UBS trial shows emptiness of "jail bankers" talk 4 Nov 2014 A jury acquitted the Swiss bank’s ex-wealth management boss of cheating the U.S. taxman. It’s the latest case of failing to tie finance industry chiefs to underlings’ misconduct. Yet Attorney General Eric Holder keeps hinting at Wall Street prosecutions. He’s wasting his breath.
U.S. trustbusters put the rage in arbitrage 4 Nov 2014 The DoJ sued to stop the country’s top two cinema advertisers from merging. Ensuing stock drops suggest M&A bettors were caught off guard in another blow to the business. Growing market doubts over other deals, like Comcast’s with Time Warner Cable, may reflect unjustified fear.
JPMorgan makes Citi’s forex excuse look a tad lame 4 Nov 2014 The bank run by Jamie Dimon revealed that U.S. prosecutors are investigating its currency business and that possible legal costs rose $1.3 billion over the summer. But unlike its rival, the lender hasn’t given reserves an emergency boost. That suggests Citi was playing catch-up.
End of U.S. QE is actually good for world economy 4 Nov 2014 Investors worry about the end of America’s quantitative easing but global consumers, especially the poor, can welcome it. The halt has helped make oil and food cheaper, lowering inflation. That will also keep interest rates down. In all, it may be more stimulating.
Virgin Galactic business model could still work 4 Nov 2014 After Friday’s fatal crash, Virgin will need to make new investments in its space programme. The start date for paid flights has been deferred. But if the safety issues can be overcome, the project might yet stack up commercially.
The U.S. could use a long-term marketing plan 3 Nov 2014 The tax code alienates companies and American expats, the legal system is turning off foreigners, and immigration policy is a mess. Yet the economic power of the United States is waning. It needs to start giving good reasons for others to stick with dollars and U.S. standards.
Music rally can shake off discordant Taylor Swift 3 Nov 2014 The 24-year-old pop star yanked her latest album and catalog from Spotify. The digital streaming service and its ilk offer low per-song royalties but subscriptions give labels higher margins than CDs or downloads. Buyer habits are also changing, even if Swift is stuck in 1989.
Rob Cox: Don’t blame the messenger, Jefferies 3 Nov 2014 Top brass at the $45 bln Wall Street firm peed in cups and chastised the press for writing about salacious charges against one of its rainmakers. The response is not exactly confidence-inducing behavior for a business built as much on trust as the assets on the balance sheet.
LabCorp deal tests positive for value destruction 3 Nov 2014 The firm that checks patients’ blood is paying $6.1 bln for clinical trial outsourcer Covance. The strategic logic is hazy. Shareholders’ financial diagnosis is damning, too. They swabbed some $700 mln off LabCorp as cost cuts fell far short of the 32 pct premium paid.
Publicis overpays with $3.7 bln digital takeover 3 Nov 2014 The French ad giant is buying U.S. digital specialist Sapient. The all-cash takeover comes at a big premium and with limited scope for synergies. This looks a value-destructive attempt to distract from Publicis’ faltering performance after its failed merger with Omnicom.
Bank synchrony hints at right kind of collusion 31 Oct 2014 In recent days, Barclays, Citi, Credit Suisse, Deutsche and RBS have socked away big sums for legal expenses, much of it related to forex rate manipulation. That suggests many U.S. and UK regulators are working together on a rare single settlement. It’d be good for all concerned.
Unfazed oil kings could make crude bulls bolt 31 Oct 2014 Exxon, Chevron and Conoco reported solid earnings and remained optimistic despite falling prices. Shale drilling, for example, is profitable at current rates. But investment cuts won’t hit other projects for a few years, making price rises unlikely. Investors may get antsy.
Review: No bets on Berkshire after Warren Buffett 31 Oct 2014 Lawrence Cunningham’s “Berkshire Beyond Buffett” argues the Oracle of Omaha has built a corporate culture that will ensure success after his departure. The book does a good job of cataloging Buffett’s portfolio. But it doesn’t make a strong enough case for investors to follow.
APEC summit shows value of calm and platitudes 31 Oct 2014 Obama, Xi, Putin and Abe will have much to disagree about when they meet with other national leaders in Beijing next week. The host city’s odd theatrics add to the awkwardness. But the fact that top people from around the Pacific want to show a united front helps keep the peace.
Citi’s legal misery better have some company 30 Oct 2014 Having to slash $600 mln from recently disclosed earnings because of new regulatory developments is an unwelcome surprise for investors. The bank blames fast-moving investigations. If rivals don’t follow suit, though, the excuse may not be enough cover for Citi’s top brass.
Starbucks Venti cup is half full 30 Oct 2014 Sales at the $60 bln coffee chain’s established locations increased less than expected. Even so, 10 pct revenue growth is a problem the likes of McDonald’s would love to have. Savvy marketing and smart acquisitions should help Starbucks keep pace with changing consumer tastes.
Regal movie chain could follow competitor’s script 30 Oct 2014 The largest U.S. theater group is considering a sale. Rival AMC is flush after being acquired by China’s Wanda in September 2012 and relisting in late 2013. For Regal, keeping up may cost more than 47 pct owner Philip Anschutz is willing to spend. It needs its own AMC sequel.
Friends of finance put to U.S. election test 30 Oct 2014 Two Republicans face unexpected threats this midterm season. As a Democrat narrows the gap against New Jersey’s Scott Garrett, a moderate is challenging Jeb Hensarling’s spot atop the financial services committee. Six years post-crisis, Wall Street’s taint may not have worn off.
Tim Cook’s pride may expand corporate talent pool 30 Oct 2014 The Apple CEO’s decision to speak publicly about being gay should help advance the march toward acceptance. As boss of the world’s biggest company by market value, Cook could inspire others, giving C-suites and boardrooms more choice. They could use it.
Sub-$100 oil will inflame geopolitical tempers 30 Oct 2014 Even with sharply lower crude prices, OPEC may not cut supply. Saudi Arabia, the lynchpin, can afford to run deficits. Not so Venezuela. Less pricey crude is painful for Russia, too. Oil at $80-plus per barrel will boost world growth, but it could make global tensions worse.