Bond investors toss a coin on Saudi reforms 28 Sep 2017 The kingdom’s $12.5 bln bond was oversubscribed. Rising oil prices and low debt help explain the appeal. But the 30-year notes remain a bet that Crown Prince Mohammed bin Salman can wean Saudi Arabia off oil. Investors’ zeal is a benchmark of the demand for emerging market debt.
U.S. plane spat morphs into unwinnable dogfight 27 Sep 2017 The UK joined Canada in threatening to punish Boeing after the Trump administration slapped duties on Bombardier’s flagship jet. Targeting aircraft subsidies is laudable, but Washington’s tough tactics, matched by Justin Trudeau and Theresa May, could shoot down all sides in flames.
State tax deduction pain would spread to Trumpland 27 Sep 2017 GOP leaders want to scrap the break that mainly helps upper-income earners in Clinton-backing locales like New York. It raises $1.3 trln over a decade to help offset tax cuts. Yet all states take advantage of the deduction, which includes sales tax. It sets up a bruising fight.
Southern Europe may miss Wolfgang Schaeuble 27 Sep 2017 Germany’s finance minister is ready to step down to become the head of the lower house of parliament. An insistence on budget discipline made him popular at home but reviled in crisis-hit euro zone countries. His replacement may come from a party that takes an even tougher line.
Hadas: Fighting corruption delivers small payoffs 27 Sep 2017 Miner BHP wants to see if 20 years of more openness has made lives better. It’s doubtful. The "Panama Papers", Brazil's "Car Wash" and Olympics scandals suggest graft remains standard practice. Public outrage may be subdued, though, because obvious economic harm is hard to find.
Alstom gains upper hand in Franco-German rail deal 27 Sep 2017 The French group’s shareholders will own nearly half the combination with Siemens’ train unit, despite contributing just a third of the operating profit. Alstom also keeps its CEO and head office. Hefty cost savings and the creation of a European champion justify the concessions.
College-sports fraud case obscures the real crime 26 Sep 2017 Federal prosecutors have charged 10 people, including four coaches, with using bribes to influence university basketball players. The government says the case exposes the dark underbelly of the sport. But fraud flourishes largely because the NCAA cartel refuses to pay athletes.
U.S. will pay for Puerto Rico one way or another 26 Sep 2017 The already-bankrupt commonwealth is reeling from the devastation wreaked by Hurricane Maria. Blackouts may persist for months even as a $72 bln debt bill looms. Without swift and generous aid from Washington, a mass exodus for the mainland will only increase the ultimate cost.
Botched SEC hack probe a warning for other agencies 26 Sep 2017 Chair Jay Clayton says he doesn’t know the exact timing of a 2016 breach and his predecessor may not have been notified. It’s troubling given the sensitive market data kept there, and a heads up for the CFTC and other watchdogs. Investor worry over their defenses is justified.
Macron’s European vision too honest for own good 26 Sep 2017 The French president set out comprehensive proposals to overhaul defence, taxes, social policy and more. Though he deserves credit for articulating Europe’s potential, his detractors have many targets to attack. Candour about EU integration makes such dreams harder to realise.
Italian banks become unlikely governance converts 26 Sep 2017 UniCredit will give its board authority to propose directors. Mediobanca has taken similar steps. This reflects the loss of power of foundations and investor blocks. Broader shareholder representation could make banks healthier, if boards resist the urge to feather their nests.
German vote bodes ill for utilities and autos 26 Sep 2017 Chancellor Angela Merkel may well turn to the Greens to form a coalition government. The party’s priority is combating climate change. Carbon-heavy power producers like RWE and carmakers wedded to the internal combustion engine are likely to be the first in the firing line.
AIG deserves to be SIFI-free, with caveats 25 Sep 2017 Watchdogs delayed a decision on whether to remove the insurer’s status as a systemic risk. It seems justified, as AIG has halved in size since its $182 bln bailout and long ditched the unit behind its collapse. But regulators should use safeguards to avoid deregulating too far.
Italy’s 5-Star puts respectable face on radicalism 25 Sep 2017 The protest movement, doing well in opinion polls, has named a 31-year-old lawmaker as its leader. Luigi Di Maio’s cool appeal contrasts with founder Beppe Grillo’s vitriolic style and may win over moderate voters in 2018. But going mainstream could undermine its basic appeal.
Diminished Merkel will choke ambitious euro reform 25 Sep 2017 One of Chancellor Angela Merkel’s prospective coalition partners rejects closer euro zone fiscal ties. A weak election showing has made her own party restive and the right-wing AfD will hound her. Preserving the euro's status quo is the best that Europe can expect from Germany.
Germany’s Caribbean coalition will shake Europe 24 Sep 2017 The country’s two biggest parties suffered their worst post-war election result. That leaves Chancellor Angela Merkel with little choice but to forge a tricky and fragile “Jamaica” coalition with the pro-business FDP and the Greens. It’s a blow to hopes for European Union reform.
Theresa May embraces “extend and pretend” Brexit 22 Sep 2017 Fifteen months after Britain voted to leave the European Union, the prime minister still has no coherent idea how to deliver it. Her proposal to keep things as they are until 2021 lowers the risk of a chaotic Brexit. If accepted, the temptation will be to delay further.
Russia’s state banks profit from financial turmoil 22 Sep 2017 The rescue of two private lenders has raised fears about the country’s banking sector. Savers have flocked to state-owned Sberbank and VTB, which have seen deposits swell by 1.2 pct and 18 pct, respectively this year. The tumult could leave the pair with better lending margins.
Siemens-Alstom train-deal economics trump politics 21 Sep 2017 The German firm may merge its train unit with the French peer Alstom, rather than Bombardier. That would create a global player in high-speed rail, but leave Siemens in an awkward embrace with joint-owner French government. It’s a price worth paying to create a European champion.
SEC failure puts U.S. cyber security on back foot 21 Sep 2017 Unlike the Equifax hack, the breach into the watchdog’s systems doesn’t put people’s data at risk. But the SEC buried its belated disclosure of the attack in a broader statement on cyber issues. It sets a terrible example on transparency for the publicly traded firms it oversees.