United States of America

Pain now should bring gains later for U.S. lawyers

4 Apr 2012

Like doctors and bankers, they’ve lost cash and cachet. But there’s an upside to the technological and economic changes roiling their profession. Smart computers can take drudgery out of legal practice, while a more law-abiding Wall Street will need attorneys to keep it in line.

Buffett’s banker may come in handy for Coty

3 Apr 2012

The perfume maker will have to sweeten its offer from $10 bln to, say, $11.6 bln, to woo resistant Avon. That would mean $5 bln of equity, after factoring in debt and synergies. Byron Trott, a Coty adviser, might need to call in some favors, perhaps even from his biggest fan.

Gun bubble reloads on Obama re-election fears

3 Apr 2012

The president’s 2008 victory triggered massive growth in firearms sales. Purchasers thought strict gun control legislation was coming. It never arrived, and weapon sales tumbled. Yet the prospect of a second Obama term is boosting sales - and shares of gun-makers - once again.

Not all IPOs are about smart money cashing out

3 Apr 2012

Biotech firms exist in a topsy-turvy universe where early backers actually buy up large chunks of additional stock when their companies go public. In theory, that may sound like a refreshing alternative to hot Internet deals like Facebook. But caution is nonetheless warranted.

JPM insider non-trading case puts banks on notice

3 Apr 2012

Britain’s regulator has fined Ian Hannam for sharing price-sensitive information about a client. The penalty looks harsh since the JPMorgan dealmaker’s slip was accidental and nobody traded on the tip. Even if Hannam wins his appeal, advisers may have to re-think how they work.

Europe unrecognizable from U.S. Republican rhetoric

3 Apr 2012

Mitt Romney and Rick Santorum accuse Obama of leading America to “European-style socialism.” The pejorative works to a point but conveniently overlooks German trade surpluses, Dutch unemployment and Polish growth. GOP hopefuls might aspire to some of the continent’s achievements.

Goldman follows board stitch-up with smackdown

2 Apr 2012

The Wall Street firm just avoided a push to split the chairman and CEO roles by simply renaming its top director. Now it has given the job to the wrong guy. James Schiro is already on the board, and his record hardly proves he’ll ask tough questions. Goldman isn’t getting it.

U.S. lawmakers talk discipline but still love pork

2 Apr 2012

A gridlocked Congress is rethinking its ban on earmarks. Bringing back this form of wasteful spending might grease the wheels of compromise. But it would also show that fiscal responsibility is a Washington mirage - until market forces make austerity the only option.

Avon’s hapless board opened door to Coty’s bid

2 Apr 2012

The cosmetics group rejected the $10 bln offer but will struggle to convince shareholders it has attractive alternatives to the LBO-like bid. Fealty to CEO Andrea Jung did less for Avon than Coty accomplished in a morning. It’s a useful lesson for pliant directors everywhere.

EU fine print could give hedgies a new fright

2 Apr 2012

The latest version of Brussels’ alternative investment directive may lift the bar for regulating managers hoping to raise funds in Europe. That could limit investors’ choice, hurt managers based outside the EU and revive a transatlantic row that was buried two years ago.

KKR picks an odd time to go to the mattresses

2 Apr 2012

A nightmarish run has destroyed 90 pct of mattress-maker Sealy’s value since its 2006 IPO. An activist wants to shake the slumbering board, which kept paying fees to the LBO firm even as its stake fell to under half. At this stage, KKR might do well to embrace a new bedfellow.

Worse still to come for Research In Motion

30 Mar 2012

After losing $70 bln of market value in less than four years, the BlackBerry maker’s latest results horrified again. Sales tumbled, margins fell, inventories rose and more executives left. Its next operating system or a sale might provide salvation. But those seem like longshots.

Lottery mania behavioral quirk also causes bubbles

30 Mar 2012

Punters on the $540 mln Mega Millions U.S. jackpot are fixating on what they’ll do with their winnings. This economically regressive and socially destructive behavior also drives the gambling business. In markets the same impulse creates bubbles and encourages rogue traders.

New financial watchdogs won’t thrill Wall Street

30 Mar 2012

Congress has finally given the nod to some of President Obama’s appointees to the FDIC and OCC. None of the fresh faces is likely to rock the boat much. But one of the banks’ stronger supporters is now gone and the new guard has little reason to push back against Dodd-Frank.

IPO feeding frenzy isn’t quite ready for Facebook

29 Mar 2012

Investors are devouring stock debuts. Even shares of a humble mac ’n’ cheese maker like Annie’s almost doubled. But that’s more a sign of recovery than exuberance. Most recent deals have been small and only just started popping. A hefty sale like Facebook’s has yet to be tested.

Oil billionaire shows how to handle M&A conflicts

29 Mar 2012

Continental CEO Harold Hamm has persuaded the firm to buy another of his companies, Wheatland. That’s prime territory for stiffing shareholders. But both executives and the board appear to have played it fair. It’s a good blueprint for other firms, and Wall Street, to follow.

Obama backs healthcare defender – until he doesn’t

29 Mar 2012

Despite top lawyer Donald Verrilli’s stumble before the Supreme Court, the White House gave him a confidence vote. That’s what famed Yankees manager Billy Martin would get before being fired. Verrilli’s miss may not change the result but it costs him credibility - if not his job.

Intel and ARM heading for bloody chip collision

29 Mar 2012

Intel dominates the market for PC processors. ARM Holdings-powered chips run nearly all phones and tablets. Their skirmishing over tablets is just the start of what is likely to become a full-fledged brawl as both firms invade the other’s territory. Investors look out.

Roche makes tactical gain with Illumina sweetener

29 Mar 2012

The Swiss drugmaker has upped its unsolicited offer for Illumina by $1 bln to $6.7 bln – a smidgen above the gene firm’s market value. That puts real pressure on the board to talk. The stage is set for Roche to add a last sweetener in return for a recommendation.

Dodger blue outshines gold after $2 bln deal

28 Mar 2012

The sale of the Los Angeles baseball team represents almost a five-fold gain in value since 2004. Gold aside, returns on sports franchises blow away most other major asset classes, including stocks. The demand for such trophy investments from the ultra-rich is stoking prices.