Stars may finally align against buyout-baron taxes 23 Jun 2016 A group of self-proclaimed “patriotic millionaires” wants to close a loophole that allows private-equity partners to pay lower taxes on investment profit. Clinton and Trump both back the idea, too. Though efforts in Congress have failed for years, fresh momentum is building.
Musk’s clean-energy deal runs on fossil governance 22 Jun 2016 The entrepreneur may see possibilities from uniting Tesla and SolarCity that others are missing. They seem, though, to share little beyond big ambitions, cash outflows and stakes owned by Elon Musk. Easier to spot are similarities to a dreadful mining and oil merger from 2012.
White House wannabes slip through safety nets 22 Jun 2016 America’s healthcare fund for the elderly will run out two years sooner than expected while Social Security resources are depleting fast, too, new research finds. Retirement savings already fall well short. These subjects are amazingly missing from the presidential campaign.
Facebook’s indie owners send upside-down message 22 Jun 2016 Shareholders not named Mark Zuckerberg gave more likes than frowny faces to just three members of the board. Puzzlingly that included Gawker-hunter Peter Thiel and not key executives like COO Sheryl Sandberg. It’s a head-scratcher probably explained by investors ticking boxes.
Tesla’s bid for SolarCity is mad science 21 Jun 2016 Elon Musk’s electric-car maker has offered to buy the solar-panel installer he also backs for up to $2.8 bln. The idea of a renewable-energy roll-up is at best way early and at worst wild. It looks like a way to boost SolarCity’s languishing stock at the expense of Tesla’s.
Yellen’s fidelity to low rates may be all relative 21 Jun 2016 Reluctance to move beyond a 0.25-0.5 pct range smacks of excess caution. Yet the Fed seems persuaded by a “new normal” with low growth, high employment and little inflation. Right or wrong, the gap between U.S. policy and Japan and the EU also could be part of the equation.
Congress, not Fed, has more to do on job creation 21 Jun 2016 U.S. hiring has slowed, yet there are millions of openings going unfilled. Janet Yellen says there is an imbalance between less-educated people looking for work and more skilled positions available. Addressing training and education needs is lawmakers’ business.
Brazil’s Oi struck by national-champion curse 21 Jun 2016 The phone company’s bankruptcy filing with $19 bln of liabilities owes a lot to state meddling. Born of a government-backed merger, Oi has struggled with debt and mandatory investment. Like the upheaval at oil giant Petrobras, the tale is salutary for future administrations.
Kion’s forklift deal assumes serious heavy lifting 21 Jun 2016 Europe’s largest forklift maker Kion is paying $3.3 billion for U.S. logistics tech company Dematic. That’s 20 times last year’s operating profit. To earn its cost of capital, the buyer might have to wait until 2020 and make rosy assumptions on revenues, margins and synergies.
Wal-Mart picks right battle in China with JD deal 21 Jun 2016 The U.S. giant is selling its local website to rival JD for $1.5 bln in stock. Wal-Mart only recently took full control of the unit. But battling Alibaba and JD would have been difficult and costly even for the world’s top retailer. Now it can focus on boosting offline sales.
CBS-Viacom reunification doesn’t add up 20 Jun 2016 The idea of the $24 bln broadcaster buying its MTV-owner sibling is going around 10 years after Sumner Redstone separated them. The split never made sense and Viacom’s weak performance has brought boardroom discord. But the likely benefits don’t justify CBS paying a premium.
Too-big-to-fail tour missing Washington headliner 20 Jun 2016 Minneapolis Fed boss Neel Kashkari brought his bid to break up big banks to D.C. His talks have attracted publicity. But the central bank’s actual Wall Street beat cops weren’t on the agenda. Without their involvement Kashkari’s tour looks like little more than a publicity event.
Big Oil’s capex conundrum will fix itself 20 Jun 2016 Drastic spending cuts mean the global industry will struggle to extract enough new crude to make up for declining older wells. But draining reserves is normal in a downturn. Rising prices and, for many companies, more renewable energy should eventually restore the balance.
Symbolic iPhone ruling attests to real China risk 17 Jun 2016 A Beijing regulator ordered Apple to stop selling some smartphones in the city because their design was too close to a Chinese firm’s model. The ruling probably won’t have much effect, but it’s a reminder of the uneven field upon which Apple, Uber and others are playing.
U.S. needs lifehack to streamline cyber defenses 17 Jun 2016 A breach at the Democratic Party headquarters is the latest to grab headlines. Companies and government offices are threatened daily. But Uncle Sam is handicapped by having a dozen or so entities involved in policing cyberspace. Creating a single expert agency could help.
Newly reliable Argentine data show Macri challenge 17 Jun 2016 Consumer prices rose 4.2 pct in May alone, indicating the scale of the new government’s problems as it seeks to fix Latin America’s No. 3 economy. It’s a race between inflation and restoring growth. But after years of statistical fantasy, at least the numbers are now credible.
New U.S. exchange won’t fix unfairness in markets 16 Jun 2016 IEX is pitching a “speed bump” to level the playing field for regular players and high-frequency traders. SEC staffers want their bosses to approve the plan. But the upstart’s approach might just fuel the race for a trading edge. Retail investors could still be left behind.
Bond vigilantes give Illinois whispered warning 16 Jun 2016 The U.S. state, which hasn’t even set a budget, sold $550 mln of bonds on Thursday at a slightly higher yield premium than it paid in January. It’s not enough of a financial penalty to force reforms, but it’s a hint of the danger that bickering politicians are courting.
Viacom boss may soon pull gilded ripcord 16 Jun 2016 Media mogul Sumner Redstone says he has lost trust in Philippe Dauman, putting the CEO’s future at the MTV owner in doubt. If cut loose, he’d leave with an $80 mln exit package that rivals those of Michael Ovitz and Carly Fiorina. Corporate payouts for failure stubbornly linger.
Review: Blockchain hopes go well beyond finance 10 Jun 2016 The distributed-ledger concept is linked to the bitcoin cryptocurrency, and more recently potential financial uses have taken wing. A new book, “Blockchain Revolution,” explores democratic and humanitarian applications. It’s both eye-opening and, at times, a bit wide-eyed.