Americas

Facebook shows signs of answering mobile question

24 Oct 2012

The social network’s mobile ad business grew sixfold in three months and provided 14 pct of ad sales in Q3. Worries remain about durability, cost control and competition. But for the first time, the shift to mobile devices seems an opportunity for Facebook rather than a threat.

Apple takes lower-priced tablet fight to Amazon

23 Oct 2012

The new iPad mini takes Apple closer to the price point for the online retailer’s devices. The iPhone maker is risking some cannibalization, and possibly lower margins. But for Amazon, selling content is all-important. The new hardware rivalry could trigger price cuts.

Canada banks give local M&A advisers hope

23 Oct 2012

Zealous watchdogs have nixed several deals, or talked of doing so. While Chinese buyers face the heaviest fire, locals aren’t immune. But the risk should be low for RBC’s $4 bln purchase of Ally’s Canadian auto finance arm and TD’s of Target’s credit card business for $6 bln.

Last U.S. debate neglects foreign policy realities

23 Oct 2012

Listening to Barack Obama and Mitt Romney spar, it would have been easy to forget that Europe exists, free trade matters or global coordination of finance remains a priority. Worse, the politically facile China-bashing suggests both men are missing the big opportunity.

Experian sees gold in Brazil’s blind credit boom

23 Oct 2012

The credit bureau’s $1.5 bln purchase of the rest of Serasa brings Experian’s total outlay since 2007 to below nine times EBITDA for a business that has tripled. As Brazil’s banks lend aggressively with little information on a rising middle class, there’s further growth to harvest.

Equities business hits the pain threshold

23 Oct 2012

The cash equities model is broken. An industry plagued by overcapacity and weak profitability can’t cope with higher costs and lower volumes. Some investment banks are trimming equities headcount, when they really need to decide whether they should be in the business at all.

It’s not too late to choose an Economic Dream Team

22 Oct 2012

As the U.S. presidential candidates head to their final debate, we’ve added new choices for key economic jobs. Should financial reformer Barney Frank have a spot? Can deficit hawk Martin Feldstein, or Treasury’s No. 2 Neal Wolin, help fix the U.S. fiscal mess?

Farallon founder navigates hedgie succession trail

22 Oct 2012

Hedge fund moguls aren’t known for achieving smooth transitions to new management. Some struggle to let go, fail to retain would-be successors, or see investors flee. But Tom Steyer, who started the $20 bln San Francisco-based Farallon, seems to have checked the right boxes.

Goldman exposé doesn’t go according to plan

22 Oct 2012

Greg Smith’s resignation book doesn’t blow the lid on Wall Street the way “Liar’s Poker” did. Even his purported tale of disillusionment has been done before and better by Goldman veteran Jonathan Knee. The real revelation is the firm’s apparent erosion of employment standards.

Moody’s-S&P spats offer fix to ratings conflicts

22 Oct 2012

Moody’s has publicly trashed its rival’s work on a mortgage bond, the second such squabble in two weeks. Companies may now fear getting punished for cherry picking the most favorable rater. But that’s the best antidote yet to the ratings business’s inherent conflicts of interest.

McGovern embodied U.S. economic left’s last stand

22 Oct 2012

The South Dakota senator, who died on Sunday, lost the 1972 presidential election on a platform proposing the government as employer of last resort. That did not seem wild when communist regimes had full employment. McGovern has no heirs in America’s political mainstream today.

Is everything sacred in Canada?

20 Oct 2012

At first it was a hole in the ground - then the stock exchange and a DIY chain. Now the government has blocked a $5.2 bln shale gas deal - signalling to investors that the market for corporate control is effectively shut.

Even GE can’t beat sluggish global growth

19 Oct 2012

The U.S. conglomerate and economic bellwether missed third-quarter revenue estimates, putting it in the same camp as more than half the nation’s top companies. Cutting costs and shrinking assets only does so much. Economic growth provides the real juice. That’s in short supply.

Internet parasitism powers Barry Diller’s returns

19 Oct 2012

IAC is abandoning Newsweek in print as the mogul’s web businesses flourish. An online search boom has powered the $4.6 bln firm’s stock this year. But much of the growth seems driven by customers unwittingly downloading IAC toolbars. It’s a risky way to build a lasting business.

ArcelorMittal uses iron ore to dodge the junkyard

19 Oct 2012

The world’s biggest steelmaker is on the edge of full relegation to “junk” credit status. A rights issue would be one - painful - solution. It’s easier to sell a minority stake in its Canadian iron ore unit for $2 bln or so, even though Arcelor likes to feed its own steel mills.

Wall Street’s conflicts misery gets legal company

19 Oct 2012

Goldman Sachs and Barclays have come under fire in court for playing both sides of deals. Now, U.S. law firm Covington & Burling just got tossed from a case for a similar offense. Ethics rules and clients usually keep attorneys in line. That’s what makes this lapse so troubling.

Review: The danger of trading machines

19 Oct 2012

It’s a quarter-century since computerized program trading led to Black Monday on global stock markets. Scott Patterson’s “Dark Pools” is a good introduction to the latest machine-based trading technique. Arcane algorithms have reduced real liquidity and expanded rent-seeking.

Vickers’ ring-fence is worth defending

19 Oct 2012

Paul Volcker has picked a hole in the UK Commission’s plan to isolate banks’ retail deposits. The ex-U.S. central banker is probably right that fences would fall in an extreme crisis. But that doesn’t make them worthless. They’d simplify banking and protect the financial system.

Spat with Exxon bad for Iraq – and oil consumers

18 Oct 2012

The U.S. major may exit the country’s top field, and Baghdad could push Exxon and others out of deals with Kurdistan. The tangle undermines hopes that Iraq could supply half the expected increase in world crude demand by 2035. Falling short would cost Iraqis and raise oil prices.

Morgan Stanley investors must wait for pay day

18 Oct 2012

Boss James Gorman set aside more for bankers in Q3 after railing against Wall Street’s “heads I win, tails you lose” culture. Revenue rebounded, but not enough for shareholders to get the cut Gorman says they deserve. His model for Morgan Stanley needs to catch up to his message.