Money‚ Markets & Macroeconomics

Germany’s climate menu mixes small beer and fudge

20 September 2019

Angela Merkel’s coalition will begin pricing carbon at 26 euros a tonne to reduce emissions. That gives big polluters little incentive to clean up. It also limits Berlin’s need to disguise that its new 50 bln euro fund to smooth the transition will stay off-balance sheet.

Bold tax cut hands stimulus charge to India Inc

20 September 2019

New Delhi is making the most of a sharp slowdown, cutting corporate taxes from 30% to 22%. Companies can use savings to repay debt, invest, cut prices or pay bonuses. The faster benefits are shared with consumers, the sooner they will spread badly-needed economic cheer.

Beijing’s monetary easing path is a conflicted one

20 September 2019

China has trimmed its new one-year benchmark lending rate to 4.2%. Policymakers want to boost slowing growth, but without fueling a property or credit bubble. The result is another half-step towards loosening that will disappoint those hoping for a quick stimulus.

JPMorgan shares too much space with WeWork

19 September 2019

Jamie Dimon’s outfit has helped line up $6 bln in credit for the office sublessor and lent millions to CEO Adam Neumann. Funds advised by the bank are also one of the firm’s largest investors. With WeWork’s IPO increasingly in doubt, the ties call into question JPM’s tech savvy.

Airbnb may be everything WeWork isn’t

19 September 2019

Both space-sharing pioneers have been valued at more than $30 bln. Yet Airbnb’s asset-light business needs little capital while reaping obvious economies of scale and network benefits. That should help its public listing, planned for 2020, succeed where WeWork’s is failing.

Weaker Aussie jobs clear fiscal spending path

19 September 2019

More people worked Down Under in August, mostly because of an increase in part-time positions. Overall unemployment ticked higher to 5.3%. It makes another interest rate cut more likely, but goosing government outlays would be a more effective option for the cooling economy.

Fed wrestles the unpredictable and the unintended

18 September 2019

Cutting interest rates again was the easy part. The whimsical trade policy of President Donald Trump and threats to oil supplies call for insurance. But stress in money markets is partly the U.S. central bank’s own handiwork. Chair Jay Powell is discovering the Fed’s new normal.

SoftBank’s funding tricks lack a magic tech wand

18 September 2019

Masayoshi Son’s firm lavishes startups with cash to help them dominate their field. But WeWork is struggling. Other Vision Fund-backed firms from dog-care service Wag to car-sharing app Getaround lag rivals. Deep pockets alone can’t conjure up strategy, leadership and execution.

Spain turns Italian as economic fault lines widen

18 September 2019

The fourth election in four years follows Prime Minister Pedro Sanchez’s failure to form a government. Unlike in Italy, bond investors have shrugged off Spain’s dysfunctional politics. But gridlock has left debt high as growth dips, while the Catalan question remains unsolved.

Money-market wobble is whodunnit without a villain

17 September 2019

The U.S. Fed pumped in $53 bln to calm interbank lending after rates spiked. The movements were dramatic, but the many causes look mostly mundane. Banks might use the ructions to argue they deserve a regulatory break. Such ripples, though, can be tolerated, and may have to be.

Guest view: Finance can put out rainforest fires

17 September 2019

The burning Amazon has sparked international concern, tension between Brazil and Europe, but no solutions. One remedy, argue execs at the Coalition for Rainforest Nations, is for big firms to pay landowners to keep the forests and use the investment to offset their own pollution.

Review: Blackstone’s unapologetic buyout baron

17 September 2019

Steve Schwarzman’s memoir is a rollicking tale of banking’s glory days, and how he built an investing colossus. It’s also a love letter to elitism from a man who talks with Donald Trump and Xi Jinping. Capitalism is under attack, but Schwarzman leaves no doubt which side he’s on.

The Exchange: The Asianisation of the world

17 September 2019

A splintering West and increasingly interconnected East is creating a newly powerful mega-region, according to Parag Khanna, author of “The Future is Asian.” He swung by the Breakingviews office in Hong Kong to break down the economic and geopolitical rationales behind his idea.

Oil market may help shale, not vice versa

16 September 2019

Producers of U.S. oil would struggle to ride to the rescue after attacks on Saudi oil fields put a question mark over the security of future supply. Even so, sustained high prices would be a happy outcome for companies that have a habit of digging themselves into a cash hole.

Washington casts longer shadow over Hong Kong

16 September 2019

Protests in the Chinese territory have rallied momentum for a proposal that scrutinises its special trade status and threatens sanctions. It’ll be hard to make the bill a priority in Congress, but President Trump could use it as leverage as he seeks a broader deal with Beijing.

ECB’s Super Mario channels a new cartoon hero

12 September 2019

Mario Draghi unveiled a rate cut and new asset purchases, his parting gift as central bank chief. While he shares a name with Nintendo’s famous plumber, the open-ended buying smacks of Toy Story’s Buzz Lightyear. Markets seem to think stimulus will last to infinity and beyond.

Holding: Insider-trading law fix is within reach

11 September 2019

The U.S. Congress seems closer than ever to clarifying rules that have perplexed investors, watchdogs and judges for decades. With prosecutors pushing legal limits and dodgy traders slipping through loopholes, reform is overdue. Bipartisan support suggests it may finally happen.

Peloton pedals furiously to IPO fantasy-land

11 September 2019

The interactive exercise firm is seeking a valuation of $8 bln, twice as high as its last funding round, hoping explosive revenue growth pulls along the public. Yet losses are rising rapidly too, and fitness is a faddish business. It’s not just calories that could get burned.

Hadas: It’s the economy, stupid – sometimes

11 September 2019

Stagnant incomes can help breed voter bitterness, as can losing out to an economic elite. But money issues are not the whole story, so the popular response to a post-Brexit UK recession or a post-trade war U.S. decline is unpredictable. Policies and ideas matter, too.

Beijing’s new moves dance around capital controls

11 September 2019

Quotas on a pair of high-profile inbound investment schemes are being scrapped. It’s partly symbolic, given that a $300 bln cap was never hit. China wants more foreign funds, but not enough to put outbound flows at risk. Mounting debt problems will further entrench the system.