Even free marketers can get behind U.S. wage hike 6 Jan 2014 The matter of raising minimum hourly pay from a stagnant $7.25 is due a fresh hearing in Congress. One issue often lost in the debate is how retail and fast-food jobs can’t move offshore. Boosting incomes for such low-skilled workers would offset harmful effects of globalization.
Bondholders may be forced to fix liquidity crisis 6 Jan 2014 Investor appetite for owning, buying and selling debt is growing while Wall Street’s shrinks. Tapering and rate hikes will make corporate credit volatile and vulnerable. Investors need to support nascent e-trading platforms – or accept routinely being stuck with unwanted bonds.
John Malone deploys same old tricks against Sirius 6 Jan 2014 Liberty Media is offering $10 bln-plus to squeeze out the satellite radio company’s minority investors. They’d get a derisory 3 pct premium and perhaps better liquidity in return for non-voting Liberty stock with inferior prospects. Sirius shareholders should hit back.
Rise of e-payments leaves old guard in charge 6 Jan 2014 Square, Stripe and other startups are changing how Americans move money. They compete with many incumbents, but largely avoid fighting Visa and MasterCard. Using these networks is easier than replicating them. As cash use declines, the payment giants should be the biggest winners.
Monetary policy similarity outweighs divergence 6 Jan 2014 It looks like monetary policy is splintering around the world. The Fed will taper, while the ECB may have to add stimulus. Japan and the UK plan to stay where they are. But the variations hide a greater similarity: they are all still trying to push up growth with easy money.
Politics become less of a threat for investors 6 Jan 2014 In 2013, political news in the world’s big economies was basically positive for markets. The euro zone and U.S. budget crises waned, Abenomics trundled forward and China’s new leaders offered comfortable reforms. But the trend isn’t universal, and not firmly established anywhere.
Commodities set to distinguish themselves 3 Jan 2014 From gold to grain, raw materials will in 2014 trade less in line not just with equities, but each other. That’ll continue a trend started in the summer. Thank a calm euro zone and the prospect of a Fed taper. Commodity costs set by fundamentals, not fear, would be good for many.
U.S. utilities face German-style solar burn 3 Jan 2014 Solar power accounts for just 1 pct of U.S. electricity production, against 10 pct in Germany. But generators stateside are already feeling the heat and pushing for levies on solar panels. They’re keen to avoid the scorched profit seen at traditional Teutonic utilities like E.ON.
Double logic of $1 bln cyber deal reveals hotspot 3 Jan 2014 FireEye’s stock jumped 33 pct after buying Mandiant, a takeover that marries computer protection with attack response capabilities. Snowden’s revelations and data theft like Target’s should fan investor enthusiasm in 2014. So too will the continued appeal of smart acquisitions.
Rail crash shows why Dakota oil boom hard to match 3 Jan 2014 With no casualties, the fiery derailment of a crude-laden train will soon fade from view. But North Dakota’s mix of huge reserves and low population is rare. The Bakken shale’s sevenfold output surge since 2007 isn’t easily reproducible in places where people actually live.
The chilling echoes of 1914, a century on 3 Jan 2014 A rerun of descent into global war is really rather unlikely. But some of the danger of 100 years ago is present today. Late 19th century increases in tariffs helped to create competing blocs. A similar multi-polar economic world is now emerging.
Selfish behavior will propel sharing economy 2 Jan 2014 New matchmaking business models are thriving in large part by forging into gray areas of tax and regulation. The likes of Uber, Airbnb and Lending Club face growing scrutiny from authorities. Just as Amazon did, though, self-interest should inspire some canny maneuvers.
Stock surge stretches Fiat acceleration hopes 2 Jan 2014 Shares of the Italian carmaker leapt 15 percent after it secured an affordable way to take full ownership of Chrysler. The deal is good news and underpins an expected recovery in earnings. But investors are in danger of overpaying for the stock.
Chrysler deal gives Fiat a new year’s turbo boost 2 Jan 2014 Boss Sergio Marchionne comes out on top in the $4.3 bln pact with the union trust fund for the rest of the carmaker’s shares. It ends a messy dispute, avoids an IPO, doesn’t overtax the Italian firm’s finances and gives Marchionne more resources to get Fiat driving forward.
Small tech best placed to take on Big Brother 2 Jan 2014 The lesson from 2013: there are grievous flaws in security systems once thought virtually impenetrable. Companies and their data need better protection. With many big players compromised, small tech groups may step up and make a lucrative stand against surveillance.
Merck woes show animal drugs are no panacea 30 Dec 2013 Animal medicine, whether for livestock or pets, is booming. Pfizer’s spinoff, Zoetis, trades at a fat valuation premium. But controversy over Zilmax, Merck’s muscle-building feed additive, suggests that an increasingly complicated food chain comes with its own investment risks.
Time for Larry and Sergey to invest in journalism? 30 Dec 2013 Amazon billionaire Jeff Bezos is buying the Washington Post and eBay founder Pierre Omidyar is funding a new reporting venture. But take a look at the numbers, and few have made their money at the expense of the fourth estate quite as obviously as the Google guys.
Delaware and NY more different than meets M&A eye 30 Dec 2013 Most big deals are governed by one or other U.S. state’s laws. But as the likes of Tyson Foods have learned, it matters which. They differ on enforcing contracts, collecting damages and altering deadlines. A hasty assumption that they’re similar could bring trouble in court.
Oil’s new age of plenty challenges old assumptions 27 Dec 2013 Cheap shale, cheaper renewables, and increasing efficiency are creating a glut of non-OPEC crude, and bringing forward the peak of fossil fuel demand. Even if energy prices don’t fall sharply, there will be more volatility in oil prices, energy investments and geopolitics.
Brinksmanship to worsen with U.S. midterm election 27 Dec 2013 Congressional contests will make extremism more appealing to lawmakers than compromise. That means more gridlock, in which President Obama’s healthcare reform gets more attention than economic policy. Worse, the GOP minority’s only real leverage is the threat of default.