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.
Private equity finds egress easier than entrance 24 Jun 2013 Take Blackstone’s sale of Vanguard Health to rival hospital chain Tenet for $1.7 bln - the latest profitable cash-out. Steve Schwarzman’s firm more than doubled its money. Finding suitable investments – and companies that will accept private equity cash – is harder.
Supreme Court delays demise of racial preferences 24 Jun 2013 The U.S. justices told a lower court to rethink its approval of race-based affirmative action, but it’s time to move on. Class-based alternatives can create greater economic mobility with less resentment or legal scrutiny. The ruling is a chance to give them a bigger role.
Tesla obstructionists should be firmly resisted 24 Jun 2013 New York is the latest state where U.S. car sellers want to stop Elon Musk’s company selling directly to customers. The franchised dealership model is antiquated and expensive, as the woes of Detroit’s Big Three showed. Government shouldn’t stand in the way of Tesla’s innovation.
Microsoft’s bucket list needs more realism 21 Jun 2013 The software giant dreamed of “Windows everywhere” in its youth. Now, the firm seems to be racking up experiences while it still has strength. It has decided not to take on Amazon. But retail stores and smartphones remain on the cards. A narrower focus could prove more rewarding.
Congress not courts should cure Obamacare’s ills 21 Jun 2013 The U.S. healthcare act doesn’t need major surgery as it rolls toward full implementation, but it could do with some nips and tucks. Judges are hearing dozens of cases like this week’s test of certain tax credits. Such policy issues, however, are better handled by lawmakers.
Home equity help is better route to U.S. ownership 21 Jun 2013 The Federal Housing Administration is in a $16 bln hole thanks to a failed model of encouraging home-buying by allowing tiny down payments. A new proposal to match buyers’ savings to create a bigger slug of equity looks like a less risky way to subsidize the American Dream.
Review: What’s wrong with economics, anyway? 21 Jun 2013 In “The Origin of Economic Ideas” Guy Routh provides a witty and persuasive explanation of the original sin of the discipline: putting ideology first and observation almost nowhere. His book is almost 40 years old and economics has advanced, but the shadow of bad theory endures.
Bernanke should be international man of mystery 20 Jun 2013 The Fed chairman has embraced a far more communicative approach than his predecessors. The benefits, however, aren’t obvious. Based on the latest reaction in the markets, investors are parsing his comments as much as they did Alan Greenspan’s. Maybe fewer words would say more.
End of QE could create a healthy stimulus 20 Jun 2013 Ben Bernanke has upset investors with talk of lifting off the monetary gas. But the Fed chairman’s bond-buying accelerator has stoked markets for commodities and other assets more than GDP growth. Less acceleration could deflate energy prices and provide a broad economic boost.