Shale gas could blow up U.S. politics 27 Oct 2014 It’s playing a big part in upcoming midterm elections. Coal’s downfall is an important issue in one race that could swing the Senate Republican. Obama’s “war” on the dirty carbon is real, but so are market forces. Fracking-related jobs and manufacturing could rock future votes.
Google makes U.S. trade arbiter look patently daft 27 Oct 2014 The search giant says an International Trade Commission ban on imports of infringing items in digital form may disrupt the internet. Moreover, websites and cloud computing firms could become easier prey for patent trolls. It’s up to an appeals court to squelch ITC excesses.
Chiquita inversion slips on cash appeal 27 Oct 2014 The banana company’s shareholders voted down a stock deal to acquire Irish produce distributor Fyffes, a decision that now points to a sale to Brazilian buyers. Ailing arbs, a crackdown on tax-driven M&A and economic ructions didn’t help. The path of least uncertainty wins again.
Anglo-American alliance bears down on bankers 27 Oct 2014 UK and U.S. supervisors agree bonuses should be deferred, serial-offending firms broken up and individual misconduct industrially logged. European regulators may have other ideas. But transatlantic harmony is a step towards these ideas being solidified as post-crisis policy.
More Dilma Rousseff will be no carnival for Brazil 27 Oct 2014 Unless the re-elected president makes big policy changes, government bloat and meddling will bring stagnation and more inflation. The danger is that Brazil starts looking much more like near-defaulters Argentina and Venezuela than growth economies like Bolivia or Ecuador.
Apple’s promise justifies return to old big self 24 Oct 2014 The iPhone maker’s $615 bln market capitalization is nearing its own record of two years ago, which eclipsed Microsoft’s peak valuation before the dot-com bust in 2000. This Apple share-price runup may not go far enough. But there’s no bubble fantasy math involved if it does.
Duracell jolt highlights the value of focus at P&G 24 Oct 2014 Investors were energized by the consumer-goods giant’s plan to offload its struggling batteries arm. Spinning off a low-growth commodity business won’t create much value on its own. But it’s a solid step in boss A.G. Lafley’s campaign to simplify the sprawling $225 bln firm.
Review: World needs agreed ground rules for peace 24 Oct 2014 Henry Kissinger’s “World Order” bemoans the lack of one, as the West’s prevailing approach of nation states with limited conflict isn’t reflected in non-Western traditions. However the Vienna Congress innovation allowing intervention only to protect stability might work better.
Zuckerberg’s Chinese chat leaves CEOs tongue-tied 24 Oct 2014 The Facebook founder surprised and delighted a Beijing audience by answering questions in Mandarin. His linguistic skills probably won’t make the social network any more welcome in the People’s Republic. But other corporate chiefs could learn from his efforts to friend China.
Amazon’s ambition outruns its cash flow 23 Oct 2014 The online retailer’s 20 pct sales growth in its third quarter was slower than expected, and its $437 mln loss was an ugly record. The firm’s voracious need for investment is a problem. CEO Jeff Bezos’ vision may be limitless, but his company’s ability to finance it is not.
U.S. mortgages sputter on demand more than supply 23 Oct 2014 Plenty of home loans are available, industry data show. But a lukewarm economy has made potential borrowers skittish. With the likes of ex-Fed boss Bernanke complaining about getting turned down, blaming stingy banks is easy. It’s the other side of the equation that needs work.
Air-bag recall poses carmaker valuation challenge 23 Oct 2014 Supplier Takata’s faulty devices have sucked $6.5 bln from Honda’s market cap. Dodgy ignitions helped dent GM’s by $16 bln. Automakers can overcome such woes, as GM’s Q3 earnings imply. Increasing automation adds a new dimension to the risk, making it even harder to quantify.
M&A boom puts Lazard earnings goal in sight 23 Oct 2014 The Wall Street firm’s Q3 results show boss Ken Jacobs short of his 25 pct margin target for the year. Getting there requires a fair drop in pay in the final quarter. But rising revenue from the urge to merge should allow him to balance the interests of bankers and shareholders.
Robots may spell "Control-Alt-Delete" for workers 23 Oct 2014 Researchers think automatons could displace half of all existing U.S. jobs. If that happens rapidly, it could push humans into a strife-torn future in which lack of wage income hobbles prosperity even in capable societies. Yet governments can make the transition less stressful.
U.S. central bank can do without higher inflation 22 Oct 2014 One regional Fed boss worries CPI is below the institution’s 2 pct target. Yet EU-like deflation fears don’t travel. American prices are up an average of almost 2 pct a year since the crisis. And measures of future inflation expectations are still close to the target, too.
Drones and lawyers could give each other a buzz 22 Oct 2014 Unmanned aircraft need help navigating rules that have grounded commercial flights. Law firms could use a boost against earnings headwinds. With Morrison Foerster and others touting drone expertise, the two industries’ potential for mutual assistance may be more than hot air.
Brazilian challenger offers reform without clout 22 Oct 2014 An ambitious agenda is helping Aecio Neves give President Rousseff a run for her money. But without more allies in Congress, his platform of lower deficits, slower wage growth and higher gas prices looks unrealistic. Keeping the economy steady may be the most he can deliver.
Tesla may get last laugh on Michigan protectionism 22 Oct 2014 The home to GM, Ford and Chrysler revised a law to ensure the electric carmaker can’t sell directly to customers. It’s a rich decision for an industry with a history of lobbying for freer trade. A groundswell against the farcical dealer model, however, should in time win the day.
Hunt life lesson: Ideology and business don’t mix 22 Oct 2014 The right-wing beliefs of Nelson Hunt, dead at 88, colored his judgment on 1970s policies and led him to buy silver. An attempt to corner the market blew out when the Fed tightened money. Hunt’s failure showed why billionaire politics are best limited to funding candidates.
Amgen boss makes a prime breakup target 21 Oct 2014 Former Morgan Stanley banker Robert Bradway runs the $109 bln biotech being eyed by activist Dan Loeb. Splitting into a cash cow and a growth arm comes up often in the industry but rarely happens. In Amgen’s case, its drug focus and the CEO’s background give the idea a chance.