What’s Important in the Financial World (7/31/2012)

A headline on the home page of Coke.com reads “Battle for Everything.” It is a promotion for a film that failed at the box office — “Battleship.” It could describe the match the Coca-Cola Co. (NYSE: KO) has set to decide who will be its new chief executive. At least that is what outside analysts guess. Hidden deep inside the Coke site, beyond the promotions for the Olympics, is a press release that says:

Ahmet Bozer, currently President of the Eurasia & Africa Group, will be appointed President of Coca-Cola International. Steve Cahillane, currently President and Chief Executive Officer of Coca-Cola Refreshments (CCR), will be appointed President of Coca-Cola Americas.

One of these people will become the CEO of Coca-Cola Co. when Muhtar Kent, who is 57, retires. That may be several years off — probably sometime around the 2020 Olympics.

A U.S. Postal System Default

The U.S. Postal System probably will default on about $5 billion owed to the Treasury as soon as this week. There are actually two payments, one of $5.5 billion due now and another in September for $5.6 billion. Each is earmarked for benefits for postal employees who will retire in the future. An analysis by the federal government claims the USPS loses $25 million a day. There may be no solution to how retiring postal workers gain access to future benefits. Congress is not required to make the pensions whole. The USPS is required to do so, but that does not matter much if the red ink continues. The post office has not gotten permission to lay off tens of thousands of workers to balance its books. While it may seem impossible, the agency could solve its employment and pension problem, perhaps, by turning the issues over to a bankruptcy judge.

LinkedIn Matters

CNNMoney has added its voice to the chorus that says that LinkedIn is the “only social network that matters.” Website Business Insider has made the same argument for months. Part of the assumption that LinkedIn is so important is that Facebook and Twitter are useless, at least economically. A look at the shares of Facebook Inc. (NASDAQ: FB) and LinkedIn Corp. (NYSE: LNKD) shows that Wall St. supports the CNNMoney and Business Insider cases. One of the buttresses for the argument about LinkedIn’s prowess is that it has two revenue streams — advertising and professional services. Facebook and Twitter, some analysts argue, barely have one because the ad revenue they generate is so small compared to their user bases. LinkedIn reports earnings on Thursday, so its boosters will get a chance to further their case — or not.

Douglas A. McIntyre