Italy’s 5-Star puts respectable face on radicalism 25 Sep 2017 The protest movement, doing well in opinion polls, has named a 31-year-old lawmaker as its leader. Luigi Di Maio’s cool appeal contrasts with founder Beppe Grillo’s vitriolic style and may win over moderate voters in 2018. But going mainstream could undermine its basic appeal.
Diminished Merkel will choke ambitious euro reform 25 Sep 2017 One of Chancellor Angela Merkel’s prospective coalition partners rejects closer euro zone fiscal ties. A weak election showing has made her own party restive and the right-wing AfD will hound her. Preserving the euro's status quo is the best that Europe can expect from Germany.
Germany’s Caribbean coalition will shake Europe 24 Sep 2017 The country’s two biggest parties suffered their worst post-war election result. That leaves Chancellor Angela Merkel with little choice but to forge a tricky and fragile “Jamaica” coalition with the pro-business FDP and the Greens. It’s a blow to hopes for European Union reform.
Theresa May embraces “extend and pretend” Brexit 22 Sep 2017 Fifteen months after Britain voted to leave the European Union, the prime minister still has no coherent idea how to deliver it. Her proposal to keep things as they are until 2021 lowers the risk of a chaotic Brexit. If accepted, the temptation will be to delay further.
Growth shows up just in time for Argentina’s Macri 22 Sep 2017 The pro-business leader is counting on economic recovery to salve the pain of austerity as he undoes the spendthrift policies of populist predecessor Cristina Fernandez. Strong second-quarter growth is likely to help him stymie her aspirations of a comeback in mid-term elections.
FDIC is last defense against Dodd-Frank rollbacks 22 Sep 2017 Wall Street bankers are counting down the days for the term of Chair Martin Gruenberg, an Obama administration holdover, to end in November. Trump has yet to tee up a successor, however. The longer the Volcker Rule and living wills stay as is, the harder it may be to undo them.
Viewsroom: German election all about runners-up 21 Sep 2017 Chancellor Angela Merkel and her Christian Democrats should win more votes than rivals. But they’ll need coalition partners to form a government. Choosing among them promises to be a nail-biter. Also: the Toys R Us bankruptcy won’t be a total loss for its private-equity owners.
SEC failure puts U.S. cyber security on back foot 21 Sep 2017 Unlike the Equifax hack, the breach into the watchdog’s systems doesn’t put people’s data at risk. But the SEC buried its belated disclosure of the attack in a broader statement on cyber issues. It sets a terrible example on transparency for the publicly traded firms it oversees.
China can afford to shrug off credit downgrades 21 Sep 2017 S&P just dinged the sovereign rating. Banks have been marked down too. Worries about rising debt are justified, but the market’s non-reaction shows how differently China’s economy is wired. State control and plentiful savings mean Beijing will escape most of the usual fallout.
Hadas: Crypto-currencies presage new monetary era 21 Sep 2017 No, bitcoin and its peers won’t become an electronic version of the gold standard. Rather, the speculation surrounding them indicates a financial system out of control. If the frenzy ends in a crash, it’s a chance to revive the old idea of a centrally controlled money supply.
What Carney can learn from Yellen 21 Sep 2017 Fed Chair Janet Yellen showed rate-setters can shock markets even when they stick to the script. That’s a lesson for the Bank of England’s Mark Carney, who has talked up a rate rise this year. Like her, he may have to hike without having solved a host of economic puzzles.
Fed balance-sheet runoff could rock fiscal boat 20 Sep 2017 The U.S. central bank will start shrinking its $4.5 trln bond portfolio next month. The timing is risky, with lawmakers set to spar over government funding and the debt ceiling. Fed downsizing will also cut the $92 bln it sent to Treasury last year, adding to budget pressures.
Russian bank aid plea tests too-big-to-fail triage 20 Sep 2017 B&N Bank, the country’s 12th-largest lender by assets, has asked for help less than a month after the central bank rescued rival Otkritie. Support would blur the line between systemically important banks and others. But rejecting the request could cause problems to spread.
Snap poll in Japan would be mixed for investors 20 Sep 2017 A renewed mandate for Premier Shinzo Abe would provide political certainty. It could also bring a big tax hike, which would hurt growth and the battle against deflation. In turn, that calls for yet more super-easy monetary policy: a plus for markets, at least in the short-term.
China “Belt and Road” waves red flag for investors 18 Sep 2017 Beijing’s vision of infrastructure connecting some 70 countries already has fund firms rushing to create vehicles to lure investment. But broad index ETFs miss that many projects make little commercial sense. Skeptical punters should focus on a narrower set of potential winners.
EU aims torpedo at asset managers’ Brexit defence 19 Sep 2017 Europe’s market regulator may be given new powers to prevent national watchdogs from turning a blind eye to funds that outsource jobs to the UK in the hope of luring business to their shores. London-based funds could face more upheaval than expected after Britain leaves the EU.
What we’ve learned about Brexit so far 19 Sep 2017 Britain’s divorce from the European Union is reaching the critical stage where talks are meant to shift from principle to detail. Progress is being slowed by bickering, technicalities and economic fog. Despite the risk of Brexit fatigue, five clear lessons stand out.
Activist has fighting chance with China’s Sina 19 Sep 2017 U.S. hedge fund Aristeia is going after the $8 bln Chinese web company. Sina looks like a good target: it is clearly undervalued and its boss is not protected by super-voting shares. A big stake in microblogging affiliate Weibo offers some straightforward ways to create value.
U.S. electricity grid is a Category 5 problem 18 Sep 2017 Hurricane Irma left much of Florida without power after ripping down transmission lines. Burying cables is one fix, if time-consuming. But storms are just one catastrophe threatening the nation’s aging electricity infrastructure. Upgrading it could cost as much as $2 trillion.
Qatar jet deal a win for BAE but a loss for London 18 Sep 2017 A deal to buy Typhoon fighter jets will secure thousands of UK manufacturing jobs. But building stronger defence ties with the sheikhdom is a risk when its squabble with Saudi Arabia is unresolved. That could backfire if the kingdom reacts by vetoing a London listing for Aramco.