Will the real Michelle Bachelet please stand up? 18 Nov 2013 After navigating Chile through the 2008 crisis she now wants another shot as president. But on education, tax and the constitution she wants to reverse factors that have allowed Chile to stand out from its neighbors. Striking a balance between business and students will be key.
Derivatives detail could sink bank wind-down plans 18 Nov 2013 American and European regulators want to standardize contracts to help cross-border banks fail smoothly. If the problem isn’t fixed, investors could undermine financial stability by calling in swaps. It’s a reminder of how much work still needs to be done to end too big to fail.
Geithner smartly passes on a big bank job, barely 18 Nov 2013 After 25 years of public service former Treasury boss Tim Geithner is finally set to make some money. Not at Goldman or Citi. He’ll work for private equity titan Warburg Pincus. He didn’t bail out that industry, but rules he helped craft have benefitted LBO-land.
GE finally puts Jack Welch era out to pasture 15 Nov 2013 The conglomerate is spinning off its North America retail finance business. The move helps return GE Capital to its roots lending to mid-market companies and its parent’s industrial units, spelling the end of GE’s mission creep under its ex-CEO. That’s good news for shareholders.
U.S. utilities want to rain on solar parade 15 Nov 2013 A lobby group says solar power may put $170 bln of utility revenue at risk. Meanwhile Elon Musk’s panel installer SolarCity could quadruple sales in two years, and solar ventures abound. No wonder a big Arizona utility is fighting back with a fee on citizens with solar panels.
Apple, Samsung won’t stop feuding until judges do 15 Nov 2013 The iPhone maker is retrying last year’s $1 bln patent win because jurors misread the rules. No wonder they were confused: America’s top IP court splits on even basic issues like what’s patentable, new research shows. Clearer legal guidance could give smartphone peace a chance.
Review: At Apple’s core, a fitting man of mystery 15 Nov 2013 Jony Ive is the British perfectionist who leads the U.S. tech giant’s design team. A new book shows his huge influence uniting form and function at Apple. But Ive the man remains largely hidden behind a screen that’s as obsessively crafted as any of the company’s gadgets.
Lower inflation can spur global growth 15 Nov 2013 The trend towards lower inflation rates is unlikely to end in massive global deflation. There may be a risk in the euro zone, but most disinflation is a healthy response to falls in oil and commodity prices. Consumers and growth will benefit. Policymakers shouldn’t panic.
Yellen channels her inner Bernanke before Congress 14 Nov 2013 In her first Senate confirmation hearing as nominee to lead the Federal Reserve, Janet Yellen was calm and composed. On policy questions, she argued the Fed’s actions were prudent without dropping any hints on the future. Markets may feel like Ben Bernanke never left.
Fannie, Freddie buyout offer too good to be true 14 Nov 2013 A group of investors wants to buy their insurance businesses. The offer of a takeover windfall might appeal. But the easy transition they promise and the need for no taxpayer backstop sound unlikely. The plan wouldn’t end the cycle of privatizing profit while socializing losses.
QE’s surprising beneficiaries: taxpayers 14 Nov 2013 That’s according to McKinsey, which reckons low interest rates saved western governments $1.6 trillion. Totting up winners and losers is hard, as we can’t know how economies would have fared otherwise. At least the study helps debunk the idea that money-printing only aids the rich.
Cisco spies bigger problems for techland 14 Nov 2013 The networking company blames fallout from the Snowden affair as one reason why its revenue is sliding – along with increased competition and emerging-markets weakness. Some damage is self-inflicted, but there’s enough concern for rivals to be looking over their shoulders, too.
Sotheby’s adopts car-crash defense to repel Loeb 14 Nov 2013 The auction firm’s contemporary art sale fell short of Christie’s. But hawking a $105 mln Warhol and an $83 mln diamond – plus boatloads of impressionists last week – provides much-needed sparkle. Activist investor Dan Loeb has made money, but his catty critique looks overdone.
JPMorgan’s tweet defeat reveals multiple failures 14 Nov 2013 A hasty retreat from a Twitter Q&A with banker Jimmy Lee after a barrage of snarky abuse suggests the bank doesn’t quite get the pros and cons of the human newswire it just took public. Worse, JPMorgan doesn’t seem to realize just how badly reviled Wall Street banks are.
Snapchat bid triples Facebook’s desperation 13 Nov 2013 Mark Zuckerberg’s social network shelled out $1 bln for no-revenue Instagram last year. Now it’s dangling $3 bln to a mobile application that sends self-destructing digital images. Facebook’s escalating need to buy off marauders at its moat suggests its defenses are scalable.
Speculation isn’t always a dirty word 13 Nov 2013 The U.S. derivatives regulator wants to curb market manipulation by capping some commodities trading. It’s the wrong approach, not least because it could reduce liquidity with limited benefits. Transparency and stronger policing of large positions are enough to do the job.
Peru swaps Brazil’s oil loser for China’s 13 Nov 2013 Petrobras is selling fields that pump about 16 pct of the tiny nation’s crude to PetroChina. Little distinguishes the two state-controlled titans. The inefficient Chinese group has lost $750 bln of market value in six years. Peru shouldn’t expect much of a partnership upgrade.
A trio of finance lessons from Bacon’s triptych 13 Nov 2013 The record-busting $142 mln sale by Christie’s of the artist’s set of paintings of Lucian Freud shows a contemporary art market in heady territory. The mind-boggling price paid for Bacon’s extraordinary work suggests three tenuous extrapolations for the broader world of money.
Starbucks can stomach Kraft $2.8 bln coffee jolt 13 Nov 2013 Howard Schultz’s coffee chain is paying dearly for breaking off a grocery alliance with the Cheez Whiz juggernaut and losing an arbitration case. Though a fat number, for Starbucks the penalty pales next to the benefits of bringing a fast-growing, high-margin business in-house.
U.S. trustbusters make skies friendly for lobbyists 12 Nov 2013 American Airlines and US Airways resolved antitrust issues with their merger by dumping slots at LaGuardia and Reagan airports. That should mean better service and lower prices for fliers. But the biggest winners may be paid schmoozers plying the Washington to Wall Street corridor.