Tom Buerkle
ReutersBreakingviews
New York, NY, United States
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Past articles by Tom:
Hedge funds just can’t cope with rising markets – Breakingviews
The industry has become a chronic investing laggard as most assets rise. Even the flagship fund of Ray Dalio’s Bridgewater was down some 5% this year. Ex-Harvard whiz Jack Meyer is closing shop after years of bad results. Hedge funds’ $3.2 trln of money looks under threat. → Read More
Boeing’s 737 disruption is still not maxed out – Breakingviews
The aerospace giant is owning up to nearly $7 bln in charges and increased costs over the grounding of its troubled MAX jet. The tally is bound to grow, and a return to service in the fourth quarter is far from guaranteed. Airlines and investors should brace for more turbulence. → Read More
America’s record recovery runs on borrowed time – Breakingviews
It’s been over 10 years since the economy pulled out of the great recession. That’s unprecedented, yet cycles have lengthened as services predominate over manufacturing. Risks to the outlook have grown, meanwhile, and there’s less room to ease policy when the next downturn comes. → Read More
Apple tastes luxury’s less lustrous side – Breakingviews
Jony Ive, whose iMac and iPhone designs fueled the $920 bln firm’s meteoric rise, is leaving - and at a time when phone sales are falling and trade flows under threat. Design-dependent brands can recover from creative brain drain, but it’s sometimes a painful process. Just ask Gucci. → Read More
Facebook discovers money is tougher than data – Breakingviews
Fed Chair Jerome Powell joined foreign watchdogs in vowing tough scrutiny of the $539 billion company’s planned crypto coin. Some of its own partners may have doubts about the project, too. The tactics Facebook used to pioneer social networking don’t transfer easily to finance. → Read More
Buybacks prolong Wall Street rally nobody loves – Breakingviews
U.S. stocks are near record highs – thanks in part to purchases by their issuers. Investors are pulling out of equities and fund managers report extreme bearishness amidst a weakening global economy. Hopes of Fed rate cuts are a fragile support when it’s the only game in town. → Read More
Facebook throws down crypto-gauntlet to critics – Breakingviews
The social network’s poor track record on privacy makes it an unlikely creator of digital money. Yet it boasts 2.4 bln users and has enlisted some of the biggest names in tech and finance as partners. The new currency, Libra, is a bet that Facebook’s trust problems are overblown. → Read More
Boeing order drought compounds 737 MAX woes – Breakingviews
Airlines have turned stingy this year, ordering fewer planes from the $200 bln aerospace giant and 100 bln euro rival Airbus. Boeing already faces a long delay getting its grounded jet back in the air. A weakening aviation market is the last thing the company and its owners need. → Read More
Cool U.S. jobs report helps Fed run economy hot – Breakingviews
Employment gains in May were weak. The volatile data doesn’t yet reflect the latest trade tensions. Meanwhile, traders are betting the central bank will soon cut rates rather than stand pat. Weak inflation and rising productivity give the Fed room to do so, but it may take time. → Read More
Facebook coin may aid crypto-rivals more than self – Breakingviews
Mark Zuckerberg’s social network could launch its own digital currency as a way into global payments, but it faces daunting trust and regulatory issues. Still, if some of its 2.4 bln users get hooked, that would boost the likes of bitcoin as well as blockchain technology overall. → Read More
SEC’s new conflict rule does investors few favors – Breakingviews
The U.S. securities watchdog is tightening conduct standards a bit for brokers while loosening them for investment advisers. The industry-friendly fudge leaves investors to fend for themselves. Sharp dissent within the commission underscores the weakness of that approach. → Read More
Buffett may find value in crypto lunch ‘n’ learn – Breakingviews
Blockchain developer Justin Sun can afford the $4.6 mln he has bid for lunch with the Berkshire Hathaway boss. Any shift by Buffett, who has labeled bitcoin a fraud, could ignite digital assets. The sage of Omaha will get a check for his charity and a much-needed tech tutorial. → Read More
As impact investing grows, its purpose strays – Breakingviews
Investing for social or environmental good, once a niche for foundations and development banks, now attracts the likes of Blackstone and KKR. There’s plenty of demand for the sector’s $500 bln of capital. For the biggest players, though, it’s still all about market-rate returns. → Read More
Bond market rate cut beats Fed to the punch – Breakingviews
U.S. Treasury yields have fallen over a quarter point in a month, equivalent to a central bank easing. Blame trade worries plus structural factors like weak inflation and negative rates overseas. Fed rate cuts are never a one-off; this market-led one is unlikely to be different. → Read More
Payments bonanza has spoils even for latecomers – Breakingviews
Global Payments’ $22 bln merger with Total System Services is the sector’s third big deal this year. What it lacks in first-mover advantage it makes up for with sensible terms – the premium is less than FIS is giving Worldpay. Missing consolidation would have been a worse fate. → Read More
Brazil’s Natura is Avon’s logical final house call – Breakingviews
An equity value around $2 billion is an ignominious end for the famous cosmetics brand. But the Sao Paulo-based buyer, which also owns Body Shop and Aesop, is probably the right one, strategically and geographically. Synergies worth more than 3 times the premium attest to that. → Read More
Boeing boss’s job is to restore trust – or quit – Breakingviews
The aerospace giant has a technical fix to the problem that caused two 737 MAX crashes. The real challenge for CEO Dennis Muilenburg is to regain the confidence of regulators and the public. That starts with owning up to mistakes made. If he isn’t up to the task, he should go. → Read More
Bitcoin’s latest surge lacks ground support – Breakingviews
Markets are again eyeing the digital currency after it doubled in six weeks. Yet adoption of its blockchain technology remains sluggish and applications developed by Amazon, Microsoft and others don’t need the crypto-asset. That virtually assures more bitcoin volatility. → Read More
Legg Mason checks all boxes for activist interest – Breakingviews
Nelson Peltz is eyeing the underperforming manager of $758 bln of assets. As a mid-sized purveyor of mostly actively managed funds, Legg Mason sits in the industry’s biggest danger zone. High costs offer some low-hanging fruit, but a sustainable turnaround is a tougher challenge. → Read More
Goldman beats path to new Wall St hunting ground – Breakingviews
The firm is courting an investment adviser in what would be its largest deal since the financial crisis. United Capital’s $23 bln in assets are a drop in the bucket for Goldman Sachs, but bring the kind of predictable earnings that boss David Solomon wants. He’s not the only one. → Read More