The Big View

Revamp of the world order will have to wait

29 Jan 2024

Developing countries last week called for a rethink of global governance. While it’s possible to imagine an order more conducive to peace, justice and prosperity, the chances of creating it are slim. Better to shore up the existing multilateral system and wait for better times.

Abu Dhabi’s Europe M&A hedges an opaque future

26 Jan 2024

The UAE’s key oil group is readying $40 bln of European petrochemicals deals. Some Western rivals are doubling down on the black stuff. ADNOC’s plan – buying up the value chain of an area where crude demand may persist – is a partial hedge against cratered oil usage in 2050.

Gary Gensler crafts SEC into a mighty sandcastle

25 Jan 2024

The chief US securities watchdog has outpaced predecessors in making rules and extracting penalties from firms like Morgan Stanley and D.E. Shaw. But his aggressive approach has inflamed a wider war on regulation. Gensler’s accomplishments could yet wash away.

Four-day week is clever fix to economic malaise

24 Jan 2024

Companies including EssilorLuxottica and Panasonic are experimenting with shorter working weeks. Pilot schemes have led to revenue increases, declines in burnout rates and lower churn. It’s an anti-inflationary way to keep staff happy and give them free time to consume more.

Fractured world is changing investment geography

23 Jan 2024

Washington and Beijing’s quasi-Cold War, and rising protectionism, are already hurting foreign direct investment. Though some states are gaining from China’s falling FDI, overall cross-border flows are down. If Trump becomes US president, they will take another hit.

Davos holds up funhouse mirror to shifting world

22 Jan 2024

Delegates from the Middle East and India made a splash at last week’s World Economic Forum, reflecting their wealth and investment appeal. Europeans and Chinese were subdued. Big Tech looks the winner from AI. This year’s Swiss conflab arguably exaggerated more than it distorted.

Private credit gets the slice-and-dice treatment

19 Jan 2024

Managers like Blackstone and Blue Owl are selling ‘collateralised loan obligations’ backed by privately issued debt. Such alchemy, common in traditional lending, helps lenders raise cheap funds. It also adds complexity, and makes private credit more dependent on flighty markets.

Carbon markets have a long shot at redemption

18 Jan 2024

The US hopes to raise over $200 bln using carbon credits to help emerging markets cut emissions. The idea of enabling firms to offset pollution with cuts elsewhere has long been flawed. Washington’s wager is that a lack of green cash for developing states is a bigger evil.

US Steel deal stokes fiery stakeholder standoff

17 Jan 2024

The $14 bln sale to Nippon Steel is riling workers and politicians. A rival Cleveland-Cliffs bid will attract trustbusters. Staying independent would anger shareholders and squeeze automakers. It epitomizes today’s fraught M&A, but the Japanese buyer is in the strongest position.

Economics is pushing US swing voters to pick Trump

16 Jan 2024

The real estate mogul won the Iowa caucus, the first Republican primary in the presidential race. The midwestern state is not a battleground, but hotly contested areas favor him over President Joe Biden. That may be because their residents feel poorer than four years ago.

Reparation bonds could unlock $300 bln for Ukraine

15 Jan 2024

The US and EU are struggling to keep writing mega cheques to Kyiv and reluctant to hand over frozen Russian central bank assets. One alternative is for Ukraine to sell bonds backed by future claims for reparations. It could then use the cash to defend itself against Moscow.

The spectre of Donald Trump hangs over Davos

12 Jan 2024

The former US president is not among the 2,800 business and political leaders converging on the Swiss resort. But his possible return to power will pervade debates about Ukraine, China, and climate change. In 2016, Davos laughed off the idea of a Trump presidency. Not this time.

EU’s energy security drive may have gone too far

11 Jan 2024

The bloc’s pivot away from Russian pipeline gas has worked. But Europe’s fast-rising capacity to import the fossil fuel in liquid form will surpass its total gas needs by 2030. LNG infrastructure’s public and private backers have a stark choice: scale back, or risk writedowns.

Wall Street brings gun to Basel knife-fight

10 Jan 2024

JPMorgan and peers have good reason to be livid over proposed US bank rules. Some planned changes would punish them unduly, clash with existing controls, and effectively hand business to foreign rivals. With logic on their side, the risk is that banks overplay their hand.

Rich nations can learn from Ireland’s health shift

9 Jan 2024

Dublin wants to build a universal healthcare system. Phasing out a US-like insurance model is bold and could require 20 bln euros from the state. Countries thinking of similar overhauls to deal with waiting lists and ageing citizens will need money and political consensus.

Global polycrisis could yet have not-so-bad ending

8 Jan 2024

From war in Gaza and Ukraine to superpower rivalry, climate change and slow growth, there is a lot of danger in the world. The possible return of Donald Trump as US President is another risk. But there are more optimistic scenarios - and some silver linings in pessimistic ones.

Big Tobacco’s smoke-free rush may soon burn out

15 Dec 2023

British American Tobacco and Philip Morris International want fast-growing, smokeless products like vapes to offset stagnant sales of normal tobacco. Yet countries from Australia to the UK are clamping down on the $90 bln market. Rich valuations leave little room for error.

Chinese equities are ready for long march upwards

14 Dec 2023

Share prices and valuations in the world’s second-largest economy are near 2016 lows. Foreigners have retreated but any recovery will depend on Beijing and domestic buyers. Patient investors willing to stomach geopolitical tensions and other risks could earn big rewards.

Banks’ hidden losses are surprise survivor of 2023

13 Dec 2023

The same paper deficits that helped fell Silicon Valley Bank in March still burden lenders worldwide. Bank of America alone sits on $130 bln; US banks nurse a record sum. Investors are now better at telling what’s scary from what’s not, but fuzzy accounting remains unhelpful.

AI firms lead quest for intelligent business model

12 Dec 2023

Automating a swathe of tasks could help startups capture $140 bln in revenue. But even sector darling OpenAI is deeply unprofitable. To justify the billions invested by backers like Microsoft and Amazon, artificial intelligence will have to deliver lasting productivity gains.