United States of America

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.

Obama is handing too much gold to ivory towers

26 Oct 2011

The $1 trln U.S. student loan market fuels soaring tuition fees and leaves taxpayers on the hook for default. The president’s move to lighten the burden on graduates will only increase defaults. And taxpayers are already getting scant return for rising college subsidies.

Jon Corzine gets déjà vu moment at MF Global

26 Oct 2011

Dealing with rising costs, prop trading pain and capital concerns helped elevate Corzine to the top job at Goldman in 1994. Now he’s facing similar issues running MF Global. His experience should help, but the brokerage’s turnaround story is a tougher sell than Goldman’s was.

Gupta arrest puts Corporate America on notice

26 Oct 2011

Prosecutors have nailed dozens of insider traders, including Galleon founder Rajaratnam. Those now look to be mere prologue to the case against former McKinsey boss and Goldman director Gupta. The charges will be tough to prove, but a conviction would be the ultimate deterrent.

Neutral is best gear for U.S. automakers’ cash

26 Oct 2011

Ford’s ninth quarterly profit in a row has investors wondering about a dividend. GM’s cash pile has raised hopes it might buy back the U.S. Treasury’s holdings. But growth is sluggish and Europe’s still a profit hole. Keeping balance sheets strong is the better option for now.

Crop of shock CEO exits reinforces need to plan

25 Oct 2011

Judging by First Solar’s 25 pct stock price drop, you’d think it erred in ousting its chief. Or that Quest’s 11 pct jump meant it should’ve dumped its boss sooner. And no reaction must make IBM’s new CEO a snooze. The real lesson is that boards must carefully plan successions.

Amazon keeps digging costly moat around business

25 Oct 2011

The Internet retailer shocked Wall Street with low profitability due to heavy investment. This expenditure may eventually pay off - that’s why the stock trades at 100 times estimated earnings. But it’s a timely warning that even Amazon must keep girding the barriers to entry.

ArcelorMittal chickens out to hoard its cash

25 Oct 2011

The world’s largest steelmaker abruptly bailed on a joint takeover of Australia’s Macarthur Coal, selling out to partner Peabody, as investors tendered their shares with unexpected alacrity. It may be a sensible move, but it certainly makes the billionaire Mittals look a nervy bunch.

Sprint’s antitrust pitch hedges against DoJ miss

25 Oct 2011

The third-largest U.S. mobile operator says it just wants to help Justice kill AT&T’s takeover of T-Mobile USA. But its separate lawsuit suggests unease with Uncle Sam’s arguments. Such private cases rarely succeed. But this one looks like insurance against a government stumble.

Rick Perry’s simple tax plan spoiled by complexity

25 Oct 2011

The Republican presidential contender’s 20 pct flat tax is a sensible plan with some nice new features and structured to avoid being too regressive. But the capital gains exemption is a silly loophole and making it optional wrecks Uncle Sam’s yield. It’s a missed opportunity.

Rupert Murdoch’s sham governance on full display

25 Oct 2011

A majority of stockholders who don’t share the media mogul’s last name snubbed his sons, James and Lachlan, along with three other News Corp directors. The emphatic vote may be only symbolic. But even a board so entrenched as this one can’t ignore the angry mob.