Americas

Exxon fears hammer home risks of Kurdish oil rush

6 Mar 2012

Speculation the U.S. major may not enter Iraqi Kurdistan after all has pummeled shares in the region’s oil companies, including a 24 pct drop in Gulf Keystone. Exxon was meant to break the political impasse in Baghdad, without which big energy bets in the region may be off.

Demographic flip endangers U.S. jobs recovery

6 Mar 2012

Some 4 mln people under 55 may soon seek employment, a Breakingviews analysis of labor participation rates shows. Yet the share of older folks working has grown – and they might not retire so fast. As the economy improves, the two trends could wreak havoc on the jobless rate.

Peugeot’s $1.3 bln cash call inspires confidence

6 Mar 2012

Underwriters sought a 32 pct discount to the theoretical ex-rights price for the carmarker’s fundraising in its alliance with GM. That seems steep, but reflects a challenged industry. Indeed, for a company raising a third of its market value, the 6 pct share price drop is muted.

U.S. stock bubble is in profit, not value metrics

5 Mar 2012

The S&P 500 trades at 14 times earnings, so valuation multiples aren’t excessive. But U.S. domestic corporate profitability is running 50 pct above the long-term average, while global profits have soared even higher. This is unlikely to last long.

Who cares how many jobs Apple has created?

5 Mar 2012

Shareholders should be scratching their heads after the gadget king commissioned a study showing it produced half a million jobs. This subjective report misses the point. Apple has created $400 bln of value in the past three years - that’s good for the economy and capitalism.

U.S. natural gas looks irresistibly cheap vs oil

5 Mar 2012

With crude prices rising and gas sliding further, oil is now eight times dearer than gas based on energy content - the biggest gap since the 1950s. Global shifts dictate the price of the black stuff but, as news from Detroit shows, local market forces should work on American gas.

Citi steals governance march as Parsons quits

5 Mar 2012

The recovering megabank is keeping the split at the top when the current chairman leaves in April. That’s an example other Wall Street firms should follow. After sitting on Citi’s board for 16 years through several crises, it’s finally a decent legacy for Parsons’s reputation.

Zynga has less to fear from mobile than Facebook

2 Mar 2012

The online gaming company is diversifying away from the social network. But one trend affecting its giant symbiotic partner shouldn’t much worry Zynga - the shift to mobile devices. Ad-dependent firms like Facebook and Yelp could lose out, but Zynga’s revenue model is different.

Corporate political donors don’t need SEC policing

2 Mar 2012

As election spending soars, the watchdog faces pressure to make firms disclose their campaign contribution largess. Some already do, thanks to shareholder proposals. A broad rule would be an unnecessary venture into politics and stretches the idea of investor protection.

Would-be U.S. TV disrupter reveals flaws in law

2 Mar 2012

Broadcasters claim online TV startup Aereo is violating copyright by streaming programs with tiny antennas. The company says it merely mimics what viewers did for decades with set-top and roof-top versions. The legal contortions show how old rules often fail new technology.

Review: Free will, shopping and bad habits

2 Mar 2012

We have free will, but less than we think - unconscious routines fill our lives. Charles Duhigg’s “The Power of Habit” taps brain science to explore the ramifications of this, both hopeful and sinister. We can  change habits, as people and groups. But habits destroy, too.

Top hedgies show Wall Street how it’s done

1 Mar 2012

The $3 bln paycheck for Bridgewater’s Ray Dalio, as calculated by Forbes, hasn’t generated the outrage directed at investment bankers. The message seems pretty clear: Create your own business, reward investors, too, and don’t go public. Oh, and skip the government bailout.

Brazilian banking star puts $15 bln value to test

1 Mar 2012

In three short years, André Esteves has dealt his way to a six-fold increase in the price of his BTG Pactual. Wall Street can only dream of such riches. Former owner UBS must be quietly weeping. But the planned IPO will reveal just how solid the investment bank’s foundations are.

Kinder deal conflicts deserve a second hearing

1 Mar 2012

A judge was right not to block the pipeline owner’s $21 bln acquisition of El Paso over the skewed motives of Goldman, Morgan Stanley and the target’s CEO. But it’s also a good idea for shareholders to keep the fight going. Penalizing misaligned incentives is the best way to stop them.

Strong-arming YPF would do Argentina few favours

1 Mar 2012

Fears that President Fernandez will nationalise the country’s biggest oil company have receded. But the state is still cajoling YPF to boost output. Such Chavez-like tactics are counterproductive, scaring off foreign investors needed to exploit Argentina’s new oil and gas finds.

Don’t penalize money funds for the sins of banks

1 Mar 2012

The SEC wants to step up regulation of money market funds. But their losses have been relatively trivial and mostly non-systemic, while providing savers with diversification from insured deposits. A better idea would be to clearly delineate their risks from those of banks.

Scarce U.S. small-cap IPOs need nurturing

1 Mar 2012

Efforts in Washington to cut regulation for emerging firms won’t reverse a decade-long slide in smaller offerings. Technology has done more to keep companies away from public markets than red tape. One way to escape the hyper-liquidity squeeze may be to embrace the past.

Kim Jong-un could thaw dictatorship into growth

1 Mar 2012

If North Korea’s basketball-loving young master really wants to build on his limited nuclear deal with the U.S., land reform would be a good place to start. That should boost food supplies and stimulate small business. Privatizations, big finance and crony capitalism can wait.

Fed’s mortgage sales tighten Volckerian knots

29 Feb 2012

The central bank offloaded the last $6 bln of housing dreck from the AIG rescue. The deals can be construed as prop trading, but also show how big banks work well as market-makers. Maiden Lane exemplifies the conundrum confronting regulators as they draft the final Volcker Rule.

Yelp IPO: four reviews, 2 stars out of 5

29 Feb 2012

Categories - user review websites, stock sales, unprofitable enterprises, Google rivals. Location - Silicon Valley and New York Stock Exchange; Attire - casual; Price range - $ to $$ per share; Good for bankers and backers - yes; Good for investors - no.