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Archived Since:June 19, 2011

Blog Post Archive

Prison break frees Columbia to make a difference

Divesting from private jailers may actually boost the Ivy League school’s influence over a bloated U.S. penal system. Investments that pay off if inmate populations drop rather than rise can prompt fundamental change. The profit may be less, but the returns to society priceless.

Tsipras U-turn only lowers short-term Grexit risks

Greece’s latest bailout plan accepts most of what its July 5 referendum rejected. Creditors will have to actively want a Greek exit from the single currency for it to happen now. Yet fresh austerity, capital controls and Athens’ weak reform record mean the truce may not last.

What was lost in China’s stock market slide

In their attempts to prop up share prices, the authorities abandoned all pretence of respecting market forces. Worse still, their efforts were visibly ineffective. The debacle undermines China’s reputation for competent economic management. It may also set back broader reforms.

Barclays investment bank is hardest to turn round

The UK lender, Credit Suisse and Deutsche Bank have all changed chief executives this July. Each has a distinct investment banking challenge. The Swiss bank is capital-light, Deutsche needs to cut costs. Yet Barclays’ shrinking top line suggests its revamp will be the toughest.

Rob Cox: The (bank) resolution will be televised

Global regulators have made great progress preparing for the technical aspects of a collapse, and resurrection, of a major financial institution. What they need to spend more time on is ensuring they can effectively communicate the process to a world consumed by financial panic.

Trade halts add to China’s Potemkin market problem

Boom, bust and bailout already make it hard for outsiders to take Chinese stocks seriously. An extraordinary slew of trading halts, trapping investors in hundreds of stocks, makes things worse. Bosses and bourses get a temporary respite at the cost of their own credibility.

NYSE, United give glimpse of connectivity’s future

Tech woes grounded Big Board trading and the airline’s planes for a few hours. Chance, not a zombie apocalypse, explains these snafus and a Wall Street Journal glitch the same day. But as computers drive more businesses, occasional multiple outages may be common – and related.

China market slide turns brokers into policy tools

Authorities have enlisted securities houses to prop up stocks. As with China’s banks, financial returns rank below official aims. It’s a far cry from the expansion Haitong and Huatai promised as the industry raised $25 bln this year. No wonder investors are running for cover.

Univision’s IPO could be just a warm-up act

Private equity backers are finally floating the fast-growing, debt-laden U.S. Spanish-language broadcaster. Univision would make a nice fit for Disney, Time Warner or CBS. A full sale, however, may wait until the valuation – and minority owner Televisa’s position – is clearer.

Latest pharma roll-up leaves lots of room to grow

Horizon’s $1.75 bln unsolicited offer for U.S. rival Depomed continues the sector’s M&A rave fueled by tax savings and cost cuts. The Irish bidder is a recent entrant on the scene, so its low debt load and small size means it can easily expand. That portends more deals ahead.

Oil is grounded in a sub-$60 bear market

Brent crude fell over 6 percent on the back of worries about Greece and the prospect of an Iran nuclear deal. The latter has a much bigger, if delayed, impact. As U.S. shale drillers cut costs fast and Saudi Arabia goes for volume, ample supply is likely to keep a lid on prices.

Elliott buys new stick to beat Samsung

The activist fund has a new lever to oppose the South Korean group’s ruling Lee family over a $9 bln merger. Buying stakes in two more group firms probably ups Elliott’s total outlay on Samsung by more than a quarter. This makes the fight more complex – and perhaps uglier.

Chinese shares still look overvalued

Mainland authorities are taking ever-bolder steps to prop up stocks which have dropped almost 30 pct in three weeks. Yet earnings growth is slowing and valuations are still high when compared with other markets. If fundamentals matter, Chinese equities have further to fall.

Hugo Dixon: Greece will struggle to stay in euro

After the people gave an emphatic “No” to the creditors’ proposals, there are still several ways Athens could avoid the drachma. But none seems terribly likely. All routes will lead to further hardship.

Hugo Dixon: How to jump Greece’s next debt hurdle

Even if the Greeks vote “Yes” in Sunday’s referendum, the country will struggle to pay a bond owned by the ECB on July 20. Failing to pay could trigger the bankruptcy of the country’s entire banking system. Financial engineering may provide a solution.

Life after default: Malaysia’s tips for Greece

The Asian country shunned an IMF lifejacket in 1998. Greece could soon be in a similar boat. Breakingviews imagines former leader Mahathir Mohamad’s advice to Greek PM Alexis Tsipras: devalue, fix the banks, and boost spending – but don’t bother jailing your finance minister.

Healthcare M&A pumped after Obamacare booster shot

The U.S. top court decision upholding medical-coverage subsidies signals the official start of a race to consolidate. Centene and Health Net’s $6.3 bln deal gives the insurers an early lead. Big rivals like Cigna may catch up as the industry accepts that reform is here to stay.

Hugo Dixon: Greeks choose between bad and terrible

Voting “Yes” in Sunday’s referendum would mean Greece suffers at least two years of recession. Voting “No” would bring financial havoc in the short run followed by the return of the drachma, hyperinflation and deep-seated economic depression. The right answer is “Yes”.

Ousted CEO shows risks of SoftBank startup splurge

Indian property site Housing.com has fired founder Rahul Yadav six months after the Japanese conglomerate became its largest shareholder. The 26 year-old was a liability and had to go. Still, it’s a reminder of the perils of listed companies making venture capital investments.

ACE aims to defy history with $28 bln Chubb deal

The Swiss insurer is buying its upscale U.S. rival. Cost and tax savings don’t cover the premium, implying ACE believes in promised revenue gains, also touted in the Willis-Towers Watson merger this week. The failed 1999 marriage of Provident and Unum, though, provides a warning.

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