United States of America

Berkshire buyback a move best left to Buffett

26 Sep 2011

The Sage’s conglomerate has taken the highly unusual step of repurchasing shares, at up to a 10 percent premium over book value. It doesn’t mean it’s a strategy to be followed, though. If shares of other companies were truly undervalued, Berkshire probably wouldn’t be buying its own.

Gates helps put Tobin tax back on G20 agenda

26 Sep 2011

Support for a financial transaction tax from America’s richest man won’t sway opponents like the UK. But it makes it easier for France and Germany to go ahead, even if the funds raised aren’t all used for aid, as Gates hopes. Curbing financial churn may prove just as alluring.

IMF’s dovish turn may be seen as favor to the rich

26 Sep 2011

The fund has long been a tough schoolmaster on fiscal probity. This softened after 2008 and now the IMF is proposing still more stimulus in some nations. This makes economic sense but opens the fund to charges that it pushes Keynesianism for the rich and monetarism for the poor.

Patent spats getting pricier for tech shareholders

23 Sep 2011

The likes of Apple and Samsung are spending millions to sue each other. But new research shows it’s the trolls that own little more than legal rights to inventions levying the heftier toll on investors and innovation. It’s more evidence of why patent law needs to change.

Misguided share buybacks at least help Wall Street

23 Sep 2011

Companies don’t often time stock repurchases well for their own accounts. But the roughly $500 bln expected this year couldn’t come at a better juncture for ailing investment bankers. IPOs and other new equity deals have slumped, so even paltry fees on buybacks will be welcome.

UBS, Yahoo and HP have made failure traditional

23 Sep 2011

The Swiss bank’s $2 bln rogue trading loss echoes its U.S. mortgage misadventures while persistent strategic drift led the two tech companies to chuck out their bosses. All three have self-images that are badly out of date. Few companies can recover from this cognitive disorder.

Bank paperwork snafus trap Uncle Sam in mortgages

23 Sep 2011

Fannie Mae and Freddie Mac’s past failures make them easy targets. But the pile of lawsuits against private sector banks, notably over mortgage servicing, suggests they’re not yet ready to replace the government - at least until legal action, time and effort scrape away the rot.

Meg Whitman is unjustifiable choice for HP CEO

22 Sep 2011

The former eBay boss only joined the tech company’s board this year. The feckless body has ousted three previous outsiders, damaging HP each time. Whitman’s experience in hardware and business software is limited. Her powers of persuasion will take HP only so far.

Fed’s Twist puts Wall Street in a spiral

22 Sep 2011

Extra stimulus pushed 10-year Treasury yields to a new low and could leave them under 2 pct for a while. That doesn’t just crimp interest margins for retail banks; it also squeezes already struggling debt traders. Financials now look nothing but a super-long-term investment.

Madoff trustee earning his eye-popping keep

22 Sep 2011

Irving Picard’s fees now top $224 mln, with the meter still running. Cleaning up the sprawling Ponzi scheme doesn’t come cheap. But it’s peanuts compared with the Lehman bankruptcy tab, and Picard is getting more than twice the return on the dollar. He could turn out a bargain.

United Tech’s $16.5 bln buy relies on debt markets

22 Sep 2011

The nearly 50 pct premium it’s paying for Goodrich might have been lower if United Tech’s intentions hadn’t been leaked. But low interest rates, strong demand for blue-chip debt and a good fit should make the deal easier for shareholders to swallow despite the jet-fueled price.

Monetary moves have lost their magic

22 Sep 2011

Markets spurned the Fed’s latest love offering. The Twist was seen correctly as a small manoeuvre that can do little to speed up growth. It could even be more dangerous than helpful. Central banks should not try too hard - the pains of economic rebalancing cannot be avoided.

IMF issues timely warning on ultra-low rates

21 Sep 2011

Just as Ben Bernanke and his crew contemplate further easing, a new IMF report lays out the multiple threats created by such loose monetary policy. In rich nations, small firms suffer while in emerging markets, capital inflows produce bubble conditions. The FOMC should pay heed.

IMF financial crisis indicator bodes ill for China

21 Sep 2011

The fund has found a measure of credit growth that could predict crunches. It makes the Middle Kingdom look precarious and heralds problems for Turkey and Vietnam. The IMF’s crisis-spotting record is lousy. But overheating nations shouldn’t dismiss what seems a sensible metric.

New CEO wouldn’t fix dysfunctional HP board

21 Sep 2011

The tech group’s directors are thinking about jettisoning yet another boss, Leo Apotheker, after less than a year and right after green-lighting his $12 bln purchase of Autonomy and other radical changes that have rattled shareholders. But the board may be the real problem.

Netflix’s clumsy divide could have one step to go

20 Sep 2011

The once-soaring video service angered customers again by separating mail-order from streaming. It will take far more subscribers to justify even its vastly shrunken valuation and to pay off rising obligations. Netflix may yet need to sell the DVD arm to preclude a cash crunch.

Ponzi bluff may yet help weak legal poker hand

20 Sep 2011

U.S. prosecutors seem to face long odds in a case against the Full Tilt Poker website. Gussying up fraud charges against the firm and some famous players by evoking Madoff sounds a stretch but could prove an ace in the hole. At least it shows the feds aren’t ready to fold.

Jefferies shows bank investors are braced for pain

20 Sep 2011

Rather than punish the growing investment bank for its 85 pct crash in Q3 debt trading revenue, the market shrugged. True, a tough quarter was expected. But such nonchalance about this and JPMorgan’s earlier warning implies investors reckon fixed income will suffer for some time.

IMF’s education remedy won’t cure rich world ills

20 Sep 2011

The fund’s flagship yearly outlook laments a jobs crisis and rising inequality in wealthy nations. But its prescription of more education spending is unlikely to do the trick. Though desirable in many ways, such outlays aren’t the golden ticket economists often claim.

Proxy advisers’ clout is overstated

19 Sep 2011

When it comes to say-on-pay, director elections and the like, some U.S. companies fear that shareholders just parrot ISS and other purveyors of sometimes flawed advice when they vote. New research suggests the worriers should relax: company owners are more thoughtful than that.