Dec 3, 2012 22:00 UTC

Wall Street deal-making has lesson for Washington


By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

When it comes to deal-making, Washington could learn from Wall Street. The U.S. budget talks have become the equivalent of an ugly, public merger proxy battle. While investment bankers are often too eager to push for a deal, they also know that negotiating in public usually only makes things tougher.


I think that every congressman should be able to draw a diagram for any individual in any industry such that the diagram shows the avenues by which money spent by the individual circulate back to the individual. Without this visualization, no person can discus what improves or impedes the circulation of money. With this visualization, we can imagine many different excellent solutions to the fiscal conflict.

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Dec 3, 2012 19:33 UTC

SandRidge CEO sets bar even lower for oil patch


By Christopher Swann

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Tom Ward, chief executive of troubled oil and gas explorer SandRidge Energy, has set the bar even lower for the oil patch. He is not the first energy boss to live large at shareholders’ expense. But his extravagance at the nearly $3 billion U.S. company would make even TV villain J.R. Ewing blush. Angry owners are right to want him out.

Nov 30, 2012 19:31 UTC

Review: How a maverick CEO exposed a scandal at Olympus


By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Society and markets need whistle-blowers. But it’s hard, lonely work. Michael Woodford’s “Exposure” details first-hand how the maverick executive blew the whistle on a $1.7 billion accounting scandal at Olympus, the company he ran. His integrity makes him a welcome outlier in an age of financial scandal.

Nov 30, 2012 19:24 UTC

Groupon discounts dual-class share structures


By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Groupon’s melodrama is discounting dual-class share structures. Chief Executive Andrew Mason and Chairman Eric Lefkofsky appear locked in a dysfunctional battle over how to run the flailing company. The board is keeping Mason at the helm, but the fighting probably isn’t over. Super-voting shares like the ones both men own are meant to give founders flexibility. But Groupon is a reminder of just how dangerous the arrangement can be.

Nov 30, 2012 07:52 UTC

HK exchange plays it safe with equity finance


By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Hong Kong’s stock exchange is playing it safe. The bourse’s $1 billion share placing will allow it to repay more than half the debt it took on to buy the London Metals Exchange earlier this year. Ultra-low yields might make bonds look tempting. But a recent share rebound, and HKEx’s hefty dividend payout, justifies its cautious approach.

Nov 29, 2012 19:07 UTC

Corporate America fears taxes more than recession


President Barack Obama is seeking input from Corporate America on the so-called fiscal cliff. But whatever company honchos may be saying about the risk of recession in 2013 if tax hikes and spending cuts kick in on Jan. 1, it looks as if they actually fear higher taxes more than a downturn.

Exhibit A is the recent flurry of special dividends, including a $3 billion whopper announced on Wednesday by warehouse retailer Costco. Data group Markit says 112 firms so far this quarter have already pulled the trigger on special dividends. They include casino operator Las Vegas Sands, which will send more than $1 billion to Mitt Romney’s pal Sheldon Adelson, his wife and the trusts the billionaire controls. Markit expects 20 more firms to do something similar before the year is through.

Nov 29, 2012 14:37 UTC

Spain’s bank rescue is part bail-in, part bail-out


By George Hay and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own

Spain’s bank haircuts are part bail-in, and part bail-out. The indebted government has lopped 10 billion euros off its euro zone-funded bank rescue bill by cutting the value of its worst lenders’ hybrid debt. Yet if it hadn’t been for political considerations, the burden-sharing might have been greater.

Nov 29, 2012 05:47 UTC

Low valuations don’t make China stocks a bargain

By Wayne Arnold

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Conventional gauges of value make China’s stocks tempting, particularly amid signs growth may be picking back up. But even if the economic rebound lasts, stocks haven’t been great proxies for corporate growth. Even China bulls should be ursine on the country’s equities.

Nov 28, 2012 10:15 UTC

Olam should show, not tell in Muddy Waters fight

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Muddy Waters and Olam are trading punches. The U.S. short-selling firm has released a 133-page report that mixes forensic accounting with some shoe-leather sleuthing in Africa to claim that the Singaporean commodities firm is heading for an Enron-style collapse. Now Olam has hit back with a detailed rebuttal. But for a trading business, perception matters more than facts.


No offense, but you must be joking… How can you seriously suggest OLAM should sell off part of their inventories just to prove that they are a liquid asset. It is bad enough that OLAM management has to spend their valuable time writing a 45 detailed response to the MW report and go through the effort of having to sue MW for their baseless attacks. OLAM has done more than enough to show that they are a legitimate operation. Let them go back to do their business and create employment and shareholder value as they have done successfully for a long time already (unlike MW).

The burden of proof is on MWs side. Unlike OLAMs track record, CB so far got only one thing right in his career (Sino Forest) and plenty of failures (such as Focus Media, as well as his storage company). As far as I am concerned he is an arrogant 36 year old wanna be finance star, who is targeting companies with complex balance sheets to make a quick buck on the short side, as he knows there will always be some doubt left, after he attacks them.

There is nothing wrong with shorting stocks of companies you dont like. Many hedge funds do that successfully. There is everything wrong with building a large short position in a stock and then using you reputation to make aggressive public statements
about the company such as “the company will fail and shareholders will be left with nothing”.

I thought we had finally learned a lesson that employment creating, profit creating companies are more valuable to society than Gordon Gekko style short sellers. I find it absolutely appalling that a Reuters reporter is taking the MW side on this issue.

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Nov 26, 2012 16:01 UTC

Barclays’ investment bank is too good to lose


By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Is Barclays’ investment bank too good to lose? Antony Jenkins is wrestling with this question ahead of the UK lender’s strategic D-day next February. Politicians, as well as some regulators and shareholders, wouldn’t mind seeing the hard-charging investment bankers associated with the Bob Diamond debacle cast adrift. But while Jenkins will need to perform open-heart surgery on the unit, it still has value as part of the group.