Obama’s nuclear gift to Modi is shrewd investment 26 Jan 2015 The U.S. president has unblocked a stalled nuclear power deal with India, allowing Prime Minister Narendra Modi to build new reactors. While that will boost orders for GE-Hitachi and Westinghouse, bigger gains to the U.S. economy will come from ending India’s energy deficit.
More Wall Street CEO cash is hint for shareholders 23 Jan 2015 JPMorgan is paying a portion of Jamie Dimon’s bonus in hard money for the first time since 2011. Goldman is boosting Lloyd Blankfein’s cash. Meanwhile, stock gains are slowing. Bank bosses still get most of their comp in shares. But the switch may suggest equity has less to offer.
Capital One slips on Main Street bank victory lap 23 Jan 2015 A slew of mid-sized lenders like BB&T, U.S. Bancorp and PNC beat fourth-quarter estimates as Wall Street giants faltered. Capital One, though, fell short as loan loss provisions rose. Though small, it’s a sign that an industry slowdown may be more likely than an earnings boom.
Review: The Mad Men are watching you 23 Jan 2015 A lot happens in a split second online, much of it good for the ad industry but worrying for privacy advocates. Instant auctions to push tailored ads to individuals are growing fast, says “Targeted” author Mike Smith. The ad men will need ever more personal data to fuel them.
Siemens faces big oil deal debacle 23 Jan 2015 The collapsing oil price turns the German engineer’s dash for shale into a costly blunder. Its $7.6 bln September bid for U.S. oilfield kit maker Dresser-Rand will stain CEO Joe Kaeser’s reputation. With shares of Dresser’s peers clobbered, a major impairment is looming.
Google fans flames of wireless price war 22 Jan 2015 The search giant plans to sell relabeled service from Sprint and T-Mobile US. This virtual carrier is a cheap way to intensify the battle for customers raging between these two, AT&T and Verizon. Consumers should benefit – Google, too, if it can avoid getting burned.
Oil billionaire pumps Kinder Morgan for tidy gain 22 Jan 2015 Continental boss Harold Hamm sold Hiland Partners, his private pipeline firm, to its giant rival for $3 bln. That ends a conflict arising from his initial stake in Hiland and covers his $1 bln divorce. Kinder, meanwhile, gets a prized – if pricey – foothold in the Bakken shale.
RBC’s foray south a pricey bet that two’s a charm 22 Jan 2015 The Canadian bank is paying $5.4 bln for U.S. lender City National, a 26 pct premium that planned cost cuts don’t justify. The so-called banker to Hollywood stars is growing well. But RBC’s last venture into American retail banking was a mess. It needs to prove it can do better.
Portuguese scandal breeds oddest of M&A activists 22 Jan 2015 The $9 bln sale of Portugal Telecom’s old domestic unit to France’s Altice is at risk. The unlikely foe? The lawyer who runs PT’s own investor meetings. Resistance to the deal is understandable after PT’s history of bad management. But halting the disposal would be self-sabotage.
Modicare may add to big pharma’s Indian gripes 22 Jan 2015 The Indian prime minister plans to launch a universal healthcare scheme on a tight budget. That bodes ill for efforts to improve patent protection. Despite pressure from Barack Obama and big drugmakers, it will be tough to shake India’s addiction to cheap generic pharmaceuticals.
Economic reality could upend Fed message, too 21 Jan 2015 Following last week’s Swiss upset, Canada’s central bank set investors spinning again. The oil price-inspired rate cut from Ottawa seems out of step with stable inflation. But it shows how changing conditions could yet make the Fed’s careful expectations management look futile.
SEC-Harvard board clash is music to investor ears 21 Jan 2015 A commissioner at the watchdog raised the stakes by calling the university’s shareholder-rights advocates deceptive. Dozens of professors howled, while former SEC lawyers jumped to the official’s defense. Catty tone aside, it’s a corporate governance debate that needs to happen.
Canada’s shock rate cut hurts global risk appetite 21 Jan 2015 First Zurich, now Ottawa. Days after the Swiss central bank abruptly reversed a cornerstone policy, the Bank of Canada upended market expectations with a 25 bps easing. The Canadian dollar plunged. Unpredictable policy generates volatility and fear, hurting economic prospects.
SpaceX satellite dream is throwback to 1990s 21 Jan 2015 Google is investing in Elon Musk’s company, which is planning a broadband network of 4,000 satellites. The pioneering Teledesic tried something similar two decades ago but failed. Falling costs and rising demand have changed the equation. But SpaceX could still be too early.
Rob Cox: Davos badly needs a Henry Ford moment 21 Jan 2015 The widening gap between the Capital Class and the rest threatens global prosperity. Ford was a pioneer at voluntarily paying employees more, as U.S. insurer Aetna did last week. The great American auto entrepreneur would also have applauded Obama’s plan to tax workers less.
Old M&A dogs try old tricks with new activist fund 20 Jan 2015 Former JPMorgan CFO Doug Braunstein and lawyer Jim Woolery have collected $250 mln and a CEO network to kick-start a fund to buy small stakes in companies and persuade them to do value-enhancing deals. The question is whether there’s room for permanently well-mannered activism.
Former Peltz adversary comes full circle at Pepsi 20 Jan 2015 At the activist’s behest, the beverage and snacks group has agreed to put Bill Johnson on its board. The former Heinz boss tussled with Peltz in 2006 but later became an adviser to his Trian fund. The rare turnaround shows why even activists should win friends, not make enemies.
Obama’s tax plans are good, bad and ugly 20 Jan 2015 It’s hard to argue against the U.S. president’s proposal to close a big capital gains loophole. And measures to encourage work and savings make sense. But more college subsidies heighten an already big financial risk and a tax on big bank borrowing brings the wrong incentives.
Fixing Brazil’s economy is a marathon not a sprint 20 Jan 2015 President Dilma Rousseff’s new economic team has started fast off the blocks, pledging more belt-tightening and less government meddling to reassure investors. There’s a long haul ahead, however. The risk of Rousseff losing steam as the going gets tough can’t be discounted.
Morgan Stanley rains on its own parade 20 Jan 2015 The Wall Street firm was progressing nicely in the first nine months of 2014. A dismal fourth quarter, though, exposed cracks that boss James Gorman still needs to fix. Hitting a 10 pct ROE this year may be possible, but could require the Fed’s helping hand on capital return.