Booming U.S. oil is rare advert for big capitalism 6 Jun 2012 America now boasts the world’s fastest-rising oil production outside OPEC. That leaves Brazil’s growth trailing, while output in Mexico is falling. With banks in particular in the doghouse, it’s a reminder that private enterprises seize opportunities better than governments.
BofA reject wins Fannie Mae booby prize 6 Jun 2012 No good deed goes unpunished. Tim Mayopoulos, fired as the mega-bank hid Merrill losses in 2008, is the mortgage zombie’s new boss. That won’t improve the firms’ tense relationship. And he’s taking a pay cut. But his integrity and background make him a decent fit for the job.
ECB stuck in morass of euro zone inaction 6 Jun 2012 The central bank wants governments to make the next big move to address the euro crisis. But the ECB is itself paralysed by an internal conflict, between the demands of Germany and the needs of other governments. So it is left fiddling while Madrid burns.
Spain’s message keeps getting lost in translation 6 Jun 2012 With multiple government officials speaking at once, it’s hard to know exactly what Spain is thinking. Having one authoritative voice would help. One thing seems clear: it is not asking for a bailout. Still, some outside help might be inevitable for the banks.
Ethical economy: Depressions can be avoided 6 Jun 2012 In agricultural economies with hard money, economic ups and downs were inescapable. While finance is under-regulated, booms and busts are inevitable. But policymakers now have the tools to limit and neutralise reckless behaviour. They just have to decide to use them.
Bankia shows why U.S. Sifis must be ready to die 6 Jun 2012 Uncle Sam might easily wind down a firm the size of the sick Spanish bank. But coping with systemic institutions is different. A looming deadline for U.S. giants to draft living wills is a chance to prove they’re not too big or complex to fail. Otherwise, breakups could beckon.
Wisconsin puts proactive policies back on the map 6 Jun 2012 Governor Scott Walker’s victory in the Badger State’s recall election doesn’t just affirm his 2011 union-curbing budget reforms. It also suggests well-designed controversial policies are far from doomed. That’s good news for politicians of all hues battling Washington’s gridlock.
Investors in India’s Reliance need more to rely on 6 Jun 2012 The Indian conglomerate is underperforming. Reliance also has $14 billion in cash but doesn’t seem to know what to do with it – though it has a half-hearted share buyback programme. Investors gathering for their annual meeting are in need of commercial and financial refreshment.
Long-term plans won’t fix short-term euro panic 6 Jun 2012 Euro pundits and policymakers too often muddle up measures to build a better union with those needed to solve the immediate crisis. There is, of course, an interplay between the two. But only quick fixes will help if Greece blows or Spain slides to the edge.
Time for China to look beyond Deng’s big ideas 6 Jun 2012 It doesn’t matter if a cat is black or white, so long as it catches mice. Cross the river by feeling for stones. Those lines from China’s leader pushed the economy forward three decades ago. Now they often serve as excuses for persisting in bad habits and delaying reforms.
Qatar play for EFG Hermes stokes backlash in Egypt 6 Jun 2012 The possible bidding war for the investment bank illustrates the growing fears about the emirate’s influence in post-Mubarak Egypt. EFG agreed to be partially taken over by QInvest. But the Gulf state’s rivals promise to keep the bank whole, and Egyptian. Now anything can happen.
Party City celebrates embattled private equity 5 Jun 2012 A $2.7 bln deal for the costume and streamer chain wraps together the mixed feelings U.S. voters have for the buyout industry. Revel in the huge jobs and profit growth created by three Boston-based owners. But a dividend recap and growing debt leave the affair somewhat subdued.
Newest bank sheriff can’t let JPMorgan moment pass 5 Jun 2012 Just two months into the job, Thomas Curry got a swift reminder about the shortcomings he confronts running the OCC. Despite being JPMorgan’s primary U.S. regulator, it missed the whopping trading loss. Curry now has a chance to show if he’s ready to toughen up the agency.
Brazil’s easy money squeezes banking weaklings 5 Jun 2012 The central bank seized consumer lender Cruzeiro for “serious” financial violations. The episode may show what happens when a bank loses its way in a lending frenzy. Government policies of lax lending and loose money are taking a bite out of an otherwise sound financial system.
Britain’s monarchy-fest shows power of sentiment 5 Jun 2012 A four-day celebration for the queen’s diamond jubilee is eccentric, even as austerity rules the land. But it also demonstrates how crowds - not unlike markets - act on airy sentimentality as well as cold logic. Tiny things, if valued by enough people, are extraordinarily potent.
UK could sacrifice its jubilee queen to Europe 5 Jun 2012 A common monarch would give the region the sort of political unity it sorely lacks. And the royal family is basically Continental by blood. English is the regional tongue. Americans would have new respect. Brits would become europhiles. Put it on the next summit’s agenda.
Record low rates encourage fat and lazy Uncle Sam 5 Jun 2012 Rock-bottom borrowing costs make future attempts by the Federal Reserve to boost growth largely irrelevant while giving Washington a free pass to do squat on the nation’s long-term fiscal problems. The U.S. needs a reality check, but markets continue to conspire against one.
Facebook’s short-term greed carries long-term harm 5 Jun 2012 Going public is more than just a one-time money-raising event. Facebook is a case in point. Debuting at a lofty valuation helped insiders. But the 30 pct stock plunge has hurt the social network’s reputation, a new Reuters poll shows. That’s bad for a consumer brand.
Euro bonds will be hard for investors to swallow 5 Jun 2012 Investors might be attracted to new-fangled euro bonds. Risks with peripheral sovereign debtors might be diffused and yields could look more generous. It is far from certain, however, that the small-print details will bear close inspection from buysiders.
Liquidity fears trump sense in Asia’s markets 5 Jun 2012 Investors fretting about a euro breakup are moving into the wrong Asian markets. They are favouring liquid Australian and South Korean bonds. But it is hot money that could burn investors if the story changes. Higher-yield bonds from say, the Philippines, might be a better bet.
Pick-a-pay creator follows dodgy product to grave 4 Jun 2012 Golden West founder Marion Sandler has died aged 81. She and husband Herb built a supremely efficient mortgage lender, sold at the top and donated $1.3 bln to political and other causes. But they’ll be remembered as the architects of one of the more egregious mortgage offerings.
Latam’s new oil king dons large and heavy crown 4 Jun 2012 Colombia’s Ecopetrol is jockeying to surpass Brazil’s Petrobras as the region’s biggest oil producer by market value. Solid management has lured billions in capital away from rivals in meddling nearby states. But Ecopetrol may struggle to live up to the high hopes for its reign.
Chesapeake board ups governance; now to govern CEO 4 Jun 2012 Finally, investors including Carl Icahn will get to pick four directors at the beleaguered U.S. gas firm, and all board seats will be less secure than before. But even vigorous directors have their work cut out reining in Aubrey McClendon, the company’s founder and 23-year boss.
Salesforce.com enlists Buddy to help defy gravity 4 Jun 2012 One after another, über-trendy stocks have fallen to earth - think Netflix or Green Mountain. The $18 bln Salesforce.com has held up better than some. To help it stay aloft, it is spending $689 mln on Buddy Media. Social media is still a sweet spot, but it’s an expensive gambit.
Arctic “Great Game” needs careful management 4 Jun 2012 The U.S., Russia and Canada are among the governments limbering up. Boundary rights in the Arctic are fuzzy, and potential benefits huge. Future conflicts over energy and other resources could turn nasty. An international effort to set firm rules is needed before it’s too late.
Hugo Dixon: ECB and euro governments play chicken 4 Jun 2012 There isn’t just brinkmanship between the zone’s core and its periphery; there’s also a standoff between the central bank and the governments over who should rescue the single currency. In such games somebody usually blinks. But if nobody does, the consequences will be terrible.
Douwe Egberts listing has to create its own buzz 4 Jun 2012 Sara Lee’s $5 bln-plus coffee spin-off is percolating towards the Amsterdam exchange. The maker of Douwe Egberts is uncomfortably big in sleepy bits of the coffee market. But the cast-off could thrive if its top team capitalises on lessons learned in beer and baby food.
Activist flushes out Nomura and investor weakness 4 Jun 2012 An anonymous shareholder has filed all 18 independent proposals for the Japanese firm’s annual meeting. Some are peculiar, like suggesting workers squat on the toilet. Others are more mainstream. If nothing else, the secret scribe exposes the supine nature of Japan’s investors.
Egypt’s EFG Hermes is worthy of a fight 4 Jun 2012 The region’s pre-eminent investment bank has sparked rival bid interest from Qatar and an Egyptian consortium. M&A-ers have to rise above doubt created by illegal share-dealing allegations and links with the old regime. But in a post-Mubarak world, EFG has a decent business.
Asia offers Myanmar development do’s and don’ts 4 Jun 2012 One advantage of 50 years of isolation is being able to learn from neighbours’ mistakes. Myanmar isn’t a blank slate, but has a rare chance to get right on corruption, property, infrastructure, education, foreign investment, trade, markets, and currency what others got so wrong.