Americas

Goldman’s omerta loses force – along with brand

14 Mar 2012

A banker’s public resignation has revived accusations the bank puts its interests ahead of clients, or “muppets.” Though the complaint is familiar, it’s usually kept private. The worry for Goldman is some employees are no longer scared of the firm nor take pride in its pedigree.

Ethical economy: What’s really wrong with Europe?

14 Mar 2012

It’s not the economy. On that score, despite recent stress, Europe is working at least as well as the United States. But the euro crisis showed a deeply defective political system. Europe needs more discipline, greater solidarity and a higher purpose. It should be able to manage all three.

New York Times pay structure isn’t fit to print

14 Mar 2012

The venerable U.S. newspaper group revealed that it rewards bosses with fat bonuses for a mere 1.6 pct return on capital. That’s a fraction of the company’s cost of funds, and much lower than its own previous standard. A high bar for journalists doesn’t extend to management.

Fed strikes right balance with latest stress test

13 Mar 2012

Unlike the last look under the hood, investors have been given reams more useful data to separate sheep from goats in U.S. finance. At the same time, the Fed’s acting prudently to ensure capital adequacy across the system. It’s a sensible way to head off another financial crisis.

All inflation seems temporary to the Bernanke Fed

13 Mar 2012

The central bank said the impact of higher gas prices would be fleeting, justifying its pledge to keep rates low through 2014. But price rises are already above the Fed’s soft target. The intellectual contortions needed to maintain policy for 30 more months will get interesting.

Markets fear loss of QE3 and LTRO3 boosters

13 Mar 2012

More U.S. jobs is better news than the reaction of stocks and oil suggest. Exuberance is restrained because markets have prospered on abundant Fed and ECB liquidity, and may now face the loss of their stimulants. Still, a market retrace could be good for global growth.

Citi, time to hand Smith Barney to Morgan Stanley

13 Mar 2012

The firm led by James Gorman should get Fed approval this week to buy another 14 pct of the stockbroker it owns with Citi. But acquiring it all would make more sense and unlock capital for Citi. Assuming they can agree on price, of course - and convince regulators of the plan.

China has much to gain from rare earths fight

13 Mar 2012

A new WTO case against China may put Beijing on the defensive. But China’s global dominance puts it in a strong position to resist pressure. Besides, the backdoor trade protectionism plays well at home, as does the effort to make rare earth mining less environmentally damaging.

Splitting AT&T CEO and chairman roles a no-brainer

13 Mar 2012

Randall Stephenson’s botched plan to buy T-Mobile USA came with a $4 bln tab. The board didn’t see fit to hold him accountable with his pay package. But shareholders can have their own say - and should vote to strip Stephenson of his chairman title and install an independent.

Silicon Valley’s undeserved moral exceptionalism

12 Mar 2012

The ruthless overlords of technology and the Internet at Google, Facebook and elsewhere paint themselves as saints of American capitalism. But like other big business, they’re really the successors to the robber baron magnates of the Gilded Age, Rob Cox argues.

Facebook’s underwriter friends are cheap insurance

12 Mar 2012

The social network’s IPO now has 31 banks working on it. There’s no evidence having more underwriters affects early stock performance either way, and some may be friends of convenience rather than necessity. But for Facebook it’s extra reassurance at little, if any, cost.

Icahn targets given red alert by Dynegy debacle

12 Mar 2012

The activist’s reputation already precedes him when he turns up to agitate. Now a court-appointed official has shredded a retooling at Dynegy, where Icahn meddled and installed directors. Firms on the receiving end of his tactics, like CVR, have all the more reason to spurn him.

Big banks don’t face daunting new world alone

12 Mar 2012

Though U.S. lawmakers aimed much of their firepower at institutions deemed too big to fail, smaller lenders were caught in the crossfire. As the nation’s legions of community bankers gather in Nashville, they’ll grapple with similar regulatory and economic challenges.

Glencore faces fight to land $5.5 bln Viterra deal

12 Mar 2012

Buying Canada’s biggest grain handler would round out the commodity trader’s growing agricultural portfolio. The assets are attractive and the timing is right. But rival bidders, a lack of obvious synergies and Canada’s penchant for resource nationalism may present obstacles.

Improving U.S. jobs trend favors old over young

9 Mar 2012

A solid 227,000 jobs were added in February, with upward revisions for past months. In the last five years, people aged 55 and over have gained 3.6 mln jobs, while younger workers have lost 7.6 mln. The incentives of shrunken savings and funny money are doubly harming the young.

M&A lawyers lob stones at Goldman from glass house

9 Mar 2012

At the dealmaker jamboree in New Orleans, debate over how the bank played both sides of the El Paso sale drowned out other hot topics. Bankers and CEOs took beatings over other conflicts, too. And yet for an event mainly devoted to legal issues, there was little self-reflection.

Mutual fund managers prove unusually bearish

9 Mar 2012

A survey of around 200 leading U.S. stock and bond pickers conducted by Breakingviews yielded some negative sentiment about stock valuations, the economy and even the Facebook IPO. But one constituency will draw comfort from the findings: supporters of President Barack Obama.

No winners in Vale’s tax clash with Brasilia

9 Mar 2012

The Brazilian mining giant is embroiled in an escalating legal row over back taxes. The new CEO is looking more like his own man than a state functionary. But investors are right to focus more on Brasilia’s growing temptation to extract that pound of flesh.

Bankers behaving badly are no black swans

8 Mar 2012

Job stress and simple statistics mean it shouldn’t be too shocking to hear of Wall Streeters stabbing a cabbie or defecating in public. More surprising is that such tales are relatively rare. After all, unlike their poor on-the-job decisions, such risks cannot really be managed.

Forced sale of News Corp Sky stake less improbable

8 Mar 2012

The UK media watchdog has a special team assessing the U.S. media group’s fitness to run broadcaster BSkyB. That test is applied regularly anyway. But the situation’s heated politics make it a less remote possibility that authorities require Rupert Murdoch to sell.