Japan index: Wages and consumption stymie recovery
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Firmer prices, stronger bank lending and higher manufacturing output helped the Breakingviews Abenomics Index reverse half the previous month’s decline in July. But unless wages and spending rise, Prime Minister Shinzo Abe will struggle to win his war against deflation.
Commodity decoupling hints at return to old normal
By Kevin Allison
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Commodity markets are rediscovering a semblance of normality. After a sustained period of tight correlation, the prices of raw materials have diverged from equities. Different commodities are charting different paths too. If the trends hold, it suggests that familiar forces of supply and demand are regaining the upper hand after years of crisis-driven trading.
China’s bad debt could leave $500 bln equity hole
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
China’s bad debts could blow a $500 billion hole in bank balance sheets. That’s roughly how much extra equity the eleven biggest lenders might need if 10 percent of their loans went sour, according to a Breakingviews calculator. Though the chairman of ICBC, China’s biggest lender, thinks dismal bank valuations are “unfair”, the malaise is well deserved.
Verizon puts AT&T’s acquisition willpower to test
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Verizon just put AT&T’s acquisition willpower to the test. Growth in the U.S. mobile market is slowing, and as AT&T learned the hard way, competition concerns preclude any transformative domestic deals.
The lessons for China from Japan’s lost decade
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Is China condemned to suffer a Japanese “lost decade”? Its economy today has three big similarities with Japan in the late 1980s: High and rising debt, diminishing export competitiveness and an ageing society. China can avoid slipping into Japan’s deflationary hole, but only if it learns from Tokyo’s failure to cleanse its banking system.
Emerging market currency rescue is a pipe dream
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Can emerging markets fight back against currency speculators? An idea floated by India to mount a joint defence has a certain charm. After a rout in the rupee the past three months, New Delhi wants other developing countries to help in a coordinated intervention in offshore foreign exchange markets, Reuters reported on Aug. 31. In reality, it sounds unworkable.
Wall Street megadeal quest reaches end of rainbow
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
After a decade-long quest, investment bankers on both sides of the Atlantic may have finally discovered the end of the rainbow. A $130 billion transaction between Vodafone and Verizon, longtime partners in U.S. wireless, would translate into a highly coveted – and given the post-crisis pace of M&A, much-needed – pot of golden fees.
China growth index: Good month for train-spotters
By Katrina Hamlin
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Breakingviews’ forward guide to China’s economy has picked up, including rail freight volumes, an important sign of domestic demand. Summer’s PMI readings also improved. But most of the alternative growth indicators remain negative. Things are far from full steam ahead.
China’s consumers aren’t living up to sales pitch
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Consumer brands in China are finding their rewards aren’t quite as advertised. Growth in purchases of a wide range of goods has slowed sharply over the past year, and companies ranging from Samsonite to Apple are reporting disappointing Chinese sales figures. Consumers in the world’s second-largest economy will have their day, but the idea they alone can sustain growth looks threadbare.
China’s debt molehills could turn into mountains
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The mountains are high, and the shareholders are far away. China’s banks are reporting results that suggest their bad debts are under control and earnings healthy. But where investors don’t easily see them, risks are growing. It’s at the local level that the problems with China’s debt build-up could escalate most rapidly.
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FEATURED VIDEO
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Breakingviews: JPMorgan's governance cosmeticsSept. 9 - Breakingviews editors offer qualified praise for the bank's two new board members, but are less enamored by the switch to an independent lead director.Video
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Breakingviews: Japan's Olympic boost mostly psychologicalSept. 9 - Tokyo's victory in the race to host the 2020 Games will help rebuild the country's confidence. But expectations an investment spree will lift Japan out of deflation are misplaced, says Breakingviews.Video
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Abe’s Economic Experiment
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