Bank of England rate hike has dismal logic 2 Nov 2017 The first increase in UK interest rates for a decade is no grounds for celebration. Rather, it’s an admission that Brexit has permanently lowered the country’s growth prospects. Governor Mark Carney must worry about inflation and a weak currency. The rest is up to politicians.
Cox: Saudi crown prince revealed his magic number 2 Nov 2017 It's not a sum of money, but a year: 1979. Mohammed bin Salman's promise to return the kingdom to the more moderate society that prevailed before the siege of the Grand Mosque is a watershed moment. Global investors can play a role in helping the Saudis modernize.
Dubai demonstrates the distance ahead of Saudi 1 Nov 2017 The UAE’s most populous emirate has become a global financial hub thanks to a diversified economy and tolerance of Western culture. Now Dubai is pushing a green agenda. The kingdom can learn much from its smaller neighbor, including its imperfections, as it tries to catch up.
Complacency is biggest risk for Facebook investors 31 Oct 2017 Mark Zuckerberg’s firm set new highs even as it said nearly half of American voters may have seen Russian propaganda on its site. The fallout from fake content could hit its runaway value, but investors can’t be bothered as long as advertisers keep flocking to the social network.
UK student loan sale has costly Corbyn hedge 31 Oct 2017 Britain is pushing ahead with the sale of 4 bln pounds of loans, despite Labour leader Jeremy Corbyn’s promise to ease student debt. Investors will get compensation from a complex scheme if government policy changes. That further strains the logic of the sale.
Hadas: Martin Luther’s unexpected business legacy 31 Oct 2017 The German theologian could hardly have cared less about commerce and manufacturing. But 500 years after his complaints about cash-for-grace deals started the Protestant Reformation, intrusive governments, big companies and individualist consumerism are all greatly in his debt.
It’s getting better to be a big Chinese bank 31 Oct 2017 A crackdown on shadow banking helped the country's four state-owned giants in the third quarter. With over half the listed industry's deposits under their control, they can squeeze smaller lenders. That leaves them better-placed to cope with any fallout from China’s debt boom.
UK gender pay equality drive is too easy to skirt 30 Oct 2017 Bigger employers have less than six months to disclose any difference between how much men and women earn. Transparency is supposed to help close the gap. But Austria has tried something similar to little effect. Only the threat of eventual sanctions will make a real difference.
U.S. economy doing just fine without tax cuts 27 Oct 2017 Initial estimates show GDP expanded at 3 pct in the third quarter, despite the hurricanes. Increasing inventories helped, but global growth and healthy corporate earnings are other positive signs. Trump will take credit, but protectionist policies could put the trend at risk.
Treasury crowns asset managers, insurers victors 27 Oct 2017 Investment and insurance firms should be regulated for systemic risk based on their activities, not by specific entities, the U.S. department said. It also rebuked the global FSB for overreach with its stricter approach. The industries got nearly everything on their wish list.
Bank of Italy chief’s new term faces uphill start 27 Oct 2017 Ignazio Visco has been reappointed as central bank governor despite political opposition. His first challenge is to quell critics of his handling of Italy’s banking crisis. EU rules are also getting tougher and Mario Draghi’s departure from the ECB in 2019 will remove an ally.
RBS’ next tempest beckons as past storms subside 27 Oct 2017 The state-owned lender is resolving litigation and other hangovers from the 2008 crisis. It is still barely profitable, but third-quarter results suggest it might one day cover its cost of capital. A rich valuation, however, pays little heed to the risk of a Brexit-induced slump.
Kool-Aid on tap in Saudi Arabian desert 26 Oct 2017 The crown prince’s vision for a $500 bln mega-city may have generated even more buzz than the mooted IPO of oil behemoth Aramco. But any kind of success depends on people wanting to do business and live there. The kingdom faces a tough uphill road on competitiveness and freedom.
Viewsroom: China’s leader cements his power 26 Oct 2017 President Xi Jinping emerged stronger at the end of China’s Communist Party Congress. His desire to consolidate control however may not help his plans to keep the Middle Kingdom’s economic engine humming. Plus: U.S. telecom firms try again to dial up a merger.
The Exchange: Mark Meadows 26 Oct 2017 The congressman and chair of the Freedom Caucus thinks neither Republicans nor Democrats have had success in being the governing party. The Exchange went to his office to discuss what that means for tax reform and other issues, and why members of Congress could lose their jobs.
Hadas: Greed is best indicator of financial crisis 26 Oct 2017 New research casts small-time property investors as the secret villains in the 2007 U.S. house price collapse. As usual, the love of leverage was the root of financial distress. Balance sheets are stronger today, but investors still haven’t learned the virtue of moderation.
Banks score hollow victory in class-action win 25 Oct 2017 The U.S. Senate killed a rule allowing groups of consumers to sue financial firms and card issuers. Forced arbitration clauses caused uproars in the Equifax hack and Wells Fargo fake-accounts mess. The shrinking political target on Wall Street’s back is set to grow again.
Republican tax-reform hopes have yet to hit reality 24 Oct 2017 A giddy GOP looks set to pass a budget resolution to pave the way for a tax overhaul that the House aims to approve by Thanksgiving. Members haven’t solved their deficit dilemma, though, and President Trump has shot down potential revenue raisers. The hard work is just beginning.
UniCredit gets head start on recovery path 24 Oct 2017 A data glitch forced Italy’s biggest bank by assets to publish third-quarter results two weeks ahead of schedule. Fortunately, the figures show lower costs and stronger capital. A fee-boosting partnership with asset manager Amundi helped offset the drag from low interest rates.
Italy’s north teaches Catalonia a self-rule lesson 23 Oct 2017 Areas which bring in 30 pct of Italian GDP demanded more autonomy in a referendum. Lombardy and Veneto want to keep more tax revenue. But unlike the Spanish region they stopped short of demanding independence. Orderly voting and a clear outcome will force Rome to negotiate.