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Archived Since:June 19, 2011

Blog Post Archive

Scandal in Seoul masks bigger economic problems

A furore over a quirky confidante is buffeting South Korean President Park Geun-hye. The regularity of such crises attests to poor governance. But that's only part of a larger challenge: avoiding Japan-style stagnation despite heavy debts, weak exports and an ageing

Breakdown: Gauging the risks of a China crisis

Debt is rising rapidly, while the links between the official banking system and shadowy institutions are growing deeper and harder to fathom. The People’s Bank of China can probably ride to the rescue in the event of a shock. But a painful credit crunch will be harder to avoid.

Emperor Xi gets new clothes

China's Communist Party named President Xi Jinping as its "core" leader - a title previously granted to icons like Mao and Deng. But Xi needs more than titles to implement tough reforms; he needs provincial allies and a viable vision for economic policy. He may have neither.

GE joining M&A frenzy would be no shocker

The industrial giant is rebuffing reports it might buy $23 bln oil-services outfit Baker Hughes. But after selling some $200 bln of financial assets plus appliances and media, GE is in fighting shape for an offensive. If it can find Alstom-like targets, shareholders will gain.

Britain’s Brexit airbag can’t cushion everyone

Nissan’s UK plant will get state help if its competitiveness is harmed by Britain leaving the EU. Offsetting potential tariffs is unorthodox, but feasible and not especially expensive, even if rolled out to the whole industry. But picking winners also means picking losers.

Viewsroom: AT&T’s dog of a deal

CEO Randall Stephenson’s $85 bln offer for Time Warner lacks strategic rationale, has politicians of all stripes criticizing it and has destroyed shareholder value while denying owners a vote. All it lacks – so far – is an activist shareholder demanding it be scrapped.

AT&T deal may yet help more indie M&A shops

The year's biggest merger enlisted boutiques Perella Weinberg and Allen & Co alongside their bigger Wall Street rivals. If the $85 bln Time Warner acquisition emboldens other CEOs, the likes of Lazard and Moelis should benefit. They can use the help amid a patchy advice market.

Resilient UK growth adds to policymakers’ quandary

GDP rose by 0.5 pct in the third quarter as the economy barely broke its stride after Britain voted to leave the EU. The good news makes it harder for the government and Bank of England to justify a hefty stimulus. But if things do get worse their response may come too late.

Samsung heir’s new job comes with tough to-do list

Shareholders put Jay Y. Lee, son of the electronics group's patriarch, on the board. That makes his role official just as Samsung grapples with the Note 7 fallout and an activist investor's demands. Lee's accountability and signs of greater transparency come at the right time.

Comcast schools AT&T on media M&A

The cable giant now streams a third of its revenue from NBC Universal, a deal it concluded in early 2013. The regulatory and political climate was more accommodating and CEO Brian Roberts' strategy sound. AT&T's $85 bln bid for Time Warner, by contrast, is a dog's breakfast.

Oil prices are too gloomy on chance of OPEC deal

Crude prices have wilted after Iraq joined Nigeria, Iran and Libya in seeking exemptions from production cuts. But this need not be the death knell of a deal to reduce output. Even a small reduction to production would balance a market that is now only narrowly oversupplied.

SoftBank’s $100 bln VC dream requires creativity

Masayoshi Son's group has pledged a quarter of the total touted for a giant technology fund venture with the Saudis. That's a lot for a company with a strained balance sheet. But fees from the fund, hybrid bond issues and asset sales mean Son has plenty of ways to find cash.

Apple demonstrates why it doesn’t need Time Warner

The iPhone maker sniffed around, but never made a bid for, the media firm AT&T's buying. It would've been an alarming acknowledgement of a tough future in the maturing smartphone market. A decent new iPhone and rising service revenue are sufficient to forestall desperate M&A.

Cox: AT&T opens itself up to activist attack

CEO Randall Stephenson is an old-fashioned empire builder cut from Jean-Marie Messier cloth. In an era of pushy investors, however, running roughshod over shareholders to play Hollywood mogul doesn't fly. There's a blueprint for challenging this terrible plan to buy Time Warner.

AT&T runs corporate finance into populist uprising

The $85 bln acquisition of Time Warner would consolidate an industry already controlled by a small group. It's just the sort of concentrated power that gave rise to the likes of Donald Trump and Bernie Sanders. This deal, which both oppose, could become a symbol for the movement.

Infrastructure dream grounded by Heathrow reality

Britain has finally agreed to add a runway to London’s main airport. Even now, the plan may yet founder. Western democracies face challenges when launching big projects. The benefits of a renewed splurge of infrastructure spending will take decades to materialise.

Free trade can survive its Wallonian wobble

The tiny Belgian region is holding up a trade pact between Europe and Canada. That doesn’t mean such deals are impossible, though - they just need even more time and creative thinking. The messy process also undermines the notion that ordinary people have no say in globalisation.

China’s “bicycle Ubers” worth taking for a spin

MoBike and ofo are billed as sexy pedal-powered answers to the ride-hailing app. The startups, backed by local tech giants, are actually asset heavy and capital-intensive. They face unique risks, but pairing smart hardware with rental economics justifies some enthusiasm.

AT&T goes Looney Tunes for Time Warner

The U.S. telecom titan is paying $85 bln for the media conglomerate behind HBO, CNN and Bugs Bunny. Conventional financial analysis can't justify the whopping premium on offer. Instead, Time Warner shareholders benefit from AT&T's desperate search for a new business model.

Spanish government begins to make up for lost time

The country's Socialist Party will allow acting Prime Minister Mariano Rajoy a second term, ending 10 months of political deadlock. His minority administration will now begin arduous tasks like cutting the budget deficit as the economy slows. A fractured parliament won't help.

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