Bitcoin ETF signals time to make market in cash 2 Jul 2013 A virtual currency fund IPO means there will now be an index tracker for almost everything. Except that financial engineers have ignored the most important asset class of all. No more. Say hello to the Breakingviews Dollar Trust. It makes holding cash as easy as trading a stock.
Tribune’s TV deal should spawn repeats 1 Jul 2013 The $2.7 bln acquisition of 19 U.S. stations comes fast on the heels of Gannett’s plan to buy Belo. Such combinations offer healthy revenue synergies and often, as for Tribune, tax benefits, too. The industry’s programming thrives on copycats. It’ll be the same for TV M&A.
Student loan rate hike is a D.C. dysfunction bonus 1 Jul 2013 Congressional inaction means Uncle Sam-backed college borrowing costs double to 6.8 pct. That should curb the rapid rise of such debt, now at nearly $1 trln. It might even slow education inflation. It’s a rare case of useful policy that doesn’t require waiting for the Fed.
Hostile $10 bln biotech bid set to go far higher 1 Jul 2013 Partners Pfizer and Bayer are natural buyers of Onyx. But Amgen has jumped in first, sending the cancer drug specialist’s shares up more than 50 pct. Onyx’s position in the hot field, rights over multiple potential blockbusters and a wide field of bidders suggest a rowdy auction.
Remodeled MBA program makes good business sense 28 Jun 2013 UCLA’s Anderson school will no longer rely on California taxpayers. Filling the funding gap from revenue-generating programs and alumni gifts should restrain tuition cost growth. That may help woo students to degrees that lead to high-paying jobs and ultimately help the economy.
China’s corporate spying is three-cornered problem 28 Jun 2013 U.S. prosecutors could slap a $4.8 bln fine on a Chinese wind turbine maker accused of stealing code from a U.S. supplier. Such cases are on the rise. Corporate espionage often requires three factors: opportunity, pressure and rationalization. China has them all in spades.
IPO investors sober up as punch bowl drains 27 Jun 2013 CDW and HD Supply both were forced to slash their debut stock prices. Buyers had been lapping up new issues at a pace not seen in six years. Without the intoxicating effect of low rates, though, revenue-free startups and heavily indebted buyouts will be harder to serve up.
Investor imperative – get on top of bond duration 27 Jun 2013 Until now, only geeks worried about this measure of a bond’s sensitivity to changing rates. But if yields keep rising, duration will become a crucial indicator. For a start, it shows how the UK government is well prepared for the shift - and how the U.S. Treasury is vulnerable.
Peugeot family may hold key to European autos M&A 27 Jun 2013 Descendants of the French automaker’s founders may give up control for closer ties with General Motors, according to Reuters. Its U.S. partner may balk at a merger. But the family’s recognition that its time is up may help spur much-needed broader industry consolidation.
Chevron ruling could erode M&A home-court edge 26 Jun 2013 Allowing deal lawsuits to be forced into the preferred corporate forum may initially swell Delaware’s caseload. But the decision could also lead companies to bypass courts for arbitration. That would eat into investors’ rights - and perhaps the state’s business law supremacy.
Wall Street finds itself in a 1994 state of mind 26 Jun 2013 Back then a jump in rates inflicted mega damage. Goldman Sachs partners even had to recapitalize their firm. Bank bosses are confident today, saying they’re no longer holding inventory and ceded prop trading to hedge funds. If true, maybe they have regulators to thank.
Basel leverage fudge puts heat on Wall Street 26 Jun 2013 The Swiss-based global regulator has hit at U.S. banks more than euro peers in its attempt to harmonise leverage rules. Basel’s proposals stop American lenders offsetting derivatives. But by trying to steer a middle path it actually makes international convergence less likely.
Obama’s anti-carbon plan is more cost than benefit 25 Jun 2013 The president’s new pollution caps will probably just lead to increased coal exports, already at a record high, and lower industry profitability – but not to the intended goal of climate improvement. His $8 bln fund to clean up the fossil fuel is a better way forward.
Weil Gotshal may have first-mover advantage 25 Jun 2013 The powerhouse U.S. law firm is slashing the number of attorneys and the pay of partners. The cuts target weak practices and acknowledge a potentially structural slowdown in legal business. Banks have learned there are risks to such boldness. Weil, though, could come out ahead.
Snapchat’s valuation built on false assumption 25 Jun 2013 Mistakes last forever on the Internet. That’s why everyone from teenagers to traders have latched onto Snapchat’s app, which can send self-deleting pictures and videos. Problem is, it’s not foolproof – and the perception that it is could lead to even more embarrassing mistakes.
Brazil protests hint at Lula model’s deficiencies 25 Jun 2013 The former president, and successor Rousseff, took advantage of a commodities boom, but have overspent and tolerated too much corruption. Export prices have dropped, budgets need cutting and the people aren’t happy. Placating them with more handouts would worsen the problem.
Corzine lawsuit would be sad financial crisis coda 25 Jun 2013 The former MF Global boss is set to be sued over the broker’s 2011 failure, according to a report. He’d be the first Wall Street headliner targeted by a U.S. regulator. Without criminal charges, though, the case is a reminder of how watchdogs and prosecutors wasted the crisis.
Biased business rankings are better than none 25 Jun 2013 A panel of experts wants the World Bank to drop its Ease of Doing Business national rankings. The critics have a strong case - the criteria are biased and the weightings arbitrary - but the desire to show off, at home and abroad, does spur business-friendly reform.
Is Ben Bernanke wrong, or is QE impotent? 25 Jun 2013 Investors are upset, but why? They might just be “feral hogs”, trying to scare the Fed into abandoning plans to tighten money. They might fear tightening now will stop a weak recovery. Or maybe they think central banks don’t have “whatever it takes” to help the economy.
AIG buys itself some dividend payment insurance 24 Jun 2013 Returning capital to shareholders may hinge on divesting aircraft lease unit ILFC. The $4.2 bln deal with a Chinese group is wobbling, so AIG is prepping alternatives. Choppy markets could make an IPO tough but values also have jumped. A Plan B looks doable if time-consuming.