Politics

Facebook owners ignore Russian affair at own peril

22 September 2017

The $500 bln social network's alleged role in election meddling has legislators flapping, regulators gearing up and even roiled Mark Zuckerberg from paternity leave. Yet Facebook's valuation, at 27 times forward earnings, remains robust. There's a risky disconnect at work here.

Theresa May embraces “extend and pretend” Brexit

22 September 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 September 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 September 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.

Diplomatic fog blinds China and U.S. over N. Korea

22 September 2017

Economic curbs are squeezing North Korea but the volley of test missiles hasn't slowed. Trump and Xi have misread the situation, and each other. Kim Jong Un is unimpressed by half-hearted sanctions; they strengthen him domestically. Time to price in the risk of real violence.

Viewsroom: German election all about runners-up

21 September 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.

Snap poll in Japan would be mixed for investors

20 September 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.

South Korea wobbles walking U.S.-China high-wire

20 September 2017

Seoul's balancing act between China and America looks untenable. North Korean missiles are flying, yet Beijing is spanking South Korea over a U.S. missile-defence system. Trump, unsympathetic, wants trade concessions. Perhaps it’s time for a regional counterbalance to China.

China “Belt and Road” waves red flag for investors

18 September 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.

What we’ve learned about Brexit so far

19 September 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.

Breakdown: Colour-coding Germany’s election

18 September 2017

GroKo, black-green or Jamaica? Angela Merkel is almost certain to win a fourth term, but the race to be her partner is wide open. The outcome matters for Germany – and for Europe. Breakingviews decodes the colourful jargon, and looks at the consequences of different outcomes.

Fosun beats the odds with revamped Indian deal

18 September 2017

The Chinese conglomerate’s drug unit will buy a smaller 74 pct of KKR-backed Gland Pharma for $1.1 bln. That shows Beijing is still open to sensible foreign deals. And despite a recent border spat, India is open to Chinese money, especially if deals are carefully structured.

Trump follows Obama’s lead on Chinese chip deals

14 September 2017

The U.S. president blocked a $1.3 bln takeover of Lattice Semiconductor. It’s not a new position: his predecessor was sensitive to Beijing’s ambitions and nixed a similar acquisition. With scrutiny likely to intensify, buyers and sellers can save face by rethinking these mergers.

Cox: Donald Trump is failing America’s gun lobby

13 September 2017

The candidate's campaign messaging echoed the National Rifle Association's efforts to sow fear and sell weapons. Trump promised to "come through for" the NRA, which backed him. But a profit warning from Smith & Wesson’s parent and other signs suggest he’s not delivering.

U.S. healthcare for all inches toward mainstream

13 September 2017

Though the idea has kicked around for years, Bernie Sanders has been shouting into the Washington wind. Democrats will now give his universal-coverage pitch fresh momentum. It's a pricey plan, but one that warrants fresh consideration given rising costs and Obamacare strife.

EU foreign investment review raises bar for China

13 September 2017

Brussels has proposed a pan-European scheme to vet sensitive purchases by other countries. Unlike the U.S., rulings will be non-binding. Even so, the People’s Republic will find it harder to buy up EU infrastructure and technology. It’s another reason for Beijing to open up.

Hadas: EU single economy eases way for separatism

13 September 2017

Catalan and Scottish nationalism have bubbled up recently. Besides sentiment, the European Union has played a part. The super-national single market not only provides economic protection, but opens up a new vision of sovereignty. It’s the same idea Brexit fans have rejected.

Campaign for euro zone budget is a distraction

13 September 2017

The single currency area needs a way to absorb future economic shocks. But comments from European Commission chief Jean-Claude Juncker show that a common tax-funded budget would be a stretch. Better to tweak fiscal rules, deepen financial reform and beef up Europe’s bailout fund.

Ten years on, UK banks still far from utility-like

13 September 2017

A decade after the run on Northern Rock, British lenders are smaller and better capitalised. But earnings remain bumpy and subdued economic growth means they will struggle to lift earnings. An average dividend yield of 4 pct compares poorly to genuinely safe and boring utilities.

Merkel’s past omissions will return to haunt her

12 September 2017

Germany’s Chancellor has for 12 years failed to invest enough, prepare for costly climate change goals, or tailor the welfare state to an ageing population. An economic upswing is hiding fault lines but Merkel’s past inactivity will exact a high price in the next downturn.