United States of America

Romney only has one bold option for vice president

9 Aug 2012

An ideal running mate for the GOP ticket provides beauty and brains. Some politicos offer the U.S. presidential hopeful one or the other. But Paul Ryan has legit budget policy chops and might woo swing voters. The move would also help reorient the party toward fiscal probity.

Market geniuses don’t even get milk

9 Aug 2012

When the most pedestrian of groceries can surprise investors, something is clearly awry. Along with an unexpected profit, Dean Foods unveiled a corporate split - of one sort of milk from another. By unlocking 40 pct of value, the dairy engineering exposed glaring inefficiencies.

How to take the lies out of Libor

9 Aug 2012

The revelation that banks tried to fix the London Interbank Offered Rate sparked the year’s biggest financial scandal. A forthcoming UK review will attempt to deal with the benchmark’s shortcomings. Reuters Breakingviews has some suggestions of where reform should start.

Exclusive: StanChart threat rings Fed alarm bells

9 Aug 2012

New York’s possible revocation of Standard Chartered’s Wall Street license has bank regulators donning their macroprudential jumpsuits. The worry is that Benjamin Lawsky’s surprise risks unsettling customers and depositors. It’s getting hard to tell who the rogue is here.

John Malone counts his lucky Starz, Siriusly

8 Aug 2012

Liberty Media’s spinoff of premium cable channel Starz fits nicely into Malone’s Sirius XM ambitions. The transaction should boost his firepower to increase Liberty’s already sizable 46 percent stake in the satellite radio operator. The plan isn’t bad for shareholders either.

Priceline books industry ticket back to reality

8 Aug 2012

The travel site’s strong growth and lock on small European hotels convinced investors it was worth as much as $38 bln. But disappointing second-quarter results from it and rival Orbitz have burst the bubble. And Priceline faces the added problem of growing competition.

Uncle Sam still living well beyond his means

8 Aug 2012

While June consumer credit just missed its 2008 peak, overall debt in the first quarter was 250 pct of GDP against 232 pct four years ago. While the consumer has deleveraged a bit, business debt is flat and government debt has soared. At some point, this has to end.

Atomic halt leaves U.S. short on energy options

8 Aug 2012

A regulator is refusing to approve new reactors until there’s a plan for storing nuclear waste. With proposals to shutter a tenth of coal capacity, loud protests over gas fracking and little support for green tech, America seems to favor a none-of-the-above approach to energy.

Standard Chartered selloff has gone far enough

8 Aug 2012

Accusations of sanctions busting and a threat to its New York licence wiped almost a quarter off the bank’s market value. StanChart’s squeaky-clean reputation will be hard to regain. But emerging market growth - and perennial takeover speculation - should support the shares.

StanChart can’t avoid the long arm of the Lawsky

7 Aug 2012

The New York state regulator threatens to yank the bank’s license over claims it hid Iranian transactions. It’s a brash move that grabs the spotlight from federal enforcers like the DOJ. But if StanChart wants to do business on Wall Street, it has to play by local rules.

We need to talk about Deloitte

7 Aug 2012

The accounting firm’s consultants are accused of abetting Standard Chartered’s financial transactions with Iran. That’s bad enough. But reports of shoddy work elsewhere, including in HSBC’s money laundering cleanup, leave the impression that something’s not right at Deloitte.

StanChart joins banking march into mire

6 Aug 2012

New York regulators accuse the UK-based lender of covering up $250 bln of sanctions-busting transactions with Iran. It’s a big setback for one of the last global banks to have dodged financial and legal woes. Even just a fine for StanChart will leave the industry lacking halos.

Facebook’s market meltdown is far from over

6 Aug 2012

All the red flags apparent at the IPO - overpriced stock, shoddy governance, huge challenges to the business and a damaged brand - still fly today. The most shocking thing about the social network’s $50 bln conflagration of shareholder wealth is that anyone might be surprised.

Itaú’s aims would be badly served by Citizens

6 Aug 2012

The Brazilian bank has been tipped as a possible buyer for the U.S. retail arm of RBS. While Citizens might come cheap relative to Itaú’s own valuation, competing in a saturated country with the likes of Wells Fargo and BofA would be unwise. Better to stick with emerging markets.

Best Buy bid looks about as shaky as its target

6 Aug 2012

Richard Schulze, the U.S. electronics chain’s founder, wants to take it private for up to $8.8 bln. His 20 pct Best Buy stake adds credence to the offer, but financing and backers remain elusive. And given where it’s based, going hostile for the embattled retailer could be tough.

Knight makes most of an abysmal situation

6 Aug 2012

The $400 mln rescue underscores the painful cost of its trading debacle and dilutes existing investors. But the saviors CEO Tom Joyce assembled include a good mix of rivals and clients. That should give him scope to rebuild Knight without having to bow to a rapacious cabal.

BYD caught in two Chinese economic traps

6 Aug 2012

Warren Buffett bought into the automaker, but insiders are now selling amid falling profits. BYD expanded too fast after Beijing’s 2009 stimulus. The downturn is hurting its mostly low-end customers. Besides, a fatal tragedy has reinforced the Chinese love of foreign brands.

Bank breakups – a guide for the perplexed

3 Aug 2012

Sandy Weill created the Citigroup financial supermarket in 1998 by calling the bluff of U.S. lawmakers and ignoring the Glass-Steagall Act, which limited what banks could do. Washington soon repealed the law. Now, Weill says big banks should be broken up. What gives?

What hedge funds share with rock’n’roll festivals

3 Aug 2012

Not a lot, at first sight. But both are subject to the law of large numbers. Festivals like this weekend’s Pickathon are limiting entry to make the experience less mundane. And the likes of Moore Capital are seeking better-than-average returns by shrinking, too.

Knight shows that next creative loss is never far

2 Aug 2012

The market-maker’s unlikely $440 mln hit may put its future in doubt. The software error behind it, fresh on the heels of UBS’ head-scratching Facebook blunder, proves investors can never be too imaginative about the potential to lose money. Risk just can’t be regulated away.