Catalan poll result messier than investors think 28 Sep 2015 Spanish yields fell after pro-independence parties failed to win a majority of votes. True, Catalonia now has a doubtful mandate to secede unilaterally - but secessionists still won a majority of seats. Madrid’s next government will have to work hard to defuse tensions.
Vodafone and Liberty may yet converge 28 Sep 2015 Talks between the two telcos over a potential swap of European assets have come to nothing. Regulatory headwinds may be an issue, but the sticking point seems to have been price rather than strategic rationale. That means a deal – eventually – can’t be ruled out.
On economics, UK opposition could be more radical 28 Sep 2015 Big-name experts will help the British Labour party find new ways to promote economic growth and social justice. Stiglitz, Piketty et al will beef up the anti-austerity campaign. But if Labour listens to its new panel of advisers, it could take a sharper turn to the left.
Don’t panic: Fed’s rate hikes will be slowest ever 25 Sep 2015 The U.S. central bank has so far delayed raising interest rates from zero. Janet Yellen tried on Thursday to reduce uncertainty over when liftoff will come. But the Fed’s caution will continue even after that. Rates aren’t heading to historically normal levels anytime soon.
VW bungles restart with new CEO from old guard 25 Sep 2015 Volkswagen lifer Matthias Mueller will be the stricken carmaker’s next boss. He has what it takes to fix operational woes. But as an internal appointment he is an imperfect investigator of past wrongdoing. Herbert Diess, poached recently from BMW, would have been a better choice.
Ironman and SoulCycle may set CrossFit’s course 25 Sep 2015 Buyout shop Providence Equity quadrupled its investment in the three-part, 140-mile races popular with the hedge fund set. The fashionable and fast-growing indoor cycling chain is pursuing an IPO. CrossFit’s exercise cult should attract investors pumped up on fitness crazes.
Review: A human face for the foreclosure fiasco 25 Sep 2015 Seven years on and the financial crisis blame game is still alive and well. In his new film, “99 Homes,” Ramin Bahrani crafts a dramatic narrative that does the best job yet of capturing the complexity of assigning accountability to the collective U.S. housing delusion.
VW needs a chairman from Frankenstein’s lab 25 Sep 2015 Who could lead Europe’s largest carmaker out of its current emissions-scandal funk? The challenge is so big and diverse that it would be impossible to find the one perfect candidate. Breakingviews names five managers that Wolfsburg engineers must wish they could “cut and shut”.
Edward Hadas: VW crashes into regulation 25 Sep 2015 The German carmaker crossed the sometimes fine line between permitted arbitrage of regulation and cheating. Volkswagen got it wrong, but successful economies mostly get it right. Although regulators can be annoying, industrial prosperity depends on them.
Cameron, China and the missing pig semen 25 Sep 2015 The People’s Republic’s taste for hog DNA was touted as a 45 million pound win for UK trade back in 2013. Two years later, the results have fallen woefully short. Trade and investment are real, but the more important stuff happens when politicians get out of the way.
Swiss banks can look beyond leverage ratio noise 25 Sep 2015 Credit Suisse and UBS could face a 6 pct capital-to-assets ratio requirement, after a proposal was voted through Switzerland’s lower house. That’s higher than for peers, but the swing factor is forthcoming global bail-in rules. In most scenarios, Swiss lenders should cope.
Modi offers Silicon Valley the welcome Xi won’t 25 Sep 2015 The Indian leader is visiting California days after his Chinese counterpart met U.S. tech bosses. Though India’s economy is smaller and harder to navigate, the door is open. For foreign players, India’s promised growth may outweigh China’s giant but hard-to-reach opportunity.
Japan’s new growth target worth taking seriously 25 Sep 2015 Prime Minister Shinzo Abe has pledged to expand the economy by more than a fifth. That looks fanciful with prices falling once again. A credible objective would need central bank support and better-defined tools. Even so, targeting nominal economic activity has merit.
Rob Cox: Donald Trump’s bankrupt character 24 Sep 2015 Loose monetary policy has helped the brash presidential contender amass riches while reneging on his debts four times. Bankruptcy laws long ago undermined “dictum meum pactum” in business dealings. But it’s unsettling to see the popularity of a man whose word is worth so little.
One easy cost cut for Caterpillar is executive pay 24 Sep 2015 CEO Doug Oberhelman bet big on mining in 2011, just as commodity prices peaked. Now the $42 bln equipment maker plans to slash up to 10,000 jobs. Investors aren’t impressed. Maybe with his chairman’s hat on, Oberhelman could ensure he and his team share the pain.
Bud-SAB tie-up hinges on a scramble for Africa 24 Sep 2015 Cost-cutting will help brewer AB InBev justify a $110 billion strike at SABMiller. But a convincing top-line growth story is required if existing equity investors are to roll into the new entity. There are several levers. Africa is the most important.
StanChart’s CEO pay is needlessly complicated 24 Sep 2015 New boss Bill Winters is getting 6.5 mln stg to compensate him leaving his hedge fund. Shareholders can only hope his stake in Renshaw Bay is worth that. Such buyouts are too complex. Big hires should get more transparent salaries - even if that means they’re higher.
Headhunting firm searches for new M&A dialectic 24 Sep 2015 Korn/Ferry is buying HR consultancy Hay Group for $450 mln to form a “people” juggernaut. Layoffs will be limited, with $20 mln of annual savings coming from IT and real estate. For two companies that deal in disgruntled workers, they haven’t benchmarked merger history too well.
Credible VW cleanup calls for external chairman 24 Sep 2015 After replacing its chief executive, the German carmaker should look for a new chair. Picking long-term CFO Hans Dieter Poetsch was questionable even before the emissions cheating was uncovered. It’s now untenable - VW’s restart needs to be driven by an independent outsider.
Nomura/MPS achieve painful closure on swaps mess 24 Sep 2015 The Japanese bank has resolved litigation with Monte dei Paschi by releasing it from structured transactions. The terms mean Nomura forgoes 440 mln euros - twice as much as Deutsche Bank, which settled over similar trades in 2013. But both banks also gain from ending the saga.
Abengoa cash call keeps it from emergency room 24 Sep 2015 The Spanish engineering firm’s main creditors will underwrite a dilutive 650 mln euro rights issue to cut debt. It will also sell assets, cancel the dividend and the founding family will lose control. That helps restore credibility but Abengoa needs to show it can deliver.
Alliance Trust has new directors, same problems 24 Sep 2015 The Scottish firm targeted by activist Elliott Advisors has added two new independent board members. It’s a small change, and too late to impact an ongoing review into how Alliance can close its stubborn discount to net asset value. What’s needed is a new model, not just new non-execs.
Malaysia’s weak currency may power 1MDB cleanup 24 Sep 2015 The scandal-hit fund is seeking to ease its financial woes by selling power assets it bought for $2.8 bln. Despite the political storm and ownership limits, overseas bidders are interested. The falling ringgit, and 1MDB’s need to justify past deals, may give them the upper hand.
Elliott reboot of software firm needs a swift kick 23 Sep 2015 The hedge fund made a good start by blocking Citrix from more acquisitions. The $11.7 bln company is already bloated, though, a turnoff for possible buyers. Its business of making desktops accessible remotely is also vulnerable. A breakup may be the way to get things running.
Harvard endowment boss knows his thesis 23 Sep 2015 Stephen Blyth, in charge of the $38 bln stash since January, has laid down refreshingly clear performance goals. These require the university’s well-paid money managers do better than of late, including a 5.8 pct return in the year to June. Now Blyth has to deliver the results.
VW could use bank-style clawback of CEO pay 23 Sep 2015 Martin Winterkorn’s resignation clears the way for sweeping changes at the sprawling carmaker after its costly emissions scandal. He was one of Germany’s best-paid bosses. Revamping compensation, and even trying to recoup some of the CEO’s cash, would send a strong message.
"People’s QE" is more sensible than unconventional 23 Sep 2015 The new Labour leader in the UK wants the government to use newly created money to pay for infrastructure investments. The gains are clear. It’s simpler and more just than borrowing, healthier for the financial system and not necessarily more inflationary. The risks are hypothetical.
Santander takes mañana approach to capital raising 23 Sep 2015 The Spanish bank is aiming at a core Tier 1 capital ratio above 11 pct by 2018. Boss Ana Botin has already raised capital this year, and can make a case for a gradual buildup of solvency levels. But many of Santander’s rivals are already where it wants to be right now.
Edward Hadas: Migration unpicks globalisation myth 23 Sep 2015 Some economists see the unexpected inflow into Europe as an easy win, adding to GDP and countering ageing. But those changes hardly matter. More important is that migration challenges the idea of a global economy. Political borders still set the economic agenda.
Happy Birthday suit exposes U.S. copyright flaws 23 Sep 2015 A federal judge has freed the 122-year-old song’s lyrics from Warner Music’s claim to ownership, allowing revelers to belt them out at will. Yet the ruling does little to clarify the law’s complex protections for artists. An overhaul from Congress would be cause for celebration.