Americas

Iran sanctions shouldn’t shift oil price

10 Jan 2012

The latest sanctions are not enough to justify an oil price spike. Sure, the lack of foreign equipment may bring Iran’s oil production down, but not in a hurry. Globally, crude supplies will remain fairly steady. A serious military escalation in the Gulf would change that.

U.S. presidential race has a lone bank-buster

9 Jan 2012

GOP hopeful Jon Huntsman’s desire to break up big banks sets him apart from other candidates in his party, and even President Obama. But his financial reform plan would require a fickle Congress to go along and poses practical difficulties. Dodd-Frank actually does the trick.

Hep C deals show how biotech premia get infectious

9 Jan 2012

Bristol-Myers will pay a 163 pct premium for Inhibitex. Recent bids for other hepatitis C specialists have also gone skyward. In any hot biotech field, there are few targets and most have insiders with big stakes. Satisfying their belief in their efforts is what drives prices up.

Women are still winning the U.S. jobs game

9 Jan 2012

They’ve nabbed only a fraction of the 1.4 mln roles added since mid-2009, new data show. But the post-crisis “Mancession” hurt XYers more. Men getting jobs back isn’t the same as women losing ground. They’re ahead, and should stay that way if education-related trends persist.

Euro crisis could make IMF bigger and softer

9 Jan 2012

Europe’s travails are an opportunity for the IMF. Its kitty is nearing $1 trillion and should get heftier in 2012. And loan conditions may soften if more powerful nations come asking for help. There are risks, but this is preferable to ever rising national currency reserves.

Goldman’s first Islamic foray too clever by half

9 Jan 2012

Sharia scholars have blessed the Wall Street bank’s unusual $2 bln bond. But that approval falls away if the bonds change hands at anything other than par, and that deters potential investors. Given the inevitable scrutiny, Goldman should have been less ambitious.

Shale oil set to take edge off crude price

9 Jan 2012

Gas from shale has flooded the U.S. market, providing 20 pct of supply and squashing prices. Rock-derived oil, by contrast, may add only about 4.5 pct to global supply by 2020. But that would still cover the expected rise in Chinese demand and help keep a lid on crude inflation.

U.S. recovery now not jobless, only homeless

6 Jan 2012

Despite the 200,000 new jobs last month and another drop in unemployment, job creation is still slower than in recent recoveries and looks a bit like the early 1960s. That’s partly because the weak housing market means few new construction jobs. Still, Obama can breathe easier.

Even a legal healthcare victory may hurt Obama

6 Jan 2012

The U.S. Supreme Court should uphold the president’s crowning achievement, but that won’t preclude a backlash. A win will embolden congressional candidates seeking to repeal the law and deepen the partisan divide. Governing could be as tough a task as re-election for Obama.

Anything but Treasuries

5 Jan 2012

Uncle Sam’s bonds were big winners in 2011. Yet safe-haven manias have squeezed just about all the juice from Treasuries. In 2012, investors would be wise to peek outside the bunker. They’ll see plenty more fruitful ways to stay safe.

China’s lead in patents masks lag in innovation

5 Jan 2012

The rising economic giant probably topped the world as a place to file applications in 2011. But the dodgy quality of many patents and foreign activity contradict the idea of a surge in homegrown ingenuity. As it has in manufacturing, China will catch up - but it’s not there yet.

Fiat may find Chrysler deal is ticket out of Italy

5 Jan 2012

The Turin carmaker will spend 2012 working out how to acquire the rest of the Detroit firm after raising its stake to 58.5 pct. Depending on the structure, Fiat may become Italy’s first truly global multinational - but only if the Agnelli family puts pragmatism over sentimentality.

Kodak can seek solace in Barnes & Noble’s plight

5 Jan 2012

The iconic film company is headed toward bankruptcy, ostensibly because it didn’t keep up with the digital times. But the bookseller’s popular, fast-growing e-reader couldn’t prevent a huge profit warning either. Even surfing the creative destruction wave can end in wipeouts.

Even the Fed is giving up on Fan/Fred reform

5 Jan 2012

Its suggestions to help U.S. housing include turning tarnished mortgage giants Fannie Mae and Freddie Mac into huge landlords and making them go easy on underwater borrowers and banks. Ben Bernanke once said reform was urgent. With ideas like this he must have changed his mind.

Bankers lack leverage this bonus season

4 Jan 2012

A few at Jefferies seem to have got their way. But sluggish revenue and new regulation mean virtually all of Wall Street needs to cut costs. With no banks in major hiring mode, only the biggest rainmakers can talk their way into healthy payouts. Most don’t have a leg to stand on.

Exxon’s Japan sale may not show downstream doubts

4 Jan 2012

With rivals like Conoco splitting off refining, investors are on the lookout for signs the Texas titan will join the trend. Exxon’s likely $5 bln exit in Japan isn’t a clear one. The group recently sank $25 bln into downstream projects. It may merely be ditching a weak asset.

Obama’s recess appointment endangers recovery

4 Jan 2012

The president is bypassing Congress to install the first chief of the new consumer financial watchdog. The move shatters Obama’s already fragile relationship with Republicans. A full extension of the payroll tax cut is now unlikely, which imperils the economy’s shaky progress.

For Obama’s 2012 hopes, it really is the economy

4 Jan 2012

A reasonably reliable forecasting model puts the U.S. president with just over half the two-party vote in November. The Intrade electronic market gives him a 52 pct chance of re-election. A Breakingviews calculator shows how economic growth in 2012 could tip the result.

Romney’s Iowa win gives markets reason to exhale

4 Jan 2012

Dark horse Rick Santorum nearly edged out Mitt Romney in the first U.S. Republican presidential caucus. Though the vote was tight, it leaves Romney, with his conventional and predictable economic policies, an even clearer front-runner for the eventual nomination.

Anglo American risks reaping a Chilean whirlwind

4 Jan 2012

The London-listed miner may think it can win a $2 bln dispute with state-owned Codelco over a prized mine. Still, the stakes are high and the case would be heard in Chile. Defeat would be a big blow for Anglo and CEO Cynthia Carroll. But a face-saving compromise looks possible.