United States of America

U.S. political jamborees alienate Mr. Market

7 Sep 2012

The stark contrasts in tone at the Charlotte and Tampa conventions mirror the different options facing Americans. Republicans and Mitt Romney served up fiscal spinach while Democrats and Barack Obama dangled pro-worker red meat. Neither choice is likely to thrill investors.

U.S. insider trading cops win battles, lose war

6 Sep 2012

Nabbing the likes of Raj Rajaratnam hasn’t slowed investing on leaked secrets, new research shows. The practice may still be too lucrative and easy to hide. But with other nations also cracking down, the U.S. could lead the way with clearer laws and more consistent enforcement.

Investor ignorance and complex markets mix badly

6 Sep 2012

An SEC study reveals financial illiteracy, but is short on ideas. Most everyone should learn about compounding, how debt differs from equity, and simple risks like inflation. Even then, modern markets are daunting. Maybe investors need a road test to move beyond basic products.

U.S. leaders could learn from European austerity

6 Sep 2012

America is coming late to fiscal reform, following allies across the Atlantic. Noting the continent’s flubs and fixes would help either Barack Obama or Mitt Romney tackle a debt load that just surpassed $16 trln. Waiting too long may give investors time to make a new choice.

How to stop Basel bank safety net becoming a noose

6 Sep 2012

Global regulators are racing to agree tough reforms to prevent bank funding crises. Overly loose rules won’t be trusted, but overly prescriptive ones could choke credit to the real economy. A solution is possible. But supervisors have to avoid inflating the next bubble.

How Obama can improve a measly C- economics grade

5 Sep 2012

As he begins his re-election campaign in earnest, the U.S. president can show only a middling report card. Despite good marks for stabilizing the banks, he barely passes on debt and jobs. Obama needs to show he can play well with others - the GOP - and do better in fiscal math.

Murdoch’s reformation stops with governance

5 Sep 2012

The media mogul has sensibly deployed capital as part of a big turnaround at News Corp since the phone-hacking scandal rocked his empire. But two new board nominees look like the old Murdoch at work. Investors shouldn’t so soon forget the havoc an unchecked emperor can wreak.

Buyout bosses lose another layer of their mystique

5 Sep 2012

New York is probing a complex technique used by private equity to pay less tax on fee income. Even if legal, it’s more engineering. And it’s mainly aimed at enriching fund firms and their people, not investors. It makes claims of investing and management mojo less convincing.

Facebook crystallizes blundered IPO with buyback

5 Sep 2012

Mark Zuckerberg’s social network will essentially cut its outstanding share count by 101 mln by promising to use cash, rather than stock, to settle a tax obligation. Buying back stock four months after an IPO at half price looks cynical. In this case it’s just incompetence.

BP’s path to Macondo settlement just got harder

5 Sep 2012

U.S. lawyers say they’ve got emails showing gross negligence in the 2010 oil spill disaster. There’s still scope to settle before a trial, but the aggressive tack complicates BP’s effort to get a favourable deal. The market reaction - wiping $5 bln off BP’s value - looks right.

U.S. debt relief for Egypt is mostly politics

5 Sep 2012

Obama’s decision to write off $1 bln owed to the U.S. by Egypt will help to keep the country on the safe side of American politics in the region more than it will help the country’s troubled economy. A bigger boost would be to redirect military aid to more productive investment.

Pandora could be a Facebook friend with benefits

4 Sep 2012

The $2 bln internet radio service revealed steady strides in mobile advertising, which accounted for over half its revenue last quarter. Facebook, meanwhile, delivered fewer ads to users socializing by phone. That makes Pandora look an enticing, if pricey, companion to target.

Open courts healthy for Delaware and dealmakers

4 Sep 2012

A U.S. judge said the state’s jurists can’t arbitrate disputes in secret. That may disappoint shy companies, but it ensures the Fortune 500’s preferred legal forum remains accountable. The M&A world can also depend on continued access to helpful - and sometimes witty - rulings.

Sun Myung Moon was a sort of business success

4 Sep 2012

True, his Unification Church’s commercial operations made large losses and ran up huge debts. But even with weak operating management, the church’s knack for religious services was outstanding. Moon’s followers provided more than enough donations to repeatedly bail out disasters.

Three-edged blade sharpens case for carve-ups

4 Sep 2012

In a 48-hour span, shares in U.S. government contractor SAIC got a lift from a decision to split the company; DuPont unloaded a slow-growing unit for a good price; and a new study found value creation from divestitures. The fresh evidence should grab the attention of more boards.

Valeant deal shows how big M&A can add value

4 Sep 2012

Large acquisitions usually merit skepticism. Valeant’s $2.6 bln deal for Medicis looks an exception. The Canadian-U.S. drug maker is paying a $700 mln-plus premium for its rival, but cost cuts could be worth more than twice that. And the fit is good. No wonder both stocks surged.

Investors need steel to endure next market phase

4 Sep 2012

Global equities had a good summer. Many indexes are ahead 10 percent since early June. Optimism has also showed in shifting bond yields. The world still has serious problems, and near-term reversals are possible. But asset allocators should hold their nerve.

Apple may bury hatchet with Google – just not yet

31 Aug 2012

It’s no shock their chiefs are talking. The iPhone maker’s sweeping U.S. patent win over Samsung and its Google-run devices is a blow to the search giant too. But the rivals’ clashing business models make peace difficult. Apple may first try to push its legal edge a bit further.

U.S. political prattle gives markets just a morsel

31 Aug 2012

The Republican powwow boiled down to a pep rally for Mitt Romney, not an occasion to unveil platform specifics. Expect similar vagueness from the Democrats next week. Investors needn’t fret, though. Rhetoric will reign until debates force candidates to flesh out detailed plans.

Put Dylan’s tangled bond in the credit watchtower

31 Aug 2012

Goldman Sachs is said to be working on a tiered bond secured on Bob Dylan royalties. Investors’ blood may run for the freewheelin’ early tracks. Modern times material may be attractive too. But the street rocking 1980s stuff could leave junior creditors blowing in the wind.