United States of America

Uncle Sam has a $1 trln repatriation concern

2 Nov 2011

That’s a rough estimate of how much U.S. companies have overseas invested in Treasuries. Lawmakers want the cash brought home at lower tax rates to foster employment, growth and government revenue. But dumping that debt on the market would inevitably have consequences of its own.

Did accounting help sink MF Global?

2 Nov 2011

Much has been made of Jon Corzine’s attempt to remake the firm in the image of Goldman Sachs with risky bets on European debt. But Bethany McLean says beneath the riches-to-rags headlines are some curious choices about how MF Global paid for the purchases and disclosed them.

BofA card climbdown may push fees back in shadows

1 Nov 2011

Like rivals, the bank is scrapping plans to charge customers using debit cards. That may seem a win for consumers. But banks will find other, less transparent ways to make up for $8 bln in lost fees. The upshot of Durbin’s bill: consumers get fleeced by both banks and retailers.

MF Global exposes regulators as slow learners

1 Nov 2011

Lehman’s collapse was a stark warning of the need to handle cross-border bankruptcies better. Yet three years on, Jon Corzine’s failed brokerage shows little has changed. It’s even accused of mishandling customer accounts, a basic error. Watchdogs need yet more remedial lessons.

U.S. plea deal flaws are warning for UK

1 Nov 2011

Britain’s law enforcers may let companies avoid criminal charges if they agree to mend their ways. This would empower prosecutors. But in the U.S., where deals get little court scrutiny, it has tempted them to overreach. The Brits might do well to keep judges closely involved.

Valero’s next rainy day may not be so far away

1 Nov 2011

The biggest independent U.S. oil refiner reported a quadrupling of profit and has been buying back stock. After lean years, investors deserve a return. But the cheap U.S. crude that has been helping margins won’t last forever. Valero could do more to brace for harder times ahead.

Nabors’ $100 mln payout to CEO offers warning

31 Oct 2011

To hand Eugene Isenberg that much just to give up one of two titles seems absurd. But the board was stuck with a 1987 contract and did reduce his golden parachute. Even so, Nabors has underperformed for a decade. It shows the danger of companies binding themselves too far ahead.

Occupy themes won’t easily dazzle like Tea Party’s

31 Oct 2011

The movement that started in lower Manhattan has rightly put attention onto America’s wealthy. And though the Tea Party started out just as ragtag, it’s hard to see Occupy Wall Street catching on the same way politically. Deficits are an easier pitch than inequality. 

Rock’n’roll becomes form of economic stimulus

31 Oct 2011

That, at least, is the message from the Moogfest, which took place in Asheville, North Carolina, this past weekend. Aside from giving synthesizer geeks an outlet, Rob Cox found the three-day festival making good use of Asheville’s facilities and boosting local businesses.

MF Global’s failure vindicates Volcker Rule

31 Oct 2011

Adding the complex proposal to sweeping financial regulation looked like overkill to some at the time. But the bankruptcy of the brokerage run by Jon Corzine suggests otherwise. MF Global reinforces the idea that prop trading belongs where its damage to the system can be limited.

Jobs bio sequences his DNA but doesn’t unravel it

31 Oct 2011

It could be that’s what biographer Walter Isaacson intended. His book provides plenty of new material from the Apple co-founder and those around him. But this early, authorized tome leaves to others any serious verdict on the man or the sustainability of his business legacy.

U.S. pipeline bottlenecks favor Chevron

28 Oct 2011

Third-quarter profit more than doubled at the $220 bln energy giant, justifying the strength of its shares. Its U.S. operations are relatively free of infrastructure constraints that have hit crude prices for others. The advantage will fade, but Chevron is milking it for now.

The Avon lady needs to look in the mirror

28 Oct 2011

Andrea Jung may be a powerful figure in U.S. business, but as CEO of the $8 bln cosmetics company she has twice failed to turn it around. Never mind the federal probe into possible wrongdoing, Avon’s dismal performance is reason enough for Jung to give someone else a chance.

U.S. housing has added problem: mortgage insurance

28 Oct 2011

Many legislators want the government out of housing. Fair enough. But a look at the private business of mortgage insurance serves as a reminder that the private sector also needs an overhaul. Former highflier PMI’s takeover by regulators last week is a case in point.

Enron’s worst legacy: auditors too big to fail

27 Oct 2011

Arthur Andersen sealed its fate when it shredded Enron documents 10 years ago. But prosecutorial zeal may have created a moral hazard monster. Concerns that the world can’t afford to lose another green eyeshade run the risk of diluting standards in the industry.

New Freddie Mac boss needs low pay expectations

27 Oct 2011

The outgoing chief executive of the U.S. mortgage finance behemoth stood to make up to $6 mln a year. But times are, or at least should be, a lot tougher now. A new CEO needs administrative skills, a thick skin and little to no ambition. Breakingviews suggests a help wanted ad.

Banking boutiques aim to rise above puny moniker

27 Oct 2011

Lazard has long hated being grouped with its smaller brethren. Now, after another quarterly earnings record, Evercore’s bristling at the label, too. Their rise in M&A makes them much stronger rivals to the bulge bracket. But their niche nature means the boutique shoe still fits.

Gassier Exxon’s brave new world isn’t here yet

27 Oct 2011

Alongside a 41 pct profit surge, the $400 bln energy group’s third quarter showed a further rise in gas output relative to oil. That may set Exxon up for the future. But for now, with crude pricier than gas, it could help explain its shrinking valuation premium to oilier Chevron.

U.S. GDP is good news by today’s low standards

27 Oct 2011

The first estimate of third-quarter GDP puts it a scant 0.2 pct above the previous peak, in 2007. But 2.5 pct growth is high enough to calm fears of a double-dip. Even though consumers remain squeezed - real disposable personal income fell - Obama’s 2012 prospects look brighter.

Hot speech tech firm’s story is too complicated

26 Oct 2011

Nuance Communications has built an $8 bln market cap by getting machines to understand talk. Its technology may even be behind speech recognition in the new iPhone. But its sky-high valuation multiple requires too much trust considering its complex finances and acquisitive ways.