Problem banks return to haunt Italy 16 Nov 2017 Mid-sized Carige has failed to sign up underwriters for its 560 million euro cash call, casting doubt on its future – and on a capital hike by similar-sized peer Creval. Resolution or a takeover are possible next steps. Either way, Italian taxpayers may need to help out.
Congressional contortions raise risks to tax cuts 15 Nov 2017 The Senate is complicating tax reform by proposing to repeal a key part of Obamacare. Cuts in personal rates would also be temporary while corporate breaks would be permanent. The moves would help meet deficit rules but alienate key lawmakers - and give critics more ammunition.
Hadas: Unintended consequences may be new normal 15 Nov 2017 From Brexit to Donald Trump to Saudi Arabia, the world is full of surprises. But those cheering wrenching change may face further upsets. The UK rejoins the EU, the U.S. president discredits small government, and Saudis become poorer. The next shock may be the rise of dullness.
Upheaval could leave Zimbabwe further adrift 15 Nov 2017 An army takeover augurs change, but not a solution to the African nation’s economic problems, which include a bloated civil service and a currency crisis. Governments can change overnight, but bringing back human and financial capital – and fresh investment – is slow work.
Japan’s growth streak starts to look shakier 15 Nov 2017 GDP grew an annualised 1.4 pct last quarter, marking the longest unbroken growth run in 16 years. The data is volatile, and often revised, but a global boom appears to be offsetting weaker domestic demand. That underscores the need for further structural reform.
Trump’s coal push loses power as U.S. goes green 14 Nov 2017 An administration plan to subsidize solid fuels has stirred a backlash from industry, which fears distorted power prices. Meanwhile U.S. carbon emissions from coal fell at a record pace in 2015. Environmental and economic forces conspire against the president’s campaign pledge.
Private equity deserves U.S. tax hit, not startups 14 Nov 2017 Tech firms are understandably upset over a Senate plan to tax stock options when vested. It would raise $13 bln over 10 years. Ending a loophole on investment profit for buyout barons would bring in more. It’s a better target for Republicans already accused of favoring the rich.
Breakdown: Redesigned TPP deal goes to 11 14 Nov 2017 The Pacific trade pact may be 70 pct less valuable in terms of global income. For Japan, Canada and nine others, though, good economic reasons exist to proceed. It's a defence against lopsided bilateral deals. And TPP could yet add partners to recapture many of the lost benefits.
Scrapping China’s GDP target harder than it seems 14 Nov 2017 As economic growth cools, Beijing isn’t sweating. The government says it might soften GDP targets next year and ditch them from 2021. That would make deleveraging easier and please ratings agencies. But officials addicted to investment and credit will resist going cold turkey.
UK economy will share Theresa May’s pain 13 Nov 2017 The Prime Minister is facing growing challenges to her leadership from the ruling party’s pro- and anti-EU factions. Political disarray increases the risks that leaving the European Union will do serious economic harm. A softer Brexit is growing harder to deliver.
Britain brings the gloom to global defence party 13 Nov 2017 Shares in Ultra Electronics fell by almost a fifth after a profit warning due to UK project cancellations and delays. It is a rare sour spot in a sector that has rallied this year. With UK spending tight, mid-market defence groups might face foreign invasions of their own.
Review: The economic common good is hard to find 10 Nov 2017 Jean Tirole won the Nobel Prize for his work on regulating tricky industries. In “Economics for the Common Good” he takes on broader themes. Newcomers to current debates can learn from his general discussions, but the highlights are subtle descriptions of his area of expertise.
China gives foreigners second swing at cash piñata 10 Nov 2017 Beijing is relaxing, and later eliminating, caps on foreign ownership of banks and brokerages. It's less a concession than an enticement. China could use help deleveraging its economy. And the $10 trillion in personal savings languishing in Chinese banks are worth competing for.
U.S. tax reform heading for desperate compromise 9 Nov 2017 Senate Republicans want to delay a corporate rate cut, preserve the estate tax and fully repeal state and local deductions. It sets them at odds with House colleagues and could derail the effort. A GOP frantic for a policy win, though, means major concessions are likely.
China’s vitamin collusion is a bitter trade pill 9 Nov 2017 Beijing wants to be treated as a rule-abiding market economy. But in an ongoing legal dispute, Chinese officials say they pushed domestic vitamin makers to coordinate prices in the U.S. market. China’s unwritten trade rules are often more important than the written ones.
Wilbur Ross deflates Trump’s rich cabinet 8 Nov 2017 The president tapped wealthy execs for their supposed smarts and dealmaking skills. News that the U.S. commerce secretary may have been less than truthful about his holdings and net worth undermine that argument. The blowback may give pause to other wealthy pretenders to high office.
U.S. watchdog bares unexpected teeth on AT&T deal 8 Nov 2017 The telecom firm may have to sell Time Warner’s cable unit with CNN to win approval of the $85 bln tie-up. The Trump administration had been expected to go easy on big M&A. If the Justice Department is taking a tougher stance, corporate America will need to rethink strategy.
Yahoo ex-boss shows everyone’s in dark on hacks 8 Nov 2017 Marissa Mayer told senators she still doesn’t know who was behind a 2013 data theft affecting 3 bln users. Equifax’s CEO said the same of a breach involving 145 mln consumers. And Congress struggles to draft cyber rules. Amid such cluelessness, the epidemic can only get worse.
Hadas: Even China will struggle to control finance 8 Nov 2017 With state-dominated banks, capital controls and a trade surplus, along with a strong economy, the People's Republic would seem well-placed to limit the risk of foreign debt. Not so. As a new report illuminates, China, like its global peers, is vulnerable to a liquidity crisis.
Intesa’s bank pruning carries a short-term sting 7 Nov 2017 Rescuing two beaten-down lenders dragged on the Italian bank’s bottom line in the third quarter. However, a 1.3 bln euro tax-free state fund will soak up the cost of branch closures and layoffs, while Intesa will keep the upside. It’s still an attractive trade-off for investors.