Treasury yield surge is mostly about supply 5 Oct 2018 U.S. government debt issuance is rising while the Fed shrinks its balance sheet at a quickening pace. That’s bringing an end to an era of easy money that has lasted since the financial crisis. Along with trade tension, it’s a growing headwind for an economy at full employment.
Mattress Firm is the stuff of retail nightmares 5 Oct 2018 The bed store owned by South Africa’s Steinhoff is filing for bankruptcy protection, and blame spreads wider than a king-sized duvet. Overexpansion, underpricing, predatory online rivals and Chinese dumping make for a fable about how retailers can fail even in a healthy economy.
Review: Michael Ovitz’s Hollywood adventure 5 Oct 2018 The super-agent is out with an autobiography about life as a dealmaker and art collector, as well as a short-lived stint as the Disney CEO’s heir apparent. Like Tinseltown, it’s long on bravado and short on self-awareness. But his time at the Mouse House is a cautionary tale.
Sizing up Chinese tech political risk is perilous 5 Oct 2018 Shares in computer maker Lenovo plunged 22 pct Friday after a news report alleged Beijing agents inserted spy chips into other companies‘ motherboards. Peers fell too. Fear of China’s role in globally integrated I.T. supply chains is growing but the fallout is hard to price.
Shale gas industry hopefuls face rock-hard barrier 5 Oct 2018 Fracking is about to make its debut in the UK. The practice of extracting gas from shale rock is hailed as likely to put the country on the road to fuel self-reliance. But the industry faces many obstacles, and investors should be sceptical of the scope for gushing returns.
Highfields a warning to budding pushy shareholders 4 Oct 2018 The $12 bln behind-the-scenes activist is closing amid low returns that also hit rivals. Yet investors are still throwing money at the strategy. High-profile battles waged by funds from Third Point to CalSTRS grab headlines. But poor profits make steering clear a better bet.
The Exchange: Neel Kashkari 4 Oct 2018 Even before Lehman Brothers went belly-up, the U.S. Treasury was hatching a contingency plan. Kashkari was one of the architects of the Troubled Asset Relief Program, which plugged some $250 bln into banks. He joins Rob Cox from his current perch running the Minneapolis Fed.
U.S.-China trade war morphs into loyalty test 4 Oct 2018 Vice President Mike Pence wants Google to halt a search-app project in China. He also said Beijing tried to get an American company to denounce U.S. policies in exchange for a license. With tariffs already imposed on most products, warped patriotism provides a new battleground.
Cyber risks deserve top billing more often 4 Oct 2018 Global trade tensions have dominated recent economic news. Thursday’s revelations of possible Chinese computer-hardware meddling and Russian hacking of a world chemical-weapons body and sports-doping watchdogs give justified prominence to what may be a bigger threat to growth.
Infected supply chains challenge Big Tech defenses 4 Oct 2018 Apple and Amazon both denied a report they had installed servers harboring compromised chips. It speaks to a problem with global manufacturing. Ensuring the purity of goods made far from end users is difficult, especially across borders. The alternative is to make less profit.
Cox: Wooing of GE is lesson for wannabe Amazon HQs 4 Oct 2018 Lured by inducements and hangars for its CEO’s jets, the group quit Connecticut in 2016 for Boston. GE has since incinerated over $150 bln of value and shed businesses, leaving less for its new home. Yet it continues to inflame politics in the place it left. Bezos buyers beware.
Blackstone tries small dose of new growth drug 4 Oct 2018 Buying Clarus, which finances biotech and pharma trials, is outside the buyout giant’s comfort zone. It’s riskier than taking over mature businesses with steady cash flows. The deal is modest in size, though, and as drugmakers look to outsource, could be a useful petri dish.
Danske’s best-case scenario may be a painful fine 4 Oct 2018 The Danish bank said it faces a U.S. criminal probe over suspicious payments in Estonia. That raises the risk that it could be blacklisted in America, which sank Latvian peer ABLV, or be fined. Even a plausible $5 bln hit would send Danske’s capital ratio below its minimum level.
M&A bankers better off hunting pheasant than elk 3 Oct 2018 The value of deals above $10 bln popped by 150 pct in the first nine months of the year. Some, like Comcast’s purchase of Sky, come with chunky financing fees. Still, the glory is spread less thinly on smaller deals, which are also growing quickly, and are easier to close.
Brazil choice is how far back to wind the clock 3 Oct 2018 Elections on Sunday will probably send Jair Bolsonaro, a far-right nostalgist for military rule, and Fernando Haddad, a surrogate for jailed leftist icon Lula, into a two-man presidential runoff. Either would serve Brazilians best by letting his angriest backers down.
Carmakers self-drive closer to Marchionne’s ideal 3 Oct 2018 Honda is buying a stake in GM’s autonomous vehicle unit. Daimler and Renault-Nissan may cooperate more on Autos 2.0. Joint ventures help with costs, but are tricky to run. Full-blown mergers, advocated by late Fiat Chrysler boss Sergio Marchionne, make longer-term sense.
Hadas: Why houses are not like pigs 3 Oct 2018 Farmers respond to high pork prices, so the hog cycle keeps turning. It’s different for housing. An excess of money, not a shortage of buildings, usually turns prices upwards. And the cycle reverses when the money runs out, sometimes because lenders take fright at new supply.
Credit Suisse LBO defence is a hostage to fortune 3 Oct 2018 The Swiss bank’s asset management arm lauded the attractions of the leveraged loan market in a letter to clients last month, according to the FT. The pitch will do little to reassure those who are alarmed by the erosion of lenders’ rights and could backfire when the market sours.
Fiat car-parts sale needs private equity mechanics 3 Oct 2018 The carmaker may spin off or sell its Magneti Marelli unit. Handing it to shareholders would let them keep any upside. But the outlook for parts makers is mixed, and valuations low. Selling to the likes of KKR makes more sense, even if CEO Mike Manley has to accept a price cut.
There’s something off-key in Tencent Music’s IPO 2 Oct 2018 The Chinese web giant’s music service claims 800 million users, and super-fast revenue growth. It’s bigger than Sweden’s Spotify, and profitable too. But there are many gaps, like how it makes money, who those users actually are and what they’re prepared to pay for.