Americas

Avon CEO hire risks making corner office crowded

9 Apr 2012

Sheri McCoy, Fortune’s 10th most powerful woman in business, should make a turnaround of the cosmetics firm a real alternative to a sale. But retaining Andrea Jung, the outgoing CEO and number six on the Fortune list, as executive chairman makes McCoy’s job look harder.

Jamie Dimon lets smaller rival grab his pulpit

5 Apr 2012

The JPMorgan chief’s closely watched annual shareholder letter falls a bit flat this year. It rehashes old gripes and doesn’t lay much new ground. Step up Robert Wilmers, boss of regional bank M&T, whose take on the state of finance makes it the must-read missive of the season.

Why is IBM even sponsoring the Masters?

5 Apr 2012

Golf and business often mix well. But Augusta National remains an all-boys club. That defies IBM’s diversity aims - very noticeably so given its new CEO, Virginia Rometty. Even if the financial logic for sponsorship wasn’t fuzzy, the tech firm would be better off pulling the plug.

Delta would be crackers to fly into refining

5 Apr 2012

Pricey fuel is the airline’s nemesis. But buying Conoco’s idled plant would increase Delta’s risk. It wouldn’t hedge volatile crude prices and would leave the company exposed to the financial challenges of running a refinery. There are better ways for Delta to cut its costs.

Review: Parasites, trust and morality

5 Apr 2012

Without trust, society splits into warring tribes and parasites prosper. Moral psychologist Jonathan Haidt explores the roots of the left/right divide in “The Righteous Mind,” while security expert Bruce Schneier says in “Liars & Outliers” that all societies need a few defectors.

YPF folly could end up costing Argentina double

5 Apr 2012

If President Cristina Fernandez makes a grab for the country’s oil group, it’s unclear how she would reimburse majority owner Repsol. But even if the state managed to fork out a “fair” price, the cost of scaring off foreign investors would exceed any gain from nationalisation.

Wall Street hangs in limbo despite market rebound

4 Apr 2012

Investment banks have started 2012 far better than they ended 2011. Revenue should be higher in all but M&A and equities. A more stable Europe has helped. But even if the recovery sticks this time, most firms will need considerably more trading and deals to earn decent returns.

Moody’s gives GE another reason to snap up banks

4 Apr 2012

The rating agency is downgrading the firm and its $554 bln finance arm on concerns about funding. GE knows it’s an issue, which is why it scooped up MetLife’s $7.5 bln of deposits last year. But it may need to find five times that amount to prove GE Capital poses little threat.

D.C. holds $23 bln fix for cash-strapped states

4 Apr 2012

That’s how much they could raise from taxing online retailers. A pre-Internet ruling currently forbids such tariffs, forcing states like Georgia to resort to contorted ways around it. A federal solution is needed. Luckily, Congress may have hit on one that even Amazon supports.

Newest burger kings get Whopper of a finder’s fee

4 Apr 2012

The public return of Burger King via a tie-up with a London SPAC gives financiers Bill Ackman, Nicolas Berggruen and Martin Franklin something to relish: a finder’s fee of stock worth some $160 mln. And the hamburger chain gets a far meatier valuation than just two years ago.

Pain now should bring gains later for U.S. lawyers

4 Apr 2012

Like doctors and bankers, they’ve lost cash and cachet. But there’s an upside to the technological and economic changes roiling their profession. Smart computers can take drudgery out of legal practice, while a more law-abiding Wall Street will need attorneys to keep it in line.

Buffett’s banker may come in handy for Coty

3 Apr 2012

The perfume maker will have to sweeten its offer from $10 bln to, say, $11.6 bln, to woo resistant Avon. That would mean $5 bln of equity, after factoring in debt and synergies. Byron Trott, a Coty adviser, might need to call in some favors, perhaps even from his biggest fan.

Gun bubble reloads on Obama re-election fears

3 Apr 2012

The president’s 2008 victory triggered massive growth in firearms sales. Purchasers thought strict gun control legislation was coming. It never arrived, and weapon sales tumbled. Yet the prospect of a second Obama term is boosting sales - and shares of gun-makers - once again.

Not all IPOs are about smart money cashing out

3 Apr 2012

Biotech firms exist in a topsy-turvy universe where early backers actually buy up large chunks of additional stock when their companies go public. In theory, that may sound like a refreshing alternative to hot Internet deals like Facebook. But caution is nonetheless warranted.

JPM insider non-trading case puts banks on notice

3 Apr 2012

Britain’s regulator has fined Ian Hannam for sharing price-sensitive information about a client. The penalty looks harsh since the JPMorgan dealmaker’s slip was accidental and nobody traded on the tip. Even if Hannam wins his appeal, advisers may have to re-think how they work.

Molson runs up big tab for emerging markets light

3 Apr 2012

The North American brewer will pay $3.5 bln to enter central Europe. Savings are limited, the seller is probably making a packet, and Molson outbid a Japanese rival: all worrying signs. But while the region doesn’t promise huge growth, the prospects are better than home.

Europe unrecognizable from U.S. Republican rhetoric

3 Apr 2012

Mitt Romney and Rick Santorum accuse Obama of leading America to “European-style socialism.” The pejorative works to a point but conveniently overlooks German trade surpluses, Dutch unemployment and Polish growth. GOP hopefuls might aspire to some of the continent’s achievements.

Goldman follows board stitch-up with smackdown

2 Apr 2012

The Wall Street firm just avoided a push to split the chairman and CEO roles by simply renaming its top director. Now it has given the job to the wrong guy. James Schiro is already on the board, and his record hardly proves he’ll ask tough questions. Goldman isn’t getting it.

Quality of life may one day dethrone NY, London

2 Apr 2012

They’re still the most global cities, A.T. Kearney reckons, with Paris and Tokyo next. But Vienna, rated only 13th among global cities, tops Mercer’s quality of living list. As technology makes location less critical, life quality may matter more. Auckland or Vancouver, anyone?

U.S. lawmakers talk discipline but still love pork

2 Apr 2012

A gridlocked Congress is rethinking its ban on earmarks. Bringing back this form of wasteful spending might grease the wheels of compromise. But it would also show that fiscal responsibility is a Washington mirage - until market forces make austerity the only option.