Americas

Obama backs healthcare defender – until he doesn’t

29 Mar 2012

Despite top lawyer Donald Verrilli’s stumble before the Supreme Court, the White House gave him a confidence vote. That’s what famed Yankees manager Billy Martin would get before being fired. Verrilli’s miss may not change the result but it costs him credibility - if not his job.

Intel and ARM heading for bloody chip collision

29 Mar 2012

Intel dominates the market for PC processors. ARM Holdings-powered chips run nearly all phones and tablets. Their skirmishing over tablets is just the start of what is likely to become a full-fledged brawl as both firms invade the other’s territory. Investors look out.

Roche makes tactical gain with Illumina sweetener

29 Mar 2012

The Swiss drugmaker has upped its unsolicited offer for Illumina by $1 bln to $6.7 bln – a smidgen above the gene firm’s market value. That puts real pressure on the board to talk. The stage is set for Roche to add a last sweetener in return for a recommendation.

Dodger blue outshines gold after $2 bln deal

28 Mar 2012

The sale of the Los Angeles baseball team represents almost a five-fold gain in value since 2004. Gold aside, returns on sports franchises blow away most other major asset classes, including stocks. The demand for such trophy investments from the ultra-rich is stoking prices.

Even booming markets leave CLOs on the sidelines

28 Mar 2012

That’s a good thing. Carlyle’s $510 mln deal shows they can still be done. But both buyers and sellers are sticking with far less racy offerings than during the bubble. That limits the fuel for LBO shops, but means CLOs should be going only to investors who understand them.

Goldman Sachs now treats shareholders like muppets

28 Mar 2012

The firm criticized for ripping off clients is doing just that to investors. Goldman has long argued that its presiding director fulfils many of the duties of an independent chairman. Renaming him lead director to head off a chairman/CEO split is the underhand trade of the year.

Not all M&A and financial engineering is worthless

28 Mar 2012

That’s the read from Tyco’s spin-off and merger of its flow control business with Pentair. This paper-shuffling allows the two firms to cut costs and taxes, creating synergies worth a cool $1.5 billion. That provides a nice feast for shareholders to divvy up almost equally.

Gupta’s quiet win is loud warning for prosecutors

28 Mar 2012

Granting the former Goldman director access to government notes may help him parry insider-trading charges, but it also puts teeth in rules for sharing evidence. Recent cases show prosecutors too often hide crucial information. The Gupta ruling should help put an end to that.

Ally’s mortgage misery needs a clean ending

27 Mar 2012

The home loan mess still ails GM’s ex-finance unit and is still hampering its ability to repay $14 bln of taxpayer aid. Bankruptcy should be the ideal solution. But as an activist investor points out, that could get messy. Without greater clarity, Ally may want to hold fire.

California advances on golden goose with machete

27 Mar 2012

Governor Brown is proposing the highest state taxes in the nation to plug a looming budget gap - a shortfall caused mostly by increased spending. The tax hike may work on paper, but if it prompts an exodus of footloose millionaires, Brown may end up with egg on his face.

Inflation risks rise as recovery follows QE

27 Mar 2012

Quantitative easing helped head off disaster. But now the U.S. and the global economy are recovering - despite continuing euro trouble - the danger is inflation. Oil and some other commodities are already up. Consumer prices will be a problem if policymakers fail to get a grip.

Icahn gives Breakingviews a window into his method

27 Mar 2012

The billionaire’s reaction to a recent column echoed his approach to corporate boards. A demanding phone call, a written riposte and a form of greenmail all came into play. It’s easier now to empathize with Icahn’s targets, but also showed our interests somewhat align with his.

Icahn on Icahn: a Q-and-A with an investing icon

27 Mar 2012

For over four decades, he has been needling companies like no one else. After Breakingviews needled him, he offered his own views in his own words. Golfing CEOs, the “totalitarian state” of corporate America and Alexander the Great were all part of the conversation.

Pricey exploration means dear oil is here to stay

27 Mar 2012

Handouts to restive citizens during the Arab Spring pushed up the break-even oil price for Middle Eastern states. Oil producers face a similar problem. The fact that the cost of extracting oil has tripled over the decade for private explorers is bad news for gas guzzlers.

Diamonds are simply too small for Rio and BHP

27 Mar 2012

While Anglo America has just dropped $5.1 bln bulking up in diamonds, Rio Tinto and BHP Billiton are running for the exits. The industry is just too small for the biggest miners, despite solid fundamentals. That clears the way for niche players or even private-equity firms.

Volcker Rule remedy a decent compromise

26 Mar 2012

A bipartisan group of lawmakers wants to give regulators more time to figure out the complexities of banning prop trading. Their genuinely practical one-page fix is a rare treat from chambers famous for partisan bickering - assuming the senators can get it passed.

Brazilian billionaire buys time from Gulf

26 Mar 2012

Eike Batista may be the richest man in Latin America’s biggest economy, but he runs a cash-hungry empire. His sprawling oil and mining group is in its infancy. The $2 bln infusion of patient Abu Dhabi money should help Batista try to make good on his promise.

Monopolies thrive when politicians go short-term

26 Mar 2012

How else to explain the likely approval of a $17.5 bln New England power merger? Northeast Utilities’ incompetence is proven, but dangling a few politically expedient goodies seems to have won authorities over to its NSTAR takeover. Captive customers may lose, but investors win.

Botched BATS IPO at least good test of markets

26 Mar 2012

Scrapping a public debut is embarrassing for any company. But it’s a potential killer for an upstart stock exchange already being investigated over high-frequency trading. The relief for investors is that the failure by BATS wasn’t the catalyst for a broader meltdown.

Wall Street can relate to Hollywood underdog tale

26 Mar 2012

A smash debut for “The Hunger Games” makes Lions Gate the studio equivalent of a boutique bank landing the year’s biggest deal. And Disney’s $200 mln loss on “John Carter” raises questions about Tinseltown’s bulge bracket. Indies in both industries are fighting for the spotlight.