Rob Cox: Wall Street in grip of Geithner nostalgia 2 Dec 2014 When the former U.S. Treasury boss made a surprise visit to a recent gathering of bank CEOs, the warm welcome he received could be misinterpreted as appreciation for an old softy. In fact, it was recognition that the current regime doesn’t have its heart in financial regulation.
BNY Mellon learns activist lesson from its rival 2 Dec 2014 The $45 bln bank founded by Alexander Hamilton has given Nelson Peltz’s firm a board seat. State Street outperformed after the billionaire investor challenged management in 2011. Making his Trian partner a director spares BNY Mellon a proxy fight and could lead to similar gains.
Chipmaker merger of equals may grapple with bugs 2 Dec 2014 Cypress and Spansion are uniting in a $4 bln deal with a balanced structure. Ownership and the board will be split evenly. Cypress, however, is paying a small premium and keeps the CEO and headquarters. The financial logic computes, but control usually ends up a feature in M&A.
Tax credit gridlock may bring about needed reform 2 Dec 2014 With the U.S. Congress poised to make some business tax exemptions permanent, the White House is promising a rare veto unless it includes credits for low-income families. Though the private sector may mourn its breaks, this failure could lead to a proper tax code revamp in 2015.
Japanese drugmaker strikes yet another costly deal 2 Dec 2014 Otsuka’s $3.5 bln purchase of Avanir prolongs a track record of overpriced M&A for Japan’s pharmaceutical firms. Granted, the company needs new offerings before the patent expires next year on its blockbuster schizophrenia drug. But this transaction smacks of desperation.
M&A hackers attack on new front with old weapons 1 Dec 2014 A cyber group probably seeking a trading edge is targeting deal-prone pharma companies and advisers like lawyers. What’s striking, as in many more sophisticated hacks, is the basic mistakes people make to let the intruders in. It’s one more worry for the merger-minded.
Oil plunge mirrors 2008 surge, but will endure 1 Dec 2014 A chart of Brent’s 40 pct slide since June looks like the reverse of the spike preceding the financial crisis. Then, crude fell back in short order. A quick return to steadier prices is unlikely today. It will take months before U.S. output shrinks enough to squeeze supply.
Chinese tycoon stirs memories of old Hollywood 1 Dec 2014 Billionaire Wang Jianlin is interested in buying Lions Gate, the $5 bln “Hunger Games” producer. That would put a studio under Dalian Wanda’s roof with cinema chain AMC. Such integration was the norm until deemed anticompetitive in 1948. Tinseltown does love its remakes, though.
Black Friday will leave many stores feeling blue 28 Nov 2014 The day kicks off what will be a robust U.S. shopping season. Lower gas prices are putting about $180 mln a day in consumer pockets. More Americans are employed and under less pressure to pay down debt. But zombie retailers suffering from online competition won’t find a cure.
An energetic financial innovation worth nurturing 28 Nov 2014 New York’s $1 bln Green Bank, led by former Wall Streeter Richard Kauffman, is partnering with the private sector to fund clean energy projects. Through securitization it may help investors fund small-scale ventures. The full mark of its success will be its gradual disappearance.
Review: The shirk ethic – a user’s guide 28 Nov 2014 Work can be seen as a blessing or a curse. In “Empty Labor,” Roland Paulsen examines people who take mostly the latter view, asking how and why they shirk, and whether it’s always a bad thing. His study of idleness on the job is enlightening, amusing and sad.
Faulty air bags puncture Takata financial cushion 27 Nov 2014 The Japanese group has set aside $660 mln to replace car parts linked to at least five deaths. Regulatory demands for a US-wide recall could double the bill. Lawsuits and fines will mean more pain. Takata’s survival may depend on the support of its customers – or the government.
Bank misdeeds show lack of "should we" 26 Nov 2014 A Citi analyst settlement and a probe into an HSBC hedge fund leak aren’t about grey areas. The alleged transgressions break clear rules. As in a recent experiment reported by Nature, they betray bankers’ tendency to eschew what they should do for what they can get away with.
Wells Fargo: first big bank simple enough to fail 26 Nov 2014 The $1.6 trln lender secured a provisional stamp of approval from regulators for its living will. Less credible plans from 11 other titans suggest size isn’t the issue. Wells ranks fourth in assets and first in market cap. The real problems are complexity and interconnectedness.
Rob Cox: American banking has its own Tea Party 25 Nov 2014 Like the anti-establishment wing of the GOP, the Independent Community Bankers of America has emerged as a highly vocal opponent of all things Wall Street, including a Lazard banker’s nomination for a Treasury role. These are the plaintive cries of a dying breed of banker.
United Technologies endures irrelevant CEO 25 Nov 2014 Louis Chenevert decamped abruptly from the $100 bln conglomerate without explanation. Unlike with many other corporate shakeups, including Sotheby’s last week, its stock hardly budged. UTC may yet be put on the defensive, but having a dispensable boss is a sign of strength.
U.S. spectrum auction raises ghost of 3G sales past 24 Nov 2014 Bidding on a big chunk of U.S. bandwidth has passed $35 bln – and the sum is still climbing. The previous biggest total was $19 bln. The auctions’ cloaked nature makes it hard to tell exactly what’s driving prices. But history suggests the frenzy could bring a financial hangover.
AT&T scrambles signals on smartphone privacy 24 Nov 2014 The U.S. telco wants clearer limits on government access to location data but won’t push for a requirement that enforcers get warrants. The mixed message matches the regulated firm’s history of cooperating with Washington. As tech rivals resist Uncle Sam, though, AT&T looks weak.
Certain gridlock offsets Obama’s immigration move 21 Nov 2014 Coaxing 5 million undocumented immigrants out of the shadows could provide an economic boost, generating tax revenue and jobs. But the executive action virtually ensures Republicans won’t compromise on other priorities like tax reform, infrastructure and trade. It’s a wash.
Aviva’s Friends tie-up is far from done 21 Nov 2014 The UK insurer wants to buy its peer for 5.6 bln stg in shares, bulking up in its challenged home market. For a 15 pct premium, Friends would get a surer future. Aviva gets some cash flow. Yet Friends’ entrepreneurial backers add complexity - and it may attract an interloper.