Politics

Britain sells mortgages, buys small Brexit hedge

31 Mar 2017

Selling 11.8 billion pounds of former Bradford & Bingley mortgages to Blackstone and Prudential will cut the UK’s national debt without leaving a loss. The buyers are showing confidence in the UK economy. The seller is shoring itself up in case such confidence proves misplaced.

Review: A flawed compass for post-Brexit Britain

31 Mar 2017

The vote to leave the European Union exposed a new political fault line, David Goodhart argues in “The Road to Somewhere”. The solution is for cosmopolitan elites to share more power with those left behind. The tension is real, but the distinction too broad to be a useful guide.

Crisis can make South Korea great again

30 Mar 2017

The country has ousted its president and put its top business leader, Samsung’s Jay Y. Lee, on trial. The frustration with crony capitalism suggests South Korea's "chaebol"-driven growth model has hit its limits. The turmoil provides a golden opportunity to reform.

Mexico drives a train through Trump border wall

29 Mar 2017

The $2 bln purchase of a Florida railway by miner Grupo Mexico is a timely reminder that the countries' relationship is not all one-way traffic. The outward-looking Mexico the deal exemplifies is better for U.S. business than the more hostile neighbor Trump's wall plan portends.

Hadas: U.S. deaths are economic and social failure

29 Mar 2017

Americans are dying younger due to drugs, drink and suicide. The rise in such "deaths of despair" comes from the fatal interaction of a weak welfare system, inadequate healthcare and decaying communities. These national flaws also help explain the lack of a political response.

Market’s vision of Brexit is too rosy

29 Mar 2017

As Britain triggers the process for leaving the EU, investors are more phlegmatic than they were six months ago, a Breakingviews index based on asset prices shows. There is plenty of scope for that to change if hard bargaining coincides with slowing growth.

Saudi finds cheap way to be generous to Aramco

28 Mar 2017

The kingdom has slashed its oil major’s tax rate to juice up a potential IPO. That could theoretically triple the company’s market value to well over $1 trillion. Yet because Saudi will keep a 95 pct stake, the state can recoup almost all of what it appears be giving away.

South Africa’s real problem: credibility downgrade

28 Mar 2017

President Jacob Zuma's abrupt recalling of his respected finance minister hit domestic assets. The latest spat could speed a downgrade of the state's sovereign debt, although much of that appears priced in. The greater damage would be to South Africa’s institutional solidity.

German voters deal early blow to upstart Schulz

27 Mar 2017

The small state of Saarland backed Chancellor Angela Merkel’s CDU, while the SPD, led by the charismatic Martin Schulz, did less well than expected. Voters may tire of Merkel after 12 years, but seem inclined to prefer her stable, predictable government over the alternative.

Hong Kong’s first female chief starts from behind

27 Mar 2017

Unloved new leader Carrie Lam faces a steep climb. Growth is slow; social divides are deep. Loosening the purse strings might win a few hearts. Her real test will be preserving the rule of law, but she's unlikely to stand up to the pro-Beijing faction she owes her job to.

PPG bid for Akzo fails narrative and maths tests

24 Mar 2017

The U.S. paint and coatings maker says cost savings and the benefits of scale justify a $24 bln offer for its Dutch rival. It’s hard to tell a more visionary tale in a low-growth sector where consolidation is the way to stay ahead. But PPG’s synergy targets don’t add up either.

Markets would miss Japan’s reformer-in-chief

24 Mar 2017

Investors are relaxed about a scandal involving Premier Shinzo Abe's wife. But the episode underscores a vulnerability. Abe's grand economic overhaul has broad support - but it is called "Abenomics" for a reason. A weaker leader would struggle to keep up the momentum.

Trump’s immigration policies may put Canada first

22 Mar 2017

The U.S. president praised his neighbor’s merit-based entry system for foreigners. But administration restrictions on H-1B visas may deter high-skilled workers and their employers. That could send tech and engineering talent north to friendlier hosts, hurting American firms.

France’s Macron passes first of three big tests

21 Mar 2017

The independent presidential hopeful was, according to a poll, the most convincing candidate in a debate where he had the most to lose. His next challenge is to win the election. Even if he does, legislative ballots will decide whether the ex-banker can deliver promised reforms.

Ireland will struggle to recoup AIB bailout costs

20 Mar 2017

The country spent 20.8 bln euros rescuing the lender, and has so far got 6.6 bln euros back. A forthcoming listing could, under optimistic assumptions, raise the rest. The staggered nature of the sale, economic uncertainties and the need for a discount point the other way.

George Osborne’s newspaper gig is lose-lose deal

17 Mar 2017

British politicians tend to pursue wealth after leaving high office. The former British chancellor is doing so at BlackRock, but has added a twist: he will edit London’s Evening Standard while remaining a member of parliament. The tawdry arrangement devalues both institutions.

Market angst about France infects whole of EU

17 Mar 2017

Far-right leader Marine Le Pen has promised to reshape French ties with the European Union if elected president. That would be an existential test for the whole bloc. Currency options prices show investors have rarely been so anxious about the EU-wide impact of a single event.

Viewsroom: Intel’s pricey bet on driverless cars

16 Mar 2017

The chipmaker is shelling out $15 bln for autonomous-driving parts firm Mobileye, a cool 30 times estimated revenue. Intel missed the mobile-phone revolution. Is it finally on the right road? Plus: Washington bounces bitcoin’s bid for mainstream acceptance.

Cox: Please don’t let the Fed become the new SEC

16 Mar 2017

With legislators from both parties critical of the U.S. central bank, the risk of its politicization looms large. Donald Trump has three empty board seats to fill, and maybe two more in 2018. The flawed experience at the securities enforcement agency offers a cautionary tale.

Trump’s budget plan exhibits poor risk management

16 Mar 2017

The U.S. president wants to slash money for healthcare research, job training and clean water in favor of beefing up an already well-funded defense. His $1.1 trln blueprint discounts too many dangerous economic threats. America can't afford to forgo long-term investments.