United States of America

Carlos Brito pays through the nose for Modelo

29 Jun 2012

The Bud boss is drawing a cool $20 bln from the keg to acquire the half of the Mexican brewer he doesn’t already own. To make that work Brito is going to need to brew up more than the $600 mln of synergies he is promising. History suggests that is possible - but it’s a stretch.

Juilliard improves tone of China’s urbanisation

29 Jun 2012

The U.S. fine arts school’s new Tianjin campus will avoid some political problems that beset Western universities chasing the Chinese dollar. For the host city, Juilliard may be largely a trophy - but any idea that improves the quality of China’s city life deserves a hearing.

Jamie Dimon should be judged on his words

28 Jun 2012

A $9 bln Whale hit would contradict the JPMorgan CEO’s claims that the $2 bln loss could eventually double and that no fire-sale was planned. Even $6 bln would look bad. After his “tempest in a teapot” blunder, Dimon can’t afford to damage his credibility with shareholders again.

Splitting chairman and CEO roles is cheaper too

28 Jun 2012

Good governance dictates that consolidating corporate power with one person, as JPMorgan and AT&T do, is generally a bad idea. New research shows it also costs about 50 pct more for a single chairman-CEO. The value proposition makes two heads even more compelling than one.

Obamacare is here, it’s clear, get used to it

28 Jun 2012

Talk of overturning the Supreme Court’s ruling is empty rhetoric. Even if Mitt Romney defeats Obama, he won’t have the votes to repeal the healthcare law. Republicans and corporate America obsess over the broad lack of certainty. They should embrace the fact they just got some.

Court upholds Obamacare with barely a legal ripple

28 Jun 2012

Saving the president’s healthcare reform may roil the election but won’t change U.S. legal precedent much. Congress stays powerful subject to useful limits in the Medicaid context. The Supreme Court ruling is a reminder of the Constitution’s resilience amid political turmoil.

Murdoch deal is a non-core disposal – not a split

28 Jun 2012

After Brangelina or bananas split, two more or less equal halves remain. To suggest that News Corp’s doing anything similar sounds more like wishful journalistic thinking than clear arithmetic. The Printco’s value amounts to no more than around 6 pct of News Corp’s market cap.

Barclays overtakes Goldman for email idiocy trophy

27 Jun 2012

The UK bank’s Libor fixers didn’t just chummily collude on email and add reminders to their calendars. They went a step further by warning each other not to tell anyone. Goldman merely discussed the poor quality of securities it was dumping. A new leading knucklehead is born.

Best Buy management buyout would be hard to swing

27 Jun 2012

The U.S. electronics retailer’s founder is mulling a takeover. Despite his 20 pct stake and the near $7 bln company’s prodigious cash flow, there are roadblocks to a leveraged deal. The firm can’t take on much more debt. And electronics retailing is a dying dog of a business.

SEC finally puts squeeze on Wall Street deadbeats

26 Jun 2012

The U.S. watchdog has won a court order forcing a hedgie to cough up $12 mln in overdue fines. That’s a welcome start, but a drop in the bucket for an agency with a collection rate below 50 pct. More arm-twisting would bring in extra cash and might even deter would-be fraudsters.

China’s U.S. home loan risks being a subprime idea

26 Jun 2012

China Development Bank may lend Lennar $1.7 bln to build two housing projects - one on a polluted man-made island in an earthquake zone. It has all the hallmarks of globally distorted economic incentives forcing yield-starved investors to take risky bets they don’t understand.

Sandberg does neither herself nor women any favors

26 Jun 2012

Becoming the first female director at a prominent company like Facebook should be good for all. But joining a rubber-stamp board the CEO treats haughtily won’t help Sheryl Sandberg’s sterling reputation. Women should fight for representation where they can make a real difference.

Jamie Dimon isn’t the New York Fed’s real problem

26 Jun 2012

Former IMF chief economist Simon Johnson is on a quixotic mission to oust the JPMorgan chief from the regional central bank. But it’ll take something far bigger - an act of Congress - to truly reform the institution and end the perception that it’s too cozy with big banks.

One Great Depression lesson is enough

26 Jun 2012

Economists point to the 1930s to justify current policy prescriptions. Their research may be enjoyable, but it is inconclusive and mostly irrelevant. The main exception is the danger of debt deflation. But that lesson has been learned - and probably too well.

Oil markets could snap at the shorts

26 Jun 2012

After Brent’s rapid collapse from $126 to $90 a barrel, oil traders appear to be dismissing Iran risks and China’s ability to stimulate growth. And today’s picture of excessive Saudi production and sputtering global demand could change by year-end if Europe muddles through.

Chesapeake leaves investors wondering what’s next

25 Jun 2012

The U.S. gas producer is feverishly trying to dispel a cowboy reputation, including by shaking up the board. But emails suggesting Chesapeake colluded to buy land on the cheap are a setback. With all that’s happened so far, it’s also hard to believe this scandal will be the last.

Hunt for legal eagle fraudsters aims too low

25 Jun 2012

Two U.S. law firms will cough up $88 million to settle mortgage Ponzi scheme charges. And the SEC’s after four attorneys for aiding dodgy stock deals. That’s a good start. But watchdogs should also draw a bead on bigger legal targets for their role in the financial meltdown.

Blaming London for bank botches is too convenient

25 Jun 2012

Say what you will about JPMorgan’s stupid trades, the bank has at least owned up to its failings. That’s more than can be said for U.S. authorities, who are instead pointing fingers at their UK counterparts. It should light a fire under dragging global coordination efforts.

Fiscal cliff “Cialis plan” deserves firm support

25 Jun 2012

That’s the love-pill codename for a bill Erskine Bowles, of Simpson-Bowles fiscal reform fame, is pushing in Congress to help Uncle Sam avoid severe dysfunction at year-end. Politicians fiddling with JPMorgan trades and Mexican guns could use a cure for when it’s urgently needed.

US hot money’s new crush: Canadian, Japanese banks

25 Jun 2012

It’s hard to blame US money market funds for seeking safer harbors than the turbulent euro zone. Yet Canadian and Japanese lenders - as well as the National Australia Bank - must remember not to become too enamored with the attention from their fair-weather friends.