Americas

Obama offers more anti-fraud bark with little bite

25 Jan 2012

In his State of the Union speech, the president called for a new financial-crimes unit and harsher penalties. But a similar task force already exists, and punishment is plenty tough. What’s needed is resources for complex cases against Wall Street, not more laws and bureaucracy.

Even unity can’t solve U.S. foreclosure problem

25 Jan 2012

Banks, as well as Fannie, Freddie and FHA, want to unload an expected 3.2 mln repossessed homes. Investors want to buy them and the regulator wants to help. Despite this rare general accord between Washington and Wall Street, financing and competition are proving tough obstacles.

Roche’s resolve on Illumina will be tested hard

25 Jan 2012

Investors reckon Roche’s $5.7 bln hostile bid for the U.S. gene-sequencer will be improved. That’s sensible: the Swiss drugmaker has sweetened deals before, Illumina is a long-term strategic bet and counter-bidders could emerge. To win, Roche may have to swallow a super premium.

Conoco must prove tortoise can win oil race

25 Jan 2012

In one of its last quarters as an integrated U.S. major, Conoco delivered 66 pct profit growth. But production fell ahead of a spin-off that will pit its exploration arm against a faster-growing peer set. Though it’s buying more dynamic assets, the valuation will depend on quality.

Obama’s appeal to 99 pct won’t sway a key minority

25 Jan 2012

In his last State of the Union address before facing voters, the U.S. president outlined a radical agenda. He would tax millionaires more, target big banks and punish outsourcing. The ideas will resonate, but not with Republicans in Congress. They won’t let Obama accomplish much.

Apple juggernaut regains warp speed with new pilot

24 Jan 2012

The tech giant’s recent quarter blew away the previous rare let-down: around $30 bln of market cap added after hours proves that. The latest iPhone fueled a 73 pct surge in sales from the year before. With cash rolling in, the destiny of nearly $100 bln in the iBank is looming large.

Counterpoint: Donating a bonus doesn’t reduce it

24 Jan 2012

Breakingviews columnist George Hay suggests RBS chief Stephen Hester should take a payout but give it to charity so as to neuter the toxic politics of receiving it. That’s humbug. Philanthropy is praiseworthy and to be encouraged, but it’s not a valid defense for a bonus.

Rating agency reform needs some comic relief

24 Jan 2012

Funny man-turned-Senator Al Franken’s idea to randomly appoint firms to rate U.S. asset-backed bonds is starting to look attractive again. It can’t be worse than recently adopted rules which neither killed gaming the system nor prompted firms to offer extra unsolicited ratings.

IMF is wrong place to look for early warning

24 Jan 2012

German and British leaders, among others, have told the multinational to do a better job spotting looming economic trouble. But as the IMF’s tardy forecast of a euro zone recession shows, the fund’s diplomatic role makes it ill-suited to being ahead of the curve forecasting doom.

Patent bubble gets pricked quickly

24 Jan 2012

Apple, Google and Microsoft bid up smartphone invention prices to frothy heights last year to gain a market edge. InterDigital, owner of nearly 20,000 patents and applications, hoped to capitalize but couldn’t find a buyer. There’s still value to pan, but the gold rush is over.

New Petrobras CEO has it all – except independence

23 Jan 2012

There’s plenty for shareholders to like about Maria das Graças Foster becoming the oil giant’s boss. A veteran engineer, she has the qualifications needed to help boost output. But her close friendship with Brazil’s president reinforces the company’s subordination to the state.

Insider trading snitch got off too lightly

23 Jan 2012

A former Galleon trader guilty of illegal trading became an informant to help nab others, including kingpin Raj Rajaratnam. The stoolie was rewarded with probation and community service instead of up to 25 years in prison. Such leniency risks overreliance on criminals.

Bank CEO pay suggests Wall Street may be waking up

23 Jan 2012

The latest stock awards to Jamie Dimon, James Gorman and Vikram Pandit can’t be called austere but also don’t ignore the post-crisis contempt over excessive bonuses. So far, there’s nothing that should outrage investors or employees. But there are also still cash payouts to come.

RIM shies away from chance for reboot

23 Jan 2012

The troubled BlackBerry maker’s architects are finally giving up their shared chief executive job. But Thorsten Heins, the new boss, is an insider who sees no need for drastic change, and the two ex-CEOs will stay on the board. It could hardly be further from a fresh start.

Securitization shindig pits hope against adversity

23 Jan 2012

Car loans and other parts of the asset-backed market have recovered enough for the market’s largest annual gathering to return to Las Vegas for the first time in three years. But regulation, a gridlocked mortgage market and fears of an investor retreat may outweigh the good news.

The One Percent was real loser in South Carolina

23 Jan 2012

Plutocrats fuelling jets for Davos take note: fellow club member Mitt Romney’s path to the presidency has been obstructed by his riches. Lopsided wealth creation bothered voters even more than his rival’s carnal sins. The Occupy agenda is resonating in some unlikely places.

Chavez tests limits of resource nationalism

23 Jan 2012

The Venezuelan president nationalised foreign operators in 2007 and now threatens not to pay them as much as the international arbitrator orders. Such bravado might play well at home, but escape is almost impossible. Creditors can easily seize the state’s ample overseas assets.

Latest U.S. bank stock surge could prove fickle

20 Jan 2012

The big six, including Goldman and Citi, have added $100 bln of market value of late despite meager Q4 earnings. Receding fears over Europe helped valuations align better with balance sheet and income realities. But no further rally is warranted as more bad surprises are likely.

GE gives the world a healthy reality check

20 Jan 2012

Four years ago, General Electric shocked investors with a profit warning foreshadowing calamity ahead. Today the conglomerate merely missed revenue estimates by 5 pct. Shareholders may not like that, but as a bellwether for the global economy the results should be reassuring.

Google finds new tech expectations hard to meet

19 Jan 2012

The Internet giant’s revenue rocketed 25 pct, but its shares still plunged after hours. Google failed to match Wall Street’s hopes, whereas Microsoft and IBM’s more pedestrian results reassured. In uncertain times, the old guard’s predictability can trump edgier possibilities.