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Thursday, 20 June 2013

BREAKINGVIEWS

Fed, Fiscal policy, Bernanke

Bernanke's legacy at Fed won't be his to forge

19 June 2013

Obama says the chairman has done enough. If so, his successor will face the task of rolling back years of ultra-easy policies. Jittery markets make that tricky even for a known Fed boss. After Wednesday, Bernanke may have only five FOMC meetings left to help set a new direction.

Enlisting China underscores the Petrobras crunch

19 June 2013

Brazil’s state-controlled oil company is being forced to sell fuel at a loss to restrain inflation. The government also wants Petrobras to pump $65 bln into the economy by investing in refineries. Involving China’s Sinopec as a partner may help but such aid can’t be coming cheap.

Nicaragua canal

More geopolitics than shipping in Nicaraguan canal

19 June 2013

A controversial $40 bln project to rival Panama’s passage doesn’t seem to make financial sense. But if its Chinese sponsor is any kind of proxy for Beijing, the idea of one day balancing U.S. influence in Central America isn’t far-fetched. And for that, the price could be right.

Brazil's new-look resource nationalism still hurts

19 June 2013

A long-awaited mining bill reflects weakening commodities prices. Instead of a windfall tax, royalties may double. The market expected worse, but a levy on mine revenue rather than profit will still make future projects less viable. The new law could dent investment – and Vale.

The logo of oil company Eni-Saipem is pictured at its headquarters in Rome February 8, 2013

Eni could be better off holding on to Saipem

19 June 2013

The Italian oil major probably wishes it didn’t own 43 pct of Saipem, the struggling oilfield contractor. Ditching the unit was politically tricky before a string of profit warnings. Now, with investor faith in Saipem crumbling, Eni’s least-bad option may be to keep it.

Home Depot

Home Depot out-flips and strips private equity

19 June 2013

A Carlyle-led group bought the retailer’s wholesale arm for $8.5 bln just before the real estate bubble burst. The firms should recoup on paper their HD Supply investment in the IPO. Home Depot fared better. With the proceeds, it bought back shares – which have since doubled.

The Dish Network logo on the side of installers truck is seen in Denver March 2, 2009.

Dish refines guerrilla campaign against SoftBank

19 June 2013

The satellite TV company won’t up its bid for Sprint, paving the way for SoftBank to buy the U.S. telecom provider. Instead it’s focusing on winning a chunk of Sprint’s subsidiary, Clearwire. Dish’s switch in tactics may yet be enough to force SoftBank to sign a peace agreement.

UK banking report pulls more punches than it lands

18 June 2013

The long-awaited parliamentary report on UK banks is underwhelming. A “Fred Goodwin” law that could put the reckless in prison is a bold idea. A call for an inquiry into banking competition is right but hardly novel. Ultimately, the work is long on words and short on deeds.

Ian Livingston attends a session at the World Economic Forum (WEF) in Davos January 27, 2011

BT does its best to counteract government poaching

19 June 2013

After leading an impressive turnaround, Ian Livingston is leaving the UK telco. The timing is surprising: BT is embarking on a big push in TV. But it’s hard to make the boss say no to a government job. And BT has plumped for a strong internal candidate who signals continuity.

BREAKINGVIEWS TV ON INSIDER

Breakingviews E-book

Japan’s prime minister has electrified investors with his three-pronged strategy to shock the country out of its economic malaise. Abenomics has profound implications not just for Japan, but for the rest of the world too. Our new book examines the economic phenomenon of the year.

Calculators

Columns

Edward Hadas: Rate rigging costs more than money

19 June 2013

In cash terms, the manipulation of supposedly objective reference rates and prices is a petty crime: relatively small gains for a few and microscopic losses for many. Ethically, though, the tolerance of untrustworthy behaviour makes the industry look particularly bad.

Andy Mukherjee

India in depth: Diaspora’s yield hunt gone wrong

18 June 2013

Indians living overseas thought rupee deposits paying 9 percent were a great deal. Not anymore. Alarmed by a falling currency, the diaspora may unwind its $47 billion carry trade, causing a deposit crunch at Indian banks and complicating the financing of the nation’s trade gap.

Features

G8 is forum for hard questions about central banks

17 June 2013

When world leaders talk about monetary policy this week, they should discuss how to replace the discredited shibboleths of central banking, namely narrow inflation targeting and political independence. It’s time for more nuanced - and controversial - goals and tools.