Spain cannot afford to be complacent 7 Apr 2011 The country has persuaded investors it is not part of the euro zone's troubled periphery. But Portugal's bailout puts it back in the spotlight. Prime Minister Zapatero should use his final months in power to push through more structural reforms, and sort out the financial system.
SEC needs to pull out stops with Buffett’s deputy 6 Apr 2011 Any reasonable lay reading of how David Sokol bought and sold Lubrizol shares shows a violation of the spirit of insider trading rules. Yet lawyers consider the situation a fuzzy one. If a case isn't attempted, it will make a mockery of U.S. law, the securities watchdog, or both.
U.S. could benefit most from Colombia trade deal 6 Apr 2011 A new deal on labor has unblocked the path to U.S. ratification of the two nations' free trade agreement, which has languished since 2006. The FTA may come just in time: China and others are courting the emerging, commodityrich Colombia and America's trade lead is under threat.
Commerz’s 8 bln euro cash call helped by state aid 6 Apr 2011 The German bank's biggerthanexpected rights issue allows it to turn 11 billion euros of state capital into proper equity. But the government is helping by speeding up the process and by allowing Commerzbank to aim for a lower capital target than some European rivals.
Republican budget should spur Obama counter-offer 5 Apr 2011 By massively cutting healthcare spending, Rep. Paul Ryan's blueprint would quickly reach primary balance and pay off the federal debt by midcentury. It's not a longterm plan the president would ever support. But it should galvanize him into preparing a credible plan of his own.
Asian bourses can afford independence 5 Apr 2011 Australia is blocking the Singapore Exchange's $7.8 billion bid for ASX. Fortunately, each enjoys growth which underpins independent prospects. Though there is industrial logic in mergers, political and corporate realities mean that the Asian exchanges may remain unconsolidated.
ECB rate hike: better now than later 5 Apr 2011 The ECB is likely to raise its key interest rate this week, the first major central bank to do so postcrisis. It could constrain growth in the euro zone and make things harder for periphery countries. But with inflation looming, now is the right time to act.
Fed needs to treat markets like a serious addict 4 Apr 2011 Rate hike talk is in the air. Yet, the central bank is still injecting money directly into the financial system's bloodstream. Current policy would have markets go cold turkey after June, but there's still time to tweak QE2 to minimize disruptive withdrawal symptoms.
Obama’s biggest 2012 obstacle: income, not jobs 4 Apr 2011 As the president kicks off his run for a second term, the issues battlefield is shifting. Although job growth is slowly returning, worker wages are still stagnant. As a result, income growth may emerge as the critical economic factor in the 2012 race for the White House.
Buyout barons could help pay for U.S. tax reform 4 Apr 2011 Looking to offset the budget cost of lower corporate rates, Congress may alter the treatment of publicly traded partnerships. That might mean a bigger tax bill for Blackstone, Fortress and Apollo. Recent efforts to make firms pay more have failed but this time could be different.
U.S. joblessness stubbornly stickier this cycle 1 Apr 2011 While March saw 216,000 new jobs created, the average duration out of work crept back up and remains far above previous cycles. The risk is that as the skills of workers atrophy, wage inflation and shortages may kick in before full employment is reached.
Brazil sends bad market signal scalping Vale’s CEO 1 Apr 2011 Roger Agnelli fought the state's designs to push the $180 bln mining giant into lowreturn, if laborintensive, businesses like steel production. With President Rousseff getting rid of him, investors must prepare for a strategy that favors jobs over profit more Pemex than BHP.
Fed transparency puts Goldman’s Cohn in a pickle 1 Apr 2011 The central bank's data dump on borrowings made during the crisis so far hasn't unearthed shocking revelations or sent financial markets tailspinning. But it seems to have contradicted the Goldman COO's account of events. It just goes to show how disclosure keeps everyone honest.
Euro zone crisis no better after Irish stress test 31 Mar 2011 The tests' verdict a capital hole of 24 bln euros wasn't a shock, and senior bank bondholders got a further reprieve. But clarity on capital won't help Irish banks obtain access to market funding overnight. Suitably punitive but longterm ECB funding is still needed.
AIG’s chief Benmosche sounds like a whiney baby 31 Mar 2011 He says the Fed's decision not to sell $15 bln of mortgage bonds back to the insurer will hurt its stock sale, and thus U.S. taxpayers. True or not, Benmosche's comment implies he feels AIG is entitled to special treatment. That's not the way to run a competitive business.
Medvedev takes power struggle to Russia’s boards 31 Mar 2011 The Russian president has ordered government ministers off the boards of stateowned companies in an overt attempt to curb the influence of Vladimir Putin's associates. Medvedev's confidence that he can assert his authority is obviously growing. But he risks a backlash.
Obama pushes on open door with energy independence 30 Mar 2011 Every president since Nixon has aimed to curb America's foreign oil addiction. Obama is almost sure to have more success. Energetic pumping and peaking gasoline demand are cutting imports even without Washington's nudge. But without a carbon price, progress will only go so far.
Activist investors embark on fight of their lives 30 Mar 2011 Uppity fund managers like Bill Ackman prefer to be on the attack. Now they're on the back foot as the SEC mulls siding with poison pill guru Marty Lipton to curb activists from quietly building stakes. The battle should heat up as M&A lawyers and bankers hold their annual confab.
Barclays’ HQ move talk puts regulators on the spot 30 Mar 2011 The bank may trade London for Manhattan if UK capital charges go too high. Funnily enough, U.S. banks complain new rules give Europeans the upper hand. Most of this is saberrattling, but it highlights the risks of watchdogs clamping down without some global harmonization.
Uncle Sam must not play fool on corporate taxes 29 Mar 2011 When Japan cuts the rate companies pay on April 1, America's will be the highest among advanced economies. Even its effective tax rate is way above average despite the likes of GE spending billions to game the labyrinthine code. A smarter approach would be to substitute a VAT.