Governments are now world’s financial engineers

November 30, 2011

The crisis exposed the trouble with complex leverage games in the private sector. But Western authorities, undoubtedly abetted by bankers, have embraced high finance for everything from housing to Europe’s rescue fund. Such finagling, however, is harder in tough markets.

Buffett steals page from odd playbook: Murdoch’s

November 30, 2011

The Berkshire Hathaway boss is buying his local newspaper publisher, defying his own investment advice. The Sage of Omaha can’t need more influence in his own backyard. But like other fogeys including Rupert Murdoch, he can’t shake a soft spot for print and its enduring clout.

Pharma stocks no safe haven in austerity storm

December 1, 2011

Drug shares have traditionally weathered economic storms well. Yet today the sector trades at a 20 pct discount to the market. With budget cuts the medicine of choice for solving government deficits, investors are rightly anticipating further knocks. The sector is best avoided.

Thomson finally completes takeover of Reuters

December 2, 2011

Tom Glocer’s bankerly CEO skills no longer suit the publishing giant. He restructured Reuters and deftly engineered its well-timed sale. But the company needs to grow – and the controlling Thomson family is weary of waiting. How it does so, though, still seems far from clear.

Delay takes shine off Zynga’s IPO

December 2, 2011

Revenue at the maker of FarmVille and other Internet games is still rising fast. But on more telling measures, growth has slowed. Zynga’s hoped-for $9 bln valuation isn’t too far-fetched. But the price tag might have been even higher had it harvested IPO investors’ cash earlier.

Monte dei Paschi’s independence looks shaky

December 5, 2011

The foundation that controls half the ancient Italian lender's shares is struggling to pay off its debts. But Monte dei Paschi also needs yet more capital. The bank may be able to shrink its balance sheet. If it fails, it may have to find a merger partner or seek state support.

New England power merger deserves final nixing

December 5, 2011

A report on Northeast Utilities’ handling of a snowstorm from a former U.S. disaster official makes it clear: the company failed in the duties that come with its monopoly. Regulators have all the evidence they need to power down the utility’s $4.7 bln takeover of rival NSTAR.

Oracle needs to read Cisco cautionary tale

December 5, 2011

Empires built on acquisitions can run into problems as they sprawl. That’s doubly so in tech, where obsolescence is a risk. Oracle has used database profits to buy new businesses. So far, so good - but Cisco’s record suggests success will be hard to sustain.

Courts more willing to second-guess Wall Street

December 5, 2011

U.S. judges have typically trodden softly over financial disputes and settlements for fear of ruffling markets. But the rejection of the SEC-Citi CDO deal is the latest sign times are changing. Activist courts aren’t good for certainty, but they’re filling a gap left by Congress.

Pharma center of gravity shifts eastward

December 6, 2011

Drug research tends to follow spending. Take Merck’s pledge to invest $1.5 bln in R&D in China. Emerging economies’ citizens are growing wealthier and living longer, while their governments’ fiscal health is robust. Merck’s step suggests drug development is shifting accordingly.