Politics

Tax reform could strip the “L” from LBO

24 Jan 2017

Many companies love the idea, espoused by President Donald Trump and Republicans, of slashing corporate tax rates. But one quid pro quo, ending the deductibility of interest payments, would spike one of private equity's most potent weapons – especially if interest rates go up.

Cox: Buy Amazon, short the euro zone, readers say

24 Jan 2017

Those are two ideas to emerge from people who attended Breakingviews predictions events in London, New York, Hong Kong and Singapore. Our audiences also anticipated a U.S. recession in 2019 and expected the family car to outlast supermarkets, television, the euro and NAFTA.

Schulz makes German election more of a contest

24 Jan 2017

The country’s Social Democrats have chosen Martin Schulz to take on Angela Merkel. The former president of the European Parliament should mount a more effective challenge to the chancellor. Yet forming a stable left-of-centre government still looks a momentous challenge.

Turkish lira will stick with FX underdog role

24 Jan 2017

Rate-setters passed up the chance to give the battered currency even a brief respite. Investors’ doubts about the central bank’s independence show how political concerns are breeding economic ones. Steep market losses can entice bargain hunters, but not when worse may lie ahead.

Brexit sceptics win battle but will lose the war

24 Jan 2017

Pro-EU campaigners succeeded in their quest to give parliament a say on triggering Brexit. The catch is that Prime Minister Theresa May will probably win a vote. Besides, her opponents would struggle to prove suboptimal outcomes like EEA membership are better than May's vision.

Judge, not Trump, kills U.S. health insurer love-in

23 Jan 2017

Aetna's $34 bln deal for rival Humana was crushed on antitrust grounds in court. That bodes poorly for Anthem's star-crossed $46 bln Cigna bid. It's a mercy killing for the firms' shareholders, who watched UnitedHealth, which sat out consolidation, gobble up market share.

France’s Macron is gifted risky centre ground

23 Jan 2017

The presidential hopeful looks increasingly like the lone mainstream candidate in the country's coming election. It's a huge opportunity to attract voters turned off by more radical solutions from the left and right. Yet appearing conventional carries its own dangers.

Five things Davos Man will get wrong this year

23 Jan 2017

Each January the politicians, financiers and company bosses who gather in the mountains offer a snapshot of elite thinking. However, this "Davos consensus" is often wide of the mark. From Donald Trump to Xi Jinping, here are five widely-held views that will probably be mistaken.

Foxconn’s $7 bln U.S. bet goes beyond politics

23 Jan 2017

Building a huge American factory would fit neatly with President Trump's push to create domestic jobs. That could help the Taiwanese iPhone maker navigate trade disputes. Grabbing a share of the U.S. television market could also help revive recently acquired subsidiary Sharp.

Trump protectionism double-down faces harsh reality

20 Jan 2017

The new U.S. president echoed his campaign rhetoric by presenting a dark picture of "American carnage" and decay at his inauguration. Ending overseas assistance to focus on growth at home is his remedy. But he also needs to boost exports, which requires other countries' help.

HK exchange seeks to shed old-economy dependency

20 Jan 2017

The Hong Kong bourse wants to shed its overdependence on real estate and finance. A proposed new board with lower entry barriers and weighted voting rights may lure hot startup tickers. But getting off the ground fast will be tricky given unresolved issues on the main board.

Trump takes office more as middle manager than CEO

19 Jan 2017

The president-elect has weighed in on place settings for his inauguration, among other insignificant matters. Trump also has been meeting with game-show hosts and municipal officials while picking fights with TV and film stars. Here's hoping he grows into the big promotion soon.

Guest view: Fixing finance to repair U.S. roads

19 Jan 2017

Plenty of federal programs exist to help leverage private funds eager to invest in infrastructure and make President-elect Donald Trump's $1 trln plan work, argues lobbyist James Courtovich. What's missing is cooperation in Washington to hold municipal bond issuers accountable.

Mnuchin has his work cut out on art of persuasion

19 Jan 2017

The U.S. Treasury nominee was grilled at a Senate hearing about using offshore havens and his chairmanship of a bank that Democrats called a foreclosure machine. He parried critics well enough on the day but to sell a tax overhaul to lawmakers will demand a much stronger pitch.

Viewsroom: Davos goes topsy-turvy

19 Jan 2017

Team Trump is AWOL at the World Economic Forum's annual alpine shindig while Theresa May's Brexit plan has people on edge. That left it to China's Xi Jinping to defend globalization. Elsewhere, U.S. bank earnings disappoint. And Snapchat considers making investor rights disappear.

Samsung leads Elliott outside its comfort zone

19 Jan 2017

A graft scandal and ongoing probe of heir Jay Y. Lee cast uncertainty over the U.S. fund's second big showdown in South Korea. Elliott wants to restructure Samsung Electronics, where it has a $1.2 bln stake. But the activist may now have limited power to influence the outcome.

Wilbur Ross helpfully plays Trump trade translator

18 Jan 2017

The commerce secretary nominee played down the possibility of a trade war. Instead, Ross, a billionaire investor, focused on practices like steel dumping by China. That's the broadly preferred path in Congress. NAFTA talks will reveal if everyone is speaking the same language.

A Trump FAQ for American business leaders in Davos

18 Jan 2017

The virtual absence of senior Republicans and top dogs from the soon-to-be Trump administration at the World Economic Forum leaves U.S. executives to field queries about the country's direction from their worried global counterparts. Breakingviews offers a helpful cheat sheet.

French Socialists compete to be first among losers

18 Jan 2017

The winner of the imminent primaries for the ruling party is unlikely to make it to the second round of the Gallic presidential race. Yet the economic policies of the also-ran may determine whether the National Front’s Marine Le Pen gets through to the final face-off.

Goldman Sachs and Trump scratch each other’s backs

18 Jan 2017

The president-elect hired the bank's president, Gary Cohn, and impact-investing head Dina Powell. The Q4 trading boost after Trump's election boosted Goldman's earnings and bonus pool. Fold in layoffs and the average Goldmanite will barely notice the firm's 9 pct revenue drop.