Long-term optimists give Goldman too much credit 13 Jul 2017 Slow trading may doom the $90 bln firm to a ho-hum Q2. But analysts see its profit growth over the next 18 months far outpacing Wall Street rivals. Its valuation implies an even rosier outlook. The likes of JPMorgan, reporting on Friday, might reasonably feel under-appreciated.
Aramco exemption bends London IPO rules to limit 13 Jul 2017 The UK regulator wants to change its listing regime to lure state-controlled groups like the Saudi oil giant. The watchdog has to keep markets clean while protecting London’s competitiveness. But making policy for a single company - especially one as big as Aramco - is a mistake.
Why Europe can’t beat Google on corporate taxes 13 Jul 2017 A court has ruled the search giant is not liable for French back-tax after all. Google will face other battles over how it arranges its profits. Tech companies will always have an advantage, though. Unlike competing European countries, they can put their global interest first.
Lula graft conviction is a sad boon for Brazil 12 Jul 2017 At his popular peak, the ex-president offered a magical moderate leftism that both markets and the poor could love. He hoped to regain power in 2018. Positive investor reaction to his prison sentence shows how dead that dream is. Brazilians face harder, more realistic choices.
Protest to keep internet weird is worthy fight 12 Jul 2017 Amazon, Netflix and 100,000 others are urging resistance to a U.S. watchdog's plan to scrap rules on so-called net neutrality. Broadband provider AT&T is among them, with its own arguments. The common thread is that companies shouldn't be able to choose which content gets online.
Canada treads a fine line in following the Fed 12 Jul 2017 The central bank raised its key interest rate for the first time in nearly seven years, saying growth looked healthy. Inflation remains below target, though, and a housing bubble threatens to deflate. It's hard for Canada not to match tighter U.S. policy, but it carries risks.
Only in Trumpland is Gary Cohn suitable Fed chair 12 Jul 2017 The former Goldmanite and White House adviser is tipped as top contender to replace Janet Yellen. Though not an economist, his years in finance put him ahead of other cabinet picks lacking relevant résumés. But a Wall Street trader's temperament is no match for the staid job.
Bank of England puts price on bond fund stupidity 12 Jul 2017 Regulators worry that the growth of open-ended bond funds could cause fire sales. A central bank paper estimates that could add nearly half a percentage point to companies’ funding costs. Pointy-headed analysis should reinforce the case for more sensible investment models.
Hadas: Fear not, you can get economics right 12 Jul 2017 The dismal science struggles to explain such basic issues as persistent disinflation, lingering post-crisis trauma and rising inequality. Unsuitable methodology is the primary culprit. A new “Blackfriars School" can help by asking better questions about what’s really going on.
Britain learns how not to think about work 12 Jul 2017 A review of the UK “gig economy” suggests some jobs have conditions that make them little better than having no job at all. Others appeal much more than pay levels would suggest. Employment data does not capture the difference. Developing countries have known this for decades.
Temasek’s garage sale highlights capital dilemma 12 Jul 2017 The Singapore state investor sold more assets than it bought for the first time since 2009. The trend may continue with valuations high and stiff competition for assets from cash-rich private equity players. It will also make it hard to redeploy capital efficiently.
Holding: Judges owe investors principle, too 11 Jul 2017 The U.S. Supreme Court has been paying greater interest to securities-related cases. One against tech firm Cyan is the latest. Yet narrow and unpredictable rulings have confused shareholders about everything from insider trading to filing deadlines. Clearer standards are overdue.
Volcker Rule emblematic of new Fed pick’s challenge 11 Jul 2017 Randal Quarles is set to be the central bank’s first head of supervision, a key role in Trump’s deregulatory push. But even where political consensus exists, like revising parts of the prop-trading ban, change requires support from fellow watchdogs. That’ll slow the process.
Fickleness hampers French seduction of bankers 11 Jul 2017 Gallic politicians are scrapping taxes and tweaking labour laws in an attempt to lure London-based financiers to Paris after Brexit. Though the gifts are appealing, memories of past banker-bashing are fresh. Today’s charmers could be replaced by unfriendly characters tomorrow.
Regulatory hide-and-seek shows banks’ new reality 11 Jul 2017 Lenders are using tricks to get around capital and liquidity rules, says Britain’s chief banks supervisor. Introducing more complex rules has only added to the behaviour that contributed to the last crisis. The good news is that banks are stronger, and regulators less trusting.
Dubai is weakest link in anti-Qatar stand-off 11 Jul 2017 Keeping its doors open while neighbours kept theirs closed has been a winning strategy for the Middle Eastern trading enclave. The blockade of Qatar will leave a mark on Dubai’s vital real estate sector and trade flows – and could leave its investor-friendly reputation dented.
Manila packs a Duterte discount 11 Jul 2017 Equities have delivered poor returns during President Rodrigo Duterte's first year in office. Valuations are similar to regional peers, despite the Philippines' better fundamental growth prospects. Investors are struggling to see past a bloody war on drugs and militants.
Companies will have their day in Trump’s courts 10 Jul 2017 The White House travel ban and environmental rollbacks got blocked in court, but there are over 100 judicial vacancies for the famously litigious president to fill. Aging jurists could leave even more open seats. That may reshape upcoming battles in finance, tech and beyond.
Cool credit markets could be own undoing 10 Jul 2017 Corporate bonds shrugged off the recent “taper tantrum” that hit government debt and equities. Investors may be betting that central banks will only slowly tighten policy, supporting demand for riskier assets. Yet unruffled markets may only hasten policymakers’ rush for the exit.
Newspapers push wrong solution to online duopoly 10 Jul 2017 The Wall Street Journal and others want the right to bargain collectively with Facebook and Google. The titans’ dominance of the $83 bln U.S. digital ad market is a concern, but not just for print media. Combating it requires antitrust enforcement, not an industry carve-out.