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.
Nine answers that should win the White House 3 Oct 2012 President Barack Obama and Mitt Romney need to explain how they would fix the U.S. economy when the first of their debates kicks off on Wednesday evening. Breakingviews concocts the nine answers we’d love to hear.
Ethical economy: The EAST cure for unemployment 3 Oct 2012 The Fed and the U.S. presidential candidates are struggling to find a way to fight high unemployment. EAST could help them think more clearly. E is for job-destroying Efficiency, A is for the Asymmetrical result, a Surplus of labour. T is for making jobs the direct policy Target.
Iran at risk of draconian response to rial slide 3 Oct 2012 Tehran’s attempt to ease pressure on the currency helped trigger this week’s sudden and sharp slide. Iran has limited short-term options to stem the panic. A deeper rebalancing of the economy is required. But in tough times that might just result in a more bullying state.
UK lost decade warnings are late – by a decade 3 Oct 2012 Ed Balls, the shadow chancellor, is not alone in warning of a UK lost decade. But the warnings come a little late. The UK has already lost most of a decade. Prospects now are hampered by more debt and the euro crisis, but still look better, provided past errors aren’t repeated.
Chinese sightseers present challenge to the world 3 Oct 2012 Half the country’s 1.4 billion inhabitants are expected to travel during this week’s national holiday. A new love for tourism provides a much-needed economic boost. But giant traffic jams and a deadly boat crash in Hong Kong underscore the difficulty of coping with the crowds.
Forming ECON Team 4 is next president’s top task 2 Oct 2012 Thanks to the fiscal cliff, whoever occupies the White House won’t have the luxury of choosing the first big legislative priority. Striking a bipartisan mega-deal to fix Uncle Sam’s finances will be priority one. Use our new Dream Team Machine to create an economic delta force.
Brazil’s lending war leaves both sides looking bad 1 Oct 2012 Browbeating Bradesco and Itaú into slashing credit card rates is President Dilma Rousseff’s latest victory in making lending more affordable. But banks may raise other fees instead. And they want to lend more to riskier customers. It’s hardly a path to a stable banking system.
Dying intellectual left awaits rebirth 1 Oct 2012 Marxist historian Eric Hobsbawm, who has died aged 95, never really got over the USSR’s failure. The passing of his generation has left a gap. The financial crisis showed something is wrong with the modern capitalist consensus, but the next big idea remains undiscovered.