United States of America

JPMorgan hit may scare more bankers than investors

13 Sep 2011

Shareholders already figured Wall Street profit would take a dive, explaining why they shrugged off a warning from JPMorgan that investment banking revenue would dip by a third or more in Q3. But it lends more weight to industry-wide fears that job cuts will probably keep coming.

GE payback of Buffett reflects climb from crisis

13 Sep 2011

Like clockwork, the industrial giant notified the Sage of Omaha on Tuesday of its intention to buy back the $3 bln of preferred stock he bought at the height of the 2008 panic. Amid widespread market pessimism, it’s a reminder of how much stronger GE and the system have become.

Early start on mobile ads brings hope for Pandora

13 Sep 2011

The Internet radio service is growing by leaps, but giants such as Clear Channel have now entered the fray with similar offerings. That isn’t good for a company still losing money. But being out in front of the trend toward mobile advertising is still an opportunity for Pandora.

Regulatory overload one cause of U.S. malaise

13 Sep 2011

JPMorgan’s CEO thinks new financial red tape is slowing the recovery, and Obama just blocked an emissions rule on a similar rationale. A flood of regulation coincided with a plunge in productivity from 1973. The recent U.S. rulemaking surge may be part of today’s economic woe.

Buffett’s new wannabe doesn’t have money problems

13 Sep 2011

He coughed up more than $5 mln just to have lunch with the Berkshire boss twice. That could be as important as his impressive track record as an investor. The Sokol affair proves that good instincts for making money aren’t the only thing Berkshire needs to succeed.

BofA boss can take comfort from Pandit’s bad patch

12 Sep 2011

Brian Moynihan gets knocked for everything from his fixes for the ailing bank to a lack of charisma - as his rival atop Citi did a couple of years ago. Pandit pulled through. That, and middling shareholder support for his latest plans, should give Moynihan a modicum of hope.

Rivals may learn from McGraw-Hill’s education spin

12 Sep 2011

The carve-up is long overdue as Standard & Poor’s never fit well with textbooks and teaching materials. Spinning off education could make it easier to sell. It should also turn up the heat at the likes of Pearson and Washington Post to consider similar breakups.

Broadcom chip deal has tech rarity: logical price

12 Sep 2011

The network chip maker is paying a huge 57 pct premium for NetLogic. But the $3.7 bln deal’s rationale is sound, and the price is reasonable considering NetLogic’s prospects. With tech valuations subdued, other companies with cash hoards may find it’s a good time to go shopping.

Forget the IPO, Facebook could reverse into Yahoo

12 Sep 2011

Offering Facebook shares to Yahoo owners sounds downright barmy. But Yahoo’s core is just a bunch of apps with a decent display ad business that belong in a social network. Facebook has the traffic, vision and possibly management in Sheryl Sandberg to exploit the assets.

Dimon can’t have it both ways

12 Sep 2011

The JPMorgan boss has made good arguments against bad regulation. But suggesting the U.S. should opt out of “anti-American” Basel III rules undermines his case. If huge private sector banks are to avoid future government rescues, they will need to hold more capital.

New U.S. patent law whiffs on system’s top flaws

12 Sep 2011

The measure may discourage dodgy filings and square American rules with those abroad. But it hurts small inventors and fails to curb vague and overlapping patents. It’s a blown chance for real reform and probably means more infringement fights for the likes of Google and Apple.

One piece of Obama’s jobs bill looks stimulating

12 Sep 2011

Paying for the president’s $447 bln plan could risk crowding out other activity, causing job losses rather than gains. But the proposed cut in employer payroll taxes would cheapen labor and may create jobs. That’s a piece of the puzzle Congress should support and even extend.

No quick fix for banks’ U.S. mortgage liability

12 Sep 2011

That’s the grim reality for investors. The entire home-lending chain - origination, servicing and securitization - is under legal fire, with a regulator aiming the latest shot at 17 banks. Settlements will help, but as this primer illustrates, a full ceasefire may be years away.

Google’s Zagat purchase looks cheap and cheerful

9 Sep 2011

The restaurant reviewer’s brand is well regarded, but its model of selling user-generated content had little future in a post-Yelp world. Google can integrate Zagat reviews with its maps, social network, and other services and sell related ads. This deal should score highly.

Dr. Obama prescribes another big dose of stimulus

9 Sep 2011

The president’s $447 bln jobs plan should please the Fed’s Bernanke and IMF’s Lagarde. Both have suggested putting stimulus ahead of austerity. Republicans may be less thrilled. But the tax cuts may pass Congress. Expect Wall Street to start boosting 2012 U.S. growth forecasts.

Gold spares lagging Paulson after August ructions

8 Sep 2011

The hedgie’s best-known fund is down 23 pct this year, but holders of gold-denominated shares are still just ahead. At Ray Dalio’s giant Bridgewater, investors are up 25 pct even without that help. If nothing else, the contrast underlines the challenge of navigating wild markets.

Jingdong IPO tests U.S. appetite for China stocks

8 Sep 2011

The Amazon lookalike, unknown outside China, hopes to raise up to $5 billion in a U.S. listing. Jingdong’s scale and growth speed are exciting. But rising doubts about Chinese Internet darlings will test demand. It is a bold bet in a tough market.

China’s hidden debt undermines its sermons

8 Sep 2011

The government’s stated debt is just 15 percent of GDP. But a gaping pension hole and heavy borrowing by state-backed entities could leave Beijing on the hook for debts closer to 130 percent of GDP. That makes China’s preaching over profligate American ways ring a bit hollow.

Ohio oil promises new bonanza for Texas bankers

7 Sep 2011

The first takeover deal in the Utica shale may be modest, but it’s only a start. Some $38 bln of shale-related deals this year account for 80 pct of U.S. exploration M&A. If Ohio’s rock formation yields even half its touted oil trove, energy financiers should be sitting pretty.

Legal surrender hurts SEC more than shareholders

7 Sep 2011

The U.S. regulator won’t appeal a ruling that blocked more investor power to challenge corporate boards. That’s understandable given the legal risks and alternative proxy options. But it preserves a precedent that makes it far more arduous for the agency to implement new rules.