China’s gains tax won’t put a roof on house prices 4 Mar 2013 Charging 20 percent of gains on houses sold will enrich impoverished local governments, and hurt developers, for whom transaction volumes count. There’s little evidence it will make housing more affordable. For that, the remedy is to lend less, not tax more.
HSBC again proves itself too big to damage 4 Mar 2013 Mis-selling charges and a record bank fine knocked financial performance in 2012, yet HSBC’s bottom line suffered barely a dent. Strong capital means more cash will flow to dividends. Accidents will happen, but it’s hard to imagine a shock HSBC couldn’t absorb better than peers.
Swiss may show the way on pay 4 Mar 2013 Voters in Switzerland have given huge support to curbs on remuneration. State meddling in pay may be clumsy, but private excess is a policy problem when governments have to justify spending cuts. Boards were asking for it. And the legislation rightly shifts power to shareholders.
Hugo Dixon: Spain probably won’t catch Italian flu 4 Mar 2013 The risk of Madrid being thrown off its reform path has risen since Italy’s shock election. But Mariano Rajoy doesn’t have to face the voters for nearly three years. What’s more, the Italian vote may even have a silver lining for Spain if it leads to less austerity across Europe.
Warren Buffett’s no-dividend policy on thin ice 4 Mar 2013 In his annual letter the Sage of Omaha defended his stance against cash payouts. But Berkshire Hathaway is underperforming and Buffett reckons it won’t match its glory days again. That’s likely to increase the chances of a dividend, whether from Buffett or his successor.
Tip bankers like waiters 1 Mar 2013 Forget Europe’s bonus caps for bankers. Why not put a ceiling on salaries and let clients reward good service, just as they do in restaurants? Banker pay could shrink to a more realistic level. After all, this is a business that likes to boast about serving its customers.
SEC goes where Chesapeake board feared to tread 1 Mar 2013 The watchdog has launched an investigation into the gas company’s disgraced CEO Aubrey McClendon. Shareholders suing the company will welcome the news. But Chesapeake’s directors should have set up a more impartial inquiry themselves. That oversight could prove costly.
All together now, central banks do not go bust 1 Mar 2013 The Federal Reserve and other central banks with bloated balance sheets will book losses when interest rates rise. But the red ink can’t bleed them dry. Ben Bernanke and other policymakers need to hammer this point home to keep away economically unnecessary political trouble.
Review: Conscious companies can revive capitalism 1 Mar 2013 Economists who say firms should pursue just profit have it wrong. That’s what a co-founder of Whole Foods and a business professor claim in “Conscious Capitalism”. Their touchy-feely free-market utopia sounds great, but pitfalls aplenty await companies that embrace their vision.
Lloyds’ "Operation 61 pence" harder than it looks 1 Mar 2013 The UK bank’s CEO is incentivised to get the shares up to 61 pence, enabling the state to sell down without a loss. The bank will get there by the time his shares vest in 2018, but doing so a lot quicker means top-line growth and an end to PPI woes. Both are out of Lloyds’ control.
UK’s EU problem becomes more pressing 1 Mar 2013 European Council President Herman Van Rompuy threw cold water on Britain’s request to renegotiate European treaties, just as a eurosceptic party pushed the UK conservatives to third place in a by-election. David Cameron may have to pen a clear EU policy sooner than he thought.
Weak CEO the least of Groupon’s woes 1 Mar 2013 The troubled Internet daily deal firm has fired witty boss Andrew Mason. But with overseas operations a mess, coupons in decline and a controversial chairman calling the shots, the company has bigger problems. Few talented executives would fancy trying to turn things around.
Much good cholesterol in India’s spending plan 1 Mar 2013 Investors are wrong to view the 16.5 percent jump in the government’s budgeted spending as fiscal profligacy. Expenditure is growing faster than projected nominal GDP because of a boost to asset creation. This healthy investment will help the slowing economy avoid a seizure.