Americas

Slippery witness gives Rajaratnam appeal traction

14 Aug 2012

Roomy Khan first ratted out the Galleon fraudster. But her lies are Exhibit A in another insider trading case. That boosts Raj’s claim that the U.S. government shouldn’t have wiretapped him based on her word. His appeal may give judges a chance to hold prosecutors accountable.

Citigroup CDO judge’s chutzpah admirable if doomed

14 Aug 2012

Jed Rakoff filed a feisty rebuttal to claims he overreached in rejecting Citi’s $285 mln settlement with the SEC. He secured his image as a public interest champion and likely stiffened the U.S. watchdog’s spine. But he’ll rightly lose this fight, and it’s time to move on.

Focus Media insider buyout gives investors relief

14 Aug 2012

Some of the people who brought the Chinese advertising firm public now want to take it private. Focus has suffered from a short seller’s allegation, but the suggested value of $3.5 billion doesn’t look like a steal. Worriers about Chinese accounting should take some comfort.

Google searches for local edge with guidebook deal

13 Aug 2012

Frommer’s may be better known among frugal travelers with comfortable shoes than digital kids. Yet Google’s purchase of the publisher looks like a smart way to further its push into the booming local online ad market, building on last year’s purchase of Zagat.

Archstone IPO makes Lehman look only mostly wrong

13 Aug 2012

The real-estate company could be worth $9.7 bln or more. That’s in line with the Wall Street firm’s valuation of its stake before collapsing. But ex-CEO Dick Fuld has no reason to crow. Hubris, lack of capital and poor risk controls landed Lehman with assets it couldn’t handle.

America’s corn monster is unstoppable – for now

13 Aug 2012

The UN is pleading with America to stop its drought becoming a food crisis. The global body wants Uncle Sam to suspend remaining support for corn-based fuel, which diverts crops from hungry mouths. Letting ethanol fend for itself makes sense. But it’s too late to help this time.

Latam’s bad oil policies laid bare across an ocean

13 Aug 2012

Despite some tough regimes and far smaller reserves, Africa is set to overtake Latin America’s crude output this year. The unlikely reversal reflects investor-friendly approaches in the likes of Angola. It’s also the clearest sign yet of how misguided the Latin region’s course is.

Julius Baer reinvention not as cheap as it looks

13 Aug 2012

The Swiss bank is paying a skinny 1.2 pct of assets for Bank of America’s non-U.S. private banking operations. Throw in restructuring costs and extra capital, though, and the $1.5 bln tag looks richer - especially for a business that’s unprofitable and hardly growing.

Besieged StanChart needs governance booster

13 Aug 2012

Chairman John Peace is spread too thinly. His peers on the bank’s board, some of whom have been around too long, lack financial oomph. A stronger board wouldn’t have prevented the attack by the New York regulator, but it might help the UK bank recover more quickly.

China mistakes foreign law firms for Party poopers

13 Aug 2012

They’re dealmakers, not threats to communist rule. Yet China’s wary leaders won’t license them. That’s no way to lure overseas investment. Change must wait until a tense murder case and political transition passes. But economic preeminence won’t come without global lawyers’ help.

It’s the budget, not the economy, stupid

11 Aug 2012

Mitt Romney’s choice of Paul Ryan as running mate can transform his mealy campaign into something substantive: a referendum on fixing the U.S. balance sheet. It’s sad that it takes a VP to give Romney appeal. But righting America’s finances is long-term legacy-setting stuff.

Goldman takes 2 legal steps forward, 700 mln back

10 Aug 2012

Both the U.S. DoJ and SEC dropped big cases against the Wall Street powerhouse, some welcome and rare relief for investors and CEO Lloyd Blankfein. But like other banks, its worries are far from over. Goldman just increased its litigation reserves by a quarter, to $3.4 bln.

Yahoo investors counting on Mayer burning cash

10 Aug 2012

The internet group led by Marissa Mayer says it may use much of the bounty from selling its Asian bits for acquisitions, rather than returning it to shareholders. That’s crummy, but already baked into Yahoo’s value. Investors seem resigned to Yahoo wasting a chunk of its cash.

Uncle Sam may never divorce Aunt Frannie

10 Aug 2012

The two mortgage agencies earned $8 bln between them in the second quarter. Rather than speed up plans to reform them, though, funding-starved politicians may get too hooked on the revenue from their bailout dividend payments. That could make Fannie and Freddie untouchable.

Uncle Sam seeks to dance around own rules in Sudan

10 Aug 2012

The U.S. wants $3.5 bln for the African nation following a recent oil pact with its southern spinoff. But that could contravene 1997 sanctions, exposing aid providers and investors to a StanChart-like zap. It would be far better to just adopt a new policy altogether.

Romney only has one bold option for vice president

9 Aug 2012

An ideal running mate for the GOP ticket provides beauty and brains. Some politicos offer the U.S. presidential hopeful one or the other. But Paul Ryan has legit budget policy chops and might woo swing voters. The move would also help reorient the party toward fiscal probity.

Market geniuses don’t even get milk

9 Aug 2012

When the most pedestrian of groceries can surprise investors, something is clearly awry. Along with an unexpected profit, Dean Foods unveiled a corporate split - of one sort of milk from another. By unlocking 40 pct of value, the dairy engineering exposed glaring inefficiencies.

Brazil bourse has more staying power than economy

9 Aug 2012

Bovespa’s been hit by delistings and a dearth of IPOs. Rival exchanges may soon arrive, too, though that’s not easy. And Bovespa has a lock on other business while expanding elsewhere. Operating leverage is wobbly, but the bourse is well placed to weather the economy’s headwinds.

How to take the lies out of Libor

9 Aug 2012

The revelation that banks tried to fix the London Interbank Offered Rate sparked the year’s biggest financial scandal. A forthcoming UK review will attempt to deal with the benchmark’s shortcomings. Reuters Breakingviews has some suggestions of where reform should start.

Exclusive: StanChart threat rings Fed alarm bells

9 Aug 2012

New York’s possible revocation of Standard Chartered’s Wall Street license has bank regulators donning their macroprudential jumpsuits. The worry is that Benjamin Lawsky’s surprise risks unsettling customers and depositors. It’s getting hard to tell who the rogue is here.