Chancellor: Buffett’s US optimism long-term valid 29 Feb 2016 In his annual shareholder missive, the Oracle of Omaha rejects arguments, by Larry Summers and others, that America has entered a period of “secular stagnation.” However, the Berkshire Hathaway chairman’s optimism looks misplaced for now thanks to distortive monetary policies.
Honeywell and UTC give tour of M&A sausage factory 29 Feb 2016 The potential $160 bln merger is worth $108 a share to United Technologies owners, maybe as much as $134. No, wait, it’s $101. Synergies add $40 bln of value. Or is it $23 bln? Maybe zero. Antitrust aside, the back-and-forth offers a glimpse into the messy process of dealmaking.
Amazon pantry raid should worry UK grocers 29 Feb 2016 The Seattle giant’s move into British fridges, via a deal with Wm Morrison, is starting modestly. Just 5 pct of UK grocery sales happen online, and profit is scarce. But Amazon has three things in its favour: size, a tolerance for low margins, and no pesky real-world stores.
Guest view: Financial storm conditions will worsen 29 Feb 2016 The disruption in international capital flows will only accelerate, says former Citibank exec Bill Rhodes, thanks to China’s slowdown, the continuing collapse of oil prices and diverging monetary policy. It’s going to be a rough ride for global markets and economies.
EU states could easily balk at data privacy deal 29 Feb 2016 Brussels’ agreement with the U.S. will tighten how Google, Facebook and others handle information. But the EU’s members need to approve it. American efforts to hack iPhones and otherwise relax restrictions on intelligence officials should make the bloc’s residents wary.
Valeant CEO back with less power and no glory 29 Feb 2016 Mike Pearson has returned from illness, stripped of his chairmanship. The $25 bln drugmaker also withdrew guidance and will further delay reporting 2015 results. Marginally better-looking governance isn’t enough to give investors like Bill Ackman hope of reversing losses.
Schwarzman’s riches mostly there for the taking 29 Feb 2016 The Blackstone boss pocketed a breathtaking $800 mln or so last year. Four-fifths of that came from dividends paid by the buyout shop to all owners. Gawking at Steve Schwarzman’s Croesus-like wealth may be good fun, but potential double-digit yields are openly for sale.
Buffett fancies himself exception to every rule 29 Feb 2016 The latest missive from Omaha hews to a familiar Oracle tradition. Asset-liability mismatches and unofficial accounting metrics get both mocked and embraced, just like investment bankers, derivatives and tech stocks before them. Homespun wisdom is for lesser investing mortals.
Oscars spotlight red carpet for Chinese investors 26 Feb 2016 Tinseltown’s glitziest night is on Sunday, where stars like Leonardo DiCaprio vie for the movie biz’s most prestigious awards. Healthy box-office sales of $11 bln last year belie looming challenges for some studios. Chinese investors are likely to get the runway treatment.
Elizabeth Warren to GOP: Do as I say, not as I do 26 Feb 2016 The Democratic senator has championed the president’s right to pick a new Supreme Court justice this year and the Senate’s duty to consider the nomination. Yet Warren has resisted confirming candidates for office with Wall Street ties. Next time she should take her own advice.
Scalia’s empty seat reverberates beyond Washington 26 Feb 2016 Dow Chemical is paying $835 mln in a decade-old lawsuit that was heading to the Supreme Court. The company decided the conservative judge’s death changed the balance of the outcome and settled. It’s a reminder that politics surrounding the top U.S. bench has real-world effects.
Paris accord weakens Exxon’s proxy defenses 26 Feb 2016 Last December’s UN greenhouse gas deal has led to an increase in shareholder resolutions on global warming, including at the $350 bln oil titan. Investors are striking while the iron is hot. It leaves energy companies with less power to resist demands for more information.
AB InBev’s thirst grows for SAB’s stronger ales 25 Feb 2016 The Budweiser brewer missed quarterly estimates as U.S. profit fell. Boss Carlos Brito may pass it off as a case of hiccups, but his stock’s 10 pct drop this year suggests broader challenges. It makes the $100 bln deal for better-performing SABMiller look all the more important.
IBM’s Watson figures everywhere but the figures 25 Feb 2016 Big Blue’s investor day focused squarely on a big bet on artificial intelligence. Software that interprets floods of data is becoming the next big thing. The hard part will be making it profitable. Years of effort have yet to produce a real financial result or forecast from IBM.
HSBC adopts the "just add Goldman" banking recipe 25 Feb 2016 The hiring of former Goldman Sachs executive Matthew Westerman coincides with a revamp of HSBC’s operations. Folding in hundreds of corporate clients from the commercial lender may accelerate cost cuts. But it also suggests second-tier investment banks are in for a struggle.
Restoration Hardware gives new excuse for failure 25 Feb 2016 The U.S. furniture retailer said sales slowed because of January’s stock market jitters. Given the high prices of Restoration products, it’s not far-fetched to believe its affluent customers have some sensitivity to the wealth effect. But this sounds like the new bad weather.
Trump shows even U.S. elections have money limits 24 Feb 2016 The Republican front-runner for president has spent $60 per vote, less than his party rivals. America still splashes out vast sums to woo its electorate. But there is some comfort that financial largesse alone cannot win the White House. Ironically it’s a billionaire proving it.
Argentina debt deal end of the beginning for Macri 24 Feb 2016 The country’s new president appears close to a $5 bln deal with holdout investors. Ending a decade of legal wrangling over the country’s defaulted debt would hand Macri an early win. But a public-sector strike over job cuts augurs a long road ahead to right the listing economy.
U.S. shale on rocky road to swing-producer status 24 Feb 2016 Saudi Arabia has ruled out oil production cuts. That suggests crude prices will stay low until enough shale drillers cut output or go bust. Brimming stockpiles and the ability to restart wells relatively quickly should keep supply flexible and any price recovery subdued.
Foreign minnows resist opaque U.S. penalties 24 Feb 2016 An Andorran bank has managed to erase its money-laundering black mark. Last year, the Chinese-backed owner of a U.S. wind-farm project won a settlement with D.C. over the secretive CFIUS group’s block on its activities. Overseas Davids can occasionally slay Washington Goliaths.