Bernanke’s Asian defence is an implausible yarn
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Ben Bernanke made a bold claim on his trip to Asia. In a speech delivered in Tokyo, the U.S. Federal Reserve chief said money-printing by advanced nations is not the “dominant” force behind surging capital flows to emerging economies, and that these countries are net beneficiaries from stronger demand from the West. If he’s right, Asian central bankers who grumble about the Fed’s quantitative easing should send Bernanke something nice this Thanksgiving.
China’s IMF boycott undermines quest for clout
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
If China wants a bigger say at the IMF, boycotting the fund’s meeting in Japan is the wrong way to get it. The head of the central bank, Zhou Xiaochuan, withdrew on Oct. 10, amid a territorial dispute between the two countries. Yet the IMF is supposed to be about finance, not border politics. If China doesn’t agree, maybe it isn’t ready for a bigger role.
France’s silly stake obsession could kill BAE-EADS
By Pierre Briançon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
When EADS and BAE went to the French government with their merger project back in July, they were greeted “as if by a Parisian waiter smoking on the pavement, who makes sure patrons understand they’re not welcomed”, says one investment banker involved in the talks. Not that Paris was opposed to the deal. But it made for an unexpectedly important decision to take at a time when the new socialist government’s energy was focused elsewhere.
There have been few mergers over the years which can truly be considered a success other than in superficial terms. Takeovers can work when commercial or financial discipline needs to be brought to bear on a failing target or when an industry needs to thin down and the best bits can be kept in a business with sufficient scale.
Academic studies and stock market results show mergers generally destroy capital and skills. Failures can be all the more sever when dealing with businesses in highly complex industries where established patterns of working might take years to change or integrate.
So why do these two sets of management want it – the easy life! They are each under financial stress and want to hide from reality.
Why do governments want it? Probably a good helping of naivety and gullibility but in the case of the Germans and French and much of the UK political class, the prospect of creating an uber-business for pan-European defense production makes them salivate. It will help them destroy the ability of the UK to have independent forces and advance their cause of an EU superstate.
This is very worrying indeed for those who favour an independent, democratic Britain.
How do India’s markets spell relief? Chidambaram
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
How do India’s investors spell relief? Palaniappan Chidambaram. Stocks have soared since word broke in June that the urbane lawyer might take a third turn as finance chief. His return in August has proved an antidote to the errors of his predecessor Pranab Mukherjee, and has revived foreign buying. But the rally will only last if the latest reforms boost flagging growth.
Even one-sided Chinese investment has its benefits
By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Canada wants equal rights for its companies to pile into China. The country’s opposition leader says his compatriots would be “chumps” if they allowed state-owned CNOOC to buy Canadian oil group Nexen without China granting equal access to its natural resources. Demands for reciprocity seem only fair. But workers and investors in rich countries gain even if the money flows only one way. It’s the Middle Kingdom that misses out by being less welcoming.
Consumer boycotts won’t decide Sino-Japan fight
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Are consumers China’s secret weapon? Not when it comes to winning its ongoing spat with Japan. Even if some Chinese shoppers are giving Uniqlo and Toyota a miss, history shows that consumer boycotts have at best a short-lived effect. Economic warfare looks reassuringly hard to wage.
For Italy, crisis freedom is almost within reach
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Rome is half out of the woods. Italy’s 10-year bond yields have fallen by over a percentage point since European Central Bank Chief Mario Draghi hinted at a new bond-buying programme. With yields falling and confidence returning, the need for a bailout is waning.
It’s the budget, not the economy, stupid
By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It’s the budget, not the economy, stupid. That variation of the 1992 slogan that propelled Bill Clinton into the Oval Office may now apply to Mitt Romney’s candidacy. The Republican presidential wannabe’s choice of conservative House budget chief Paul Ryan as his running mate has the power to transform a heretofore mealy campaign into something substantive: a referendum on fixing the American balance sheet.
All President Romney needs to do in order to turn around the U.S. economy is to propose the exact opposite of what the Obama team has afflicted us with over the past four years.
See folks? It’s not at all difficult to be a president that’s superior to Obama. In fact, even Nikacat could do better. Write in “Nikacat” next time you vote. You don’t know how many worthless bureaucratic heads can roll until you’ve seen a nikacat in action.
Spain needs to get on with its to-do list
By Fiona Maharg-Bravo
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Spain’s current government, like its predecessor, always seems behind the curve. It has made some progress in passing budget cuts and some structural reforms, but it’s not enough. Only recently did it start to mention additional measures to get the country’s finances under control. The hope is that it won’t fall short.
The origin of the economic crisis is peak oil. It seems that the jealousy of the developed countries to the underdeveloped, is avoiding recognizing that in Panama, the Oceanogenic power, submarine superconducting power lines, and offshore platforms for cryogenic plants, is the solution to the crisis of Spain, Europe and the world. Damn jealousy.
Mongolia’s task: avoid Nigerian resource curse
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
In much of the developing world, natural resources seem to offer a handy way out of poverty. But they also present a curse. Mongolia, where the center-right Democratic Party led last week’s elections on a wave of resource nationalism, would be wise to avoid the mistakes of Nigeria and other nations. Government and private fingers can get sticky, the bonanza wasted and non-resource activity burdened and disincentivized.
I think it is a very western view to say that the election was fought over the issue of resource nationalism. Surveyed Mongolians (http://www.santmaral.mn/sites/default/f iles/SMPBE12.Jun__0.pdf) listed unemployment, standard of living, inflation, law enforcement and corruption as the top issues for them in this election. Mining was number 7.
-
FEATURED VIDEO
-
Latest attempt to find Libor victim: Main StreetU.S. homeowners are accusing big banks of making money out of nudging the benchmark interest rate higher. Bringing in Joe Public could add to political pressure for tougher regulation. Even so, it’s hard to see how more than a tiny amount of harm was done.Video -
Breakingviews: RBS tackles toxic hurdleOct. 17 - RBS ditches its toxic asset insurance, but this is just one step in the many hurdles the bank faces in order to get out of state ownership say Breakingviews.Video
ABOUT BREAKINGVIEWS
BREAKINGVIEWS ON TWITTER
Books
Breakingviews has published a selection of books for purchase and download.
LATEST TITLES
Bridging the Divide: The economic and fiscal challenges facing the next U.S. president
Edited By Richard Beales
China changes leaders, but what comes after Hu?
Edited By John Foley
-
The system is rigged. Bankers, the middlemen of FED, are completely pessimistic about US domestic. They decided not to do anything and leave those struggling domestic businesses dying away themselves. Simply put, Bankers, the middlemen, are picking up those big oil and big auto attitudes, they don’t see alternatives are necessary. QE3 will become executive bonuses for not rebuilding or not recovering anything but for them to penetrate Asians corporations to spread industrial banking capitalist predator monopoly. If Asians don’t resist this, their economy bases will be infected and rigged against those highly capitalized assets now in Asia. Productivity based credits will start crunching if they don’t defense their productivity based credit system.