China has towering international influence and a huge population. It will soon be the world’s largest economy too. But it’s hard to know what makes the People’s Republic tick. Enter the Breakingviews required reading list, eight works agreeably free of “dragon” in the title.
The Swiss bank’s weak capital position is a strategic straitjacket. For incoming boss Tidjane Thiam to be able to grow its private bank in Asia or elsewhere, a big rights issue is essential. Cutting a third of investment banking assets would ease the burden on shareholders.
The South American nation tried to live a currency lie in 2001. But even clever schemes could not stave off crisis. Fernando Fernandez of IE Business School argues that Greece is in a similar situation. Clever plans cannot save the country from an untrustworthy government.
Richard Thaler’s “Misbehaving” is the story of a supposedly new approach to people’s economic decision-making. The great insight is that we’re often funny about money. Entertaining anecdotes have helped this specialized field gain attention. The science of nudge has little to offer.
The U.S. Treasury will finally put a female face on its money again. Judy Garland, Victoria Woodhull, Amelia Earhart, Rosa Parks, Beyoncé, Edith Bolling Wilson, Rachel Carson, Katharine Drexel, Jane Addams, Eleanor Roosevelt, Melinda Gates, Oprah and Caitlyn Jenner make our list.
Blackstone’s Steve Schwarzman is the latest financial bigwig to argue that the enforced shrinkage of banks’ activities is hurting liquidity so badly that it could fuel the next crisis. A look at how markets have changed – and how brokers actually behave – suggests otherwise.
The $1 bln buyout undervalues the specialty chemicals maker, writes Jeffrey Bronchick, whose Cove Street owns a 1.5 pct stake. The implied price Apollo is paying for the main magnetics unit is just 1.7 times EBITDA. Barring a revolt, a go-shop provision is the last best hope.
Many people in the financial markets have never worked through U.S. policy rate rises. Unhappily, training and textbooks are of limited use, because there are no precedents for the end of so many years of ultra-low rates. Besides, crisis and regulation have transformed trading.
If and when Greeks stop draining deposits, the country’s banks still face a big problem: not enough equity to absorb losses on bad loans. Soon 40 pct of assets will be in trouble. Some will recover with the economy, but lenders need lawmakers to amend bank-unfriendly rules too.
Japan Inc. faces unprecedented pressure to get leaner, better-run, and more profitable. Real success means higher returns on equity. First comes a tough AGM season that could embarrass the likes of Sony and Sharp. Then expect more buybacks, stake sales, activism and M&A.