United States of America

Even unity can’t solve U.S. foreclosure problem

25 Jan 2012

Banks, as well as Fannie, Freddie and FHA, want to unload an expected 3.2 mln repossessed homes. Investors want to buy them and the regulator wants to help. Despite this rare general accord between Washington and Wall Street, financing and competition are proving tough obstacles.

Roche’s resolve on Illumina will be tested hard

25 Jan 2012

Investors reckon Roche’s $5.7 bln hostile bid for the U.S. gene-sequencer will be improved. That’s sensible: the Swiss drugmaker has sweetened deals before, Illumina is a long-term strategic bet and counter-bidders could emerge. To win, Roche may have to swallow a super premium.

Conoco must prove tortoise can win oil race

25 Jan 2012

In one of its last quarters as an integrated U.S. major, Conoco delivered 66 pct profit growth. But production fell ahead of a spin-off that will pit its exploration arm against a faster-growing peer set. Though it’s buying more dynamic assets, the valuation will depend on quality.

Obama’s appeal to 99 pct won’t sway a key minority

25 Jan 2012

In his last State of the Union address before facing voters, the U.S. president outlined a radical agenda. He would tax millionaires more, target big banks and punish outsourcing. The ideas will resonate, but not with Republicans in Congress. They won’t let Obama accomplish much.

Apple juggernaut regains warp speed with new pilot

24 Jan 2012

The tech giant’s recent quarter blew away the previous rare let-down: around $30 bln of market cap added after hours proves that. The latest iPhone fueled a 73 pct surge in sales from the year before. With cash rolling in, the destiny of nearly $100 bln in the iBank is looming large.

Counterpoint: Donating a bonus doesn’t reduce it

24 Jan 2012

Breakingviews columnist George Hay suggests RBS chief Stephen Hester should take a payout but give it to charity so as to neuter the toxic politics of receiving it. That’s humbug. Philanthropy is praiseworthy and to be encouraged, but it’s not a valid defense for a bonus.

Rating agency reform needs some comic relief

24 Jan 2012

Funny man-turned-Senator Al Franken’s idea to randomly appoint firms to rate U.S. asset-backed bonds is starting to look attractive again. It can’t be worse than recently adopted rules which neither killed gaming the system nor prompted firms to offer extra unsolicited ratings.

Patent bubble gets pricked quickly

24 Jan 2012

Apple, Google and Microsoft bid up smartphone invention prices to frothy heights last year to gain a market edge. InterDigital, owner of nearly 20,000 patents and applications, hoped to capitalize but couldn’t find a buyer. There’s still value to pan, but the gold rush is over.

Insider trading snitch got off too lightly

23 Jan 2012

A former Galleon trader guilty of illegal trading became an informant to help nab others, including kingpin Raj Rajaratnam. The stoolie was rewarded with probation and community service instead of up to 25 years in prison. Such leniency risks overreliance on criminals.

Bank CEO pay suggests Wall Street may be waking up

23 Jan 2012

The latest stock awards to Jamie Dimon, James Gorman and Vikram Pandit can’t be called austere but also don’t ignore the post-crisis contempt over excessive bonuses. So far, there’s nothing that should outrage investors or employees. But there are also still cash payouts to come.

RIM shies away from chance for reboot

23 Jan 2012

The troubled BlackBerry maker’s architects are finally giving up their shared chief executive job. But Thorsten Heins, the new boss, is an insider who sees no need for drastic change, and the two ex-CEOs will stay on the board. It could hardly be further from a fresh start.

Securitization shindig pits hope against adversity

23 Jan 2012

Car loans and other parts of the asset-backed market have recovered enough for the market’s largest annual gathering to return to Las Vegas for the first time in three years. But regulation, a gridlocked mortgage market and fears of an investor retreat may outweigh the good news.

The One Percent was real loser in South Carolina

23 Jan 2012

Plutocrats fuelling jets for Davos take note: fellow club member Mitt Romney’s path to the presidency has been obstructed by his riches. Lopsided wealth creation bothered voters even more than his rival’s carnal sins. The Occupy agenda is resonating in some unlikely places.

Latest U.S. bank stock surge could prove fickle

20 Jan 2012

The big six, including Goldman and Citi, have added $100 bln of market value of late despite meager Q4 earnings. Receding fears over Europe helped valuations align better with balance sheet and income realities. But no further rally is warranted as more bad surprises are likely.

GE gives the world a healthy reality check

20 Jan 2012

Four years ago, General Electric shocked investors with a profit warning foreshadowing calamity ahead. Today the conglomerate merely missed revenue estimates by 5 pct. Shareholders may not like that, but as a bellwether for the global economy the results should be reassuring.

Google finds new tech expectations hard to meet

19 Jan 2012

The Internet giant’s revenue rocketed 25 pct, but its shares still plunged after hours. Google failed to match Wall Street’s hopes, whereas Microsoft and IBM’s more pedestrian results reassured. In uncertain times, the old guard’s predictability can trump edgier possibilities.

Alluring subprime debt can still poison investors

19 Jan 2012

Credit Suisse, Goldman Sachs and other banks reckon there’s life yet in the mortgage market’s toxic waste. Double-digit yields, after all, are hard to ignore. But subprime sludge still has the ability to slip buyers up. Investors should tread carefully.

A speech on taxes that would help Romney’s run

19 Jan 2012

The Republican U.S. presidential front-runner’s private equity background and low personal tax rate have put him in an awkward spot. Romney needs to address them in a way to both quell the attacks and appeal to moderates. Here’s an imagined, if bold, way to handle the matter.

Next World Bank chief is easy to find

19 Jan 2012

He already has the job. Though a news report says the White House is considering Larry Summers and others to run the agency, there’s no reason to replace Robert Zoellick when his term ends in June. He has shown a flair for fundraising, diplomatic skill and economic prescience.

BofA boss on thicker ice than Morgan Stanley’s

19 Jan 2012

Two years after they began their new jobs, Brian Moynihan needed one-offs to turn a Q4 profit while James Gorman was dragged down by them. But Gorman is now out of excuses for any further underperformance. Moynihan may still have some room to hide behind his predecessor’s legacy.