Americas

Occupy Wall Street is poor vessel for discontent

19 Oct 2011

The protesters may be channelling justified public anger against high finance, but they are too intellectually incoherent to start any sort of revolution. Edward Hadas suggests the mourning over Apple’s Steve Jobs is a better cultural indicator than the Wall Street movement.

Apple’s rare letdown looks more form than function

18 Oct 2011

The firm known for perfectly marrying technology with design usually manages the same élan with its finances. Under Steve Jobs, Apple blew by forecasts. The latest results, without him, missed. But there’s still plenty of value substance beyond issues of Wall Street style.

Free trade unlikely to help end U.S. jobs crisis

18 Oct 2011

The Obama administration is on a free trade roll; it’s pushing for new deals with Vietnam and Malaysia. But for rich America, freer trade with poor countries creates few new jobs. It may also exacerbate something its citizens are growing to hate: inequality.

Goldman’s loss far less worrying than it appears

18 Oct 2011

Diving into the red is rare for the Wall Street firm and confirms Goldman is losing some luster. But despite these challenges, its investment banking and trading ops held up relatively well. The pain was in private equity. Yet even that reassures the firm takes its lumps quickly.

Bank of America suffers worst of both worlds

18 Oct 2011

Forget the reported $6.2 bln profit. Both the commercial bank and the Wall Street operations fared worse than rivals in the third quarter. Even a very low tax rate couldn’t help. Strip out the accounting funnies and the CCB sale gain and BofA lost money again.

Through adversity, Goldman still plays all angles

17 Oct 2011

The $38 bln Kinder Morgan deal epitomizes what the bank does best. It owns a stake in the pipeline operator, underwrote its IPO and worked with its takeover target, El Paso. Such finesse is what sets Goldman apart. It’s just not clear it’s a gift that will keep on giving.

Wells Fargo’s premium suffers justifiable hit

17 Oct 2011

Its record $4.1 bln Q3 earnings barely missed estimates. But revenue slipped, too. Returns just beat the cost of capital and a struggling American economy won’t help the U.S.-centric bank. That makes it harder to rationalize Wells trading much above rivals, or its own book value.

Hulu owners destined to be regretful refuseniks

17 Oct 2011

Disney, News Corp and Providence pulled the plug on the video streaming service’s auction after bids were too cheap and conditional. But the media giants have struggled with their own digital transitions. Hulu is likely to become a distracting headache they’ll wish they’d exited.

Citi gets the jitters in emerging markets

17 Oct 2011

Fears of another recession already have hammered the bank’s shares. Now, Citi is slowing lending in developing countries, one of its fastest-growing businesses. With reserve releases slowing and Citi’s ROE just 3 pct after one-offs, it’s another obstacle to a banking recovery.

Kinder pays top dollar to enter energy big league

17 Oct 2011

If regulators give the nod, a new $94 bln pipeline titan will be born, becoming among the biggest U.S. energy firms. Kinder is paying more than is justified by the synergies for El Paso. But Kinder’s chief has done investors proud in the past and is not to be underestimated.

Goldman Sachs’s exceptionalism takes another knock

14 Oct 2011

Shares of the Wall Street firm briefly traded at a bigger discount to book value than JPMorgan. That rarely happens and is a worrisome sign that investors fear the firm’s franchise, not just trading but serving clients, has been irrevocably damaged. Goldman is now just ordinary.

Latest MAC attack hints at bigger M&A trouble spot

14 Oct 2011

After crying “material adverse change,” buyout firm Cerberus is close to landing Innkeepers for less than first agreed. The broad MAC in this bankruptcy deal may not reflect market reality. But sellers still have work to do ensuring buyers know the price of trying to walk.

Republican frontrunner’s glory should be fleeting

14 Oct 2011

The buzz around Herman Cain’s tax plan helped move him to the top of some polls. But on closer inspection, his 9-9-9 scheme is highly regressive and unattractive to nearly all. Cain’s questionable political and business credentials also imply this heyday will be short-lived.

Google investors "like" mobile and social results

14 Oct 2011

The Internet giant’s dazzling earnings report, showing adjusted sales up 37 pct, brought an after-hours share price jump. In mobile search, Google is making inroads the numbers don’t yet show, and its social network is gathering steam. But grappling with Facebook will be tough.

Opportunity knocks for U.S. gas exporters

13 Oct 2011

With natural gas four times dearer in Asia than America, U.S. producers will be tempted to export. But the price difference must endure to justify the infrastructure investments needed. Still, rising global demand and booming U.S. drilling mean the numbers might now stack up.

Imagine if Merrill had been smart like Goldman

13 Oct 2011

That’s the basic conceit behind the latest film to emerge in the financial crisis genre, “Margin Call.” Kevin Spacey stars as the head of a desk overloaded with MBS about to blow that his boss forces him to unload to unwitting buyers. It’s simplistic, but eerily familiar.

Rajaratnam sentence shows value of court process

13 Oct 2011

The 11-year term handed to the Galleon fraudster may seem excessive to those who think insider-trading penalties are overdone. But it looks about right in context - and it has unusual credibility. Not only was there no shortcut deal, the legal battle was also fully engaged.

Jamie Dimon puts brave face on tough quarter

13 Oct 2011

JPMorgan’s boss confronted a triple whammy of falling revenue, lower reserve releases and fallout from his incendiary comments. Dimon made a good stab outlining the benefits of banking. And there are signs of a middling, not reeling, economy. But investors may be less reassured.

New U.S. trade deals are political, economic wins

13 Oct 2011

After an overlong hiatus, the passage of laws fostering commerce with Korea, Colombia and Panama is a welcome boon for free trade. While bilateral deals are only modest job-creators, they deepen economic links, enhance efficiency and build friendships. Next up? Indonesia.

Dow Jones doesn’t need scandal-by-association

13 Oct 2011

The Wall Street Journal Europe’s publisher quit just before a report of controversial deals to boost circulation. The full facts aren’t clear, and such practices could happen anywhere. But when the parent is scandal-prone News Corp, it’s harder to avoid coming under suspicion.