Disney magic hasn’t exactly worked on Pixar 5 Aug 2013 “Monsters University” should enhance the company’s latest earnings, but a Breakingviews analysis suggests the animation studio’s value falls short of the $7.4 bln Disney boss Bob Iger paid in 2006. Pricey deals for Marvel and Lucasfilm may also disappoint investors over time.
U.S. jobs data entrench slow-growth economy 2 Aug 2013 July’s unemployment rate may have fallen, but the share of the population actually employed was flat. Moreover, the latest numbers confirm too many new jobs are either temporary, low paid or both. With growth and incomes also sluggish, an anemic recovery looks here to stay.
Flawed Dell compromise saves faces all round 2 Aug 2013 Letting the $24 bln buyout fade away would have hurt most shareholders, the board and the founder. But the PC maker’s worsening prospects left little room. A 2 pct hike in the offer price in return for a tweaked voting procedure won’t delight anyone but should seal the deal.
Boutiques, bulge bracket hit the other’s weak spot 2 Aug 2013 Moelis and Rothschild scooped the big bragging rights to this week’s $35 bln Publicis-Omnicom deal. But BofA, Morgan Stanley and others can at least feast on the bigger payday financing the $2.5 bln Saks takeover. That’s money the boutiques are leaving on the table – for now.
Mad Men bring the negative campaign to M&A 2 Aug 2013 WPP boss Martin Sorrell says Publicis-Omnicom is a lopsided merger that will lose staff and clients. Publicis’ CEO deplores “anxious” rivals. The unusual public sniping is entertaining. But as in advertising, that’s not really the point. Both sides have something to sell.
A Goldman minnow finally lands in the SEC’s net 1 Aug 2013 The jury verdict against Fabrice “Fabulous Fab” Tourre ends a losing streak at trial for the U.S. regulator. But the former trader played a minuscule role in Wall Street’s machinations during the financial crisis. The SEC’s win won’t absolve it from letting big fish get away.
U.S. Treasury fills watchdog hole, creates another 1 Aug 2013 Federal Reserve Governor Sarah Bloom Raskin is set to become Jack Lew’s right hand. Her regulatory chops make up for some of his deficiencies in the area. But her move will widen the gender gap on the central bank’s board just as President Obama is mulling chairman candidates.
Nothing sweet about charity as a legal penalty 1 Aug 2013 Allowing the likes of Facebook, Google and now Halliburton to settle cases by making non-profit donations doesn’t serve justice. Victims are denied compensation, while companies gain tax breaks and a do-gooder’s aura. U.S. courts shouldn’t let alleged wrongdoers off so easily.
Chesapeake’s new boss hits all the right notes 1 Aug 2013 Just weeks after replacing the energy group’s ousted founder, CEO Doug Lawler is off to a great start. He can’t take credit for beating Q2 earnings estimates or rising oil output. But his vision of simplifying the fiendishly complex creation of Aubrey McClendon merited applause.
U.S. GDP revisions flatter to deceive 1 Aug 2013 New accounting rules, mostly around R&D, have increased the estimated size of the country’s economy by 3.6 pct. Sort of. Among the many reasons not to use GDP as an indicator of prosperity is that it excludes depreciation. National income, which includes it, has hardly changed.
Exxon buyback cut deserves two cheers at best 1 Aug 2013 The oil giant is slashing its favorite method of returning cash to investors. That’s smart considering a 19 pct drop in Q2 profit and rising capex. But Exxon’s habit of buying back stock at peak prices suggests this is temporary. It’s an irrational policy the company should drop.
Why would anyone but Janet Yellen chair the Fed? 31 Jul 2013 Ben Bernanke may quit the U.S. central bank chair after his term ends in January. Vice Chairman Yellen ticks all the boxes. She has experience, brains and plays well with others. If judged by credentials alone, Yellen should be a shoo-in for central banking’s most coveted job.
Larry Summers may be best suited for a crisis 31 Jul 2013 Like other Fed contenders, Summers is a top economist with a career of public service, including calamity management for Mexico and Asia, where he pushed the limits of U.S. action. Should things go awry Summers is also unwedded to current policy and capable of finding a new one.
Fed’s court slapdown puts regulatory nous on spot 31 Jul 2013 Judge Richard Leon has ruled the watchdog’s 2011 cap on the $16 bln debit card business “utterly indefensible.” The Federal Reserve now carries the taint of both misreading the law and cozying up to banks. Harsh or not, it’s a position no regulator should risk putting itself in.
Facebook mobilizes back to square one 31 Jul 2013 The social network’s stock finally traded above the price set at its messy debut 14 months ago. Founder Mark Zuckerberg has made Facebook’s platform work on smartphones and tablets as his tech rivals flounder. Even so, he doesn’t deserve a thumbs-up from investors just yet.
Boring U.S. growth is here, clear, get used to it 31 Jul 2013 Second-quarter GDP increased at a 1.7 pct rate, fed by 2.2 pct private-sector expansion even as government shrank. Global growth is robust, though America’s slice is smaller. The steady but unspectacular results could cool stocks while bringing the Fed closer to cutting stimulus.
Edward Hadas: Detroit, decay and solidarity 31 Jul 2013 Who is my neighbour? That question is as relevant to the bankruptcy of Motown as the decline of the American car industry or incompetent city governments. If the suburbs lived up to their neighbourly responsibilities, Detroit would not be such a mess. It’s not too late.
JPMorgan case is more regulatory bark than bite 30 Jul 2013 Taking a $410 mln chunk out of the bank’s hide may be three times what traders gained from alleged electricity market manipulation. But the U.S. energy watchdog isn’t sinking its teeth into top executives as it did in a similar Barclays claim. Individual attacks are a better deterrent.
Obama’s corporate tax plan lacks solid foundation 30 Jul 2013 The U.S. president wants to end a congressional impasse by rewriting the tax code and using new proceeds to fix roads and bridges. Both ideas make sense; combining them doesn’t. Politically, it probably won’t work. Economically, better ways exist to fund infrastructure projects.
U.S. hospital M&A treats symptom not disease 30 Jul 2013 HMA agreed to sell itself for $3.9 bln at an odd moment. Shareholders are set to vote on whether to oust the board, the CEO is decamping for a Mormon mission and government scrutiny of its practices is growing. The deal looks hasty and may leave money on the operating table.