Americas

U.S. currency slap looms as China least deserves it

3 Oct 2011

A bill enabling sanctions on Chinese goods may pass the Senate this week, even though the yuan has appreciated strongly on a trade-weighted basis. China’s central bank has been guiding the currency stronger despite falling markets. For the U.S. to lash out now looks a mistake.

New Morgan Stanley woe is a drama lacking a crisis

3 Oct 2011

The Wall Street firm was facing skepticism about its turnaround even before the third quarter turned crummy. Its latest misery, though, is driven not by substance but by numerical confusion. It should pass – unless the fear driving the herd mentality turns into outright panic.

Blocking a deal isn’t always best antitrust answer

30 Sep 2011

When Live Nation merged with TicketMaster, the prognosis for competition in the live music and ticketing business wasn’t good. Concessions extracted by U.S. regulators seemed bitty. But nearly two years on, rivals are flourishing. Live Nation doesn’t look so dominant any more.

U.S. government has chance to borrow very long

30 Sep 2011

Thanks to the Fed’s maneuvers, Uncle Sam could sell bonds maturing decades from now at uncommonly low yields. Moreover, pension funds need the paper. The Treasury has kicked around the idea of 50 or 100-year bonds before. Maybe it’s time to actually issue some.

Insider traders pay too much for choosing court

30 Sep 2011

Uncle Sam rewards cooperation with milder sentences. But Galleon-related cases show that prosecutors’ targets are heavily penalized just for asserting basic trial rights. Judges should be wary of too big a difference - trials like Raj Rajaratnam’s bring needed clarity to the law.

Dodd-Frank’s latest dumb unintended consequence

29 Sep 2011

BofA is to charge $5 a month for debit cards to recoup fees lost as part of the financial reform bill. That seems high, but the rule was nothing more than a sop to retailers at the expense of banks. It fails to make the system safer and it’s now a quantifiable tax on consumers.

Brazil oil riches may sabotage infant firm policy

29 Sep 2011

The BRIC nation wants to build world-beating firms that do more than extract natural resources. Protecting embryonic industries created big winners in Korea and Japan. But unless Brazil can prevent its energy wealth inflating its currency, multinational wannabes could struggle.

BBC ersatz trader has serious markets message

29 Sep 2011

A clip of a trader admitting to dreaming of financial doom as a money spinner has spread like wildfire. The Gordon Gekko wannabe doesn’t work on Wall St but his vulgar amorality offers a description of trading that strikes a chord with a public still smoldering over bailouts.

HP’s lack of direction continues apace

29 Sep 2011

The battered U.S. tech firm, now led by Meg Whitman, has hired Goldman Sachs to fend off activists. And Oracle is baiting HP, suggesting its offer for Autonomy is profligate and the UK firm’s CEO forgetful, at best. An uppity investor with a strategy could be just what HP needs.

U.S. money markets lose scale but not power

29 Sep 2011

This source of short-term funding is much diminished from the 2008 heyday, but they still have $2.5 trln to invest in debt. That is more than enough to keep bankers up at night, especially as low rates, European bank woes and lower corporate demand have made managers desperate.

Thomson at last sees fit to merge with Reuters

28 Sep 2011

Three years after uniting, the onetime rivals are forcing the professional and financial publishing arms together. The acquired Reuters side retained a certain clout in 2008, but has struggled since. The Thomson family now seems to be reasserting control to make the deal work.

Amazon and Apple’s historic paths collide

28 Sep 2011

The online retailer’s cheap new Kindle Fire tablet reflects the company’s roots - it’s a tool for the sale of content. Apple, by contrast, used music and movies to hook customers into buying its gadgets. The two currents are now clashing, and survival requires strength in both.

Auto workers adapt to life as Motown shareholders

28 Sep 2011

The new UAW contract with GM eschews the overly generous benefits of the past for more measured terms. Deals with Chrysler and Ford may be tougher. But Detroit’s near-death experience and the UAW’s stakes in two of the big three have taught the union the benefits of restraint.

Chilean Winter tests the country’s economic model

28 Sep 2011

Mass protests over education mask a deeper divide over the post-Pinochet preference for market-based, rather than state, solutions. The Chicago Boys got it mostly right, but not on education. Resolving the current dilemma may require fundamental philosophical reform - and money.

Stock market crash more likely than new recession

28 Sep 2011

One ratio of U.S. stock market value suggests it’s expensive compared to 1995, a middling year. Low interest rates and a weak dollar have boosted profits while rapid money growth has juiced valuations. More normal monetary policy could make the market crash - without a recession.

Turmoil leaves Asia Pacific facing dollar drought

28 Sep 2011

Strong government finances and exports in the region aren’t enough to offset the reversal of Western investment. While some countries can draw on huge reserves, others like South Korea and Australia are facing a dollar shortage and potentially destabilizing currency declines.

Anna Nicole gives Wall St. a lift from the beyond

27 Sep 2011

The late Playmate’s U.S. Supreme Court case made it easier to shift suits from bankruptcy to federal court. That may help JPMorgan’s case over Lehman’s demise and ding the Madoff trustee’s search for redress. The centerfold may have given as much to the law as to Playboy readers.

Latest tech valuation evokes bad dot-com memories

27 Sep 2011

Tumblr’s funding round values the popular blogging site at $800 mln. The service is growing fast, but there’s precious little revenue. While that makes profitless dot-coms relying on sales multiples look good by comparison, valuing eyeballs again is bad for tech.

Richest Brazilian talks his book on protectionism

27 Sep 2011

Eike Batista thinks the U.S., like Brazil, should shield young industries from overseas competition. But it’s hard to take him very seriously when it’s his wallet talking. Batista’s oil rig-building firm, OSX, is placed to be a big winner from his country’s local content rules.

P&G’s Pringles partner warrants careful taste test

26 Sep 2011

The consumer giant wants investors to swap P&G stock for shares in Diamond Foods as part of a $2.4 bln deal to offload the chips brand. But financial wrinkles and angry walnut growers are among possible concerns. P&G holders may want to check the contents of the package closely.