Holding: Lawyers have a case for a free education 28 Aug 2018 NYU Medical School's new free-tuition policy allows graduates to avoid loans that keep many from entering low-paying yet vital fields. The logic could also work for the law. Relieved of debt, more legal eagles might choose public-interest work – to the benefit of U.S. justice.
Apollo reinsurance buyout bets on calmer waters 28 Aug 2018 The private equity group paid $2.6 bln for Aspen Insurance, less than expected. Hurricanes and wildfires have weakened small reinsurers, offering a chance to raise premiums. Even then, Apollo will have to contend with bigger players squeezing prices, and avoid more disasters.
Consumer giants have bigger problems than Turkey 28 Aug 2018 Unilever and Nestlé can resist a crisis in Turkey, which accounts for little of their revenue. But both will suffer if troubles spread across emerging markets, which account for about half of group sales. All the more so since Western shoppers are unlikely to take up the slack.
Cyprus’ bad debt cleanup has lessons for Italy 28 Aug 2018 Bank of Cyprus will sell 2.7 bln euros in non-performing loans to private equity group Apollo. A price of nearly half book value is higher than comparable deals in Italy or Greece, thanks to government reforms. That should lead to healthier, more profitable banks.
India’s Jet can redeem some air miles to ease pain 28 Aug 2018 After a quarterly net loss of $190 million, the country’s second-largest airline badly needs cash. It has laid out a list of planned fixes, including somehow tapping its loyalty programme. That won't solve its engine trouble, but may help smooth out some of the turbulence.
Gig economy throws wrench into China labour policy 28 Aug 2018 App-based jobs are becoming controversial in the People's Republic, too. Factory strikes may be waning, but reports of worker protests involving startups like Meituan and Didi are rising. That's leaving Beijing stuck between two priorities: social stability and tech innovation.
Korean chaebol overhaul runs into economic reality 28 Aug 2018 Seoul’s antitrust chief unveiled new rules to rein in powerful family conglomerates. Slowing growth, however, has made the likes of Samsung even more important to the country’s jobs plight. That means governance reform probably will wind up weaker than originally anticipated.
Tesla recharge rests in board’s hands 27 Aug 2018 Elon Musk’s abortive buyout bid dented his credibility and may bring legal and regulatory censure. A narrower focus for the boss, realistic goals and a capital raise would help the company back on the road, even if the stock tanks. But it requires Tesla’s cozy directors step up.
P&G’s WTF move misses the point 27 Aug 2018 A bid to trademark initialisms like LOL suggests the $208 bln consumer giant has lost the plot. Slightly passé social-media argot is unlikely to sell more Cascade detergent to millennials. Brands that fit their preferences – and cost less – are the way to get growth going again.
U.S.-Mexico deal is only start of tough NAFTA road 27 Aug 2018 The neighbors agreed to boost regional auto content for tariff-free trade. Now Ottawa will rejoin the talks. Hurdles like dispute panels remain, and Trump’s fresh outburst at Canada will make it hard to close the pact this week. Approval by Congress also isn’t a slam dunk.
Berkshire’s India deal is so wrong it’s right 27 Aug 2018 Warren Buffett’s company is taking a small stake in digital-payments firm Paytm. Indian tech doesn’t fit the Omaha sage’s playbook, but his outfit has $110 bln in cash and holdings like Kraft Heinz are flatlining. Letting his lieutenants place some bets on the future makes sense.
Latam’s market-friendly shift is at a parlous pass 27 Aug 2018 Argentina’s faltering growth imperils President Macri’s reforms. Mexico has delayed oil liberalization. Brazil’s main pro-business presidential candidate looks weak. Losing fiscal nous and foreign investment in the region’s biggest economies would hit business and the poor alike.
China Biologic suffers contaminated infusion 27 Aug 2018 The plasma-products maker rejected two buyout offers, including one worth $3.9 bln led by its former boss, in favour of a dilutive share sale at a discount to both. Investors are stuck with fuzzy maths and poor governance that show why China Biologic would be better off private.
China’s oil majors risk wasting a good trade war 27 Aug 2018 Earnings are gushing at energy giants including $210 bln PetroChina. They are benefitting from Washington’s belligerence, which has driven up crude prices and should open opportunities in Iran. The windfall, though, masks the need for extra investment, cost cuts and other reform.
For a Republican, McCain was a financial maverick 26 Aug 2018 The Arizona senator, who died Saturday, was famous for his independent streak. Last year he helped block the repeal of Obamacare. He refused to toe the party line on big finance, too, often working with Democrats – including on reining Wall Street after the financial crisis.
Musk flip-flop makes job harder to do – and keep 25 Aug 2018 Tesla’s CEO has pulled the plug on taking the $55 bln electric-car maker private, capping a record of overpromising and underdelivering. The abysmal handling of the half-baked idea calls Musk’s judgment further into question, just as Tesla needs cool heads to become profitable.
South Africa has thin defense against Trump thump 24 Aug 2018 The U.S. president’s complaint about the killing of white farmers didn’t much rattle markets, but South Africa’s trade-dependent economy can’t afford a fight with the White House. The only comfort: leader Cyril Ramaphosa is more business-friendly than his ousted predecessor.
As Trump goes low, Fed goes high 24 Aug 2018 Jerome Powell sees little risk of economic overheating, indicating the Fed will raise rates again next month. The U.S. central bank chief’s first public comments since the U.S. president said he wasn’t thrilled with Powell’s policies suggest he’s largely impervious to Trump.
Review: Citigroup’s 2008 bailout won’t be its last 24 Aug 2018 That’s one conclusion to draw from “Borrowed Time,” a new book examining the troubled 200-year history of Citi. The $180 bln bank has suffered repeated failures of over-aggression and lack of foresight, while Uncle Sam’s wallet blocks meaningful reform, the authors argue.
Mom and pop put a face on U.S. trade folly 24 Aug 2018 Sellers of wedding dresses, lawn sweepers and bike helmets have asked U.S. officials to drop tariffs on $200 bln of Chinese imports. They show how much lower-tech production has moved abroad, taking American jobs, but also how that has created new ones and saved consumers money.
Norway and Saudi face two sides of same problem 24 Aug 2018 Oslo’s $1 trillion wealth fund wants to shed its oil and gas stocks, but a cautious government may not let it. Riyadh’s $250 billion equivalent wants steady growth, but the state may push it into leveraged, risky ventures. Both need more independence, and less political meddling.
Goldman Sachs slaps sell sign on London property 24 Aug 2018 Like HSBC a decade ago, the U.S. bank has sold its UK headquarters for just over 1 bln pounds. As in 2007, Goldman is doing so as rental yields hover at the toppy level of 4 pct. And while a two-decade lease appears to be a vote of confidence, it can sublet if Brexit bites.
Italy’s Trump card shows bond market fragility 24 Aug 2018 The U.S. President offered to buy Italian debt, according to one newspaper. Donald Trump may want to help a eurosceptic government but has limited scope to mitigate the damage that Rome’s policies are inflicting on domestic asset prices. Help is better sought closer to home.
Australian politicians play with economic fire 24 Aug 2018 Malcolm Turnbull has been forced out, ushering in the country's sixth prime minister in a decade. Political turmoil contrasts with 27 years of unbroken growth. But reforms are hard to implement and voters are disgruntled. The economy’s immunity to upheaval in Canberra is waning.
Anti-dollar push can fly in Beijing but not Berlin 24 Aug 2018 Germany’s foreign minister wants a payments system that’s independent of the United States. Europe will struggle to set it up given close transatlantic economic and financial ties. China is better placed and could demand that all who want to access its economy use an alternative.
More AWOL China bosses flag unique key-man risks 24 Aug 2018 Casino operator Landing has lost half its market value amid news that its chairman is unreachable. It’s the second such case in three days. Overdependence on top executives continues to plague many Chinese companies, and they’re exposed to hazards uncommon in other markets.
U.S.-China trade talks stumble on biggest block 24 Aug 2018 Mid-level negotiations yielded no breakthroughs as tariffs hit $16 bln of Chinese goods. The United States wants reforms to industrial policy that would fundamentally alter Beijing’s development model, and might even rewire how it runs the economy. It will struggle to deliver.
Babytree’s Hong Kong IPO robs the cradle 24 Aug 2018 The Alibaba-backed Chinese parenting site wants to raise up to $1 bln. Targeting tiger mothers might seem timely, given Beijing’s fertility push. Yet the chat-and-shopping combination is unprofitable after 11 years, and its desired value exceeds the wildest demographic optimism.
Fed vice chair deserves to be top global bank cop 23 Aug 2018 Allies of President Donald Trump have slammed the Financial Stability Board, but Randal Quarles is a strong supporter. Putting the U.S. central banker in charge of the body that oversees financial regulation when Mark Carney steps down would help maintain global rules.
Texan oil dominance teeters on shaky ground 23 Aug 2018 Shale oil helped the U.S. state’s main ports become an exporter of oil for the first time in April. Producers are basking in prices up around 40 percent in a year, and profits that encourage pumping. Tariffs, rising costs and the ease of closing the spigots can quickly change that.