United States of America

Fiat may find Chrysler deal is ticket out of Italy

5 Jan 2012

The Turin carmaker will spend 2012 working out how to acquire the rest of the Detroit firm after raising its stake to 58.5 pct. Depending on the structure, Fiat may become Italy’s first truly global multinational - but only if the Agnelli family puts pragmatism over sentimentality.

Kodak can seek solace in Barnes & Noble’s plight

5 Jan 2012

The iconic film company is headed toward bankruptcy, ostensibly because it didn’t keep up with the digital times. But the bookseller’s popular, fast-growing e-reader couldn’t prevent a huge profit warning either. Even surfing the creative destruction wave can end in wipeouts.

Even the Fed is giving up on Fan/Fred reform

5 Jan 2012

Its suggestions to help U.S. housing include turning tarnished mortgage giants Fannie Mae and Freddie Mac into huge landlords and making them go easy on underwater borrowers and banks. Ben Bernanke once said reform was urgent. With ideas like this he must have changed his mind.

Bankers lack leverage this bonus season

4 Jan 2012

A few at Jefferies seem to have got their way. But sluggish revenue and new regulation mean virtually all of Wall Street needs to cut costs. With no banks in major hiring mode, only the biggest rainmakers can talk their way into healthy payouts. Most don’t have a leg to stand on.

Exxon’s Japan sale may not show downstream doubts

4 Jan 2012

With rivals like Conoco splitting off refining, investors are on the lookout for signs the Texas titan will join the trend. Exxon’s likely $5 bln exit in Japan isn’t a clear one. The group recently sank $25 bln into downstream projects. It may merely be ditching a weak asset.

Obama’s recess appointment endangers recovery

4 Jan 2012

The president is bypassing Congress to install the first chief of the new consumer financial watchdog. The move shatters Obama’s already fragile relationship with Republicans. A full extension of the payroll tax cut is now unlikely, which imperils the economy’s shaky progress.

For Obama’s 2012 hopes, it really is the economy

4 Jan 2012

A reasonably reliable forecasting model puts the U.S. president with just over half the two-party vote in November. The Intrade electronic market gives him a 52 pct chance of re-election. A Breakingviews calculator shows how economic growth in 2012 could tip the result.

Romney’s Iowa win gives markets reason to exhale

4 Jan 2012

Dark horse Rick Santorum nearly edged out Mitt Romney in the first U.S. Republican presidential caucus. Though the vote was tight, it leaves Romney, with his conventional and predictable economic policies, an even clearer front-runner for the eventual nomination.

Yahoo’s gain is eBay holders’ pain

4 Jan 2012

The Internet company has nabbed the head of eBay’s PayPal as its new CEO. That’s good for Yahoo, but less so for eBay’s shareholders. The auctioneer’s payments business is a gem that could grow faster on its own. Thompson’s walk suggests such a split isn’t coming any time soon.

Federal Reserve sets itself up for a messy exit

3 Jan 2012

The U.S. central bank’s decision to forecast overnight interest rates has little downside in the short term. An implicit target should keep rates low and dependable. But it will tie the Fed’s hands tightly, something it could regret when the economy forces a change in course.

RIM needs more than third hand on steering wheel

3 Jan 2012

The BlackBerry maker is hurtling in the wrong direction. Joint bosses Jim Balsillie and Mike Lazaridis haven’t been able to change course. But inserting a chairman while leaving both men as co-CEOs seems more likely to bring further bickering than a successful new direction.

U.S. shale exuberance may need to be tempered

3 Jan 2012

France’s Total and China’s Sinopec kicked off 2012 with $4.5 bln of deals to drill for U.S. oil and gas. Vast resources and technology should keep attracting foreign buyers. But the reaction by Ohio officials after several earthquakes suggests political risks will intensify.

Uncle Sam’s gas exports could sink global prices

3 Jan 2012

If energy firms win official approval, the U.S. may one day export up to a fifth of its gas – enough to shift the balance of energy power elsewhere in the world. But exporters risk undercutting the buoyant global prices that justify the huge capital cost of LNG projects.

Ron Paul won’t win but his ideas could

3 Jan 2012

Though the Texas Republican isn’t going to the White House, a strong showing in Iowa may help his party get there. Paul’s hard-money and economic ideas may stick, his isolationism revives an old GOP tradition and his libertarian social views attract young and minority voters.

1912ers would find the world strangely familiar

30 Dec 2011

An awakened sleeper from a century ago would be delighted with 2012 technology and not too surprised by the globalised economic system or unstable power structures. But the gigantic public sector would be puzzling, and gold-less banking and persistent fiscal deficits distressing.

Mortgage reform might actually help U.S. economy

30 Dec 2011

Lawmakers have punted the problem of Fannie Mae and Freddie Mac, probably until 2013 at least. But reforms could take a decade to implement and a start is long overdue. Maybe politicians shouldn’t be so leery - greater certainty about the future might boost housing and growth.

Republican candidates share lack of tax realism

29 Dec 2011

With the Iowa Caucus soon kicking off the GOP race for the U.S. presidency, the contenders want to set themselves apart. But they don’t differ much on taxes. They would all cut them, reducing government revenue. But that undercuts another supposed shared goal: deficit reduction.

Confidence in cloud, cybersecurity key to growth

29 Dec 2011

They’re both hot $60 bln markets. But faith in cloud computing took a blow in 2011 with outages at Amazon and elsewhere. And the hacking of targets from Sony to Scarlett Johansson showed shortcomings in security. The tech industry needs to stay ahead if it wants to keep growth going.

Imagined Goldman Sachs memo that wouldn’t shock

28 Dec 2011

It has been a rough year for Wall Street’s pre-eminent firm. Its stock has even underperformed the likes of Citi and Morgan Stanley. With regulatory and other headwinds still strong, big changes can’t be ruled out in 2012. Breakingviews envisions some of the possibilities.

Next digital tidal wave target: 3D objects

28 Dec 2011

The ability to turn music, books, films and newspapers into easily transferable electronic files up-ended these industries, destroyed old businesses and created new ones. The rise of printing technology now threatens to wreak similar havoc on producers of physical things.