E.ON brinkmanship gets rewarded in court 6 Dec 2016 Germany’s constitutional court has ruled in the troubled utility’s favour over an 8 bln euro compensation claim following the government’s U-turn on nuclear power. A payout should ease E.ON’s balance sheet headache and vindicate its decision to delay a much-needed capital hike.
UK regulator makes brokers feel like their clients 6 Dec 2016 The FCA is set to cap leverage punters can take when spread-betting. It shouldn’t have been a shock given EU peers had questioned a product in which 80 pct of clients lose money. Brokers’ 30 pct share falls imply they suffer from the same mindless optimism as their customers.
Greece turns from Sisyphus into Hercules 6 Dec 2016 Euro zone lenders agreed to rejig some of its debt, which adds to the likelihood that future financial support isn’t just good money thrown after bad. Greece is no longer pushing a rock up a hill, but some pretty hefty tasks still stand between it and economic recovery.
“Irrational exuberance” gets a new lease on life 5 Dec 2016 After Alan Greenspan coined the phrase exactly 20 years ago, it took three years before the tech bubble burst. Markets are spirited again, by low rates and Trump. As the Fed acts and the president-elect pushes his policies, asset values may face a quicker reckoning this time.
Dakota pipeline defeat fast becoming wistful memory 5 Dec 2016 The Obama administration nixed a key permit for an Energy Transfer oil plan after an uproar by Native Americans and activists. President-elect Trump's love of fossil fuels, including $1.5 trln worth on tribal lands, augurs a tougher fight against pollution and climate change.
Bank clean-up opportunity is Italy’s to waste 5 Dec 2016 The failed referendum need not cause a crisis if UniCredit completes its rights issue and fellow lender MPS can be quickly stabilised. Political turmoil and weak growth, though, could push up bad loan levels. A new "bad bank" would help, but political will may be lacking.
Closing jaws of China cash trap bad news for MNCs 5 Dec 2016 Multinationals in China can bring money in any time they like, but it may never leave. Tightening capital controls will be a major problem for foreign companies in mature sectors, especially for U.S. firms planning to remit profits if Trump cuts taxes on offshore earnings.
Italy’s vote is for uncertainty but not for crisis 4 Dec 2016 Matteo Renzi resigned as prime minister after losing his constitutional reform referendum. The immediate challenge facing his successor is to make sure banks in need of capital still get it. Longer term, Italy will hobble on without the change-minded strong government it needs.
Austria’s “nein” to far-right buys time for reform 4 Dec 2016 The presidential election ended in a clear defeat for Norbert Hofer's Freedom Party. Chancellor Christian Kern has just under two years to deliver a "new deal" including lower tax and more infrastructure spending. His right-wing opponents have taken a knock, but remain strong.
Financial startups may soon storm gate 2 Dec 2016 New ventures like SoFi and Betterment could become banks under a new charter regime. The OCC's plan initially may please established lenders by leveling the regulatory field. It also, however, should help upstarts breach the industry's last line of defense: cheaper funding.
Chess: a 1,500-year-old startup that doesn’t scale 2 Dec 2016 A fresh push to popularize the game at this year's championship between Magnus Carlsen and Sergey Karjakin faltered. Pay-TV won't woo fans who can watch board movements for free and broadcasts are too technical for novices. Poor governance and few sponsors are hindrances, too.
Richmond sharpens up Britain’s Brexit divide 2 Dec 2016 The victory of a pro-EU liberal in a UK local election hints at a potential swing back to the centre. Stronger opposition could keep the government honest as it negotiates Brexit. Yet Richmond is wealthy, and voted strongly to stay in Europe. More clarity doesn't mean more unity.
Hollande’s problem was bigger than Hollande 2 Dec 2016 France's president saved his ruling Socialist Party from electoral annihilation by saying he won't seek a second term. His flaws had become obvious. But whoever seeks the country’s highest office faces the same challenge of reconciling modernisers with those opposed to reforms.
South Korea can offer roadmap to cashless Asia 2 Dec 2016 The country wants to go coinless by 2020. That sounds achievable. Electronic payments are already commonplace in one of the most wired nations in the world. It’s the latest currency experiment in the region that offers valuable lessons for a continent hooked on cash.
Review: China’s doomed anti-corruption campaign 2 Dec 2016 Tales of Chinese officials enriching themselves are so prevalent they no longer astonish. President Xi Jinping's anti-corruption campaign has penalised bad behaviour. But in "China's Crony Capitalism", Minxin Pei argues that state ownership makes any sustained crackdown futile.
U.S. housing revival remains under construction 1 Dec 2016 Home prices just surpassed their 2006 peak, boosted by more buyers amid tight supply. Further gains could be tough – or slow. Rising interest rates and privatizing the government agencies that back mortgages, as Trump's Treasury nominee wants to do, could impede affordability.
Viewsroom: Is Trump’s dealmaking already working? 1 Dec 2016 The president-elect brought in a rare bipartisan player as Treasury secretary, Steven Mnuchin and saved 1,000 jobs in Indiana. But bigger economic challenges await. And he has yet to solve his business conflicts. Elsewhere, Dallas' pension woes put a $4 trln industry on notice.
Europe’s long weekend presents a triple threat 1 Dec 2016 In the space of just 48 hours Italy's premier will face a make-or-break referendum, Austria could elect a far-right president, and Greek debt talks will reach a head. All three have the potential to revive the centrifugal forces that could send Europe spinning out of control.
Mnuchin’s first job: get own finances in order 30 Nov 2016 Trump's choice for Treasury has made millions on Wall Street. Unlike his boss, Steven Mnuchin will have to produce his tax returns to win congressional approval, a step that has tripped up past nominees. Mnuchin's wealth and potential use of tax loopholes could be problematic.
Trump puts GOP’s competing loyalties in play 30 Nov 2016 The president-elect's inconsistent comments about his business conflicts have spurred Democratic lawmakers to propose ways to rein them in. But Republicans will control Washington. Failure to tackle any issues could stymie policy goals like tax reform and spook markets.