United States of America

Toothless U.S. say-on-pay still biting CEO perks

7 Sep 2011

The SEC’s mandated votes may be non-binding, but they’re no bust. Though shareholders approved almost all executive pay packages in the recent proxy season, many firms preemptively cut golden parachutes to ensure victory. Investors are speaking softly but carrying a big stick.

Rubenstein won’t easily snatch Schwarzman’s crown

7 Sep 2011

The Carlyle and Blackstone private equity powerhouses both manage about $150 bln of assets. But Carlyle has less steady fee income. If investors looking at Carlyle’s new IPO filing value the firm the same way as Blackstone, it would be worth only about $7.5 bln, or half as much.

New Yahoo CEO challenge: to dismantle the beast

7 Sep 2011

Fixing the $16 bln Internet firm is proving tough thanks to its many dysfunctions. Firing Carol Bartz looks a step forward, even if the hapless board did so in characteristically shambolic fashion. A breakup is probably needed, but may be hard with the founders calling the shots.

AT&T bet on T-Mobile puts CEO, board in crosshairs

6 Sep 2011

The U.S. telco has wagered $6 bln that it can beat regulatory opposition and buy T-Mobile USA. The net benefit of the $39 bln purchase could be in the same ballpark. But few experts thought the odds were better than 50-50. The AT&T boss and directors may have made a poor call.

U.S. mortgage suits inflict super-damages on banks

6 Sep 2011

The latest U.S. regulatory assault for mis-selling mortgage securities has dragged down bank stocks. But damages previously sought from UBS, and the performance of the underlying loans, suggest the impact of this particular banking nasty is now more than priced in.

Running for president like a hedge fund manager

2 Sep 2011

White House hopeful Jon Huntsman aims to employ a fund-of-funds approach to policy: Combine the best off-the-shelf economic plans on taxes, debt and energy into one broad proposal. Even if Republican voters don’t invest in the underdog’s offering, his opponents might want to.

More winners than losers if AT&T deal fails

1 Sep 2011

The operator’s top brass and lawyers will obviously look awful if the $39 bln deal collapses. It’s not yet obvious how T-Mobile and Verizon would fare. But telecom equipment and handset firms, as well as the likes of Sprint, LightSquared and Crown Castle all stand to gain.

U.S. bank boss ouster undermines cult of CEO

1 Sep 2011

Surprise changes at the top, especially ones with mealy-mouthed excuses, don’t typically go down well with investors. But BNY Mellon became about $1 bln more valuable after the departure of boss Bob Kelly. Evidently investors, like the board, considered him entirely dispensable.

Irene should blow U.S. utility deal off course

1 Sep 2011

The $4.2 bln merger of Northeast Utilities and NSTAR is up for approval. But blackouts following the hurricane have exposed NU’s deficiencies serving customers despite charging America’s highest rates. Regulators should ensure service is on a better track before they OK any deal.

Big pharmacy deal confronts past and now present

1 Sep 2011

Wall Street is betting there’s almost no chance trustbusters will approve the $29 bln acquisition of Medco by rival Express Scripts. Though overly pessimistic, two nixed healthcare mergers in the late 1990s and the challenge to AT&T’s deal provide good reason for skepticism.

More U.S. mortgage help isn’t needed

1 Sep 2011

There’s talk of yet more help for careworn borrowers. Washington has already made Herculean efforts. Some were valuable, but there’s no magic bullet and the modest returns are diminishing. It would be better for lawmakers to deploy precious capital, real and political, elsewhere.

Obama’s watchdogs call AT&T’s $39 bln wager

31 Aug 2011

The No. 2 U.S. mobile company bet it could persuade regulators that buying No. 4 T-Mobile would benefit consumers. The U.S. DOJ senses a weak hand. With the industry a near duopoly, the government’s read looks right. AT&T isn’t folding but looks on the verge of a bad beat.

Exxon’s Russian coup rubs salt in BP’s wounds

31 Aug 2011

The U.S. oil group’s Arctic exploration agreement with Rosneft mimics BP’s aborted deal but without the $16 bln share swap. Instead, there’s Russian access to U.S. drilling projects. Assuming no hidden snags, Exxon could become the big winner from BP’s botched Russian strategy.

Tar sands pipeline environment fears are overdone

30 Aug 2011

Despite a sanguine State Dept, there’s heavy opposition to a $7 bln pipeline bringing Canadian oil to Texas. But oil sands are less dirty than their reputation, and the U.S. buys crude from worse polluters. There are better ways to control emissions than boxing in Canada’s oil.

Groupon’s gaffes give fair warning to investors

30 Aug 2011

The run-up to the web coupon company’s IPO has been a string of embarrassments. Promised profits disappeared in filings, the chairman put his foot in his mouth and now the CEO has made comments that appear to skirt SEC rules. Forget valuations, this company should be avoided.

Obama’s new economist faces political headwinds

30 Aug 2011

With U.S. unemployment hovering above 9 pct, Alan Krueger - a Princeton labor market expert - is suited to be the next White House chief economist. But his job creation ideas may not get much of a hearing. With Obama campaigning, political pros will have the president’s ear.

CCB sale underlines BofA’s slow road to recovery

30 Aug 2011

Offloading some $8 bln of the Chinese bank’s shares is a double boost to capital. Along with Buffett’s investment and future earnings, it should help put BofA back on track. But none offers a quick fix. Economic and mortgage woes will leave shareholders dangling for some time.

Mother Nature threatens another mark on markets

30 Aug 2011

Just days after a rare earthquake, Wall Street faces a more serious disturbance from Hurricane Irene. The storm may still fizzle out. But it’s heading for a region with $12 bln of daily output and could cripple finance’s capital at a time when investors are already jumpy.

Bernanke’s inaction, even if temporary, is welcome

30 Aug 2011

Stock investors may have been briefly underwhelmed, but the Fed chairman was right not to promise new easing in his Jackson Hole speech. Aside from its likely ineffectiveness, he faces dissent at the Fed. That’ll make the now extended September meeting a new focus for markets.

Temasek’s smart CCB trade may have strategic costs

30 Aug 2011

Singapore’s state investment fund is buying shares in China Construction Bank from Bank of America - at a valuation 21 pct below where it dumped the stock last month. That has financial logic. But it may look too clever for Beijing, and hurt Temasek’s access to deals in China.