Reuters blog archive
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
China’s shaky accounting practices are a sound target for U.S. regulators. Or at least, they would have been ten years ago. The Securities and Exchange Commission’s action against China-based auditors, including affiliates of big accountants like KPMG and Deloitte who refuse to hand over files on U.S.-listed companies, comes too late. If the SEC pushes the point, it could bring a moral victory, but a financial mess.
The SEC’s position is fair, but futile. Auditors say they can’t give up Chinese documents for fear of accidentally passing on state secrets. The power to release audit work performed in China resides with the securities regulator. Besides, under China’s loose definitions, auditors don’t always know what is a secret and what isn’t. American and Chinese authorities have been in talks for at least five years on closer co-operation, but with little progress.
By escalating the issue to a 300-day court review, the SEC may just prove that compromise is elusive. The SEC is effectively asking Chinese auditors to flout local law, or China to cast off its preoccupation with state secrecy. Neither is plausible. Starting a fight as China prepares to hand over power to new leaders, who may wish to score easy political points by swatting away attacks on the country’s sovereignty, looks especially unwise.
Deutsche Boerse and NYSE Euronext's plan to create the world's largest exchange has sent competitors around the world scurrying to find partners, accelerating an industry shake-up. The Wall Street Journal looks at the how stock exchanges make money and what it means for investors.
Google and Facebook, plus others, have held low level takeover talks with Twitter that give the Internet sensation a value as high as $10 billion, the Wall Street Journal reported.
from Shop Talk:
Toys "R" Us, the U.S.-based specialty toy retailer, announced a national plan that lets consumers trade in their used cribs, car seats and other baby-related items in exchange for a 20-percent discount to buy a new product in the same categories and by specific manufacturers.
The "Great Trade-In," as the program is called, was put together to underline the fact that certain baby items are not ideal for being handed down or resold because of safety concerns.
Private equity giant KKR's latest document on its lengthy route to becoming a publicly-traded company makes the intriguing suggestion that it could list on either the Nasdaq or the NYSE.
The idea all along has been for KKR, after listing on Euronext through buying its Amsterdam-listed fund KPE, to potentially list on the NYSE, so switching to Nasdaq would be quite a suprise.
from Photographers Blog:
What's in U.S. Treasury Secretary Timothy Geithner's wallet? Not much.
While testifying in front of a House Appropriations Subcommittee on Capitol Hill Thursday Geithner was shown a $50 Billion Zimbabwean bank note (rendered worthless by Zimbabwe's hyperinflation) by U.S. Representative John Culberson (R- TX) and asked if he had ever seen one himself. Geithner immediately pulled a piece of Zimbabwean currency out of his own pocket and showed it off to the committee. At the next break in the hearing I approached Geithner and asked how he happened to have a piece of foreign currency in his pocket. His response was "I often have some foreign currency in my wallet. Want to see?" He pulled a very thin and mostly empty wallet from his pocket.
Amongst many empty slots in the thin weathered leather wallet there could be seen three credit or debit cards with Visa and Mastercard logos (all inserted into the wallet upside down so that the card issuers could not be seen) and an old and yellowed looking identification card of indeterminate origin.
from Global News Journal:
Hezbollah literally rolled out the red carpet to welcome home five prisoners released by Israel in a U.N.-mediated exchange deal. Securing the release of the last five Lebanese held by Israel was a major triumph for the group, which in turn handed over the bodies of two Israeli soldiers captured in a 2006 raid into Israel.
Having achieved a long-held goal, Hezbollah is holding up the exchange as further evidence that its uncompromising, armed approach to dealing with Israel brings results, directly challenging the policies of Arab leaders who have engaged in negotiations or signed peace treaties with the Jewish state. The New York Times called the prisoners' homecoming a triumph.