Viewsroom: Saudi Aramco’s path may lead to China 21 Dec 2017 That the Hong Kong Stock Exchange will join Riyadh in hosting the world’s largest IPO is one of Breakingviews’ 2018 predictions. We also explain the method to our fortune-telling and lay out why China will win the 5G standards race and why Wall Street will learn to love bitcoin.
Capital glut will overwhelm rising disaster losses 21 Dec 2017 Hurricanes and wildfires doubled estimated catastrophe-related insurance claims to $136 bln in 2017. Reinsurers and cat-bond holders have had a bad year. A hotter planet suggests more pain. But a surfeit of investors chasing uncorrelated returns will keep the cash flooding in.
Sun will be setting on Silicon Valley imperialism 21 Dec 2017 Expect tech firms to keep going public with lopsided share-class structures like Snap's that treat public investors as serfs. Rising pressure from fund managers and index creators, however, will bear fruit in 2018, mainly by imposing temporal limits to super-voting tendencies.
Tax cuts crystallize haves, wants, can’ts, won’ts 21 Dec 2017 AT&T, Comcast, Boeing and Wells Fargo are among companies sharing the wealth from lower levies with workers. Most have reason to curry favor with the White House. So such deals may be less than they seem – while others will struggle to hold on to any benefits at all.
Uber for everything will arrive in 2018 21 Dec 2017 The tech industry spent 2017 awash with cash and keen to disrupt the entire global economy. But loopy ideas, on everything from juice-making to how to treat co-workers, suggest a little hubris is creeping in. Breakingviews duly offers a few investment pitches for the year ahead.
Fed calls time on monetary and regulatory activism 21 Dec 2017 After nearly a decade of zero rates, asset purchases and tighter rules, the central bank is stepping back. Janet Yellen started the trend as the crisis receded, but her chair apparent promises a real laissez-faire shift. Markets may struggle to adapt to life without a Powell put.
Who’s driving global growth in 2018? 21 Dec 2017 Here’s how forecast global GDP expansion breaks down for the coming year, based on World Bank estimates. Flex the individual country numbers to change their relative shares, and the overall result.
India bids adieu to “promoter” capitalism in 2018 21 Dec 2017 The country's errant tycoons have fewer places to hide as Prime Minister Modi ushers in a new era of governance, starting with a strict insolvency code. This will send serial defaulters packing and signal a shift towards more market, creditor and shareholder-friendly forces.
Chinese government debt will go global 21 Dec 2017 A major index will include Chinese government bonds in 2018, dragging foreign money into a $9 trillion market. Beijing will appreciate the foreign stamp of approval. But sovereign guarantees will give scant cover against volatility spreading outwards from corporate credit.
China pulls disappearing debt trick 20 Dec 2017 Beijing talked up better-quality growth and risk management in its latest annual economic preview. But reducing the country’s $30 trln debt load, last year’s “top priority,” was barely mentioned. It’s a worrying sign if China’s leaders can’t kick the country’s credit addiction.
The Exchange: Newark Mayor Ras Baraka 20 Dec 2017 Will Amazon choose New Jersey's largest city as the location for its second headquarters? That's what hometown native Baraka is hoping - and he's lobbying hard to make it happen, even trying to cajole neighboring New York City to play a role in swaying the e-commerce juggernaut's decision.
Cox: Is Wall Street more democratic than America? 20 Dec 2017 Taxpayers in the most productive U.S. states would be forgiven for asking the question after the way Congress treated them with a slapdash tax bill skewed to corporations, not people. The big risk is that while capitalism becomes more representative, America goes the other way.
How to know if America’s big tax bet pays off 20 Dec 2017 Republican lawmakers have passed revised tax cuts that give even more breaks to companies and the wealthy. They are banking on those benefits trickling down to average workers. It could come back to haunt them. Breakingviews notes a few ways to measure the policy’s success.
Bitcoin insider trading lends veneer of normality 20 Dec 2017 Coinbase is investigating possible insider trading after the price of bitcoin cash surged just hours before the digital-wallet provider added the crypto-currency to its platform. Wealth always attracts fraudsters. And that, in turn, strengthens the case for regulation.
Five possible triggers of the next market shock 20 Dec 2017 It takes a catalyst to set off a downturn and other reagents to sustain it. Breakingviews runs through a few more and less obvious elements: central-bank shocks, wayward exchange-traded funds, doubts about “crisis alpha,” unforeseen hedge-fund trouble and, yes, crypto-currencies.
Canada will be biggest loser in U.S. trade spats 20 Dec 2017 Trump threatened China and Mexico with tariffs, but the real levies hit Canadian lumber and Bombardier jets. While Ottawa is pushing other trade deals, America is its biggest export market. Souring NAFTA talks and fights over dairy, wine and paper make it the chief target.
Best thing Trump and Xi can do in 2018 is nothing 20 Dec 2017 The two leaders command half of the planet’s expected GDP growth. The biggest risks are more trade barriers, a Chinese housing market collapse, and armed conflict. All can be avoided if the U.S. president fails to use his powers and his Chinese counterpart opts not to use his.
Bitcoin finds unlikely ally in Asian watchdogs 20 Dec 2017 Japan and South Korea make up half of global trading volumes in the $300 bln bitcoin market. Tokyo has officially recognised digital currency exchanges. Seoul is mulling the same. Regulations help contain risk but also increase acceptance and allure of this untouchable cash.
China’s belt will get tighter and its road bumpier 20 Dec 2017 Xi Jinping's ambitious infrastructure plan enters its fifth year with some notable struggles. Countries are pushing back for political and economic reasons while Chinese banks grapple with mounting debt. So-called Belt and Road projects require more of a team effort in 2018.
Ex-Im revives just as it’s least useful 19 Dec 2017 A Senate committee rejected the nomination of Scott Garrett, a vocal critic, to lead the bank. It’s a sign that Ex-Im is bouncing back from its nadir in 2015. But with the economy roaring and tax cuts coming, the result may be mostly a small stimulus for big firms like Boeing.