Government & Agencies

New threats will corrode infrastructure M&A

30 Dec 2022

Blasts that damaged Baltic pipelines in September alerted investors to the physical risks to energy networks from geopolitics. Add growing cyber concerns and the cost of insurance is set to rise. As the appeal of formerly quasi risk-free bets dims, states will surely step in.

Macron’s fiscal torpor will weaken France

29 Dec 2022

The French president is running the only big European economy whose public debt, now at 112% of GDP, is still rising. High government spending helped during the crises but is now pushing up bond yields, stifling growth. Budget neglect will also erode Paris’s influence in the EU.

Treasury market best tuned up before it breaks

23 Dec 2022

U.S. government bonds are getting harder to trade, and more volatile. The Fed could deploy a simple patch: revive a Covid-inspired rule tweak that lets banks hold Treasuries without locking up precious equity capital. It sounds like a gift for banks, but beats the alternative.

Bulb bailout exposes UK’s pseudo power market

23 Dec 2022

Octopus Energy is receiving a 4.5 bln pound taxpayer backstop to take on the bust supplier’s 1.5 mln customers. Like the government’s subsidy of household bills, the deal reveals the limits of Britain’s supposedly privatised power market. The question is when politicians notice.

Missing jobs mystery puts Fed on back foot

22 Dec 2022

A new study from the Philadelphia Federal Reserve says the U.S. added 1 mln fewer jobs in the spring than the government reported. It’s not the only example of mismatched economic data, and underscores the challenge the Fed faces in piloting the pandemic-era economy.

Putin’s Russia will look more like North Korea

22 Dec 2022

The Kremlin leader will strengthen his hold over the ailing economy, from banking to industrials. Massive nationalisation, along with the end of U.S. and European investments, could soon be followed by strict capital controls. The complete closure of the Russian economy is next.

Divided America will unite under economic duress

21 Dec 2022

A split U.S. government in 2023 will mean gridlock on topics like social spending and clean energy. But to continue operating, Congress must lift the ceiling on government debt. To do that, moderates will unite Democrats and Republicans against a common enemy: inflation.

Euro crisis shield is stuck in hedge fund mode

21 Dec 2022

The European Stability Mechanism, set up to help troubled euro countries, aspires to be the bloc’s debt manager. But member states’ distrust of perceived German control and stigma around its aid make this unlikely. Managing old bailout loans is the fund’s best hope.

EU pulls its punches on making polluters pay

20 Dec 2022

The bloc has expanded its emission trading system, but will allow heavy industry to enjoy free permits until 2034. Protecting European companies hit by high energy costs is understandable. Yet the freebies risks undermining a new carbon tariff, and the EU’s own green goal.

Economic chaos will break Orbán’s strongman spirit

20 Dec 2022

The Hungarian leader needs EU funds to prop up his country’s struggling economy. With inflation at 20% and the forint in free fall, social unrest is brewing. Backing down on civil rights restrictions and tackling corruption would be a small price to pay for the EU’s support.

UAE will look to a world beyond OPEC

19 Dec 2022

The United Arab Emirates suffers from the oil cartel’s output restrictions. Distancing itself from the club would boost revenue and potentially attract more Western capital. President Mohammed bin Zayed al-Nahyan has a good moment to do so when he hosts the COP28 climate meet.

Polycrisis may lead to polycentric world order

19 Dec 2022

The United States is still top dog. But to contain China, it will need to listen to allies, take account of other powers and avoid throwing its weight around. Such “polycentrism” is the best chance to create order in a world struggling with multiple crises, says Hugo Dixon.

China’s reassuring growth talk comes cheap

19 Dec 2022

Policymakers said they will boost consumption, buttress property and support the private sector at a key meeting. The message is positive, repetitive and insufficient. A chaotic Covid outbreak, record job losses and fiscal stress demand concrete measures, preferably cash.

China’s U.S. audit capitulation is rare win-win

16 Dec 2022

Beijing has let American audit watchdogs inspect its New York-listed firms, the first concession of a years-long spat. In return, over $1 trln worth of equities, including Alibaba, can keep access to U.S. markets under stricter enforcement. China is better off losing this battle.

Qatar has got what it wanted from the World Cup

15 Dec 2022

The Gulf state has taken more flak than it would have done had it not staged the soccer tournament, which ends on Sunday. Yet in this Viewsroom podcast, Breakingviews columnists discuss how Qatar’s largely successful event also aids a strategy to make itself globally visible.

Lack of trust leaves markets at odds with the Fed

14 Dec 2022

The Federal Reserve rankled investors this year after it misjudged inflation. Markets have since ignored the central bank’s comments and bet on rate cuts in 2023. Yet the Fed continues to say it will hold rates high. The longer the two disagree, the more investors stand to lose.

Market overhaul pits perfect against good-enough

14 Dec 2022

The SEC’s proposal to put retail stock trades to an auction would make markets fairer. It’s also complex and untested, and solves a problem most investors don’t know exists. Still, by shooting for the moon, Chair Gary Gensler may find it easier to secure more modest upgrades.

EU angst over “Buy American” reopens old wounds

14 Dec 2022

European policymakers are in a tizzy over local subsidies in President Joe Biden’s Inflation Reduction Act. Technical tweaks may level the playing field a bit. Even so, the bill rekindles long-running disputes over who picks winners and losers in the EU – and who should pay.

FTX sins don’t absolve its big-money enablers

13 Dec 2022

The SEC, CFTC and federal prosecutors said the crypto group’s founder Sam Bankman-Fried defrauded investors and users. But venture backers were gullible and regulators idle. Institutions can try to pin blame on just one bad actor. But they can’t ignore their own culpability.

Chinese equities need time to exit lockdown

13 Dec 2022

Local bourses have rallied somewhat as Beijing eases pandemic controls. In the long run, ending policies that depress consumption and investment will boost earnings at listed Chinese firms. The wild card is how the real estate rescue package impacts appetite for stocks.