Americas

Anglo finds satisfactory end to Chilean quarrel

23 Aug 2012

The London-listed miner has buried the hatchet with Codelco, selling Chile’s copper producer 25 pct of a disputed mine for $1.9 bln. Anglo American’s other problems will be harder to solve, but here CEO Cynthia Carroll can reasonably claim she’s protected shareholder value.

Disputes give WTO chance to prove it has cojones

23 Aug 2012

Complaints lodged with the trade body have doubled this year, including a big case against Argentina. That’s to be expected as economic woes encourage protectionism. But with Russia joining, the WTO now includes the top 30 exporters. That may lend it some much-needed influence.

Exxon aims for smarter Russia bet as rivals fold

23 Aug 2012

ConocoPhillips’ exit from a JV means its 20-year Russian adventure is all but over. BP has had to retreat from some of its forays too. While making money, neither built the kind of business they hoped for. Armed with a few lessons and its world-beating clout, Exxon may do better.

Carl Icahn gets a dose of his own tart medicine

22 Aug 2012

The uppity investor yanked his failed bid to buy the rest of CVR Energy. That leaves Icahn controlling a public company he can’t take private and wanted to sell - but couldn’t find a buyer. Now he has to deal with a group in some ways a bit like him: a stubborn minority.

U.S. housing watchdog wise to go long on short sales

22 Aug 2012

The federal agency that oversees mortgage behemoths Fannie and Freddie is making it easier for underwater borrowers to sell homes at current prices. That’s better than cutting the amount owed as it should enhance housing market stability without introducing moral hazard.

Brazil’s infrastructure plans look rose-tinted

22 Aug 2012

President Rousseff hopes private investors will help provide $66 bln for rail and roads over the next 20 years, boosting growth - and that’s just a start. But past state-led efforts have fallen short of expectations. Now, red tape is still a problem and financing is a challenge.

Market could overrule U.S. court on coal pollution

22 Aug 2012

An appeals panel has put the brakes on the EPA’s effort to cut emissions from coal-fired power plants. That could keep the dirtiest U.S. smoke stacks going a bit longer. But at least for now, cheap gas is doing the environmental watchdog’s work, whether judges like it or not.

Peter Thiel’s sale encapsulates Facebook folly

21 Aug 2012

The venture capitalist took the first opportunity to unload some $400 mln of shares from his initial $500,000 bet on the social network. His decision cements the idea that Facebook’s IPO was run by and for early backers. Thiel’s board seat is now a snub to new investors, too.

Muni investors shouldn’t be spooked by Buffett

21 Aug 2012

The Oracle’s decision to unwind $8.25 bln of derivatives deals is being interpreted as a bearish sign on America’s states and cities. Investors are better off keeping their own counsel on a market so broad and diverse. It’s a lesson learned from muni doomsayer Meredith Whitney.

China’s oil giant may need pricey Canadian boost

21 Aug 2012

CNOOC’s $15 bln tilt at Canada’s Nexen seems an expensive distraction, especially since the Chinese oil major has cut its dividend, has flat output and rising costs. Yet CNOOC needs a booster. Nexen’s drilling expertise could help it squeeze more out of its domestic business.

Soros backing could lift Manchester United

21 Aug 2012

The soccer club’s U.S. float was panned for leaving the Glazer family firmly in control - and for missing their lofty goals on value. But George Soros’s emergence as a major shareholder could lift sentiment. Despite his $20 bln fortune, Soros is not a typical trophy investor.

Lawsky affair rekindles U.S. regulatory arb risk

20 Aug 2012

The crusading NY watchdog single-handedly extracted $340 mln from StanChart. That’s good politics, but goes against a pact between the feds and the state not to work at cross purposes. The danger is financial firms circumvent regulations by exploiting rivalry among overseers.

U.S. money market funds can’t have it both ways

20 Aug 2012

Lobbyists are trying to stifle reforms in the $2.7 trln industry, while the New York Fed boss has lent his support to changes the SEC chairman wants proposed. The funds can’t go on claiming ultra low risk while having no obligation to hold a buffer. Something needs to give.

Bondholders should back Brazil’s bank bail-in

20 Aug 2012

Some are crying foul over plans to impose a 50 pct haircut on creditors in seized Banco Cruzeiro. This may just be grandstanding, though there’s favoritism in the bail-in. But with no buyers for the disgraced mid-size lender, the other option is liquidation. No one wants that.

Greek lesson encourages can pay, won’t pay states

20 Aug 2012

Belize is trying to force a restructuring. The Caribbean nation is more or less solvent, but its cash is precious and its debt expensive. Foreign creditors have limited leverage, as the Greek and Argentine examples show. They can lose their shirts even if countries don’t go bust.

US derivatives leader makes timely push on Europe

20 Aug 2012

CME plans a London derivatives exchange. By starting in currencies it avoids tackling rivals NYSE and Deutsche Boerse head-on. The timing is also canny. Private trading is migrating to bourses and moving earlier might have made it easier for NYSE-DB’s merger to win approval.

Treasury’s Frannie fix puts Congress on the spot

17 Aug 2012

Team Geithner is forcing the two bailed-out home loan agencies to shrink their portfolios faster and hand all profit to taxpayers. These are excellent steps. But Fannie and Freddie remain too central to U.S. mortgage finance. It’s up to lawmakers to come up with the solution.

U.S. refiners gain from infrastructure bottlenecks

17 Aug 2012

Domestic WTI crude sells at a discount to globally traded Brent. That’s partly because there’s inadequate capacity to move the stuff around. Even when pipelines catch up, home-produced crude may still be cheaper. The boost for American oil processors could last a while.

Assange asylum is a political freebie for Ecuador

17 Aug 2012

The country’s leftist government has annoyed the U.S. by granting asylum to the WikiLeaks founder. Given that its oil exports, mineral exploration and loan funding are increasingly dominated by China, which suggested Assange for the 2010 Nobel, it’s also not totally surprising.

Electronic Arts LBO would make tricky video game

16 Aug 2012

A private equity firm considering a $6 bln takeout would battle the twin evils of erratic, film-studio-like cash flows and the secular decline of the game console business. EA’s balance sheet offers weapons for the fight, as do buoyant debt markets. But victory will be elusive.