Rio snub is latest Chinese setback in global M&A 5 Jun 2009 The Chinese are great at selling to foreigners, but seem to have trouble buying. Chinalco s inability to pay Rio Tinto s $19bn is the latest example. It follows bad investments in Fortis and Blackstone. The problems: naïveté, poor communication and Beijing s alltoovisible hand.
Pound could plunge again as UK risk soars 5 Jun 2009 Sterling has been on a harebrained upward surge. But the prime minister s precarious position amplifies the UK s big risks: a huge fiscal deficit, a tripleA rating at risk and a possible financing crisis. At least a sharp fall in the pound would be good for the country.
Devaluations loom in eastern Europe 4 Jun 2009 A failed Latvian debt auction is a clear market no to the attempt at devaluationfree restructuring. Latvia probably can t hold out, and Estonia and Lithuania are likely to follow. Baltic woes are bad for Swedish banks and for other frail eastern European economies.
US FDIC, Treasury deals need more disclosure 4 Jun 2009 The government is deep into the financial sector. Selling out to LBO firms or others at a loss to taxpayers may be the best way out. But with transparency an Obama tenet, failing to spell out deal details risks a loss of public trust, say Lauren Silva Laughlin and Richard Beales.
Interview: Indiana to Obama – what about the law? 4 Jun 2009 Three Indiana pension funds have filed a lawsuit challenging the proposed restructuring of bankrupt US car maker Chrysler. Indiana State Treasurer Richard Mourdock gave his perspective on the politicallycharged situation to Breakingviews.com's Lauren Silva Laughlin.
Personal view: Britain has too many low-quality politicians 4 Jun 2009 The MPs expenses scandal has underlined the need to reform UK politics. Hugo Dixon suggests a seven point plan for dramatic improvement.
Germany may get pain but little gain 3 Jun 2009 Germany used less stimulus and runs lower deficits than other big economies. That made its slump deeper, but raised hopes of a healthier recovery. Regrettably, its chancellor is right to fear that central bank easing may cause inflation, depriving Germany of austerity s rewards.
Let US bank watchdogs fight it out 2 Jun 2009 Lawmakers are rightly sceptical of Obama s emerging plans for an allpowerful federal bank regulator. Duplication of effort among overseers that have tangible interests in the health of their charges could unearth problems earlier and keep them from festering.
Why no sterling crisis? 1 Jun 2009 The UK economy and public finances are in a mess. But parliament is transfixed on the scandal over MPs expenses. It sounds like a recipe for market panic. Yet the pound is holding up largely because the odds of an early election and a Conservative landslide have risen.
Is Canada – not the US – the world’s safe haven? 1 Jun 2009 Its biggest bailout to date wasn t one of its own but rather GM s local arm. Its banks are sound, its recession relatively shallow, and its finances in reasonable shape. With an economy strong in resources and a fiscally careful government, Canada looks safer in turmoil.
US mortgage investors amplify Treasury sell-off 1 Jun 2009 The government s massive borrowing needs and investors rebounding risk appetite have caused Treasury bond prices to fall. Hedging by mortgagebacked securities investors is adding to the selloff, possibly hurting the housing market and those MBS investors even more.
Nice-guy politics shouldn’t thwart China-US rebalancing 29 May 2009 Don t expect verbal grenades from Treasury secretary Geithner on his first state visit to Beijing, despite his past swipes at Chinese currency manipulation. It s pointless to lash out after all, supertanker economies take a long time to turn around. But turn around they must.
Which EU country could grow this year? 28 May 2009 The surprise answer is Poland. It may be located in the heart of troubled Central Europe. But it avoided the credit boom, ran a prudent economic policy and has competitive industry. What s more, its floating currency and Germany s car scrappage scheme have helped its exports.
Political fear of gas tax risks trillions 28 May 2009 US Energy Secretary Steven Chu s claim that a gas tax is not politically feasible seems wrong on two levels. First, Obama has sufficient support. Second, a gas tax would be a far better way to fight climate change than new CAFE standards and a cap and trade system.
Government bonds enter danger zone 28 May 2009 With risk appetites returning, investors are no longer herding to the safety of government paper at just the moment when a torrent of new issuance is hitting the market to fund ballooning deficits. Navigating the danger zone will require skill and luck.
Overvalued euro weighs on fragile zone 27 May 2009 Recession in the eurozone is far deeper than in the US. Germany s GDP decline is enormous. Meanwhile, competitiveness and fiscal pressures are terrible in Ireland, Spain and other smaller economies. The strains in the zone are likely to mount.
California: the four-state solution 26 May 2009 Readers responded in droves to Martin Hutchinson s provocative suggestion that California s financial problems could be eased by breaking it into four smaller states. Breakingviews presents a collection of the most noteworthy comments.
Ex-mortgage salesman tries rebirth as savvy buyer 26 May 2009 Stanford Kurland made a mint as the number two at lender Countrywide. Now he s looking for $750m to bankroll picking over the wreckage of the mortgage market. Sure, he should be equipped to find bargains for investors. But he and his colleagues will make the more certain return.
Korean investors too sanguine on geopolitical risk 25 May 2009 Nuclear tests to the north and the death of an expresident barely ruffled South Korea s markets. The events may not derail the nation s tentative stabilisation, but they do have some troublesome implications.