Greed isn’t good enough for ex-Lehman trader 23 Apr 2015 Jonathan Hoffman is in court demanding $84 mln in bonuses from the defunct U.S. firm – even though Barclays paid him the same hefty sum. The UK bank’s ex-boss Bob Diamond once touted a “no jerks” policy to fix the culture. Hoffman exemplifies why some banks have so far to go.
GM miss hints at broader struggle for U.S. autos 23 Apr 2015 Restructuring, higher taxes and weaker sales in Russia and Brazil hit the carmaker last quarter. The strong dollar’s effect is more worrying, though. It hurt in Latin America, and Japanese and European rivals are gaining an advantage over Detroit’s Big Three in the U.S. market.
Facebook growth rate depends on users liking R&D 23 Apr 2015 The social network spent 30 pct of Q1 sales developing new products. That’s proportionately about twice as much as Google and 10 times the outlay at Apple. At 42 pct, top line expansion fell short of expectations. To keep it up, all the investment needs to bear fruit.
Petrobras $17 bln charge lances festering boil 23 Apr 2015 The long-awaited writedown puts a concrete figure on years of corruption and mismanagement. The number looks big enough to satisfy investors, but shows the Brazilian oil giant’s problems go well beyond graft. It’s a start toward rebuilding financial and political confidence.
Banker-bashing comeback in full electoral swing 22 Apr 2015 It’s not just in the UK, where voters hit the polls in May. Though the U.S. election is over 18 months away, the debuts of Clinton, Cruz, Paul and Rubio are already inciting the torch-and-pitchfork brigade against finance. Some barbs should worry Wall Street more than others.
McDonald’s serves up Earth Day nugget 22 Apr 2015 The fast food chain aims to end its role in deforestation, following agriculture giant ADM’s lead. Investors, whose pressure helped, are also alert to climate change and water risks. Such shifts boost the annual homage to the planet, but they are bite-sized appetizers at best.
Reeling oil titans fall back on familiar scapegoat 22 Apr 2015 Exxon boss Rex Tillerson and Conoco chief Ryan Lance slammed U.S. regulation during the industry’s big annual gathering this week. Even if there is a valid point or two to be made, busting out that old chestnut now is rich given the evidence of a recent surge in domestic output.
Whiskey heist proves potent for cybersecurity age 22 Apr 2015 An old-fashioned case of 200 missing bottles of prized Pappy Van Winkle bourbon, which Kentucky cops cracked on Tuesday, is almost refreshing in an era of daily digital theft. It was an inside job. Watching one’s own is as important and difficult as guarding against intruders.
Flash crash case suggests small can be systemic 21 Apr 2015 U.S. prosecutors have accused a UK trader of manipulating futures markets and contributing to a broader rout in May 2010. It’s a timely reminder of the limits of regulating risk. The lawsuit also shows how one person can have as much power as a big institution to stir a crisis.
GE Capital sale may be zero-sum TBTF game 21 Apr 2015 Shrinking the finance unit should allow GE to ditch its systemically worrisome tag. One possibility is Wells Fargo buying $83 bln of the assets, in deals that would surpass the comfort level of regulators for most bank M&A so far. And it would make one mega-bank even more mega.
Petrobras poised to extract itself from deep water 21 Apr 2015 Brazil’s state oil giant is set to announce delayed results and quantify the costs of corruption. Along with new bosses and financing, Petrobras may be ready to start emerging from its murky mess. Though there is more work to be done, its home country would benefit, too.
Circus deal risks becoming lunge at falling knife 21 Apr 2015 TPG and others are buying Montreal-based Cirque du Soleil at a $1.5 bln valuation. That’s over $1 bln less than the price secured by founder Guy Laliberté in an ill-fated 2008 sale to Dubai. Recent shows have struggled, though, and hoped-for Chinese growth could easily stumble.
Teva’s $40 bln hostile bid puts hope over reality 21 Apr 2015 The Israeli drugmaker needs a deal to shore up falling sales. Smaller rival Mylan offers that and oodles of synergies. A tie-up, though, would face antitrust concerns, require high leverage and have to get around a powerful poison pill. No wonder the market is skeptical.
Rob Cox: EU’s new trustbuster begins with a bang 21 Apr 2015 Since becoming Brussels’ antitrust chief, Margrethe Vestager has taken action against the twin monsters of the digital and energy worlds: Google and Gazprom. But her battles on the Eastern and Western fronts of market abuse may leave Europe’s M&A boom plenty of room to flourish.
Bond market shock wouldn’t trigger new 2008 21 Apr 2015 Thinning markets have led even Jamie Dimon to fret over what happens if investors are surprised. Bank exposure has fallen, while funds and ETFs have grown. Breakingviews explains why, despite the potential for price gyrations, lower leverage should help avoid another crisis.
Alliance Trust can do more to fend off Elliott 21 Apr 2015 The Scottish investment trust’s fight with Elliott Advisors has turned ugly. Embattled CEO Katherine Garrett-Cox has criticised the U.S. activist but barely parried its criticisms. Copying some of Elliott’s ideas - and tweaking her pay - would be a smarter defence.
Weak U.S. Q1 more a blip than reason to flip 20 Apr 2015 The New Year began with a shrug, as growth appears to have slowed from late 2014’s robust pace. The economy hasn’t felt the expected bump from cheap gasoline. Instead the shrinking energy sector provided a headwind. Look for signs of life this spring, from housing to spending.
Old age will get more unpleasant around the world 20 Apr 2015 Older populations and economic slowdown have put budgets out of whack globally. Tax increases and austerity alone won’t solve the problem. Governments will need to find ways to erode seniors’ benefits without succumbing to their voting power. It will be painful.
Morgan Stanley Q1 rivals Goldman by different path 20 Apr 2015 James Gorman’s firm had its best quarter in years. Its Wall Street competitor still has the edge with returns and book value growth. By one key metric, though, investors value Morgan Stanley more highly. Gorman’s strategy, which downplays volatile trading, is starting to pay off.
Volcker watchdog reform plan takes on sacred cows 20 Apr 2015 The former Fed chief and other gurus want to streamline U.S. financial-sector rulemaking and supervision, including merging the SEC and the CFTC. It’s business left unfinished by the Dodd-Frank Act of 2010. But there are long-standing political obstacles - and dangers, too.