Americas

Review: A woman’s view of the boys at Facebook

13 Jul 2012

Katherine Losse was Facebook’s 51st employee, so she is in a good position to chronicle the company’s long adolescence. “The Boy Kings” is the story of a culture that mixed Peter Pan with “Mad Men.” The preparation for the IPO brought some maturity, but may have ruined the dream.

Global warming adds to food inflation risk

13 Jul 2012

Corn prices spike after the hottest U.S. six months ever. Russian wheat is also afflicted. Does global warming threaten a food price shock? For now, the risk is mitigated by a big commodity price retreat from 2011’s speculative bubble. But in the long term, the threat is serious.

Guide for the perplexed: Libor litigation

12 Jul 2012

It’s unclear who got hurt in the rate-rigging mess, but banks will pay big bucks just fighting mounting lawsuits. How much is still anyone’s guess. Bank investors can hope for full disclosure and quick settlements, but as this primer shows, the legal battles have just begun.

Booz recap lets it suck from government teat again

12 Jul 2012

The Carlyle-controlled defense consultant is mulling a big, debt-financed dividend. Investors sent the shares up 15 pct despite the extra risks Booz Allen Hamilton would take on by borrowing another $1.3 bln. Credit the perverse debt incentives built into the U.S. tax code.

Fender stock buyers will gently weep

12 Jul 2012

The iconic maker of guitars favored by Clapton and Hendrix is riffing on an IPO valuation of 20 times earnings. But Fender has questionable global expansion plans, depends on a big shaky customer and generates only pick-thin margins. There’s too much to make investors fret.

Ex-Dewey lawyers tote heavy baggage with them

12 Jul 2012

The defunct law firm wants to settle with former partners. But that wouldn’t necessarily let their new employers off the hook. A recent ruling means those shops may need to surrender profit from cases attorneys brought with them. It’s a daunting twist for the U.S. legal industry.

Silicon Valley gift brings market to Oxford degree

12 Jul 2012

Venture capitalist Michael Moritz has donated 75 mln pounds to finance grants for poor students. Such schemes encourage colleges to control costs and produce other grateful graduates. It’s a better system than state grants where the less well off support the soon-to-be rich.

Wells Fargo’s mortgage strength is U.S. weakness

12 Jul 2012

The San Francisco-based bank accounts for a third of the country’s new home loans and is the largest servicer, too. That’s great for Wells’ bottom line. But such a dominant market share, if sustained, could be bad news for consumers and taxpayers. Rivals need to up their game.

Brazil’s bet on consumer-led growth is not enough

12 Jul 2012

The central bank’s eighth cut in less than a year leaves rates at a record low 8 pct. That fits with President Dilma Rousseff’s belief in the power of consumers to reignite growth. But they can only do so much. Boosting investment and revamping infrastructure could achieve more.

New Great Depression may be delayed, not dodged

12 Jul 2012

In the 1930s there was a huge decline, a small recovery and then a lesser drop. This time, the pattern may be reversed. A modest decline has been followed by a tepid recovery - and more risky debt excess. Another crash could lead the world’s economies off a steep cliff.

Bankruptcy loses its taboo for California’s cities

11 Jul 2012

San Bernardino is the third Golden State city to fail in two weeks as the housing bust and bad governance have left California’s heartland strained. Investors seem sanguine, but aggressive court tactics and more filings could hurt them and push up costs for other muni borrowers.

Bolivia’s nationalizations leave no room for error

11 Jul 2012

President Evo Morales has seized a second mine in a month and already taxes natural gas producers heavily. High prices allowed such antics and kept foreign firms onside. But slowdowns in Argentina and Brazil, Bolivia’s main customers, could whack revenue. Morales needs a Plan B.

Mobile sticks to sidelines in browser wars

11 Jul 2012

Google and Microsoft have fought furiously to control how desktop users access the Internet. Google’s new Chrome browser for the iPhone and iPad probably won’t set off a similar battle in mobile. That’s why operators are encouraging Mozilla’s open source operating system instead.

Comcast deal extends content’s precarious reign

11 Jul 2012

Feuds between U.S. TV program creators and distributors are as ugly as the one in “Hatfields & McCoys.” So the $19 bln valuation implied by Comcast’s sale of a stake in the hit show’s parent company A&E is impressive. But fee fights like DirecTV and Viacom’s are the future.

Going broke can be true emergency for U.S. cities

10 Jul 2012

It ranks with riots and floods as valid grounds for trimming workers’ pay, says one Nevada town. Unions disagree, but it’s a legally plausible argument that could save crucial services. With more cities tumbling into insolvency, public officials need fresh ways to tighten belts.

Patriot’s collapse may prove coal’s low point

10 Jul 2012

Weak electricity demand and competition from cheap natural gas have been punishing all miners of the black stuff. But onerous retirement obligations and canceled contracts pulverized Patriot. Barring a calamitous price drop, most other big miners look sturdy enough to survive.

Intel deal closes circuit to faster chips, growth

10 Jul 2012

Next-generation chips are cheaper, quicker and use less power. But toolmakers have been unwilling or unable to spend the sums needed to make the switch. Intel’s $4.1 bln ASML investment deploys offshore cash to remove such bottlenecks and forces rivals to play to its strengths.

Obama tax plan neglects fragile U.S. economy

10 Jul 2012

Despite a souring recovery, the president wants to let rates rise for those earning over $250,000 a year. Yet the economy looks weaker now than it did in late 2010 when he agreed to let the nation’s wealthiest pay lower taxes. If their investment slows, so will job growth.

More missing client funds imperil futures broking

10 Jul 2012

Some $220 mln of customer money can’t be found at U.S. broker PFGBest and its boss may have attempted suicide. After the MF Global and Refco cases, too, better protections are clearly needed. That’ll add costs the industry can’t really afford. But the options are looking limited.

China’s slump pulls it into US campaign crossfire

10 Jul 2012

Weaker domestic demand means imports are cooling faster than exports. With shipments to Europe swooning, surpluses to the U.S. and elsewhere are swelling. That risks adding more fuel to the anti-China rhetoric from dueling American presidential contenders Obama and Romney.