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Archived Since:June 19, 2011

Blog Post Archive

Singapore joins global battle against deflation

The city-state has problems others would love to have, including a budget surplus and low unemployment. But falling prices and exposure to weak global trade are a concern. That’s why the monetary authority has unexpectedly eased policy by pledging to keep the currency stable.

Banks can’t rely on lifeboats when Titanic sinks

JPMorgan is among five big U.S. firms that failed the living wills test. That’s because they counted on liquidity from other subsidiaries that could be cut off from providing aid when things go awry. The regulators’ message to Wall Street is clear: every man for himself will prevail in the next crisis.

One thing Tesco doesn’t stock is pricing power

Same-store sales and operating profit are rising, but prices on the UK grocer’s shelves keep falling. It’s a problem for rivals too. Tesco used to be dominant in a concentrated market; now it’s just plain big. Consumers’ gain will be investors’ loss for the foreseeable future.

Deals can help Japan’s banks offset dollar drought

Mega-banks MUFG, SMFG and Mizuho are making new loans abroad faster than they can amass matching deposits. This headache has boosted the cost of swapping funds from yen to dollars, and made regulators in Tokyo wary. Buying smaller U.S. lenders would help reduce the mismatch.

Goldman left with long-term greedy as only option

The Wall Street firm’s executives would boast that they’d rather wait for riches than make a quick buck. Lloyd Blankfein’s minions may not have a choice. A dismal start to 2016 for the industry and several years of subpar earnings ahead justify the bank’s discount to book value.

Italy’s bank rescue is a risky Plan C

Rome has corralled banks into backing a 6 bln euro rescue fund. It’s something, but raises knotty governance issues without decisively plugging bad debt holes. Were they available, market solutions or creditor bail-ins would have been much better than stiffing the bank sector.

Corporate America could price bigotry beyond reach

Opposition to anti-LGBT state laws is growing: PayPal nixed a new North Carolina office; Apple, Google and Facebook won’t invest more in the state. Rocker Bryan Adams refuses to play in Mississippi. With resistance now financial as well as moral, bias makes zero economic sense.

Wall Street fingerprints are all over 1MDB scandal

A parliamentary inquiry notes the Malaysian fund made suspect payments worth over $4 billion. Bond deals arranged by Goldman Sachs have attracted the most scrutiny. But the likes of Deutsche Bank and JPMorgan also played key roles in helping 1MDB raise and move money.

Rail mega-deal pushed all the wrong buttons

Canadian Pacific’s unsolicited $28 bln offer for rival Norfolk Southern managed to alienate nearly every ally it needed: U.S. regulators, the target’s board, customers, lawmakers and even the American military. The bidder has finally pulled the right lever – eject.

Yahoo could be good home for sidebar of shame

The parent of scandal-peddler Daily Mail may bid for the U.S. media group. That could catapult the MailOnline onto ad buyers’ agendas. Since owner Viscount Rothermere has spent a decade diversifying away from news, the best deal might be one that breaks the UK group up.

Post-Starwood, China Inc must reassure M&A targets

The failed $14 bln deal may make foreign firms warier about Chinese bids. Big break fees, plus plenty of detail on financing, ownership, and official support, will help soothe future targets. But ironclad guarantees are impossible. So higher premiums will be needed too.

Review: Stop blaming the world’s central bankers

That’s the message of a new book, “The End of Alchemy”, from the former governor of the Bank of England, Mervyn King. It doesn’t completely wash. Low rates bear much responsibility for seeding the financial crisis - and it was central banks, after all, that set them.

MetLife’s SIFI label doomed by D.C. double-talk

A U.S. judge tossed the insurer’s designation as a systemically important financial institution because a regulator couldn’t keep its story straight. FSOC said it both had and hadn’t changed its rules, prompting a decision that it acted arbitrarily. An appeal will be tough to win.

Viewsroom: M&A overdose, Panama papers, Disney demise

The Pfizer-Allergan deal comes to a screeching halt, while a document dump exposes the elite's offshore tax finagling. Plus: An heir apparent loses the keys to the Magic Kingdom.

Credit Suisse wise to flaunt Brexit neutrality

The Swiss bank has banned staff from events and debates tied to the UK’s EU referendum. Overt partisanship might have unnerved some Credit Suisse clients. As Switzerland renegotiates its own trading terms with Europe, Brexit impartiality also makes sense for its domestic banks.

Stronger yen heightens pressure on Bank of Japan

One U.S. dollar now buys less than 109 yen, versus 120 at the start of the year. That is bad news for corporate earnings, inflation, and state finances. Direct intervention would be unpopular abroad. The central bank, already deep in experimental territory, may need to do more.

Disney leadership hitch evokes Eisner era

After losing his heir apparent, Bob Iger may opt to stick around beyond a planned 2018 retirement date. His predecessor, Michael Eisner, botched a succession plan and overstayed his welcome after a successful first decade as CEO. There’s a danger Disney history repeats itself.

Cox: Dan Loeb helps one Abenomics arrow hit target

Forget the Bank of Japan’s negative interest rate blunder, or the government’s muddled fiscal policies. Prime Minister Shinzo Abe’s corporate-governance reforms hold the most promise. The pushy investor’s fight with the operator of Seven-Eleven convenience stores offers a useful glimpse.

The British Museum should ask for more from BP

Climate change activists are protesting against the London institution’s sponsorship from the oil group. For the museum, the cost of accepting patronage has risen. More to the point, BP pays less of its annual pre-tax profit in charitable giving than FTSE 100 peers on average.

Jamie Dimon stands up to bank breakup bullies

The JPMorgan CEO’s latest annual missive tackles everything from Brazil to Brexit. An overriding message that bigger is better in finance mostly resonates, however. A reasoned case like Dimon’s is key as the likes of Bernie Sanders and Neel Kashkari advance the carve-up cause.

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