Americas

Renters need to flex muscle in U.S. housing debate

8 Feb 2012

Though America’s mortgage system subsidizes homebuyers, its dysfunction has cost all taxpayers dearly. Few groups are pushing for change. But the nation’s 39 mln renters - often an afterthought in the discussion - ought to be up in arms. They might find unlikely allies, too.

U.S. firms push too hard against class lawsuits

8 Feb 2012

Charles Schwab, Carlyle and American Express are the latest to try blocking investors and others with gripes from suing en masse. Each has faced blowback, including from regulators. Cutting litigation costs may make sense, but running roughshod over legal rights is bad business.

Still a long slog ahead for U.S. jobs

8 Feb 2012

Employment growth in the United States has started picking up. But even at a rate of 250,000 a month, roughly January’s figure, full employment may not be reached until 2020. A new Breakingviews calculator shows how a faster or slower pace of job creation changes that picture.

Goldman conflict a tough sell for El Paso moaners

8 Feb 2012

Some of the oil pipeline’s shareholders are taking the bank to court, alleging foul play in advising both Kinder Morgan and El Paso in their $38 bln tie-up. Questioning such conflicts is right, but proving investors were short-changed by a 37 pct premium will be a struggle.

The world threatens to return to normal

8 Feb 2012

A good U.S. jobs report is prompting a global rethink. Rate cuts in South Korea and Australia are now less likely. Stocks are rallying. Treasury yields are up from ultra-lows. The euro zone crisis remains grave, but the world may be improving. If it is, safe havens are in danger.

Ethical economy: The great race for jobs

8 Feb 2012

The U.S. unemployment rate is down, but the workforce is still much smaller than it was. Socio-economic forces which create employment are losing out to job destroying new technologies. The best solution is put more money into what Adam Smith called “frivolous professions”.

Itaú’s $6.8 bln Redecard bid may depend on Lazard

7 Feb 2012

The big Brazilian bank’s offer for the 49.9 pct of the card processor it doesn’t own looks fair - but it’s no knockout. Minority shareholders may push for a sweetened price. With its money manager owning almost a tenth of Redecard, Lazard could make or break any deal.

How does a $31 bln mega-LBO become an $18 mln IPO?

7 Feb 2012

What sounds like a gambling tragedy is the perplexing, yet true, story of the buyout of Caesars Entertainment by TPG and Apollo. The deal, struck at the height of the bubble, has been a tough one. Co-investors are in such a hurry to get out, they’re actually paying to exit.

New US trustbuster may rejig deals, not kill them

7 Feb 2012

Though no soft touch, as antitrust chief William Baer could prove a better listener than his predecessors. That means ideas to make deals like AT&T’s defunct bid for T-Mobile USA palatable may at least get heard. The big question is whether his appointment gets past the politics.

Commodities and debt detach Canada from U.S.

7 Feb 2012

GDP and jobs growth are slowing north of the border while picking up in America. Prices of oil and other raw materials may now be recovering after a dip in the autumn. But Canadian households are still stretched by housing costs and debt, suggesting possible trouble ahead.

A CEO’s phone mannerisms can reveal fibs

7 Feb 2012

All it takes is a shaky delivery or uneven tone on an earnings call, new research suggests. They’re among the signs that a company boss is being economical with the truth. It’s not reliable enough to land anyone in jail. But investors seeking an edge may want to listen closely.

Nabors chief’s pay surrender gives investors hope

6 Feb 2012

Eugene Isenberg surrendered a $100 mln severance payout. Cajoling the laggardly oil services firm to moderate its egregious compensation has been a hard, but useful, battle for shareholders. Their eventual victory should give heart to other investors fighting executive excess.

April Fool’s comes early to comical M&A market

6 Feb 2012

It’s hard not to smirk at America’s largest title insurer buying steak chain O’Charley’s. Not only does it sound like a bad joke, it defies conventional wisdom both on conglomerates and the use of premium proceeds. But for idle bankers, even oddball deals are no laughing matter.

U.S. tinkers around edges of housing market

6 Feb 2012

The White House wants to breathe life into a depressed U.S. housing market. Its latest flurry of initiatives is as dizzying as the whirlwind of programs launched three years ago. The trouble is, housing policy isn’t easy - and President Barack Obama’s plans won’t make much difference.

Lazard lays bare need for better pay transparency

6 Feb 2012

The bank hit expectations for revenue but missed them for earnings. The reason: how it handles deferred bonuses. The matter is becoming a complex calculation that Wall Street firms could use to massage results. Lazard, at least, breaks out the details. Rivals should follow suit.

Expect Mark Zuckerberg to morph into Murdoch

6 Feb 2012

It could take decades or only a few years but the overwhelming control investors are ceding to the 27-year-old Facebook founder will eventually cease to be in their best interest. Or at least that’s the lesson from media empires like News Corp, Viacom or The New York Times.

Mexico looks out of step with world on antitrust

6 Feb 2012

As Europe and the United States block deals that threaten competition, Mexico last week gave Carlos Slim a free pass by stopping two TV barons uniting to challenge his telecoms dominance. The country’s feeble and captured competition authorities are squelching free markets.

Rising U.S. employment masks lingering malaise

3 Feb 2012

January saw 257,000 new private-sector positions and the jobless rate fell again. That’s good for job-seekers and Obama fans. But labor force participation is well below 2007 levels and long-term unemployment is way too high, making traditional full employment hard to attain.

Facebook’s biggest risk lies in palm of your hand

3 Feb 2012

Half of the social network’s 845 mln users now access it through a phone, and that number is surging. Yet Facebook receives virtually no display advertising revenue from small screens. The shift to mobile Internet use could be Mark Zuckerberg’s biggest threat - and he knows it.

Super Bowl may settle buy-side/sell-side rivalry

3 Feb 2012

New York’s Giants are set to battle the New England Patriots on the gridiron Sunday. The fixture reflects enmity between Wall Street’s banks and Boston’s investment industry. Since neither can crow much about performance of late, bragging rights for XLVI offer a big bonus.