are corrected and the prevalent culture of greed is tempered by a culture of serving customers.

Pandit putsch is setback for U.S. board governance

26 Oct 2012

Separating the jobs of chairmen and chief executives is generally to be encouraged. But the logic is undermined by recent events at Citigroup. Chairman Mike O’Neill’s ouster of ex-CEO Vikram Pandit is looking increasingly like a power-grab rather than a service to shareholders.

U.S. GDP growth sharpens election knife-edge

26 Oct 2012

The economy grew at a 2 pct rate in Q3, just above expectations. That gives Obama a wafer-thin lead in Breakingviews’ election model. But beneath the headline, private sector growth has slowed further. That’s a hint of the problems facing whoever next occupies the White House.

Eike Batista comes to his own rescue

26 Oct 2012

With his energy and infrastructure empire a mess, the Brazilian billionaire is trying to hold things together. He offered to buy $1 bln of oil company OGX stock at a premium and is also raising his stakes in two other units. In this case, shareholders should beware the buyer.

To fix U.S. finances requires compromiser-in-chief

26 Oct 2012

Achieving a grand bargain on tax, entitlements and spending will take a leader who is capable of bipartisan dealmaking. Having worked with Democrats as governor of Massachusetts, Romney may have the edge over Obama, whose signature legislative triumphs were party-line deals.

Letter to the Editor: IAC

26 Oct 2012

Joey Levin, CEO of IAC Search & Applications, responds to an Oct. 19 Robert Cyran column about IAC’s internet strategy.

Risk relief may soften banks’ commodities blow

26 Oct 2012

Proposed regulation is making it tougher for investment banks to trade commodities. That presents unregulated trading houses an opportunity to poach people and looks unfair. But banks which pull back also dial down risk, and that may earn them higher valuations in the market.

Apple results shrink iPad mini’s relevance

25 Oct 2012

Hawking nearly 27 mln iPhones last quarter dwarfs all the hoopla around the launch of the tinier tablet, which may sell about the same amount in a year. Moreover, iPad margins don’t compare – and the mini’s will be smaller still. The phone still energizes the Apple ecosystem.