United States of America

Trade war remains a distant prospect

5 Oct 2011

The U.S. and China are once again raising the spectre of mutually destructive protectionism. But globalisation has gone so far that trade restrictions would have painful and immediate consequences in every country. That’s why the threats won’t go far beyond angry skirmishes.

iPhone 4S unleashes more creative destruction

4 Oct 2011

The latest version of the smartphone offers faster data processing and downloads, as well as voice-powered software. Apple investors and gadget fans might have wanted more. But companies ranging from Research In Motion to American Greetings probably hoped for less.

Banks may be underestimating the fury of consumers

4 Oct 2011

Barack Obama’s criticism of BofA’s debit card fee has understandably irked a sector weary of Washington’s meddling. But Jamie Dimon’s rants, Wall Street protests and the financials sell-off are all feeding into resurgent anti-bank sentiment. The industry should watch its step.

U.S debt jubilee would not rev up growth

4 Oct 2011

A one-time massive loan write-off might give consumers confidence, but would reward bad behavior and kill market trust. Besides, the Fed would end up printing money to rescue lenders. High inflation is a less pernicious way to erode debts, but just taking losses is best of all.

American Airlines feels market’s Darwinian wrath

3 Oct 2011

In volatile markets, the weak are hunted. The U.S. airline’s struggling parent, AMR, fell prey on Monday, with its stock diving 41 pct on bankruptcy talk. Kodak and Morgan Stanley have been in the crosshairs, too. Hoards of cash may be the only way to survive.

Carlyle gets slice of stale bread-and-butter deals

3 Oct 2011

The $3.9 bln buyout of drug developer PPD is one of the year’s biggest. The by-the-book takeover provides a nice premium to shareholders and leveraged upside for buyers Carlyle and H&F. But the seemingly simple deal was a slog and is a reminder of how few there are to go around.

Yahoo could find closure by way of Chinese bid

3 Oct 2011

Talk that Alibaba founder Jack Ma might buy Yahoo outright sounds like overkill: what he really wants is the 40 pct of his company Yahoo owns. But if U.S. regulators can stomach it, a Ma-led buyout and break-up of the search engine would be a neat solution to Yahoo’s woes.

HP would make lucrative Oracle target

3 Oct 2011

A selloff has left HP vulnerable, possibly even to Larry Ellison’s firm. HP is cheap, despite its pricey deal for Autonomy. Even paying a 40 percent premium, Oracle could reap a hefty 16 percent return on investment, a Breakingviews analysis suggests. And that’s before any cost savings.

U.S. refuge for equities comes at quite a price

3 Oct 2011

In stock markets, correlations are about the only thing going up. But while U.S. and EU equity indexes are moving in the same direction on more trading days, European shares have also slumped to a 20 pct discount to U.S. peers. That may overstate the security offered stateside.

U.S. currency slap looms as China least deserves it

3 Oct 2011

A bill enabling sanctions on Chinese goods may pass the Senate this week, even though the yuan has appreciated strongly on a trade-weighted basis. China’s central bank has been guiding the currency stronger despite falling markets. For the U.S. to lash out now looks a mistake.

New Morgan Stanley woe is a drama lacking a crisis

3 Oct 2011

The Wall Street firm was facing skepticism about its turnaround even before the third quarter turned crummy. Its latest misery, though, is driven not by substance but by numerical confusion. It should pass – unless the fear driving the herd mentality turns into outright panic.

Blocking a deal isn’t always best antitrust answer

30 Sep 2011

When Live Nation merged with TicketMaster, the prognosis for competition in the live music and ticketing business wasn’t good. Concessions extracted by U.S. regulators seemed bitty. But nearly two years on, rivals are flourishing. Live Nation doesn’t look so dominant any more.

U.S. government has chance to borrow very long

30 Sep 2011

Thanks to the Fed’s maneuvers, Uncle Sam could sell bonds maturing decades from now at uncommonly low yields. Moreover, pension funds need the paper. The Treasury has kicked around the idea of 50 or 100-year bonds before. Maybe it’s time to actually issue some.

Insider traders pay too much for choosing court

30 Sep 2011

Uncle Sam rewards cooperation with milder sentences. But Galleon-related cases show that prosecutors’ targets are heavily penalized just for asserting basic trial rights. Judges should be wary of too big a difference - trials like Raj Rajaratnam’s bring needed clarity to the law.

Dodd-Frank’s latest dumb unintended consequence

29 Sep 2011

BofA is to charge $5 a month for debit cards to recoup fees lost as part of the financial reform bill. That seems high, but the rule was nothing more than a sop to retailers at the expense of banks. It fails to make the system safer and it’s now a quantifiable tax on consumers.

BBC ersatz trader has serious markets message

29 Sep 2011

A clip of a trader admitting to dreaming of financial doom as a money spinner has spread like wildfire. The Gordon Gekko wannabe doesn’t work on Wall St but his vulgar amorality offers a description of trading that strikes a chord with a public still smoldering over bailouts.

HP’s lack of direction continues apace

29 Sep 2011

The battered U.S. tech firm, now led by Meg Whitman, has hired Goldman Sachs to fend off activists. And Oracle is baiting HP, suggesting its offer for Autonomy is profligate and the UK firm’s CEO forgetful, at best. An uppity investor with a strategy could be just what HP needs.

U.S. money markets lose scale but not power

29 Sep 2011

This source of short-term funding is much diminished from the 2008 heyday, but they still have $2.5 trln to invest in debt. That is more than enough to keep bankers up at night, especially as low rates, European bank woes and lower corporate demand have made managers desperate.

Thomson at last sees fit to merge with Reuters

28 Sep 2011

Three years after uniting, the onetime rivals are forcing the professional and financial publishing arms together. The acquired Reuters side retained a certain clout in 2008, but has struggled since. The Thomson family now seems to be reasserting control to make the deal work.

Amazon and Apple’s historic paths collide

28 Sep 2011

The online retailer’s cheap new Kindle Fire tablet reflects the company’s roots - it’s a tool for the sale of content. Apple, by contrast, used music and movies to hook customers into buying its gadgets. The two currents are now clashing, and survival requires strength in both.