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Thursday, 26 November 2015


The Barclays headquarters building is seen in the Canary Wharf business district of east London.

Barclays money-laundering rap is oddly reassuring

26 November 2015

The UK bank has been fined for cutting corners on a 1.9 bln stg deal for politically sensitive clients in 2011. The temptation for banks to bend the rules for VIPs is just as strong today. But more vigilant regulators are chipping away at the idea that this is business as usual.


ECB has bright idea for targeted bank-bashing

26 November 2015

Imposing a staggered penalty on banks that hoard cash is one of many ways to ease policy being discussed by the European Central Bank. Such levies have drawbacks. But at least a split-level charge would encourage the biggest hoarders to boost cross-border lending.

German Chancellor Angela Merkel leaves after a receiption for carol singers at the Chancellery in Berlin, January 7, 2015.

German open-door isolationism is unsustainable

26 November 2015

Angela Merkel has ignored domestic calls to shut out refugees. But she will find it harder to brush off French calls for the same. Alienating a key ally would undermine the union Merkel wants to save, and threaten economic integration.

Shipping container cranes are seen at the Patrick port facility in Melbourne June 9, 2009.

Qube edges ahead in Aussie infrastructure fight

26 November 2015

Brookfield’s $6.5 bln agreed bid for Australia’s Asciano has hit serious opposition from competition regulators. The Canadian group could yet salvage its takeover. But interloper Qube, whose break-up consortium is already examining Asciano’s books, now looks like the favourite.


UK housing market policy gets ever more misguided

25 November 2015

Britain is hoping its Help to Buy scheme will get more punters into the inflated housing market. That’s alongside 2.3 bln stg in subsidies to tempt private sector builders to sell at a discount. Even if this somehow creates 400,000 new homes, the rich gain more than the poor.

Andre Esteves, CEO Brazilian BTG Pactual bank in Davos January 24, 2014.

Brazil crisis may have silver lining: rule of law

25 November 2015

Latin America’s biggest economy will get worse before it gets better. The arrest of billionaire banker André Esteves suggests room for further nasty surprises from the Petrobras corruption probe. But feisty independent courts and stronger institutions point to a brighter future.

The flag of Europe is pictured in front of the ECB headquarters in Frankfurt, August 4, 2011.

Europe's terrible banks look their best in years

25 November 2015

Capital levels, profitability and lending rose in the six months to June, the European Banking Authority says. Bad loan ratios are almost double those of U.S. banks, and more EU quantitative easing could be bad for business. Even so, lenders are proving surprisingly healthy.

Smiling Union Jack piggy banks

Britain joins sovereign wealth party too late

26 November 2015

Creating a 1 billion pound sovereign wealth fund to encourage shale gas drilling in the UK could fail on two fronts. It won’t sway opponents of fracking in the UK countryside, and a financial windfall is unlikely given a global gas glut and unattractive shale economics.

Jack Ma, Executive Chairman of Alibaba Group

Jack Ma paper chase is test of newsprint's appeal

26 November 2015

The Alibaba founder is interested in buying Hong Kong’s South China Morning Post. The 112-year old title’s earnings are under pressure, and the financial logic looks thin. But as fellow e-commerce boss Jeff Bezos showed with the Washington Post, newspapers still have trophy value.

Britain's Chancellor of the Exchequer George Osborne

UK’s Osborne is less austere than he makes out

25 November 2015

Finance minister George Osborne isn’t quite the budget zealot his Nov. 25 spending cuts suggest. The UK has run bigger deficits relative to GDP than France during his tenure. He has also executed tax and spending U-turns when required. It helps that gilt investors buy the hype. 

Ian Read, chief executive officer of Pfizer, smiles at a news conference in New York November 5, 2013.

Pfizer's war chest stealthily rebuilt by Allergan

25 November 2015

The $160 bln mostly stock deal will create a combination gushing $25 bln of operating cash flow annually. An offshore tax address means there’s no reason to keep over $60 bln of cash on its balance sheet. That’s a lot of financial firepower to buy back shares and fuel more M&A.

A sign for Bank Street in Canary Wharf

Bank regulator's blunder sums up Europe’s troubles

25 November 2015

Lenders’ capital ratios are higher than previously calculated, the European Banking Authority has said. The watchdog’s technocratic remit makes the error galling. Such confusion could deter investment just as the region’s financial institutions are doing more to deserve it.

BHP and Rio look out of touch on China

25 November 2015

Low-cost iron ore miners BHP Billiton and Rio Tinto are accomplished experts digging for the ferro-raw material. They are much less good at consumption estimates. With the ore at 10-year lows, the companies’ investment cases depend on them getting ahead of China’s demand curve.



Hugo Dixon

Dixon: How the EU could woo the UK

23 November 2015

The British prime minister wants to rework the UK’s relationship with Europe. Once complete, other EU leaders could launch a charm offensive to persuade Britain it is valued and influential, and to vote to stay in the union. Here’s what Merkel, Hollande, Renzi, et al could say.

Edward Chancellor

Chancellor: The illusion of debt-fuelled earnings

18 November 2015

Low borrowing costs enabled acquisitive drugmaker Valeant to ratchet up EPS with leverage. Earlier episodes of financial engineering - like Japan’s zaitech and the 1960s conglomerate boom - came unstuck after rates rose and stocks fell. It won’t be any different this time.

Rob Cox

Cox: Quarterly reporting to get a major rethink

17 November 2015

From BlackRock’s Larry Fink to presidential contender Hillary Clinton, “quarterly capitalism” has become a four-letter word. Big publicly traded asset managers could change habits by abandoning their own three-monthly results. Watch for that in the coming year.


Quentin Webb

Japan’s investor revolution is delayed, not dead

20 November 2015

Shareholders are souring on the hope that Japan Inc. can become better-run and more profitable. That’s too gloomy. Last year’s returns on equity were humdrum and there have been big disappointments. But real change is underway and the pressure for more is huge.