Americas

China bean-counters should open their books

20 Jun 2012

After a rash of accounting slips, America has demanded China-based auditors hand over documents. Such meddling goes down badly in China. But if the government resists, it could end foreign listings and deprive local auditors of skills they’ll need to one day rival the Big Four.

London bankers get swift kick from Boots deal

20 Jun 2012

The UK pharmacy chain’s sale is a bitter pill for the City to swallow. Big banks that backed KKR’s 2007 mega-buyout of Boots were stuck with the debt as the crisis struck. Adding insult to injury, none were hired to advise it on the Walgreen deal. The timing couldn’t be worse.

Lehman sideshow underscores regulatory gaps

20 Jun 2012

Unable to bag Dick Fuld & Co, the SEC has spent three years suing a money market fund for its exposure to the collapsed bank. But while Lehman wreaked havoc on markets, the Reserve Primary Fund made investors essentially whole. The folly is a reminder of the watchdog’s flaws.

Dimon double gives Congress wasteful distraction

19 Jun 2012

Lawmakers from both chambers spent a total of four hours grilling JPMorgan’s boss over a loss that never put taxpayers at risk. Congress should ensure banks are well supervised, but with a runaway deficit and anemic job and GDP growth, they have more pressing work to do.

Good thing Ackman sees J.C. Penney as long-term bet

19 Jun 2012

Because it’s a dog right now. The U.S. retailer’s president abruptly left after eight months - and with $15 mln for his bad work. J. C. Penney shares fell another 9 pct and now trade around where activist Bill Ackman first bought in. Bold turnarounds are tough in the public glare.

Jilted Air Products gets only a consolation prize

19 Jun 2012

Since the U.S. hydrogen producer’s hostile bid for Airgas failed last year, it has lagged rivals. Its former prey’s dramatic outperformance exposes the $5.8 bln offer as too stingy. A smaller deal in Chile may help Air Products revive growth but is a poor Airgas substitute.

KKR gets rich prescription for top-of-market LBO

19 Jun 2012

Walgreen’s two-stage acquisition of European rival Alliance Boots should more than double the investment KKR and its partners made at the height of the 2007 boom. What the U.S. drug chain’s investors will get for their money - as much as $16.2 bln - is harder to fathom.

Lazard’s new investor isn’t passive by nature

19 Jun 2012

Nelson Peltz says his 5.1 pct stake in the Wall Street advisory shop is a bet on the current plan and management. It’s a coup to win over the uppity activist – Peltz was behind campaigns at Heinz and State Street. But CEO Ken Jacobs also probably doesn’t have much room for error.

Jefferies’ so-so Q2 may be best of a poor bunch

19 Jun 2012

Trading revenue fell less than feared while sales of new debt and stock actually increased. Yet Jefferies, which includes a buoyant March in its earnings, still only managed to eke out a 7 pct return on equity. Larger rivals reporting next month may struggle to match even that.

Microsoft tablet suffers from lack of greatness

19 Jun 2012

The software giant’s latest foray into consumer gadgets looks better than earlier attempts - remember Zune? That’s good, as a growth of mobile devices leaves it no choice but to compete with Apple and Android. But while its tablets show some promise, that’s probably not enough.

NYC plan needs Financier Bloomberg not Mayor Mike

18 Jun 2012

Privatizing 90,000 parking spaces could raise billions to head off looming budget deficits. But as Chicago showed, such deals can sacrifice long-term revenue for short-term relief. Political expediency should take a backseat in the Big Apple. A joint venture would work better.

World’s new air giant taking off at turbulent time

18 Jun 2012

The marriage of Brazil’s TAM with Chile’s LAN has taken nearly two years to consummate and will create the most valuable airline in the world. The promise of greater regional integration is fueling big expectations that will be difficult to meet given economic headwinds.

Rajat Gupta goes down but insider trading may not

15 Jun 2012

Guilty verdicts against the former McKinsey boss and P&G director should scare the bejeezus out of corporate America and Wall Street. But until the rules on passing tips are more clearly defined and miscreants truly fear being caught, the case’s deterrence value will be limited.

Letter to the Editor: R.I.P. too-big-to-fail

15 Jun 2012

Wilson Ervin, senior adviser to the CEO of Credit Suisse, takes issue with a pervasive belief that systemically important U.S. financial institutions can’t collapse. Responding to a recent Breakingviews article, he says there’s now a credible, workable way to wind them down.

Looming US debt clash a safety check for investors

15 Jun 2012

Washington looks set to repeat last year’s battle over the nation’s borrowing limit. That was almost a debacle. But the messy spectacle serves to put reducing deficits in the spotlight, forcing Congress to ensure that borrowing remains manageable. That should be welcomed.

Review: Groupon’s baby CEO grows up – to a point

15 Jun 2012

The daily deals website was the fastest company to achieve $1 bln in sales. Frank Sennett’s new book, “Groupon’s Biggest Deal Ever,” gives a blow-by-blow account of the startup’s rapid ascent. But investors looking for clues to Groupon’s sustainability may be disappointed.

Value and diversity protect in tricky markets

15 Jun 2012

No matter their views of the future, good investors prepare for whatever it may bring. That’s tough as another phase of the Europe-centred crisis unfolds. But there are a few spots where basic valuation measures look off, even in an uncertain world, and so present opportunities.

OPEC starting to look like a cartel of one

14 Jun 2012

Twelve nations belong to the oil export club, but of late only Saudi Arabia has mattered. At the latest meeting, the kingdom again batted away Venezuela, Iran and others who wanted to cut output. The deepening divide in OPEC could face a more serious test if prices keep sliding.

Dewey backlash presents law firm ethos Exhibit A

14 Jun 2012

A former partner is alleging the once-proud legal shop deceived him about its finances. New York prosecutors are considering similar charges. It’s looking as if the legal community’s quest for lessons from the firm’s bankruptcy can start with a simple reflection on Lady Justice.

Petrobras risks becoming too much like Pemex

14 Jun 2012

The $120 bln Brazilian oil giant dialed down output goals to an underwhelming level. Lower production is symptomatic of state meddling, as Petrobras diverts funds to money-losing areas like refining. Shareholders should beware the growing similarities to Mexico’s energy king.