BofA’s MBIA settlement more than pays for itself
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
By Agnes T. Crane
NEW YORK, May 7 (Reuters Breakingviews) – Bank of America’s
(BAC.N: Quote, Profile, Research) legal settlement with bond insurer MBIA pays for itself,
and then some. Agreeing to resolve disputes over losses from old
toxic sludge cheered shareholders on both sides. The bank led by
Brian Moynihan is forking out $1.7 billion, but added $6.9
billion of market value on Monday. MBIA scored nearly $900
million of extra equity on top of BofA’s check. Leaving the
crisis behind can still yield dividends.
Breakingviews-Apple iOUs may need to be as desirable as iPhones
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
By Agnes T. Crane
NEW YORK, April 26 (Reuters Breakingviews) – Apple (AAPL.O: Quote, Profile, Research)
may need to make its iOUs as desirable as iPhones. Right now,
money managers are gaga for the company’s bonds even before they
have made their market debut. But the scale of issuance that
could come from the tech giant is on a par with huge borrowers
like banks. To be sustainable, that would call for some of
Apple’s magic.
Exchange-traded funds add to gold’s gyrations
By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Exchange-traded funds have added to gold’s gyrations this week. The yellow metal’s swift decline – a 13 percent sell-off over two trading days – left investors breathless. Though it is still not clear what sparked the slide on Friday and Monday, stock-like ETFs added to the selling pressure. It’s a reminder there’s a dark side to making illiquid assets easier to trade.
Breakingviews: Exchange-traded funds add to gold’s gyrations
(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)
By Agnes T. Crane
NEW YORK (Reuters Breakingviews) – Exchange-traded funds have added to gold’s gyrations this week. The yellow metal’s swift decline – a 13 percent sell-off over two trading days – left investors breathless. Though it is still not clear what sparked the slide on Friday and Monday, stock-like ETFs added to the selling pressure. It’s a reminder there’s a dark side to making illiquid assets easier to trade.
U.S. auto sales put brakes on economy’s detractors
By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
U.S. car sales are putting the brakes on the economy’s detractors. Americans are buying more vehicles thanks in part to pent-up demand and cheap loans. But the housing recovery helps, too. That and other economic data suggest consumers are looking beyond slimmer paychecks. Federal spending cuts allowing, that means the U.S. engine may be about to purr.
Over-eager pension funds may harm EM golden goose
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
By Agnes T. Crane
NEW YORK, March 26 (Reuters Breakingviews) – Over-eager
pension funds may end up harming the emerging markets golden
goose. U.S. retirement managers are struggling to find decent
returns, leading many to stretch into riskier areas like
emerging markets. But a pension-fueled shift of hundreds of
billions of dollars of new cash into the asset class could prove
self-defeating and squeeze out whatever extra yield remains.
Next economic “It girl” is about to be discovered
By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The next economic “It girl” is about to be discovered. In 2008, the obscure Baltic Dry Index was suddenly the subject of every financial conversation. The TED spread and the ABX also briefly rocketed to fame. Now, as investors try to find a telltale gauge of when interest rates will start rising, the JOLTS report, forward curves and the overnight index swap could soon be in vogue.
New UK mortgage help misses lesson of U.S. debacle
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
By Agnes T. Crane
NEW YORK, March 21 (Reuters Breakingviews) – George
Osborne’s new mortgage subsidy program misses an important
lesson of the U.S. housing debacle. The British chancellor hopes
to boost housing, and by extension a still-struggling UK
economy, by guaranteeing home loans. It sounds like the
beginnings of an approach that saddled taxpayers across the
Atlantic with huge losses at Fannie Mae (FNMA.OB: Quote, Profile, Research) and Freddie
Mac (FMCC.OB: Quote, Profile, Research).
Breakingviews:Bank rule loophole on mortgages should be a no-no
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
By Agnes T. Crane
NEW YORK, March 18 (Reuters Breakingviews) – A regulatory
loophole on mortgage servicing should be a no-no. Basel III
should, once fully implemented, prevent any one U.S. bank from
being too dominant at managing the nuts and bolts of home loans.
It will impose a punitive charge if more than 10 percent of a
bank’s capital is dedicated to supporting the business. But
there’s a way for lenders to get mortgage servicing rights off
the balance sheet yet keep the income. That risks adding more
confusion to a complex part of the market.
Fed flunks crucial part of bank stress tests
By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
The Federal Reserve has flunked a crucial part of its bank stress tests. The watchdog is happy enough saying what might happen to big banks if the economy tanks like in 2008: they could lose up to $462 billion. But it’s shy about revealing the effects of a sharp rise in interest rates. That’s just as real a risk that the Fed should disclose to investors.
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