The Exchange: Dual-class dueling 25 Jan 2018 Hong Kong’s plan to welcome super-voting stock weakens corporate governance, but its appeal to Chinese tech companies also may be exaggerated. Officials from Credit Suisse, BlackRock, PCCW Media and Bain Capital debated the upcoming changes at a recent Breakingviews event.
U.S. flu-shot savings are nothing to sneeze at 25 Jan 2018 A harsh influenza strain is knocking more Americans flat this winter. The tab for medical care should exceed $10 bln, while lost work days will take an even larger toll on companies. Offering free shots for all would be a cost-effective way for society to reduce the burden.
Viewsroom: Trump solar tax is more burn than balm 25 Jan 2018 The U.S. president seems to be trying to right past trade wrongs. But business has long since moved on, meaning tariffs on washing machines and solar panels will do more harm than good. Also, Merkel and Modi disappoint in snow-ravaged Davos. Plus: Spotify’s Wall Street snub.
Mario Draghi is ill-equipped for currency wars 25 Jan 2018 The European Central Bank chief took a potshot at the United States for flouting an international agreement not to manipulate currencies. The rate-setter has limited policy room to resist a strong euro. European politicians who take up the cudgels risk escalating the fight.
Xi Jinping wannabes flub their lines at Davos 25 Jan 2018 Leaders including Emmanuel Macron of France and Germany’s Angela Merkel predictably spoke up for global cooperation ahead of Donald Trump’s finale. Unlike the Chinese president last year, however, their rhetoric fell flat. Competition for investment further muddles the message.
Romer exit flags World Bank’s human capital limits 25 Jan 2018 The academic known for his work on economic growth is leaving the bank after just 15 months. The attempt to shake up a staid institution fits his theories’ emphasis on new ideas. But his brash manner shows how organisations can be less than the sum of their inputs.
Hadas: Carillion and the danger of low prices 24 Jan 2018 Debt-heavy UK contractor Carillion collapsed because it wasn’t charging enough. Uber can keep distorting taxi markets with loss-making fares until its backers lose hope. And Amazon’s cross-division support unfairly harms competitors. Cheap prices can cause expensive trouble.
Mnuchin opens door to new era of currency wars 24 Jan 2018 The U.S. Treasury secretary said a weaker dollar was good for his country in some ways. True, but the break with what his predecessors have asserted since 1995 raises the risk the greenback will be used as a trade weapon. That would be bad news for foreign holders of U.S. debt.
Canada’s insurance policy on NAFTA isn’t loony 23 Jan 2018 Negotiators have opened talks on revamping the trade pact, but their chances look slim. A U.S. pullout from NAFTA would affect Canadian exports amounting to nearly 20 pct of the country’s GDP. But Ottawa has other trade pacts in the works, and a flexible currency would help cushion any blow.
Make in India clashes with America First in Davos 23 Jan 2018 Narendra Modi and Donald Trump share strongman characteristics and both have a zero-sum approach to trade. The Indian premier needs to boost manufacturing just as the U.S. president wants to do the same. The Asian nation has the most to lose if it fails to realise its vision.
South Korea’s bitcoin-trading tweak is encouraging 23 Jan 2018 A sensible curb on anonymous accounts will limit criminal activity, but hardliners are still calling for a full ban on exchanges. That could backfire by pushing traders to use riskier venues instead. Japanese-style market regulation would be a better way to protect investors.
Crypto-FOMO is a shaky market foundation 22 Jan 2018 Hackers have purloined a tenth of the $4 bln raised through initial coin offerings, according to EY. The consultancy says fear of missing out makes investors overlook projects’ flimsy underpinnings. The same could be said of the hype surrounding digital currencies and blockchain.
U.S. shutdown is expensive in more ways than one 22 Jan 2018 Lawmakers agreed Monday to reopen the federal government after a brief closure. Spending halts have only a modest impact on the economy and financial markets, but they cost taxpayers and risk deepening partisan divides. It’s a pricey tool that perpetuates Washington dysfunction.
Cox: Klaus Schwab remakes Davos as The Apprentice 22 Jan 2018 To ensure intrigue when world leaders and CEOs are locked in the Swiss mountain resort, the World Economic Forum mastermind is employing reality TV tricks that made Donald Trump a star. This year's gathering may rival the business show for ratings-boosting drama. But it's risky.
Breakdown: How do you say “taper” in Japanese? 22 Jan 2018 The Bank of Japan’s $4.7 trln balance sheet is nearly equal to national GDP. It’s early for a radical rethink by the world’s most aggressive major central bank, but tweaks could be necessary. This will require tact. Mere hints of change recently have upset investors.
Xi Jinping offers a lesson on the “Davos discount” 21 Jan 2018 The Chinese president’s 2017 oration was hailed as a new era in global leadership. What followed was a backlash against Beijing’s influence abroad, and little progress on domestic challenges. This ought not to surprise. Promises to the elites of Davos may be less than they seem.
Viewsroom: Donald Trump goes to Davos 19 Jan 2018 The U.S. president heads to the Swiss Alps confab that’s the antithesis of his “America First” ideology. He’ll have competition: keynote speaker Narendra Modi, with his “Make in India” policy. Plus: BlackRock’s Larry Fink pushes social activism. And why Ford is stalling.
Tax cuts are looking like rare Trump win 19 Jan 2018 The U.S. president’s first anniversary coincides with a possible federal funding hiatus. Slashing corporate taxes last month was a GOP success and the administration now wants infrastructure investment. But the shutdown wrangling is indicative of the partisan deadlock to come.
Review: The high cost of measuring the economy 19 Jan 2018 GDP has become an idol. “The Growth Delusion” condemns the idolatry, because this measure includes too much of some things and not enough of others. But author David Pilling misses the revolutionary implication. Economies are too complex to be summed up in a single figure.
India’s “Big Bull” likes stocks, not bitcoin 19 Jan 2018 Billionaire investor Rakesh Jhunjhunwala, in a recent Breakingviews Predictions chat, discussed his positive outlook on Indian growth and why he likes domestic equities. He also sees the country privatising assets, including banks, and thinks crypto-currencies are madness.