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.
Revamped U.S. mortgage plan too little, too late 30 Jan 2012 The Obama administration is using the last $21 bln rattling around from TARP to cajole investors to cut struggling homeowner loans. Some may bite. But the new program won’t help enough borrowers to put housing back on track and may not entice Fannie and Freddie to participate.
De-globalisation of finance looks here to stay 27 Jan 2012 The crisis has reversed a decades-old trend of increasingly international finance. Shrinking banks are shedding foreign businesses, while regulators and governments are encouraging a more national identity. The splintering so far isn’t hugely harmful, but protectionism is a risk.
Einhorn case strikes mild blow against cronyism 25 Jan 2012 The UK’s FSA has fined Greenlight hedge fund boss David Einhorn, though the rationale is fuzzy. He declined to hear inside information - but still spoke with Punch Taverns and its broker, then sold the stock. If nothing else, the case exposes cozy practices in financial circles.
Banks gain unlikely allies in Volcker rule battle 25 Jan 2012 Canada and Japan are worried the U.S. crackdown on prop trading will undermine their government bond markets. It’s another example of the unintended consequences of regulation. But it’s also hard to see why U.S. taxpayers should subsidize borrowing rates for foreign states.
Obama offers more anti-fraud bark with little bite 25 Jan 2012 In his State of the Union speech, the president called for a new financial-crimes unit and harsher penalties. But a similar task force already exists, and punishment is plenty tough. What’s needed is resources for complex cases against Wall Street, not more laws and bureaucracy.
Insider trading snitch got off too lightly 23 Jan 2012 A former Galleon trader guilty of illegal trading became an informant to help nab others, including kingpin Raj Rajaratnam. The stoolie was rewarded with probation and community service instead of up to 25 years in prison. Such leniency risks overreliance on criminals.
Commerzbank Houdini act tests regulators’ resolve 19 Jan 2012 The German lender thinks it can conjure up 6.3 bln euros of capital to meet the European Banking Authority’s target. Fiddling with regulatory ratios isn’t the same as injecting fresh equity, but the EBA lacks the power to intervene. That won’t help confidence in Europe’s banks.
Killing Keystone pipeline is bold gamble for Obama 18 Jan 2012 The president spurned Republicans by giving a thumbs-down to the giant U.S.-Canada project. It might score him environmental points with progressive voters. But Obama is sacrificing jobs and a cushion against another oil shock. The recovery is too fragile for such politicking.
Connecticut finally steps up to vet utility merger 18 Jan 2012 More than a year on, the U.S. state reversed its earlier rubber-stamping of Northeast Utilities’ $4.7 bln takeover of NSTAR. It took a couple of storms to expose Northeast’s electrifying incompetence and wake Connecticut’s watchdogs. Now they needn’t be shy of killing the deal.
BankUnited sends ominous sign with its white flag 17 Jan 2012 The Florida lender rescued from the dustbin by private equity was supposed to forge an exemplary path by rolling up small banks, finding efficiencies and creating more competition. But crummy business, picky regulators and rivals too delusional to sell have left it up for grabs.
Antitrust watchdog rivalry may spell M&A trouble 12 Jan 2012 The U.S. Justice Department surpassed the Federal Trade Commission in antitrust enforcement last year. But signs that the FTC will block pharmacy provider Omnicare’s bid for PharMerica suggest a new hard line. Competing cops on the beat could gum up Wall Street’s deal machine.
U.S. presidential race has a lone bank-buster 9 Jan 2012 GOP hopeful Jon Huntsman’s desire to break up big banks sets him apart from other candidates in his party, and even President Obama. But his financial reform plan would require a fickle Congress to go along and poses practical difficulties. Dodd-Frank actually does the trick.
Even a legal healthcare victory may hurt Obama 6 Jan 2012 The U.S. Supreme Court should uphold the president’s crowning achievement, but that won’t preclude a backlash. A win will embolden congressional candidates seeking to repeal the law and deepen the partisan divide. Governing could be as tough a task as re-election for Obama.
Even the Fed is giving up on Fan/Fred reform 5 Jan 2012 Its suggestions to help U.S. housing include turning tarnished mortgage giants Fannie Mae and Freddie Mac into huge landlords and making them go easy on underwater borrowers and banks. Ben Bernanke once said reform was urgent. With ideas like this he must have changed his mind.
IMF needs to keep powder dry for usual suspects 23 Dec 2011 The fund is getting an extra $200 bln to aid with the rescue of wealthy Europe. But the downgrade of Hungary’s credit rating is a reminder that there could be more traditional middle-income demands for aid, too. The IMF will have to allocate its growing pot of money carefully.
Mercosur searching for alternatives to Adam Smith 23 Dec 2011 With members led by leftists, it’s not surprising the Latin trade bloc is raising tariffs and promoting anti-market policies. Mercosur has lots of commodities but relatively uncompetitive manufacturing, even in Brazil. One risk of economic experimentation is a return to poverty.