U.S. utilities want to rain on solar parade 15 Nov 2013 A lobby group says solar power may put $170 bln of utility revenue at risk. Meanwhile Elon Musk’s panel installer SolarCity could quadruple sales in two years, and solar ventures abound. No wonder a big Arizona utility is fighting back with a fee on citizens with solar panels.
Apple, Samsung won’t stop feuding until judges do 15 Nov 2013 The iPhone maker is retrying last year’s $1 bln patent win because jurors misread the rules. No wonder they were confused: America’s top IP court splits on even basic issues like what’s patentable, new research shows. Clearer legal guidance could give smartphone peace a chance.
Review: At Apple’s core, a fitting man of mystery 15 Nov 2013 Jony Ive is the British perfectionist who leads the U.S. tech giant’s design team. A new book shows his huge influence uniting form and function at Apple. But Ive the man remains largely hidden behind a screen that’s as obsessively crafted as any of the company’s gadgets.
Falling pay cheques can’t solve Spain’s job problem 15 Nov 2013 Lower wages forced on Spanish workers are a tough sell, but could help shrink sky-high unemployment. The burden of adjustment is likely to fall on the newly employed. Yet tackling the country’s problems requires more reforms than brutal pay cuts.
Nationwide shows there is life in the mutual model 15 Nov 2013 The customer-owned UK lender is growing loans and deposits rapidly, without sacrificing prudence. After Co-op’s bail-in and Rabobank’s Libor shame, doubts about mutuals are widespread. Nationwide sends a timely reminder that with competent management they can work.
Italy finds a hidden trove of bank capital and tax 15 Nov 2013 The government wants the nation’s banks to revalue their stakes in the Banca d’Italia. It says the move addresses a conflict created by banks owning central bank shares, but the deal would look more like a tax grab by a cash-strapped treasury, and a mini-bailout for the banks.
Banks’ bad IPO habits spread to China bond deals 15 Nov 2013 Despite booming bond issuance by Chinese groups, banks are crowding into new offers. Companies keep lenders happy by dispensing league table credit to many book runners. As in the equity market, though, working for measly fees is a poor way for bankers to justify their existence.
Shuanghui hits on recipe for meaty returns 15 Nov 2013 Take lukewarm U.S. pork producer Smithfield. Slather with debt, remove from the market then serve up almost immediately in a Hong Kong IPO. To ensure the new listing comes out golden, add the secret ingredient: investor exuberance over Chinese consumer stocks.
Lower inflation can spur global growth 15 Nov 2013 The trend towards lower inflation rates is unlikely to end in massive global deflation. There may be a risk in the euro zone, but most disinflation is a healthy response to falls in oil and commodity prices. Consumers and growth will benefit. Policymakers shouldn’t panic.
Yellen channels her inner Bernanke before Congress 14 Nov 2013 In her first Senate confirmation hearing as nominee to lead the Federal Reserve, Janet Yellen was calm and composed. On policy questions, she argued the Fed’s actions were prudent without dropping any hints on the future. Markets may feel like Ben Bernanke never left.
Fannie, Freddie buyout offer too good to be true 14 Nov 2013 A group of investors wants to buy their insurance businesses. The offer of a takeover windfall might appeal. But the easy transition they promise and the need for no taxpayer backstop sound unlikely. The plan wouldn’t end the cycle of privatizing profit while socializing losses.
Ireland’s bailout escape is a calculated gamble 14 Nov 2013 Dublin won’t seek a backup facility when its bailout ends. The move shows how Ireland has regained market trust but says little for euro zone solidarity. The country has weak banks, and remains over-indebted and exposed to shocks. Still, the odds are that it will make it.
Europe’s Solvency II deal is better than nothing 14 Nov 2013 Brussels has completed its tortuous quest to harmonise the way Europe’s insurers work out capital reserves. Solvency II has so many national carve-outs that its original aim has almost been lost. But it’s a step forward – if only because insurers can now stop fretting about it.
QE’s surprising beneficiaries: taxpayers 14 Nov 2013 That’s according to McKinsey, which reckons low interest rates saved western governments $1.6 trillion. Totting up winners and losers is hard, as we can’t know how economies would have fared otherwise. At least the study helps debunk the idea that money-printing only aids the rich.
Cisco spies bigger problems for techland 14 Nov 2013 The networking company blames fallout from the Snowden affair as one reason why its revenue is sliding – along with increased competition and emerging-markets weakness. Some damage is self-inflicted, but there’s enough concern for rivals to be looking over their shoulders, too.
Sotheby’s adopts car-crash defense to repel Loeb 14 Nov 2013 The auction firm’s contemporary art sale fell short of Christie’s. But hawking a $105 mln Warhol and an $83 mln diamond – plus boatloads of impressionists last week – provides much-needed sparkle. Activist investor Dan Loeb has made money, but his catty critique looks overdone.
JPMorgan’s tweet defeat reveals multiple failures 14 Nov 2013 A hasty retreat from a Twitter Q&A with banker Jimmy Lee after a barrage of snarky abuse suggests the bank doesn’t quite get the pros and cons of the human newswire it just took public. Worse, JPMorgan doesn’t seem to realize just how badly reviled Wall Street banks are.
Nirvana eludes Japan after one year of Abenomics 14 Nov 2013 GDP growth halved in the third quarter. But investors are worried about something else. One year after Shinzo Abe chalked out a path to revival, Japan is still awaiting the structural reforms he promised. Without them, the effect of monetary and fiscal stimulus could soon wane.
Barclays’ regulatory fix-it role is worth keeping 14 Nov 2013 Former FSA chief Hector Sants quit as the bank’s head of regulation a month after taking sick leave. The role was created in response to Barclays’ Libor settlement, and was central to creating a new compliance culture. It remains a good idea – however hard it will be to fill.
EADS profit lift-off will be held back by A380 14 Nov 2013 The Airbus maker is enjoying a surge in global demand for civil aircraft. Yet it has sold none of its flagship A380 for more than a year. For now EADS has a decent backlog of orders for the super-jumbo. But the weakness will make it harder to lift mediocre group margins.
Aussie dairy battle in danger of overheating 14 Nov 2013 Bega Cheese hiked its offer for local rival Warrnambool to A$486 mln. That’s nearly double the dairy’s value before a bidding war erupted in September. Valuations depend on Chinese milk demand taking off. But with two other buyers still in the fight, the price could rise further.
Snapchat bid triples Facebook’s desperation 13 Nov 2013 Mark Zuckerberg’s social network shelled out $1 bln for no-revenue Instagram last year. Now it’s dangling $3 bln to a mobile application that sends self-destructing digital images. Facebook’s escalating need to buy off marauders at its moat suggests its defenses are scalable.
Speculation isn’t always a dirty word 13 Nov 2013 The U.S. derivatives regulator wants to curb market manipulation by capping some commodities trading. It’s the wrong approach, not least because it could reduce liquidity with limited benefits. Transparency and stronger policing of large positions are enough to do the job.
Peru swaps Brazil’s oil loser for China’s 13 Nov 2013 Petrobras is selling fields that pump about 16 pct of the tiny nation’s crude to PetroChina. Little distinguishes the two state-controlled titans. The inefficient Chinese group has lost $750 bln of market value in six years. Peru shouldn’t expect much of a partnership upgrade.
BoE can escape its self-made forward guidance trap 13 Nov 2013 When the Bank of England linked monetary policy to the labour market, it was unduly pessimistic about unemployment. Governor Mark Carney is now trying to fine tune his message, but he could just simplify: rates will stay at record lows for a while, whatever the jobless rate.
Insurers are killjoys at London’s IPO party 13 Nov 2013 A sales warning lopped 22 pct off Partnership Assurance shares, months after the annuity group listed. Peer Just Retirement, which floated this week, is also underwater. Next year could be better. But the duo have dented the UK’s otherwise robust IPO market.
A trio of finance lessons from Bacon’s triptych 13 Nov 2013 The record-busting $142 mln sale by Christie’s of the artist’s set of paintings of Lucian Freud shows a contemporary art market in heady territory. The mind-boggling price paid for Bacon’s extraordinary work suggests three tenuous extrapolations for the broader world of money.
Starbucks can stomach Kraft $2.8 bln coffee jolt 13 Nov 2013 Howard Schultz’s coffee chain is paying dearly for breaking off a grocery alliance with the Cheez Whiz juggernaut and losing an arbitration case. Though a fat number, for Starbucks the penalty pales next to the benefits of bringing a fast-growing, high-margin business in-house.
Edward Hadas: Favour labour over consumption 13 Nov 2013 Current policies do very little to promote job creation, except in finance. The problem is that the forces of job destruction are too powerful. To counter them, policymakers should accept that labour market inefficiency can be good, and help the tax system reward employment.
Four ways to tell China is serious about markets 13 Nov 2013 The ruling party says market forces are to take a “decisive” role in the economy. Will it happen? A domestic bond default, shrinking currency reserves, the foreign takeover of a failing state-owned company and more volatile commodity prices would all be promising signs.