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Sunday, 23 November 2014

BREAKINGVIEWS

A man hands out U.S. flags at a naturalization ceremony for 3,703 new U.S. citizens from 130 countries, in Los Angeles, California.

Certain gridlock offsets Obama's immigration move

21 November 2014

Coaxing 5 million undocumented immigrants out of the shadows could provide an economic boost, generating tax revenue and jobs. But the executive action virtually ensures Republicans won’t compromise on other priorities like tax reform, infrastructure and trade. It’s a wash.

Aviva

Aviva's Friends tie-up is far from done

21 November 2014

The UK insurer wants to buy its peer for 5.6 bln stg in shares, bulking up in its challenged home market. For a 15 pct premium, Friends would get a surer future. Aviva gets some cash flow. Yet Friends’ entrepreneurial backers add complexity - and it may attract an interloper.

A Chinese bank employee counts yuan notes at a local bank in Nanjing, capital of east China’s Jiangsu.

China’s rate cut shows depth of growth concern

21 November 2014

The first cut to lending rates since 2012 shows the limits of Beijing’s tolerance of slowdown. It should save some riskier loans from going bad, and breathe some life into a zombified property market. But huge adjustments remain, and long-suffering savers will still be left worse off.

Mario Draghi, President of the European Central Bank (ECB) waits for the start of the European Banking Congress in the Old Opera house in Frankfurt, November 21, 2014.

Draghi's anti-deflation war requires fiscal help

21 November 2014

The ECB president has gone further than ever before by pledging to raise inflation “as fast as possible.” His is a lonely fight and the central bank will soon reach the limits of what it can do. Draghi can only succeed if governments embark on more fiscal stimulus.

Endesa’s 3 bln euro quasi-IPO bucks a tough market

21 November 2014

The second half of 2014 has been rocky for share sales, particularly in Spain. A secondary offering of 22 pct of Spanish utility Endesa succeeded because vendor Enel wasn’t greedy. It treated the deal like a new issue. That will help if Enel wants to sell more in future.

Alibaba Group Holding Ltd founder Jack Ma

Alibaba's huge finance arm is a mystery to most

21 November 2014

It’s one of the Chinese e-commerce group’s crown jewels. Yet public investors don’t control it, and can’t reliably estimate its worth. Only select Alibaba executives see the affiliate’s inner workings. Since they own most of its shares, there is room for interests to diverge.

Roulette chips are locked down at Caesars in Atlantic City, New Jersey July 5, 2006.

Apollo, TPG dabble in Caesars sleight-of-hand

20 November 2014

The casino’s private equity owners are haggling with creditors. One idea is to split a key unit into operating and property arms, as rivals have. Such financial engineering would fit well with Apollo and TPG’s earlier moves to turn this top-of-the-market LBO into a decent bet.

Edvard Munch's painting "The Scream" is displayed in the Munch Museum.

Sotheby's CEO exit more scream than car crash

21 November 2014

Two artworks with those names are together worth about the $220 mln that Bill Ruprecht’s pending departure has added to the auctioneer’s value. The scream comes from board members like Dan Loeb, dissatisfied with the firm’s performance. By acting now, they may avoid a car crash.

London Mayor Boris Johnson delivers his keynote speech to the Conservative Party annual conference in Manchester, northern England October 1, 2013.

Boris should pay up but not shut up over U.S. tax

21 November 2014

The London mayor, an American citizen, objects to paying a U.S. capital gains levy on his UK residence. Uncle Sam’s ex-pat tax laws are worthy of reform. But if Johnson really cares about that, the way to show it is to clear his debt and then campaign for change.

The headquarters of the European Central Bank (ECB) is pictured prior to the bank's monthly news conference in Frankfurt July 3, 2014.

Time for ECB to overhaul its secret weapon

21 November 2014

Leaked central bank correspondence from the recent Cypriot crisis underlines how emergency liquidity assistance to weak banks had become ad hoc and political. Now that the ECB is supervising euro zone banks, it should take over - with ELA risks shared by all member states. 

A security guard is silhouetted in front a Prudential office in London.

Pru’s lesson for investors: trust animal spirits

21 November 2014

The UK insurer’s stock hit a record this week, leaving rival Aviva trailing in its wake. It is a painful reminder of how Aviva lost out by failing in its attempt to buy Pru in 2006. The main reason there was no deal? The bidder lacked investor support to pay a fair premium.

Wall St.

U.S. Senate commodities probe gets bank risk right

20 November 2014

The two-year investigation into Wall Street’s ownership of oil and other physical holdings is bigger on assertions than new evidence. But its warnings about capital shortfalls and systemic hazards ring true. They’re problems that need fixing regardless of the type of asset.

Iran's President Hassan Rouhani gives a news conference on the sidelines of the 69th United Nations General Assembly at United Nations Headquarters in New York September 26, 2014. Rouhani said on Friday "courageous decisions" must be made to clinch a long

Iran's reintegration is a prize worth working for

20 November 2014

Nuclear negotiations with six world powers remain contentious. Just talking reduces geopolitical risk, but bringing Iran back into the international fold would repay the effort. A newly unfettered economy, bigger than Singapore or Greece, would move the global needle.

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Columns

Edward Hadas

Edward Hadas: FX should be the last home for scandal

20 November 2014

Failings in the foreign exchange markets should be surprising, and not only because cheating was hard. But when process-driven clients met the hard-to-repress urge to speculate, tempted traders crossed some ethical lines. The cure? Ensure financial markets make economic sense.

Rob Cox

Rob Cox: Good news for guns is bad for gunmakers

18 November 2014

A Republican U.S. Senate puts a bullet in new federal firearms controls. Yet Colt, maker of the gun that won the West, is short of cash, Moody’s downgraded Remington and shares of Ruger and Smith & Wesson have been clobbered. The industry does better with guns in a corner.

Features

Kate Duguid

Review: Congo's problems run deeper than oil

21 November 2014

Virunga Park sits on top of reserves and between hostile states inhabited by warring militias. A new documentary casts UK oil firm Soco as the park’s top threat. Unethical exploiters are just one symptom of a nation whose institutions are too weak to assure economic stability.

Mark Haefele

Guest view: German growth fears are overblown

17 November 2014

Recent data from Germany is not as bad as it looks, and EC growth forecasts for the country are too gloomy. Europe’s largest economy is competitive enough to spur growth across the continent next year, says Mark Haefele, global chief investment officer at UBS Wealth Management.