One crime in SAC probe is letting snitch go free 27 Nov 2012 An ex-trader at Steve Cohen’s hedge fund firm faces criminal insider-trading charges. But the doctor who allegedly gave him secret data won’t, after agreeing to help prosecutors. Flipping suspects to land bigger game is standard. Going easy on serious wrongdoing shouldn’t be.
What do bullish investors see in Argentina? 27 Nov 2012 Latin America’s third-largest economy is losing a debt restructuring battle with hedge funds, faces questions about its ability to stay solvent and suffers from mounting domestic discontent. But some investors reckon Argentina’s plentiful energy reserves offer a ray of hope.
Lehman’s Archstone saga twists till the end 27 Nov 2012 The U.S. apartment empire that buckled the investment bank is being sold to two rivals for $6.5 bln. Accounting changes and poor disclosure muddle the valuation. Lehman creditors also will be left investing in the real estate. It’s a perfectly confounding denouement.
$5 bln of delayed gratification better than none 27 Nov 2012 Boardroom egos often hamper deals that can benefit investors. Ralcorp flipped suitor ConAgra the bird a year ago. With the formerly reluctant chairman running a spin-off, the food producer is now selling at a price it could have negotiated before. At least it got a second chance.
Ben Bernanke is no holiday price Grinch 26 Nov 2012 Easy money hasn’t made turtle doves and other “Twelve Days of Christmas” gifts much pricier. The cost is up a below-average 2.6 pct, excluding swans. Thanksgiving was under 1 pct more expensive, against a rise in the U.S. CPI of 2.2 pct. There’s no inflation to unwrap this year.
Obama’s got 99 problems and the SEC isn’t one 26 Nov 2012 It’s a shame, but how else to assess the choice of Elisse Walter to run Wall Street’s watchdog? Picking a bureaucrat reflects Obama’s need to conserve political capital for bigger fights on fiscal issues and his cabinet rather than attempting an upgrade of the SEC’s import.
Conoco’s $5 bln Kazakh sale is the easy part 26 Nov 2012 The U.S. oil giant’s investors should be happy to see the costly Asian project go. The cash also will help fund lavish capex plans and the generous dividend. But Conoco’s real chore is to prove it can boost sluggish output while retreating from promising, if risky, regions.
Obituary: Ewing was archetype of Reagan-era excess 26 Nov 2012 No American executive better embodied the anti-regulatory fervor and cutthroat ambitions of the 1980s than the former Ewing Oil chief. After an assassination attempt and two dark decades following the Texas oil bust his legacy was revived by, and lives on in, today’s shale boom.
Worry over state-owned acquirers may be overdone 23 Nov 2012 Canada’s prime minister, mulling CNOOC’s bid for Nexen, is skeptical of firms controlled by foreign governments. The fear is their motives are more than commercial. But evidence from nearly 200 deals suggests that if state buyers have a hidden agenda, they aren’t paying for it.
How about Mitt Romney for Treasury Secretary? 23 Nov 2012 The beaten Republican candidate certainly has the right resume, and a re-elected Obama will need a new finance chief. Markets would celebrate the pick as a shocking pivot towards bipartisanship. But neither man may have the restraint to keep from wringing the other’s neck.
HP’s accounts bombshell: a guide for the perplexed 22 Nov 2012 The U.S. tech group says it was duped into overpaying for Autonomy. The $9 bln row centres on three allegations relating to how the UK group presented its sales. Unpick them, and HP has work to do to show Autonomy went beyond being aggressive in its accounting.
Market limbo gets another extension 22 Nov 2012 China’s manufacturers have reported expanding output for the first time in more than a year. Data also show the U.S. recovery continues. These are big pluses. But a plunge in German services indicates the world is running on two out of three engines. European slowdown and the U.S. fiscal cliff will keep markets on edge.
A Hewlett-Packard primer on how not to do a deal 21 Nov 2012 A $12 bln acquisition at a 64 pct premium should involve more due diligence than looking at public financial statements. Don’t ignore your CFO if she thinks the price is way too high. And never buy anything from Frank Quattrone. Breakingviews sketches out the don’ts.
RBS’s Citizens unit all dressed up, nowhere to go 21 Nov 2012 The U.S. bank, with its $120 bln balance sheet, is a prize asset. That should mean a bidding war if UK taxpayer-owned RBS sells it. But the need to pay cash, keep their own investors happy and satisfy watchdogs may give buyers pause. Citizens could remain foreign for a while.
Disney chief’s unlikely fairy godfather: Murdoch 21 Nov 2012 With News Corp snapping up a piece of the Yankees TV network, Bob Iger’s battle with Rupert Murdoch is becoming more intense. But News Corp’s rich price for the deal implies a punchy valuation for Disney’s much-coveted ESPN. That could make the whole Magic Kingdom worth more.
Ethical economy: Candidates as consumer products 21 Nov 2012 Supermarket-style data mining was one key to Obama’s victory. The skill is undeniable, but governance is hurt by this manipulative approach to opinion-forming and opinion-following. Scientific electioneering only worsens the problems caused by money and “magical thinking”.
HP’s Autonomess should devour Marc Andreessen, too 20 Nov 2012 The Silicon Valley visionary behind Netscape goaded Leo Apotheker, the CEO he recruited to HP, to bet big on Autonomy as part of his “software eating the world” thesis. Andreessen was also integral to the value-destructive Palm deal. HP’s board would be better off without him.
Enforcers keep on casting for biggest SAC fish 20 Nov 2012 The feds hit Mathew Martoma, an ex-trader at Steve Cohen’s hedge fund firm, with criminal and civil insider trading complaints. They say he directly urged his boss to trade, helping make $276 mln. But if they hope Martoma can assist them in landing Cohen, they’ll need to deal.
JPMorgan CFO rejig leaves only Dimon unpunished 20 Nov 2012 Promoting Marianne Lake ticks several boxes. It sidelines another top dog, Doug Braunstein, who failed to spot the London CIO mess; adds another woman to the c-suite; and restores the CFO’s place in the hierarchy. Clawing back some of Dimon’s pay would at last harpoon the whale.
Baseball is due to face a financial curveball 20 Nov 2012 Rupert Murdoch is buying into the New York Yankees cable network at a Ruthian EBITDA multiple. Player salaries and ticket prices have surged at triple the rate of inflation over 20 years while franchise values are at 42 times operating income. These diamonds aren’t forever.