Blog Profile / Reuters Breakingviews Blog
| URL : | http://blogs.reuters.com/columns | |
|---|---|---|
| Filed Under: | News | |
| Posts on Regator: | 1753 | |
| Posts / Week: | 17.6 | |
| Archived Since: | June 19, 2011 | |
Blog Post Archive
How to have a good argument about economics
As the Great Stagnation stretches out into the indefinite future, the debate on how to respond is loud but inconclusive. Some want stimulus, others austerity, while structural reformers lock horns with monetary activists. Here are five rules for a more productive dialogue.
Wells Fargo boss takes turn on soapbox
John Stumpf runs the biggest U.S. bank but has kept a low profile. Lately, though, he has tiptoed into a role critiquing regulation – one filled mainly by Jamie Dimon. Now the JPMorgan boss has other concerns, and Stumpf is the bank CEO with most credibility on the stump.
Hollande gets serious on Europe – at last
France’s president has outlined a two-year plan to give the euro zone a centralised “economic government”. Addressing a key German concern, Hollande seems ready to agree sovereignty transfers to make it more than a coordinating body. The proposal may be premature. But it has legs.
Bernanke deserves art museum spot next to Pollock
A record $495 mln Christie’s sale set new highs for the abstract expressionist and other artists. More collectors than ever have $20 mln to spend on a single work. It paints a picture of an art world indebted to the Fed chairman and his alternative asset-friendly monetary policy.
Glencore should just name Ivan Glasenberg chairman
The miner’s shareholders have handed Chairman John Bond his walking papers. Best practice dictates his permanent replacement be a strong outsider. This precludes tapping Glasenberg, the miner’s CEO and biggest shareholder. But a dual mandate would better reflect corporate reality.
Rest of world wishes for Australia’s economic woes
The land Down Under has its problems, not least a China-driven commodities downturn and a rising budget deficit. Fears of a housing bubble persist, too. But with unemployment low and the currency falling, Australia has the economic stability other countries dream of.
Speech-tech firm’s M&A machine could go in reverse
Nuance went on a 10-year shopping spree, creating a $6 bln company in the process. But margins are falling, the stock hasn’t advanced in five years, and debt is accumulating. Carl Icahn’s recent entrance could signal an end to acquisitions - even the start of a breakup.
Small-number fixation clouds euro zone picture
The official data show Germany growing and France in a double-dip recession. But that’s based on a difference in GDP of three parts in a thousand - statistically meaningless for what is already a rough measure. The miniscule movements might even hide a major turn upwards.
Japan’s yield spike is no canary in the debt mine
Rising economic optimism has prompted a drop in government bond prices. Yet the cost of insuring against Japanese default remains low. Even if the country’s fabled Mrs Watanabes trim their holdings, the central bank’s bond-buying will keep Japan’s borrowing costs under control.
Tesla shareholders are pulling ahead of themselves
The award-winning $10 bln electric carmaker is trading at a multiple implying fast growth, high margins and mass-market success. The first is doable, the second harder, and the third a long way off. CEO Elon Musk is doing a fine job. But investors seem to assume he’s infallible.
Bangladeshi accord shows limits of market forces
Price isn’t everything, even in the fiercely competitive garment trade. A combination of conscience and public relations has pushed the largest European retailers to agree to curb the industry’s race to the bottom. If the new accord works, it will be globalisation at its best.
Dan Loeb‘s breakup plan deserves Sony’s ear
The U.S. hedge fund manager wants the Japanese electronics giant to spin off its entertainment arm. Activists rarely prevail in Japan. But Loeb’s idea may have merit. In the spirit of the country’s economic renaissance, Sony should take him, and other shareholders, seriously.
Could Silver Lake quietly be rooting for Icahn?
A half-baked leveraged recap plan is the latest salvo from the uppity billionaire in the Dell fight. If the buyout firm backing company founder Michael Dell is spooked by the swoon in PC sales, it can’t easily bail on its $24 bln bid. But Carl Icahn could bail it out instead.
What Would Jamie Dimon Do?
That’s a question investors must answer before voting to split the chairman and CEO roles at JPMorgan. The risk is that a governance win for shareholders prompts Dimon to leave. As petulant as that would be, cutting off your nose to spite your face is a bad investment strategy.
Abenomics pulls Japan from its post-Lehman slump
The prime minister’s war on deflation has scored some early triumphs. All but two components of Breakingviews’ Abenomics Index strengthened in March, taking the gauge to its highest level since September 2008. And that was before the central bank’s bold money-printing pledge.
Apple’s bite out of market seeds IPO appetites
The iPad maker’s $50 bln buyback, as much as the Fed’s easy money, explains surging demand for new equity. Since the depth of the crisis, some $1.4 trln of U.S. share repurchases has far outpaced sales. That should help perfumer Coty and other debutantes looking for buyers.
BT’s free sports gambit tries to out-Sky Sky
The UK telco is fighting back in broadband by offering free sports programming - just as BSkyB used its pre-eminence in content to expand. Investors initially wiped 1.6 bln stg off the key players. The fear of retaliation is justified: price wars are easier to start than to end.
Polls give strife-hit Pakistan a shot at stability
Investors will discount the pre-election rhetoric: no party explains how a broke government can spend more on welfare and infrastructure. Still, by empowering elected leaders, the May 11 election may offer a ray of hope to a nation battling Taliban and sectarian violence.
Three-digit yen no longer a one-way bet
Uncle Sam could use the money. Fannie Mae’s enormous dividend to be paid next month will cut the federal deficit further and give Treasury more headroom under the debt ceiling. But the benefits erode the cover politicians need to tackle entitlement and other much-needed reforms.
ENRC board needs to summon its poker skills
The hapless miner’s independent directors hold a weak hand. But they shouldn’t just fold if ENRC’s dominant shareholders team up to make a low-ball bid for the company. There are risks to losing a deal. Still, there is a floor to a recommendable offer.