Americas

Flummoxed Congress dims faith in post-FTX fixes

1 Dec 2022

The first public hearing since the crypto exchange’s collapse laid bare Capitol Hill’s collective ignorance. A lack of new laws leaves agencies unfit to oversee digital currencies. It’s a steep learning curve to protect investors without the industry just writing its own rules.

Salesforce shakeup puts co-CEOs under a cloud

1 Dec 2022

Bret Taylor is stepping down after just a year of running the $140 bln software developer alongside founder Marc Benioff. Another former copilot lasted less than two years. Because entrepreneurs typically struggle to surrender the reins, sharing them is often a terrible idea.

The bubble in predicting the end of the world

1 Dec 2022

The globe faces multiple threats to peace and prosperity. Several new books address the challenges of enormous debt, geopolitical rivalries and climate change, predicting disastrous consequences. The best thing investors can do is keep a level head, writes Edward Chancellor.

Capital Calls: Farfetch

1 Dec 2022

Concise views on global finance: Shares of the New York-listed online retailer dropped over 20% as its plan to sell e-commerce services to luxury groups like Salvatore Ferragamo failed to convince investors.

Airbnb has promise as the quasi-immobility firm

30 Nov 2022

The $60 bln home-sharing platform will list big landlords’ apartments so tenants can sublet them out on its app. Like its regular offering, this may draw local ire. But giving old-world property giants a way to benefit from transient post-pandemic lifestyles is a neat innovation.

Capital Calls: DoorDash puts profit on the menu

30 Nov 2022

Concise views on global finance: The food-delivery service’s job cuts should pave the way to a stronger bottom line.

Buy-now-pay-later has a case of the holiday blues

29 Nov 2022

Even though the use of credit cards has jumped, the big U.S. shopping weekend hasn’t been great for e-borrowing. With the economic outlook weakening, that isn’t terrible. The trouble is that investors in companies like Affirm are still expecting massive growth.

HSBC’s $10 bln Canada sale is ad for bank breakups

29 Nov 2022

The British lender is selling its Vancouver-based unit to Royal Bank of Canada for an eye-watering 3 times tangible book value. The buyer is paying up because it hopes to slash 55% of costs. If that’s plausible, investors should ask what else global retail banks should sell.

Musk’s Apple fight could be his Twitter legacy

29 Nov 2022

The billionaire isn’t the first to criticize the smartphone maker for taking a cut from transactions on its app store. But owning Twitter gives Elon Musk a powerful megaphone. Taking a chunk out of Apple could even be the most durable outcome of Musk’s social media foray.

Consumer spending anomalies are the new norm

29 Nov 2022

High inflation and glum sentiment are changing how people use their money. In this edition of The Exchange podcast, Brookings Institution economist Wendy Edelberg explains what shoppers are loath to give up during times of duress and why strange patterns will persist.

Capital Calls: Funky debt shock

29 Nov 2022

Concise views on global finance: Germany property group Aroundtown won’t be the last to flout bond market convention on hybrid debt.

Private equity’s pay boom may have peaked

29 Nov 2022

The average European buyout partner has 20 mln euros of outstanding carried interest in their current fund, reckons Heidrick & Struggles, up a quarter from 2021. Junior wages soared. Yet a possible fundraising slowdown and layoffs elsewhere in finance will slow the gravy train.

China decoupling takes one step forward, one back

29 Nov 2022

Wealthy nations want to cut their reliance on the country’s factories and consumers. That’s happening in goods like electronics and auto parts, but trade and investment trends show the opposite in electric vehicles and other areas. The world is as dependent on China as before.

Venezuelan oil offers little to U.S. or Chevron

28 Nov 2022

The Biden administration eased sanctions, allowing the $355 bln fossil fuel giant to access reserves. But decrepit fields mean exports could be under 1% of U.S. demand, and the dirty fuel has limited appeal. Plus Chevron is printing money and doesn’t need Venezuelan oil.

Capital Calls: Transatlantic chemicals deal

28 Nov 2022

Concise views on global finance: A potential acquisition of Univar by $10 bln German chemical distributor Brenntag makes sense, but investors may fear a bidding war.

Big Pharma will muscle in on obesity gold rush

28 Nov 2022

Novo Nordisk and Eli Lilly’s weight loss drugs are swelling their valuations, and give them a lead in a potentially $50 bln market. Yet rivals like Pfizer are not far behind, and others can snap up biotechs like Altimmune. An increasingly crowded sector may lead to lower returns.

How to design a formula to pay for climate loss

28 Nov 2022

COP27 saw countries agree to a “loss and damage” fund to help states bear the effects of climate change. But it didn’t say how it would work. Hugo Dixon proposes a formula which encourages countries to cut carbon emissions by pinning the cost on the biggest polluters.

Oatly’s best turnaround recipe is dollops of cash

25 Nov 2022

Shares in the $950 mln faux-milk maker are down 80% this year, and revenue growth is slowing. CEO Toni Petersson will struggle to stop burning cash, and has ruled out selling the company. That means a looming capital hike may have to be much bigger than he currently thinks.

Crypto winter highlights gold’s warming qualities

25 Nov 2022

The collapse of the FTX cryptocurrency exchange has institutional investors fleeing and regulators closing in. True believers argue their vision of decentralised digital money still holds. In a less dystopian world, the yellow metal may have more appeal, says Edward Chancellor.

FTX collapse consigns crypto to fringes of finance

24 Nov 2022

Sam Bankman-Fried’s failed crypto exchange is a huge blow to the ailing sector. In this Viewsroom podcast, Breakingviews columnists discuss how firewalls helped protect banks, how the saga will embolden regulators, and what the future looks like for digital currencies.