$100 bln weed company is still in the pipe 21 Sep 2018 Cannabis producer Tilray’s shares have risen and fallen at a rate that makes virtual currency bitcoin look lethargic. Its CEO claims it could have a 12-digit valuation. He’s half right. A producer of that size is likely one day, but assuming it will be Tilray is foolish.
Lobbyists reopen mutual funds’ $2 bln paper cut 21 Sep 2018 That’s what an SEC rule shifting printed and mailed shareholder reports online could save the $19 trln U.S. investment industry. The paper sector is suing to shred the plan, the latest chapter in a saga pitting economic and environmental common sense against D.C. dysfunction.
E-book: Ten Years After 21 Sep 2018 A decade since Lehman’s collapse, Breakingviews presents a multimedia collection reflecting on the 2008 financial crisis and what’s changed, including new columns and graphics as well as audio and video interviews with key figures like Gary Cohn, Barney Frank and Sheila Bair.
Banks were first to fall in decade of lost trust 21 Sep 2018 The failures and bailouts of 2008 swept away the notion that bank executives could be relied upon to safely run their firms. Since then central bankers, politicians and the media have all grappled with growing public scepticism. The institutional malaise shows no sign of lifting.
Review: Malaysian heist hides deeper moral 21 Sep 2018 “Billion Dollar Whale” tells how a chubby twentysomething stole a fortune and partied his way around the planet, ultimately bringing down his country’s prime minister. Behind the exploits, however, lies a darker story of how global capitalism facilitates fraud and fuels excess.
Trump tariffs fallout hints at protracted battle 21 Sep 2018 As U.S. companies brace for taxes on another $200 bln of Chinese exports, many say they’re considering leaving the People’s Republic. That has Beijing wondering if such an exodus is as much a policy aim as IP theft. It’s one more reason to think the trade war is here to stay.
Lone Star tactics can’t fix Chicago pension woes 20 Sep 2018 The Windy City is considering issuing debt to help plug a $28 bln retirement gap. Houston did a similar bond deal last year, but it had a smaller deficit and coupled borrowing with benefit cutbacks. Illinois law rules those out, making Chicago’s problem more difficult to solve.
Robocall infestation demands robot solution 20 Sep 2018 Scam calls may make up nearly half U.S. traffic next year, data suggests, up from under 4 pct last year. Society bears the costs in wasted time and swindles. The experience with email shows engineering will eventually provide more consistent relief than laws or fines.
Merrill Lynch deal a qualified success for BofA 20 Sep 2018 The bank bought the Thundering Herd in a hurry in the depths of the 2008 crisis. Merrill’s retail brokerage has worked out well. But the M&A and equity franchises have faded under the BofA brand. The unit’s new boss, Matthew Koder, would need something special to change that.
CalPERS has good reason to recruit from Beijing 20 Sep 2018 The $350 bln pension fund may hire a manager of China’s forex reserves as its next investment boss. His China knowledge would be a plus. Nativists may howl. But Ben Meng trained on Wall Street and ran asset allocation at CalPERS. That’s what makes him a good pick for the job.
Donald Trump makes Fed great again 20 Sep 2018 The U.S. president chose economist Nellie Liang to be a central bank governor. It will be the first time in five years that all seven board seats are filled. Liang’s financial stability expertise rounds out Trump’s other conventional picks and is going to be handy if crisis hits.
Mars plan for sustainable cocoa is moreish 19 Sep 2018 The confectioner’s $1 bln investment in the key ingredient’s “broken” supply chain benefits all from forests to farmers. As a way of getting better supplies and reassuring customers, it benefits Mars too. Other companies should feast on this kind of sustainability strategy.
Microsoft’s rising cash may burn hole in pocket 19 Sep 2018 The software giant raised its dividend by a modest 9.5 pct, virtually assuring the company will increase the $58 bln hoard on its balance sheet. Why the AAA-rated outfit needs so much dry powder isn’t clear – but it may tempt boss Satya Nadella into extravagant dealmaking.
Sky battle may end in awkward media giant impasse 19 Sep 2018 A sealed-bid auction could decide whether Comcast or Disney takes control of the UK broadcaster. The winner will almost certainly overpay. If the cable giant triumphs, the Magic Kingdom might keep its 39 pct stake. That would make the fierce rivals uneasy joint venture partners.
Dell deal falls short on three fronts out of three 19 Sep 2018 The PC maker is trying to persuade owners of VMware tracking stock to accept a big discount to the tracked shares, a whopping valuation for its own equity, and third-class voting status. The simplification ought to appeal, but Dell’s $22 bln offer includes too much to dislike.
Hadas: Economists trapped in pre-crisis fogs 19 Sep 2018 The 2008 crash proved professionals can deal with a big bank failure. Other questions raised by the slump remain open: Are hedge funds and derivatives evil? What drives inflation? Are big current-account deficits dangerous? Why has the recovery been so slow? No one really knows.
Starbucks’ Italy push may help it more at home 19 Sep 2018 The $74 bln coffee giant unveiled a massive espresso emporium in the centre of Milan. It sounds like the equivalent of carrying coals to Newcastle. But there may be some logic here if the buzz created around the Italian launch gives a jolt to flagging sales in America and beyond.
Aussie office bid war offers easy investor exit 19 Sep 2018 U.S. private equity giant Blackstone is fighting with a Canadian pension fund over $3 bln of Australian commercial property. The market has boomed but Investa, the target, has underperformed of late. The ensuing rally gives shareholders a chance to relocate at a nice premium.
The Exchange: A chat with Gary Cohn 18 Sep 2018 President Trump’s first National Economic Council director and former Goldman Sachs No. 2 discusses the financial crisis and its aftermath with Gina Chon. He also gives his take on tax cuts and trade, and explains why JPMorgan boss Jamie Dimon would make a “phenomenal” president.
Elliott flexes its two biggest muscles at Sempra 18 Sep 2018 The $32 bln utility agreed to add two new board members and says it will review a break-up. Meanwhile, Elliott’s lawyers won back a $275 mln fee from when Sempra bought Texas utility Oncor. Paul Singer’s fund specializes in persuasion and litigation. This time, both paid off.