Politics

Hadas: Governments are businesses too – sort of

19 Apr 2017

A new McKinsey report says “best practice” tools used by private companies could help the public sector provide more good things for less. There are easy global gains, where increased efficiency hurts no one. But vested interests and cultural challenges are serious obstacles.

UK election will test markets’ Brexit optimism

19 Apr 2017

Investors think Britain has a better chance of avoiding a damaging EU exit because Theresa May has called an early vote, a Breakingviews index based on asset prices shows. That view could be challenged by a campaign that will force the prime minister to clarify her policies.

Buy American crackdown may hurt Build America push

18 Apr 2017

The White House wants to curb the use of foreign goods in U.S. construction projects and procurement. Disregarding global supply chains and relying on arcane definitions of what qualifies as domestic add risk of rising prices. The same is true of Trump's infrastructure plans.

BofA return to health limited by D.C. drip-feed

18 Apr 2017

A tight grip on costs and better fixed-income trading gains than Goldman helped the bank crank out an estimates-beating $4.4 bln of earnings. Rising rates helped, too, but CEO Brian Moynihan needs more help from the Fed and Donald Trump to boost its lowly return on equity.

Theresa May cashes in at peak political valuation

18 Apr 2017

Calling an election on June 8 is the British prime minister’s best chance of securing a personal mandate. Her opponents are weak or divided and the pain of leaving the European Union has yet to bite. A big majority will give her scope to take a tougher stand in Brexit talks.

Private sector tells awkward truth on China growth

18 Apr 2017

First-quarter growth beat expectations at 6.9 pct. But investment and consumption were unhealthily focused on property and infrastructure. Wariness among retailers and service providers illustrates the difficulties China still faces in rebalancing its economy.

Brazil’s Temer steers white-knuckle reform route

17 Apr 2017

The "Car Wash" corruption probe is increasingly denting the president's government as he tries to drive crucial changes to an unsustainable pension system through Congress. The nation's economic recovery may hinge on his ability to ease off the gas just enough to ensure passage.

Second Sky bid leaves Murdochs with too much power

10 Apr 2017

Regulators are reviewing Fox's $14.5 bln offer for the pay-TV firm. In 2011 they said a bid by Murdoch-controlled News Corp risked leaving control of UK media in too few hands. Though the clan's influence has waned since then, concessions should still be on the table.

Wall Street served low-hanging China fruit basket

10 Apr 2017

Negotiators for presidents Trump and Xi have reportedly agreed to ease the U.S. financial sector's access to China. It's an easy concession as the benefits will mostly accrue to Beijing: greater inflows of foreign capital, plus help upgrading bond and equity markets.

Indonesian tax amnesty odd help for private banks

10 Apr 2017

A tax amnesty that saw citizens declare $365 bln in assets has been a blessing in disguise for top private banks. The ultimate outflows to Indonesia were a fraction of the headline amount. More importantly, the scheme gave lenders the excuse to do some overdue spring-cleaning.

Review: China’s New Silk Road mined with distrust

7 Apr 2017

The People's Republic wants to use its ambitious "One Belt One Road" infrastructure project to build soft power. "China's Asian Dream" by Tom Miller points out the potholes. The country’s search for regional allies is sabotaged by its sense of superiority.

Even Cohn-Warren can’t bring back Glass-Steagall

6 Apr 2017

The mixed bag of supporters for separating commercial and investment banking now includes Gary Cohn. The former Goldman Sachs president advising Donald Trump is aligned with Wall Street scourge Elizabeth Warren. Congress, however, is too busy to bother with breaking up banks.

Viewsroom: Jamie Dimon’s bank-reform cheat sheet

6 Apr 2017

The JPMorgan CEO’s latest shareholder letter hands President Trump and Republicans plenty of tips and sound bites for rolling back post-crisis rules. But the administration’s failure to replace the Fed’s departing top regulator throws more doubt on a Dodd-Frank overhaul.

South Africa’s slow burn cuts chances of quick fix

6 Apr 2017

President Jacob Zuma seems to be doing his best to get foreign investors to dump domestic assets. That may not lead to a sudden stop: only a small minority face being forced sellers. The bad news is that this could slow the process to replace him with a more responsible leader.

Hadas: Hard Brexit could have sting in the tail

6 Apr 2017

Conventional wisdom is that even a "clean break" with the European Union just means a slower UK growth rate. But if modern revolutionaries gain control, Britain might end up with less foreign money and fewer trading partners. That would bring a huge drop in living standards.

China’s reformers could use tough line from Trump

5 Apr 2017

The U.S. president has threatened his Chinese counterpart with punitive trade policies. A more creative approach would target barriers to foreign investment in the People’s Republic. That would find support from U.S. corporations – and China’s frustrated pro-market faction.

Markets snooze their way to Le Pen showdown

5 Apr 2017

French government bond prices suggest a lower probability of far-right Marine Le Pen winning the presidential election than bookies do. Markets may be too calm about the disruptive potential of voter apathy, or a left-wing alliance. That limits their ability to reassure.

Britain is appropriate spearhead for bonus rethink

5 Apr 2017

UK ministers want to cut so-called long term incentive plans from executive pay. Such schemes can work, but all too often don’t. Turning them into less opaque deferred bonuses could preserve domestic competitiveness, while aligning Britain with peers that value greater clarity.

Latin America needs leaders who can say “adios”

4 Apr 2017

A reluctance to cede power is a common failing in a region known for strongmen and weak institutions. Protesters who torched Paraguay’s Congress over the issue last week had the right idea, if wrong method. Rulers’ refusal to let go clouds prospects in Ecuador and Venezuela too.

Brexit forces issues that are best left murky

4 Apr 2017

A phony battle over how Spain and Britain might treat tiny Gibraltar is a distraction, and a warning. If Britain’s exit from Europe becomes a mechanism for settling old scores, it could kill the constructive ambiguity on which the UK, the euro and the single market all depend.