Economic heresy is real winner in French election 20 Apr 2017 Investors are nervous the presidential contest will be a choice between far-right Marine Le Pen and hard-left rival Jean-Luc Melenchon. That’s unlikely. Still, candidates who are blasé about debt and hostile to the EU could get two-fifths of the vote. Their ideas may catch on.
Hadas: Governments are businesses too – sort of 19 Apr 2017 A new McKinsey report says “best practice” tools used by private companies could help the public sector provide more good things for less. There are easy global gains, where increased efficiency hurts no one. But vested interests and cultural challenges are serious obstacles.
UK election will test markets’ Brexit optimism 19 Apr 2017 Investors think Britain has a better chance of avoiding a damaging EU exit because Theresa May has called an early vote, a Breakingviews index based on asset prices shows. That view could be challenged by a campaign that will force the prime minister to clarify her policies.
Mallya arrest could energise India bad debt fight 18 Apr 2017 Liquor baron Vijay Mallya fled to the United Kingdom after banks sued to recover $1.4 billion. If his arrest leads to extradition it would make an example of the poster child of India’s bad loan problem. That would help New Delhi sell any bailout of state banks to the public.
Theresa May cashes in at peak political valuation 18 Apr 2017 Calling an election on June 8 is the British prime minister’s best chance of securing a personal mandate. Her opponents are weak or divided and the pain of leaving the European Union has yet to bite. A big majority will give her scope to take a tougher stand in Brexit talks.
Brazil’s Temer steers white-knuckle reform route 17 Apr 2017 The "Car Wash" corruption probe is increasingly denting the president's government as he tries to drive crucial changes to an unsustainable pension system through Congress. The nation's economic recovery may hinge on his ability to ease off the gas just enough to ensure passage.
Fed’s new bank overseer could rattle rates process 17 Apr 2017 Randal Quarles looks headed to lead regulatory oversight at the central bank. He worked at Treasury but left before the crisis. He's expected to have a pragmatic view, despite Trump’s Dodd-Frank dissing. He may make more waves on monetary policy with a rules-based approach.
Trump finds markets, too, are complicated beasts 13 Apr 2017 The U.S. president no longer wants to label Beijing a currency manipulator. He belatedly learned the yuan hasn’t been purposely devalued for a while. He's also warming to the dovish Janet Yellen and the Export-Import Bank. As with healthcare, he seems to be learning on the job.
Dodd-Frank fight sends dangerous cues to watchdogs 12 Apr 2017 Congressman Jeb Hensarling’s latest plan gives banks even more regulatory relief and includes ratings agencies. Trump doubled down on his promise to get rid of finance rules. Democratic lawmakers stand in the way. Still, those signals could prompt officials to go easier on Wall St.
Cox: Grover Cleveland offers timely trade lesson 11 Apr 2017 The pro-trade U.S. president delivered a prescient 1887 speech deriding protectionism during his first term in office. He lost re-election but took the White House four years later as tariffs skewered the economy and the GOP was wiped out. Take note, Donald Trump and Paul Ryan.
U.S. brokers surprisingly still on fiduciary hook 10 Apr 2017 Asset managers are scrambling after a Labor Dept rule requiring them to put clients' interests first unexpectedly survived, although delayed. Donald Trump ordered a review, but that hasn't killed the measure. Even if the rule takes effect in June, the fight probably isn't over.
Second Sky bid leaves Murdochs with too much power 10 Apr 2017 Regulators are reviewing Fox's $14.5 bln offer for the pay-TV firm. In 2011 they said a bid by Murdoch-controlled News Corp risked leaving control of UK media in too few hands. Though the clan's influence has waned since then, concessions should still be on the table.
Indonesian tax amnesty odd help for private banks 10 Apr 2017 A tax amnesty that saw citizens declare $365 bln in assets has been a blessing in disguise for top private banks. The ultimate outflows to Indonesia were a fraction of the headline amount. More importantly, the scheme gave lenders the excuse to do some overdue spring-cleaning.
Europe dangles 2008-style bank moral hazard trade 7 Apr 2017 The EU’s willingness to let Italy bail out sickly banks looks a retreat from post-crisis reforms on bank failure. Investors might conclude that senior creditors will always be saved. A key change since the financial crisis – abolishing implicit subsidies – is being muddied.
South Africa’s slow burn cuts chances of quick fix 6 Apr 2017 President Jacob Zuma seems to be doing his best to get foreign investors to dump domestic assets. That may not lead to a sudden stop: only a small minority face being forced sellers. The bad news is that this could slow the process to replace him with a more responsible leader.
Hadas: Hard Brexit could have sting in the tail 6 Apr 2017 Conventional wisdom is that even a "clean break" with the European Union just means a slower UK growth rate. But if modern revolutionaries gain control, Britain might end up with less foreign money and fewer trading partners. That would bring a huge drop in living standards.
China’s reformers could use tough line from Trump 5 Apr 2017 The U.S. president has threatened his Chinese counterpart with punitive trade policies. A more creative approach would target barriers to foreign investment in the People’s Republic. That would find support from U.S. corporations – and China’s frustrated pro-market faction.
Republicans lose their way on Main Street 5 Apr 2017 The chairman of a House panel told CFPB Director Richard Cordray he should be fired. This escalating fight saps resources from guarding consumers against predatory lenders and debt collectors. Political dogma is obscuring the agency's mission and a populist message from voters.
White House cross-border M&A rethink risks blowback 5 Apr 2017 President Trump may make it harder for foreigners to buy U.S. firms. The process for divining national-security threats in takeovers needs an overhaul. But many of the ideas smack of pure protectionism against China ahead of President Xi’s state visit. It could spur retaliation.
Markets snooze their way to Le Pen showdown 5 Apr 2017 French government bond prices suggest a lower probability of far-right Marine Le Pen winning the presidential election than bookies do. Markets may be too calm about the disruptive potential of voter apathy, or a left-wing alliance. That limits their ability to reassure.