U.S. Editor, Commentary
Rob's Feed
Apr 11, 2012
via MediaFile

Everything we know about tech we learned from Kraftwerk

At 8:30 p.m. on Tuesday there was no more coveted piece of New York City real estate than standing room in the Museum of Modern Art’s Marron Atrium. And so it shall be for the next seven nights as Kraftwerk, the German electronic outfit from the 1970s, plays to a scant crowd of about 450 lucky souls. That this quartet, which includes just one of its original members, can command a showcase like MoMA – and sell out in a drumbeat – provides a useful lesson into technology’s risk of obsolescence.

It would be easy to dismiss Kraftwerk as a relic from the dawn of the digital age and its ardent fans a weird cult in turtleneck sweaters and 3D glasses. But MoMA’s eight-night retrospective of the band helmed by Ralf Hutter provides surprising insight into why some innovations fade and others flourish. Ultimately, success in technology – as in art – is derived from the expression of big ideas, not simply a mastering of its circuitry. It is an example that businesses, too, can learn from.

Apr 9, 2012
via Breakingviews

World Bank wackiness explains odd U.S. choice

Photo

By Rob Cox

This column appears in the April 9 issue of Newsweek. The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

If the competition to become the World Bank’s next president were a normal process, Jim Yong Kim wouldn’t stand a chance. The Dartmouth College president lacks two of the traditional qualifications for running an international lending body: financial savvy and diplomatic experience. But the race to lead the World Bank is everything but ordinary – particularly this time.

Mar 28, 2012

Breakingviews: Goldman Sachs now treats shareholders like muppets

By Rob Cox

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

(Reuters Breakingviews) Say what you like about Goldman Sachs, but it sure is a clever negotiator. The Wall Street firm, which was publicly criticized a few weeks ago by one of its own for running roughshod over the interests of clients – dubbed “muppets” in internal speak – in the pursuit of profit, has now pulled off what looks like the trade of the year. But this one comes at the expense of its own shareholders.

Mar 28, 2012
via Breakingviews

Goldman Sachs now treats shareholders like muppets

Photo

By Rob Cox 

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

Say what you like about Goldman Sachs, but it sure is a clever negotiator. The Wall Street firm, which was publicly criticized a few weeks ago by one of its own for running roughshod over the interests of clients – dubbed “muppets” in internal speak – in the pursuit of profit, has now pulled off what looks like the trade of the year. But this one comes at the expense of its own shareholders.

Mar 26, 2012
via Breakingviews

Monopolies thrive when politicians go short-term

Photo

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

If there ever was a deal that elected officials should hate it’s the $17.5 billion proposal to create an electricity monopoly in New England. Last year Northeast Utilities, which wants to buy NSTAR of Massachusetts, proved to be a uniquely incompetent serial abuser of its dominant position. And yet authorities are now poised to give the merger the green light. The lesson: short-term political thinking benefits monopolies.

Hurricane Irene last August and a freak October snowstorm each left millions of Northeast’s captive customers in Connecticut without power for days while nearby rivals performed far better. An independent report painted Northeast as a hapless, unaccountable monopoly. But the power of money today speaks more loudly to politicians than the promise of greater competency tomorrow. Connecticut and Massachusetts have extracted pounds of flesh that offer significant political benefits to the two states’ governors in the short term. But they do little to ensure the new behemoth is held to higher standards of service or accountability.

Mar 19, 2012
via Breakingviews

Goldman Sachs history shows resignation naivete

Photo

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

Photo

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

Photo

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

Photo

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

Photo

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.

    • 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"
    • Follow Rob