Kevin's Feed
Feb 7, 2014
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Coke and David Einhorn sing in perfect disharmony

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

Betraying its renowned jingle, Coca-Cola is singing in perfect disharmony with David Einhorn. To feel good dropping $1.3 billion for a minority stake in Green Mountain Coffee, the beverage giant must have answered some nagging questions posed by the hedge fund manager a few years ago. Investors seem to reckon Coke did its due diligence. Procter & Gamble and Hewlett-Packard have shown just how much it can matter.

Jan 21, 2014
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Dan Loeb puts the right accelerant in Dow Chemical

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

Dan Loeb is putting the right accelerant into Dow Chemical. The $52 billion U.S. chemistry giant’s shares jumped more than 7 percent at one point on Jan. 21 after the activist investor called for a split of its petrochemicals and specialty chemicals businesses. Loeb may be overly optimistic about the financial benefits, but a rough sum-of-the-parts suggests merely breaking Dow up could boost its value by a fifth.

Jan 3, 2014
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Commodities set to distinguish themselves

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

Commodity prices look set to distinguish themselves in 2014. From gold to grain, raw materials will trade less in line not only with equities, but with each other – and are likely to fall, to boot. Thank a calm euro zone and the prospect of the U.S. Federal Reserve cutting back its bond purchases.

Dec 31, 2013
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Merck woes show animal drugs are no panacea

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By Kevin Allison

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

Animal medicine, whether for livestock or pets, is a booming business. Pfizer’s recent spin-off, Zoetis, trades at a fat valuation premium to traditional drug makers. But the recent controversy over Zilmax, Merck’s feed additive, shows that an increasingly complicated global food chain carries its own investment risks.

Dec 27, 2013
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Oil’s new age of plenty challenges old assumptions

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By Kevin Allison

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

The energy business may enter a tumultuous period in 2014, even if sanctions on Iranian oil exports remain in place. The combination of increased shale drilling, cheaper solar power and higher investments in energy efficiency has the potential to create a glut of oil from countries outside the OPEC producers’ cartel at current prices. A sharp drop in the oil price is possible, and more volatility in oil prices, energy investments and geopolitics is almost inevitable.

Dec 3, 2013
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Detroit case revs up bankruptcy option for others

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

It’s the start of a new era for Detroit – and perhaps other American metropolises in wobbly financial condition. A federal bankruptcy judge ruled on Tuesday that Motown, suffocating under about $18.5 billion in debt, was eligible to file for protection from creditors. If the decision withstands appeal, it would confirm bankruptcy as a credible option for even the biggest U.S. cities. It could also give other municipalities the needed kick to get their houses in order.

Nov 1, 2013
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Review: Dissecting America’s manufacturing retreat

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By Kevin Allison

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

Those who believe that making physical things is a superior vocation will find themselves nodding through much of Vaclav Smil’s “Made in the USA”. Smil, a prolific Canadian academic, challenges the widespread view that in mature economies a shrinking factory footprint is inevitable – or even desirable. He blames short-termism and bad policy choices, not just changing economic tides, for the retreat of U.S. manufacturing. The book’s call for smarter industrial policy is appealing, but Smil comes too close to advocating protectionism.

Oct 31, 2013
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PwC-Booz merger adds up to a major culture clash

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By Kevin Allison

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

PricewaterhouseCoopers’ proposed takeover of strategy firm Booz & Co would be the most prominent example yet of a Big Four auditor bulking up on consulting. But restrictions enacted after the massive Enron scandal of 2001 mean advisory-services staffers could end up brawling with accountants over clients. While mid-sized Booz may feel pressure to compete with rivals like Boston Consulting Group and McKinsey, the proposed deal with PwC risks a huge culture clash.

Sep 11, 2013
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Big Oil’s growth addiction is counterproductive

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By Kevin Allison

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

Big Oil has a growth addiction. The industry pours billions of dollars into projects with marginal returns to keep production rising. But the oil majors’ huge size means even huge new fields barely move the needle. Petroleum bosses would do better to follow Royal Dutch Shell, and ditch output targets. The best option may be to plan for shrinkage.

Sep 4, 2013
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Commodity decoupling hints at return to old normal

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By Kevin Allison

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

Commodity markets are rediscovering a semblance of normality. After a sustained period of tight correlation, the prices of raw materials have diverged from equities. Different commodities are charting different paths too. If the trends hold, it suggests that familiar forces of supply and demand are regaining the upper hand after years of crisis-driven trading.