Americas

OPEC spendthrifts can’t blame cheap oil for woes

6 Jul 2012

Venezuela and Iran want an emergency cartel meeting, claiming overproduction is depressing prices. But despite the recent fall, crude is, at $98 a barrel, near its highest level in decades. Only profligacy prevents OPEC nations balancing their budgets at that price.

Review: Financial whodunit clues into bankers

6 Jul 2012

Imagine Goldman had merged with Lehman, stuffed it with surprise amounts of dreck as Merrill did to BofA and then Dick Fuld confessed to killing Lloyd Blankfein. A story like that underpins journalist John Gapper’s debut novel. The mystery is fun but also not entirely frivolous.

Libor adds another worry for U.S. mega-bank owners

5 Jul 2012

So far only Barclays has been accused of wrongdoing in the unfolding scandal. But shareholders now must add an arcane interest rate to an already long list of risks. That’s going to make it more difficult for JPMorgan, Citigroup and BofA to trade above book value any time soon.

Falling gas prices might just fuel Obama this fall

5 Jul 2012

The U.S. president’s re-election hopes might not be doomed by his nation’s recent economic hiccups. Like last summer, consumers had sticker shock at the pump this spring. But gas peaked earlier this year and fell further. That could restore growth - and Obama’s chances.

Coty’s IPO should give it a leg up on Avon

5 Jul 2012

The spurned Avon suitor has turned its affections to the public market where it hopes to sell $700 million of stock. Coty ought to fetch a pretty premium thanks to revenue growth and a proven management team. That would enable a second run at the lagging cosmetics group.

New mortgage seizure plan is the nuttiest idea yet

5 Jul 2012

A California county wants to use eminent domain rules to forcibly take underwater mortgages from investors. If it catches on, it will cost bondholders, and potentially taxpayers, billions. That’ll whack up mortgage costs and may leave the U.S government as the only lender.

Private equity earns slick return from oil data

4 Jul 2012

The global race for natural resources has yielded a rich seam of profits for Wood Mackenzie, a PE-backed specialist in energy data. Owner Charterhouse will recoup three times its money through a $1.7 bln sale. Paying a full price in 2009 was bold, but the risk has been rewarded.

Euro-bomb need not destroy global economy

3 Jul 2012

Global manufacturing output contracted in June by the most in three years. That sounds like an ominous sign of global recession. But there are also optimistic signals in the U.S. and China. And Europe’s summitry, together with a likely ECB rate cut, may help global confidence.

Will Microsoft learn through self-flagellation?

3 Jul 2012

The software giant squandered shareholder treasure for years to break into internet services, gaming and consumer electronics. Writing down the $6 bln it blew on aQuantive should mark a turning point where Microsoft at long last returns to its knitting and focuses on enterprise.

Best hacking defense isn’t really a good offense

3 Jul 2012

Computer break-ins have cost Citi, Sony and others millions of dollars in stolen data. Retaliation is tempting, but risky and probably illegal. Instead, law enforcers need sharper tactics like the FBI’s recent hacker sting. Otherwise, victims can’t be blamed for hacking back.

Chinese IP awareness, sown by West, bruises Apple

3 Jul 2012

The gadget maker can easily afford the $60 mln it’s paying for the iPad name in China. And a lawsuit over Snow Leopard poses little threat. Still, the Middle Kingdom is increasingly alert to trademarks, patents and so on. Western multinationals wanted that, but it cuts both ways.

Indispensability of Chesapeake CEO is exaggerated

2 Jul 2012

Embattled CEO Aubrey McClendon owes his survival largely to a myth of unsackability. Despite numerous abuses, supporters contend his talent makes him indispensable to the energy group. This puts too high a value on the CEO and too little on Chesapeake’s vast asset portfolio.

How does a $670 mln deal spark a $400 bln battle?

2 Jul 2012

When Brazil’s largest credit card processor goes on the hunt. Cielo is buying U.S. e-commerce shop Merchant e-Solutions hoping to defend its lead in a highly competitive market. With industry profits expected to fall, Cielo, Redecard and others are all fighting for an edge.

Bristol-Myers and Astra make fat bet on obesity

2 Jul 2012

The U.S. and UK drug giants are teaming up in the $7 bln purchase of Amylin. Seven times estimated sales is a hefty price for a biotech whose main drugs face stiff potential competition. But Amylin’s focus on diabetes, a sadly expanding market, makes this a healthier endeavor.

Upstart EverBank zigs while GE Capital zags

2 Jul 2012

The industrial giant is shedding financial assets and trying to reduce dependence on wholesale funding. The newly public EverBank is taking the opposite tack, spending almost double its $1.3 bln market cap on GE’s Business Property unit, leaving it with more loans than deposits.

Gas giant Linde expands to fill healthy space

2 Jul 2012

The German company will pay $4.6 billion including debt for Lincare, a specialist in respiratory gases. That is a full-looking 9.3 times EBITDA and synergies will be limited. But Linde boosts its U.S. footprint - and secures a route to growth outside its consolidated core market.

iPhone anniversary marks triumph over crisis

29 Jun 2012

Apple rolled out its iconic gadget five years ago, just as Bear Stearns subprime hedge funds sounded the alarm on systemic trauma. Financial woe often impedes development by stifling R&D budgets. But the iPhone is proof of how innovation can defy the odds and overcome hard times.

Mexico’s election provides chance to break taboos

29 Jun 2012

The party that ran the country for 71 years is set to regain the presidency. Enrique Peña Nieto has a historic opportunity to bend the PRI’s power-broking machinery toward long-resisted reforms like freeing up the energy sector. If he doesn’t, stagnation - or worse - may loom.

Review: Looking for an honest man

29 Jun 2012

Most people will cheat, but only to the point where they can still say they are honest, behavioral economist Dan Ariely writes in a new book. Dishonesty is contagious and can be fostered by anger, fatigue, self-regard and even altruism. Yet simple tools can temper the lying urge.

Carlos Brito pays through the nose for Modelo

29 Jun 2012

The Bud boss is drawing a cool $20 bln from the keg to acquire the half of the Mexican brewer he doesn’t already own. To make that work Brito is going to need to brew up more than the $600 mln of synergies he is promising. History suggests that is possible - but it’s a stretch.