Traders pull more rabbits from the hat 4 May 2010 Fixedincome desks were meant to have a humdrum start to the year: competition increased, spreads fell, leverage stayed low and parts of Q1 were slow. Yet most have surprised with stellar results, UBS being the latest. It's a trick hard to uncover given the evidence at hand.
Citic finds right partner in Credit Agricole 4 May 2010 The Chinese securities firm had sought a tieup with Bear Stearns, thinking a U.S. partner was the best way to global reach. A rerun with France's Credit Agricole looks wiser. Citic gets credibility outside China. And Wall Street won't worry which could be a benefit.
Oil watchdogs slept beside banking brethren 4 May 2010 Regulators are often accused of being in bed with industry even literally in the oil sector. The BP spill fiasco suggests they trusted tiny track records and deferred to Big Oil on the safety of new technology. Bankers aren't the only ones who need more vigilant oversight.
JPMorgan shows Congress can be an easy target too 4 May 2010 A senior economist at the bank slammed the unnerving ignorance of lawmakers at the Goldman hearings. The view reflects what many on Wall Street say privately, but JPMorgan disavowed it. That probably makes as much political sense as the grandstanding by the senators.
Did Goldman, JPM drop the ball on rental car deal? 4 May 2010 The two leading Wall Street firms are advising Dollar Thrifty on its $1.3 bln sale to Hertz, which based on all public information looks like a stitchup. A rival willing to pay more says it was never given a chance. The deal looks fishy. Its bankers have some explaining to do.
Regulators try to nudge Apple toward good behavior 4 May 2010 U.S. antitrust authorities are worried about monopolistic tendencies developing from the iPhone's success. But stiff competition in cellphones makes it hard to prove Apple's actions harm consumers. Government vigilance, though, might prevent abuses before they become entrenched.
California hints at broader U.S. housing recovery 4 May 2010 Its residential property market was the canary in the coalmine that signaled the start of the bust. Now, housing in the Golden State looks on the way to a healthy rebound. It could be an early sign that a wider national upturn will soon take hold.
Greek bailout leaves market cold 4 May 2010 Investors aren't impressed by the 110 bln euro package. Greece still has to go through wrenching cuts, and may end up restructuring its debt anyway. And they fear the euro zone won't have enough money and willpower to keep the crisis from spreading into Spain and Portugal.
Aussie super-tax could stabilise commodity markets 4 May 2010 The proposed profits tax on miners makes more sense than the current system of fixed rents. It is just and could help dampen the industry's extremes. As with most countercyclical regulation, the targets will hate it during the good times but be grateful during the bad.
BP’s big price decline may not be irrational 4 May 2010 The oil major's market cap is down $29 bln, more than three times the highest estimates of its cleanup costs for the big spill in the Gulf of Mexico. Investors hate uncertainty and often overestimate calamities. But this slick could well cover BP with costly collateral damage.
Goldman could use independent chairman right now 4 May 2010 The lost opportunity in not separating the chairman and CEO roles when Lloyd Blankfein took over in 2006 is now becoming apparent. As rivals like Citi have shown, a nonexecutive chairman helps provide air cover for the CEO it's not too late for Goldman.
Gazprom-Naftogaz deal is political fantasy 4 May 2010 Putin has caused a stir by proposing a merger of the Russian and Ukrainian gas giants. The plan, which would in fact be a Russian takeover, is a nonstarter. Putin can make life hard for Ukraine if he wants. But that's unlikely to make Kiev surrender control of this key asset.
Airline revenue synergies far from pie in the sky 3 May 2010 United and Continental reckon their merger can add almost $1 billion a year to the top line. Investors in other industries would scoff at such optimism. But for airlines much of the revenue juice is actually akin to cutting costs and there's precedent for making it happen.
Buffett – unusually – outdone by sidekick 3 May 2010 The older and sometimes wiser Charlie Munger, that is. The Sage of Omaha deferred frequently to Munger at Saturday's Buffettfest in Omaha. And Munger, the 86 yearold Berkshire Hathaway vicechairman, probably won the day on oneliners and even got the girl.
Peaking US bank failures don’t yet spell relief 3 May 2010 FDIC seized a trio of big Puerto Rican banks on Friday. It's a sign that U.S. bank problems are being worked through. Yet even assuming failures peak this year as expected, looming rate increases and other crisis hangovers mean banks are hardly out of the woods.
Oil industry risks a Luddite backlash from public 3 May 2010 Even if BP's spill comes down to human error, the disaster could cast a long shadow over deepsea drilling. Freak accidents derailed nuclear power and gene therapy and killed the Concorde. Pricier insurance and more regulation is the least the oil industry can expect.
Is Obama losing control of U.S. financial reform? 3 May 2010 Legislators seem to be scrambling to outregulate each other while the White House keeps mum. It defied its liberal base on nationalizing the banks last year and breaking them up. But as controversial amendments, such as those on derivatives, emerge, it may be time to pipe up.
BP makes itself easy to demonise 3 May 2010 The UK oil major is under attack from all sides over the horrendous Gulf of Mexico oil spill. BP may feel it can never win the PR war. But a more contrite tone, less talk of its overthetop response, and more explanation of its contingency planning, would help.
Aussie tax approach risks world resource shortages 3 May 2010 Australia's proposed 40 pct resource super profits tax risks doesn't just legitimize thirdworld profits grabs. By suppressing mining profits peaks, it could reduce goldrush exploration activity when prices are high. That, in turn, might exacerbate resource cycles.
Greek rescue has huge cost yet euro risks remain 3 May 2010 Greece is being saved by an EU and IMF bailout of staggering size. The Greek share of pain is punishing austerity. Yet the plan is unlikely to make Greece solvent and able to grow. The EU must act swiftly to prevent other countries heading along the Greek road to crisis.
Crisis may be golden opportunity for euro 3 May 2010 The Greek drama has been messy, painful and isn't yet over. But Athens has been forced to embark on radical reforms. If that effort spurs other PIGS on to avoid a similar fate, the euro zone could get the streamlined competitive structures it has long needed.