Schumpeter
Business and management
Citigroup
More pain
Dec 6th 2012, 3:13 by T.E. | NEW YORK
ANNOUNCEMENTS from Citigroup come in two forms: bad news, and bad news with a glimmer of hope. On Wednesday the bank delivered the latter, outlining its "logical next steps", which included sacking 11,000 employees, 4% of its workforce, closing branches and reducing its presence in a string of global markets.
The stockmarket applauded the moves, sending Citi's shares up over 6%, presumably on the premise that since it hasn’t done much well, doing less is better. The savings are projected to amount to $1.1 billion. While hardly inconsiderable, that is less than 10% of current revenues.
Medical equipment
Dialysis deal
Dec 4th 2012, 17:30 by C.H. | NEW YORK
AS THE world gets older and wider, it is also getting sicker. Obesity rates nearly doubled from 1980 to 2008. This is bad news for individuals. It is fantastic news for health-care companies, which are jostling to treat patients with chronic disease. On December 4th Baxter, an American maker of drugs and medical devices, said it would pay $4 billion to acquire Gambro, a privately held Swedish firm that makes dialysis equipment. It is the biggest deal in Baxter’s history.
Money talks: December 3rd 2012
Next in line
Dec 4th 2012, 3:03 by Economist.com
OUR correspondents discuss the latest in the Libor scandal, plans to buy back Greek debt and Anglo-French tensions over European banking union proposals
Law firms
The priciest partnerships
Dec 3rd 2012, 18:34 by R.L.G. | NEW YORK
HOW DO you value a company when you cannot look at its books? That was the dilemma facing American Lawyer, which writes about the business of law firms. Undaunted, the magazine took a crack, and assigned a dollar value to 100 top firms. The results are something of a surprise.
The Securities and Exchange Commission
Merger talks
Nov 30th 2012, 21:50 by T.E. | NEW YORK
THE resignation of Mary Schapiro as head of the Securities and Exchange Commission is producing more than the usual transitional ripples, largely because whoever follows her will be in a position to not only lead the troubled agency, but shape its mission and structure.
Retail in developing countries
Selling sisters
Nov 29th 2012, 12:18 by E.C. | LOS ANGELES
IN THE late 19th century “Avon ladies” started to knock on America’s doors to sell beauty products. In the early 21st century “phone ladies” began offering phone service to rural Bangladesh by renting out their mobile phone. Now a growing number of women entrepreneurs in poor countries are combining both distribution models to sell everything from soap and nutrition to medicine and solar lamps.
Spanish banks
Bail-out tapas
Nov 28th 2012, 20:50 by J.R.
THE delightful (though small) plates of tapas that often accompany an evening drink in Spain can, if eaten with gusto, end up replacing the meal they were meant to precede. After four years of appetiser-sized bank restructurings, bail-outs and reforms, Spain’s banking system may finally be getting its fill of public money.
Money talks: a good pick
November 26th 2012
Nov 26th 2012, 22:49 by Economist.com
OUR correspondents discuss Mark Carney's appointment to the Bank of England, a row over central-bank powers in Japan, and the perennial question of America's fiscal cliff
The Bank of England's new governor
Canada home and dry
Nov 26th 2012, 19:13 by J.O.
THE Premier League’s transfer window does not open until January but George Osborne, Britain’s chancellor of the exchequer, has done some early dealing. Mark Carney, currently the head of Canada’s central bank, will be the Bank of England’s new governor, when Sir Mervyn King steps down next June. “He is quite simply the best, most experienced and most qualified person in the world to do the job,” said Mr Osborne in a press statement. This is somewhat like saying Lionel Messi, Barcelona’s striker, is the best man to lead Arsenal’s attack: the hyperbole is warranted; it is just that few ever thought Mr Carney, like Mr Messi, could be hired by another team.
UBS’s rogue trader
Collective responsibility
Nov 26th 2012, 15:31 by L.P.
A FEW days ago Kweku Adoboli, a former trader at UBS, discovered what it meant to have caused a $2.3 billion loss: he was convicted on two counts of fraud and faces up to seven years in prison. Now the bank has to digest repercussions of its own: regulators in Britain, where the losses were incurred, and Switzerland are sticking it to the firm.
Britain’s Financial Services Authority (FSA) fined UBS nearly £30m ($48m) over the rogue trader—the third largest fine the regulator has imposed in its history. “UBS failed to question the increasing revenue of the desk and failed to ensure that there was a corresponding increase in the controls in place over the desk.
Governing the Bank of England
An inside job
Nov 26th 2012, 10:59 by Economist.com
OUR correspondents reveal this newspaper's favoured candidate to run Britain's central bank
Coffee and tea
American jitters
Nov 22nd 2012, 17:45 by J.F. | ATLANTA
YOUNGER Americans will have to take our word for it: there was a time, way back when Ronald Reagan was president, when your countrymen ordered coffee by simply asking for “coffee”. Ordering a “venti skinny chai latte” or a “grande chocolate cookie crumble frappuccino” would have earned, at best, a blank stare.
Additive manufacturing
Print me a jet engine
Nov 22nd 2012, 12:54 by P.M.
CONFIRMATION as to how seriously some companies are taking additive manufacturing, popularly known as 3D printing, came on November 20th when GE Aviation, part of the world’s biggest manufacturing group, bought a privately owned company called Morris Technologies. This is a small precision-engineering firm employing 130 people in suburban Cincinnati, Ohio. Morris Technologies has invested heavily in 3D printing equipment and will be printing bits for a new range of jet engines.
UBS’s rogue trader
No sacrificial lamb
Nov 20th 2012, 23:57 by L.P.
“A LESSON”. This was how Charles Sherrard, a lawyer for Kweku Adoboli, described the trial against the former UBS trader whose activities led to losses of nearly $2.3 billion, when he closed his case. And a lesson it was—for all involved: for the 32-year old Ghanaian-born Mr Adoboli, who will spend up to seven years in prison after a jury in London’s Southwark Crown Court found him guilty on two counts of fraud on November 20th; for the jury itself, who had a hard time understanding the financial jargon cited during the trial; and for the once-esteemed Swiss bank, which was more than just a victim.
HP and Autonomy
Conflicting accounts
Nov 20th 2012, 21:51 by P.L.
IN AUGUST 2011, when HP said it would buy Autonomy, a British software company that specialises in analysing “unstructured” data, for $10.3 billion, many people thought the Californian maker of computers and printers had paid over the odds. On November 20th HP agreed that it had—and claimed that it had been duped. It said that it was taking a charge of $8.8 billion related to Autonomy in its fourth-quarter results, of which more than $5 billion was “linked to serious accounting improprieties, misrepresentation and disclosure failures”. Some of Autonomy’s former managers, it said (naming no individuals), had inflated the company’s figures before the acquisition.
In this blog, our Schumpeter columnist and his colleagues provide commentary and analysis on the topics of business, finance and management. The blog takes its name from Joseph Schumpeter, an Austrian-American economist who likened capitalism to a "perennial gale of creative destruction"
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