United States of America

Consumers can hope Apple patent victory is Pyrrhic

27 Aug 2012

The iPhone maker won big with a $1 bln U.S. judgment against Samsung. In a sense that’s fair, as Apple revolutionized cell phones and rival products mostly look like copycats. But if Google and others push the technology forward to avoid further lawsuits, users may benefit.

Samsung’s stock swoon overstates Apple triumph

27 Aug 2012

The Korean company’s value dropped by $12 bln following its rival’s $1 bln court victory. But even if the damages triple and Samsung loses a year’s U.S. phone sales, the pain won’t be that severe. And it’s still beating Apple in China, where patents aren’t in dispute.

SEC flub on money market funds creates new muddle

24 Aug 2012

Other U.S. watchdogs could force changes on the $2.4 trln industry. But after SEC bigwigs couldn’t even agree to invite comment on reforms, any Plan B will be messy. The episode shows regulators’ priorities, the power of lobbying and the whole oversight structure in a bad light.

Review: Why Uncle Sam fails to fix his finances

24 Aug 2012

David Wessel’s compact accounting of American budgetary politics in “Red Ink” is required reading - along with the Bowles-Simpson plan - for understanding the current electoral battle and the massive challenge that awaits the next president in reforming the U.S. balance sheet.

Virtual foes throw down against networking giants

24 Aug 2012

The latest technology craze to follow cloud computing is software to program networks more efficiently than routers. Billion-dollar paydays for startups are evidence of the hype. Incumbents like Cisco should weather the shift, but not necessarily with their margins intact.

Citi, UBS well suited to roast Nasdaq on Facebook

23 Aug 2012

The two banks are urging the SEC to reject the U.S. exchange’s minimal $62 mln compensation offer relating to its botching of the social network’s IPO. UBS lost a bundle and may look a bit conflicted. But both companies know all about screw-ups and how to pacify critics.

The old, the poor and U.S. healthcare explained

23 Aug 2012

Republican presidential hopeful Romney’s choice of running-mate Paul Ryan has put government programs like Medicare and Medicaid in the spotlight. Their cost – over $1 trln combined in 2011 – is spiraling. Breakingviews outlines the problem and the different candidates’ fixes.

Exxon aims for smarter Russia bet as rivals fold

23 Aug 2012

ConocoPhillips’ exit from a JV means its 20-year Russian adventure is all but over. BP has had to retreat from some of its forays too. While making money, neither built the kind of business they hoped for. Armed with a few lessons and its world-beating clout, Exxon may do better.

Carl Icahn gets a dose of his own tart medicine

22 Aug 2012

The uppity investor yanked his failed bid to buy the rest of CVR Energy. That leaves Icahn controlling a public company he can’t take private and wanted to sell - but couldn’t find a buyer. Now he has to deal with a group in some ways a bit like him: a stubborn minority.

U.S. housing watchdog wise to go long on short sales

22 Aug 2012

The federal agency that oversees mortgage behemoths Fannie and Freddie is making it easier for underwater borrowers to sell homes at current prices. That’s better than cutting the amount owed as it should enhance housing market stability without introducing moral hazard.

Market could overrule U.S. court on coal pollution

22 Aug 2012

An appeals panel has put the brakes on the EPA’s effort to cut emissions from coal-fired power plants. That could keep the dirtiest U.S. smoke stacks going a bit longer. But at least for now, cheap gas is doing the environmental watchdog’s work, whether judges like it or not.

Peter Thiel’s sale encapsulates Facebook folly

21 Aug 2012

The venture capitalist took the first opportunity to unload some $400 mln of shares from his initial $500,000 bet on the social network. His decision cements the idea that Facebook’s IPO was run by and for early backers. Thiel’s board seat is now a snub to new investors, too.

Muni investors shouldn’t be spooked by Buffett

21 Aug 2012

The Oracle’s decision to unwind $8.25 bln of derivatives deals is being interpreted as a bearish sign on America’s states and cities. Investors are better off keeping their own counsel on a market so broad and diverse. It’s a lesson learned from muni doomsayer Meredith Whitney.

Soros backing could lift Manchester United

21 Aug 2012

The soccer club’s U.S. float was panned for leaving the Glazer family firmly in control - and for missing their lofty goals on value. But George Soros’s emergence as a major shareholder could lift sentiment. Despite his $20 bln fortune, Soros is not a typical trophy investor.

Lawsky affair rekindles U.S. regulatory arb risk

20 Aug 2012

The crusading NY watchdog single-handedly extracted $340 mln from StanChart. That’s good politics, but goes against a pact between the feds and the state not to work at cross purposes. The danger is financial firms circumvent regulations by exploiting rivalry among overseers.

U.S. money market funds can’t have it both ways

20 Aug 2012

Lobbyists are trying to stifle reforms in the $2.7 trln industry, while the New York Fed boss has lent his support to changes the SEC chairman wants proposed. The funds can’t go on claiming ultra low risk while having no obligation to hold a buffer. Something needs to give.

Bondholders should back Brazil’s bank bail-in

20 Aug 2012

Some are crying foul over plans to impose a 50 pct haircut on creditors in seized Banco Cruzeiro. This may just be grandstanding, though there’s favoritism in the bail-in. But with no buyers for the disgraced mid-size lender, the other option is liquidation. No one wants that.

US derivatives leader makes timely push on Europe

20 Aug 2012

CME plans a London derivatives exchange. By starting in currencies it avoids tackling rivals NYSE and Deutsche Boerse head-on. The timing is also canny. Private trading is migrating to bourses and moving earlier might have made it easier for NYSE-DB’s merger to win approval.

Treasury’s Frannie fix puts Congress on the spot

17 Aug 2012

Team Geithner is forcing the two bailed-out home loan agencies to shrink their portfolios faster and hand all profit to taxpayers. These are excellent steps. But Fannie and Freddie remain too central to U.S. mortgage finance. It’s up to lawmakers to come up with the solution.

U.S. refiners gain from infrastructure bottlenecks

17 Aug 2012

Domestic WTI crude sells at a discount to globally traded Brent. That’s partly because there’s inadequate capacity to move the stuff around. Even when pipelines catch up, home-produced crude may still be cheaper. The boost for American oil processors could last a while.