Apple needs good, not just better, supply chain 7 Mar 2012 Despite the bad press, Chinese workers preparing the iPad 3 are treated less badly than many in electronics - which in turn beats the toy and clothing sectors. But with the “lonely leadership” of Apple’s brand and cash, doing things relatively well isn’t enough.
Corporate political donors don’t need SEC policing 2 Mar 2012 As election spending soars, the watchdog faces pressure to make firms disclose their campaign contribution largess. Some already do, thanks to shareholder proposals. A broad rule would be an unnecessary venture into politics and stretches the idea of investor protection.
Would-be U.S. TV disrupter reveals flaws in law 2 Mar 2012 Broadcasters claim online TV startup Aereo is violating copyright by streaming programs with tiny antennas. The company says it merely mimics what viewers did for decades with set-top and roof-top versions. The legal contortions show how old rules often fail new technology.
Don’t penalize money funds for the sins of banks 1 Mar 2012 The SEC wants to step up regulation of money market funds. But their losses have been relatively trivial and mostly non-systemic, while providing savers with diversification from insured deposits. A better idea would be to clearly delineate their risks from those of banks.
Scarce U.S. small-cap IPOs need nurturing 1 Mar 2012 Efforts in Washington to cut regulation for emerging firms won’t reverse a decade-long slide in smaller offerings. Technology has done more to keep companies away from public markets than red tape. One way to escape the hyper-liquidity squeeze may be to embrace the past.
Feel-good laws should put practicality before hope 23 Feb 2012 California has struck the right balance making firms like Apple police labor practices at foreign suppliers. But expecting companies to starve African thugs of mining profits is a stretch. Such edicts may have good intentions but are impractical and often counterproductive.
New US finance sheriff carves out shadowy domain 23 Feb 2012 The Consumer Financial Protection Bureau under Richard Cordray is throwing a regulatory lasso around a motley crew of cash checkers, credit bureaus, money wirers and debt collectors. As our new ’Cordray Index’ shows, they’ve had a wonderful financial crisis. That may change.
Politicians’ pleading on Volcker rule looks foolish 23 Feb 2012 The finance ministers of Japan and the UK are making a big deal about new U.S. rules against proprietary trading. They want to keep American banks trading foreign sovereign debt. But if there is a problem, it’s a minor one. Politicians must have better things to worry about.
Obama’s corporate tax plan is a good start 22 Feb 2012 The president’s proposal to reduce the rate paid by companies to 28 pct and eliminate many loopholes gets the debate moving in the right direction. But there’s plenty of room to improve the plan, too. For one thing, it would make global competition tougher for domestic firms.
Frannie boss shoots more good ideas into the wind 21 Feb 2012 All credit to the FHFA for keeping reforming the money-losing mortgage agencies on the agenda. The watchdog has some workable goals for reducing Fannie and Freddie’s distorting influence and bringing in more private capital. But without action from Congress, change is a ways off.
Congress may protect its own insider traders 16 Feb 2012 The SEC could soon have far greater license to pursue insider trading on Capitol Hill. But new research suggests U.S. enforcers go easier on bosses of companies that make political contributions. If even donors are shielded, lawmakers themselves stand to get off lightly.
Europe plays risky weighting game with its banks 16 Feb 2012 Brussels may cut the capital that banks hold against small business loans, hoping lenders will then extend more credit to the engine of economic growth. But it’s not yet clear that current risk weightings are wrong. Massaging them for political ends could damage confidence.
Gridlocked Congress might respond to docked pay 15 Feb 2012 California now cuts lawmakers’ income if they don’t pass budgets on time. That could work in Washington, too, where a bill to the same effect was just introduced. As Wall Street knows, financial incentives are powerful. Many politicians would be loath to lose generous perks, too.
U.S. payroll tax fight shows faux fiscal restraint 14 Feb 2012 Using seized mortgage backers Fannie Mae and Freddie Mac to fund a short extension of the tax cut was bad enough, but Congress is about to do worse. It’s ready to pay for another 10 months’ worth by adding $100 bln to the deficit. Politics and dogma are foiling needed discipline.
Volcker muddies debate about his own rule 13 Feb 2012 The former Fed chairman’s eleventh-hour comments serve as a decent primer for why banning prop trading is a good idea. But he doesn’t address any of the practical concerns big banks have raised. And Volcker’s argument about the downside of liquidity seems a dangerous red herring.
First U.S. nuke in 30+ years won’t open floodgates 9 Feb 2012 The industry is cheering the first approval to build a new nuclear power plant since 1979. U.S. electricity demand is up 80 percent, suggesting it’s needed. But gas is now plentiful and cheap. Red tape aside, the $7 bln cost for each unit makes atomic economics look grim.
New US trustbuster may rejig deals, not kill them 7 Feb 2012 Though no soft touch, as antitrust chief William Baer could prove a better listener than his predecessors. That means ideas to make deals like AT&T’s defunct bid for T-Mobile USA palatable may at least get heard. The big question is whether his appointment gets past the politics.
Don’t bet against Glenstrata antitrust roadblock 7 Feb 2012 Many customers see Glencore and Xstrata as one, even before their all-share merger. But that won’t stop regulators everywhere poking into Glencore’s secretive business. Market share in copper and zinc isn’t the only concern: bigger miners exert pressure on governments too.
EBA has tight deadline to avoid paper tiger status 6 Feb 2012 Lenders are using sleight-of-hand to meet the European Banking Authority’s demands for higher capital ratios. But the body has no real power to challenge their tricks. Unless it can play a canny political game, the latest tests may undermine confidence in both banks and the EBA.
Google feeds regulators fresh meat to chew on 1 Feb 2012 Antitrust concerns have swirled around the Internet search giant for years. Now, changes to its data-sharing policies are causing added alarm among lawmakers. So far, Google hasn’t crossed any major legal lines. But the company, led by Larry Page, seems destined to find them.