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Mar 19, 2012
via Breakingviews

Goldman Sachs history shows resignation naivete

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By Rob Cox
This column appears in the March 26 edition of Newsweek. The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

In a sententious harrumph, a midlevel Goldman Sachs banker stormed out of Wall Street’s leading investment bank last week by publishing a critique in the New York Times of his now former employer. Greg Smith accused Goldman Chief Executive Lloyd Blankfein and President Gary Cohn of fomenting a corporate culture where the pursuit of making money “sidelined” the interests of clients, whom Smith said were referred to as “muppets” by superiors. “Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence,” he wrote.

Smith has been called brave for speaking out against the apparent wickedness of the bank that lavished him with a decade of bonuses. But there’s also a glaring naivete to his appraisal that is as short-sighted as the supposed decisions of Goldman’s masters to chase profits today over the interests of clients tomorrow. Money is and forever will be the lifeblood of global finance. The only changing dynamic is the degree to which other goals compete with this pursuit.

Mar 12, 2012
via Breakingviews

Silicon Valley’s undeserved moral exceptionalism

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By Rob Cox

This essay appears in the March 19 edition of Newsweek. The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Silicon Valley likes to think of itself as morally exceptional. When Google went public in 2004, the Internet search company’s wunderkind founders, Larry Page and Sergey Brin, penned a letter to prospective shareholders that has become the Internet industry’s version of the Magna Carta. In it, they pledged that Google was “not a conventional company” but one focused on “making the world a better place.” Their manifesto followed a venerable tradition in Silicon Valley (meaning the swath of technology and Internet companies based in the cities and towns between San Francisco and San Jose). A decade earlier Apple co-founder Steve Jobs insisted that “being the richest man in the cemetery doesn’t matter to me … Going to bed at night saying we’ve done something wonderful … that’s what matters to me.”

Feb 23, 2012
via Breakingviews

A Goldman governance fix could serve Blankfein

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By Rob Cox

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

Goldman Sachs has resisted calls to separate the chairman and chief executive roles for years. But there may now be a convenient, if self-serving, reason for the board to do so. Surrendering the CEO title, while remaining chairman, would enable Lloyd Blankfein to gracefully move on after six mostly productive years and put the onus on his presumptive successor, Gary Cohn, to carve his own path.

Feb 23, 2012
via Breakingviews

New US finance sheriff carves out shadowy domain

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By Rob Cox and Daniel Indiviglio
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.The American banking industry has had a rough few years. The subprime meltdown, financial crisis and economic hardship have slammed stocks, slashed bonuses and crunched jobs. But life has been pretty sweet for a motley crew of companies – from cash checkers and credit bureaus to money wirers and debt collectors – operating on the edges of the regulated financial services industry. That may be about to change.

The recent recess appointment by President Barack Obama of Richard Cordray to lead the newly formed Consumer Financial Protection Bureau will, for the first time ever, throw a federal regulatory lasso around the biggest players in the shadows of finance. In the same way that enhanced regulation has curbed many of the excesses on Wall Street, so, too, may the increased scrutiny of this netherworld of the money industry.

Feb 15, 2012
via Breakingviews

Kellogg rescues P&G from over-cleverness

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

“Half the cleverness, none of the risk” makes an apt cereal-box slogan for Procter & Gamble’s sale of Pringles to Corn Flakes-to-Froot Loops giant Kellogg. By offloading the chips business for $2.7 billion in cash, P&G swaps a complex structure that, while it would have saved on payments to the tax man, put the consumer giant’s corporate finance competencies to a severe test.

And what may be P&G’s loss looks like Kellogg’s gain. While the cereals group is plunking down 15 percent more in cash than Diamond Foods had originally agreed to pay in new stock, the accompanying cost savings more than justify the premium. In a nutshell, this is a reasonable outcome, not least because P&G emerges with a valuable lesson the rest of Corporate America would be wise to observe.

Feb 6, 2012
via Breakingviews

Expect Mark Zuckerberg to morph into Murdoch

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By Rob Cox

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

How long before Mark Zuckerberg morphs into Rupert Murdoch? It may take decades or, given the accelerated lifecycles of Internet companies, just a few years. At some point, though, the overwhelming control investors are ceding to the 27-year old Facebook wunderkind is bound to stop being in their best interest.

Jan 30, 2012
via Breakingviews

Facebook IPO will put public markets to shame

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

Facebook’s imminent stock sale risks putting public stock markets to shame. Investors will surely clamor for a piece of the social network. But unlike Google’s 2004 initial public offering, everyone who’s anyone has already made a killing off Mark Zuckerberg’s dorm-room project. At a $100 billion valuation, it’s hard to imagine much could remain.

Jan 30, 2012

Facebook IPO will put public markets to shame

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

By Rob Cox

NEW YORK, Jan 30 (Reuters Breakingviews) – Facebook’s
imminent stock sale risks putting public stock markets to shame.
Investors will surely clamor for a piece of the social network.
But unlike Google’s 2004 initial public offering, everyone who’s
anyone has already made a killing off Mark Zuckerberg’s
dorm-room project. At a $100 billion valuation, it’s hard to
imagine much could remain.

Jan 27, 2012
via Davos Notebook

A Van Winkle return to Davos and to real problems

It was well past midnight in late January 2000 when an investment banking contact called my Davos hotel room to share the latest details on Vodafone’s hostile bid for Mannesmann. That was news, but the huge hostile takeover was no longer the largest deal in history. It had been displaced a few weeks earlier by the agreed merger of AOL and Time Warner. Such was the talk of the World Economic Forum. The great and the powerful had gathered together to celebrate the success of business and, especially, of finance.

Exuberance over technology and venture capital was almost limitless back in 2000, thanks to the seemingly limitless rise of the tech stocks. Dotcom startups were all the rage. When Japanese Internet mogul Masayoshi Son finished one panel, he was assailed by a gaggle of entrepreneurs waving business plans for him to peruse. In full disclosure, this columnist two weeks later signed up to establish the online financial commentary business that eventually became Reuters Breakingviews.

Jan 26, 2012
via Breakingviews

Uninvited guest, Mr 99 Percent, crashes Davos

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By Rob Cox 

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

The most difficult guest to avoid bumping into at the World Economic Forum this year has no badge. He was not invited to the annual gathering in Davos, but he haunts the panels, hallway conversations and politicians’ speeches. He is Mr. 99 Percent, the specter of the unemployed and disenfranchised.

    • About Rob

      "Rob Cox helped establish Breakingviews in 2000 in London. From 2004 he spearheaded the firm's expansion in the United States and edited its American edition, including the daily Breakingviews columns in the New York Times and Wall Street Journal. Rob has worked as a financial journalist in London, Milan, New York, Washington, Chicago and Tokyo. Rob graduated from Columbia University’s Journalism School and the University of Vermont. Follow Rob on Twitter @rob1cox"
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