UK stimulus gives securitisation a good kick 9 Oct 2012 The Bank of England’s funding for lending scheme makes it easier for banks to push cash into the UK economy. But by soaking up issues of high grade mortgage-backed debt, it is helping the rebirth of more esoteric securitisations. It’s a benevolent, albeit unintended, consequence.
Oil price benchmarks left at risk of Libor moment 8 Oct 2012 Soft proposals from those who oversee influential oil price yardsticks may leave the likes of Brent open to insider manipulation. Braver reform - along the lines followed by the UK financial watchdog fixing the scandal-hit Libor interest rate - is merited.
Hugo Chavez gets chance to do more economic damage 8 Oct 2012 Before Sunday’s election, some of Venezuela’s creditors thought the ailing strongman would lose. His easy win gives him six more years to take over industries like mining and food and squeeze the oil sector further. Bondholders can expect the Chavez discount to return.
Hugo Dixon: Crisis, what crisis? 8 Oct 2012 The term crisis is used not just in finance, but in politics, business, medicine, ecology and psychology - in fact, virtually every field of human activity. But what are crises, how do they develop and what can people do to change their course?
China’s telco suppliers can’t escape spying row 8 Oct 2012 American lawmakers warn that Huawei and ZTE pose a threat to U.S. national security because they are too close to the Chinese state. Such accusations are almost impossible for the targets to contradict. Unless relations improve, the playing field will remain tilted against them.
How do India’s markets spell relief? Chidambaram 8 Oct 2012 Stocks have soared since word broke that the urbane Harvard man might take a third turn as finance chief. His return has been an antidote to predecessor Mukherjee’s errors, and has revived foreign buying. But the rally will only last if reform manages to boost flagging growth.
U.S. jobless dip boosts Obama, but probably a blip 5 Oct 2012 The unemployment rate dropped to 7.8 pct in September, a headline that helped the president’s odds of re-election regain half the ground lost in this week’s debate. But the reality is more of the same - a steady but uninspiring recovery. Jobs will be on the agenda for years.
Review: Lessons for the poor from English history 5 Oct 2012 Mack Ott shows how the nation became fit for economic growth by developing the rule of law, property rights, a middle class, civil society and free institutions. He argues, for the most part persuasively, that the English experience offers lessons to today’s would-be wealthy.
India’s insurance reform sends strong signal 5 Oct 2012 New Delhi has decided to allow foreigners a bigger stake in its insurance industry. Unlike recent retail and airline reforms, the eight-year-old proposal needs parliamentary approval. If successful, it’s a clear sign to investors that India’s new finance minister means business.
West still rules in global education 5 Oct 2012 The original homelands of modernity - Europe, the U.S. and their close cousins - account for 90 percent of the world’s top 200 universities in the new Times Higher Education rankings. Developing nations are trying to catch up, but this cultural advantage is likely to persist.
France can’t always count on sleepy markets 5 Oct 2012 President Francois Hollande’s domestic support is falling, but his market support remains high. Peripheral distress is keeping French yields artificially low, and distracting investors from France’s competitiveness woes. Austerity without reforms won’t do.
Nixed Chinese wind-farm builder deserves answers 4 Oct 2012 Ralls sued Barack Obama after he took the rare step of blocking its project. Security may be a real concern, but with a costly investment at stake, the veto rationale should be explained clearly. Even if China wouldn’t reciprocate, due process still matters in America.
Californians missing a trick on Proposition 31 4 Oct 2012 Other initiatives on the state’s Nov. 6 ballot - Prop. 30, which raises taxes, and Prop. 32, involving political contributions - have grabbed more attention. But the rambling no. 31 could actually improve government. Suburb-dwellers fearful of city control shouldn’t fret, either.
Euro zone leverage gamble isn’t that simple 4 Oct 2012 European governments are considering using leverage to boost their rescue fund’s capacity. That could mean more money to bail out Spain and Italy. But losses in a default would be higher, and the leverage concept clashes with the fund’s supposedly preferred creditor status.
Commodity traders face up to end of good old days 4 Oct 2012 Trading houses’ rush to diversify sources of capital and shed non-core assets partly reflects straitened financial times. But like Goldman’s decision to go public in the 1990s, it’s also about a generational shift and the need for scale in a changing economic order.
New U.S. stress test needed: higher interest rates 4 Oct 2012 Don’t fight the Fed, the saying goes. The central bank is promising ultra-low rates into 2015. Yet the buildup of low-yielding debt on financial firms’ balance sheets means they may suffer badly if rates jump. The Fed aside, prudent bosses need to avoid fights with history, too.
Indonesia may be unfairly tarred by Bumi’s brush 4 Oct 2012 The heavily indebted coal miner may sell assets or equity after its London-based parent said it would probe potential fraud. With coal prices weak, Bumi’s plight is trouble for feuding shareholders and creditors. But investors would be wrong to see it as a metaphor for Indonesia.
Bigger bucks come to Supreme Court clerks who wait 3 Oct 2012 Top U.S. law firms are offering $280,000 signing bonuses to lure the best young lawyers. But many do stints with the government first. A new Breakingviews calculator shows how that path can be financially smarter over the long run. Uncle Sam gets to hire the best talent, too.
Do Venezuela debt investors have a death wish? 3 Oct 2012 They’re pushing the country’s 10-year yields to near-historic lows, in what looks like a bet on Hugo Chavez losing at the ballot box or succumbing to illness soon. But neither he nor his policies will be easily unseated. That could mean bond buyers are planning their own funeral.
Portugal jumps the gun on ECB’s new plans 3 Oct 2012 Lisbon has raised long-term funds in a canny debt swap and now plans to issue new debt, mimicking a similar move by Ireland. Investors’ willingness to take risk highlights Portugal progress in reforming its economy. The deal may also help kickstart the ECB’s bond purchases.