Skeptics have best of U.S. Ex-Im Bank fuzzy math 26 Jun 2014 Depending who’s talking, the export lender costs taxpayers $2 bln or earns $2 bln, is essential or aids just 2 pct of exports, and helps mainly Boeing or predominantly small businesses. Ex-Im is a political football more than a linchpin of trade, and its critics have the edge.
Biggest risk of geopolitics is as a distraction 26 Jun 2014 Fears that war and foreign policy chaos will disrupt the global economy have insidiously crept into the minds of investors, Barclays discovered. In reality, despite deterioration in the Middle East, the global balance is broadly positive. There are bigger things to worry about.
Barclays dark pool rap suggests little has changed 26 Jun 2014 New York’s top lawyer has brought a juicy lawsuit against the UK bank. Relying on whistleblowers, he alleges equity e-traders lied to clients to boost revenue, status and bonuses – all since 2011. It’s as if the hubris and poor ethics that led to the 2008 crisis never happened.
Supreme Court gets message on smartphone privacy 25 Jun 2014 The top U.S. tribunal has ruled the devices contain so much personal data that cops can’t search them without a warrant. It’s a huge victory for individual rights in an era of ubiquitous snooping. The graying justices have again defied doubts about their technological chops.
America oil export boost barely scratches surface 25 Jun 2014 The Obama administration is relaxing a decades-long ban on selling black gold abroad. But the move only affects ultra-light crude, a sliver of U.S. output. Allowing sales overseas of all oil would narrow the trade deficit and foster jobs. That, though, requires Congress to act.
Monsanto wisely picks introspection over inversion 25 Jun 2014 The $67 bln biotech seed company wants to increase investment and R&D, double profit by 2019 and is borrowing to buy back up to $10 bln in stock. M&A may still factor in its plans, but a tax-inspired mega-deal seems off the table. Monsanto has found a smarter way to grow.
AbbVie hints it can afford to pay more for Shire 25 Jun 2014 The U.S. drugmaker is marketing its $46 bln bid proposal direct to Shire investors. As bear hugs go, it’s soft. A price increase would have put more pressure on the target. AbbVie’s talk of material earnings gains in a deal implies a raise is possible – and may scare interlopers.
Five years is a long time for U.S. economy 25 Jun 2014 First-quarter GDP contracted at a surprisingly high 2.9 pct annualized rate in the final accounting, the biggest drop since early 2009. Back then, output, jobs, investment, trade and the markets were heading in a different direction. Rhyming economic declines aren’t all the same.
Aereo is dead, long live TV disruption 25 Jun 2014 The U.S. Supreme Court says the Barry Diller-backed streaming startup violates copyright law. Legal loopholes abound, however, and investors and viewers will reward those who find ways to exploit them. The likes of CBS and Disney can’t afford to spend much time celebrating.
Wall Street titans miss climate change opportunity 24 Jun 2014 Ex-Mayor Mike Bloomberg, former Treasury boss Hank Paulson and financier Tom Steyer have made a big splash with their Risky Business report on how environmental havoc may hurt U.S. prosperity. But the research so far lacks the financial heft to sway corporate bosses to act.
UK hacking verdicts could embolden Murdoch 24 Jun 2014 One of Rupert Murdoch’s key lieutenants, Rebekah Brooks, has been cleared of phone hacking. Another editor was convicted of conspiracy to hack phones, and he awaits verdicts on other significant counts. For now, Murdoch can savour the symbolic resonance of the outcome.
Rob Cox: Hollywood’s hopes in China rest on Youku 24 Jun 2014 The Chinese website streams 400 mln videos a day, making it Netflix, YouTube and Comcast stuffed into one dumpling. For all that, Youku loses money. Yet the interests of Tinseltown and the Chinese Communist Party may be converging around its business model.
Vertex offers niche prescription for pharma profit 24 Jun 2014 Proof that the biotech firm’s cystic fibrosis drug can help thousands of patients added more than $6 bln to its valuation. There’s no real alternative treatment, so insurers will pay. It’s another reminder that pharma’s future is in high-priced medicines for uncommon diseases.
Next stop: Siemens-Alstom train merger 24 Jun 2014 Losing the competition for Alstom’s power assets was a blessing in disguise for the German engineering group. It can now focus fully on its internal restructuring. Fixing the ailing train unit is crucial. Hiving it off to Alstom itself could well be the best solution.
Target for fixing Argentine bond mess looks small 23 Jun 2014 Handing $1.5 bln to leading holdouts from last decade’s restructuring is one thing, but repaying all remaining old bondholders could cost half Argentina’s $29 bln official reserves and upset creditors who took a haircut. Paying in bonds may help, but there’s limited wiggle room.
Aggrieved investors win by efficient market fail 23 Jun 2014 Halliburton and others can block group stock-fraud cases by showing a lie didn’t hurt prices, the U.S. Supreme Court ruled. That defies assumptions about how share value reflects public information and will curb some stockholder suits. Stronger cases, though, should deter deceit.
Oracle deal provides partly cloudy forecast 23 Jun 2014 In a way the $5.3 bln deal for Micros is a relief for shareholders. Even if it’s the start of an M&A binge, it’s not at a crazy valuation. Then again, longtime partner Micros is more an add-on than a way to supercharge Oracle’s effort in the cloud. That challenge remains for now.
Midwestern utility keeps cool in hot M&A summer 23 Jun 2014 Wisconsin Energy’s $5.7 bln takeover of overlapping Integrys will justify the 17 pct premium with cost cuts of only around 6 pct. More should easily be doable. The market-wide surge in mergers may have encouraged the deal, but no one in the Badger State is losing their head.
GE scores a Pyrrhic victory in France 20 Jun 2014 The U.S. conglomerate has won the battle for Alstom’s energy businesses. It saw off nemesis Siemens and reached a truce with a hostile French state. Yet here’s a paradox: this is a clearer victory for Paris and Alstom than for GE itself. And it’s not all bad for Siemens either.
Blackstone and Bain craft a crisis keepsake 20 Jun 2014 The private equity firms are taking public Michaels, eight long years after buying the U.S. art supply retailer for $6 bln. They pieced together cost cuts, growth, debt and a dividend. A 13 pct IRR won’t be their fondest memory, but the overall project is one for the scrapbook.