Agnes's Feed
Mar 21, 2013
via Breakingviews

Next economic “It girl” is about to be discovered

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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.

Mar 21, 2013

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).

Mar 18, 2013

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.

Mar 8, 2013
via Breakingviews

Fed flunks crucial part of bank stress tests

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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.

Mar 5, 2013

Breakingviews-U.S. housing reform takes baby step uphill

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)

By Agnes T. Crane

NEW YORK, March 5 (Reuters Breakingviews) – U.S. housing
reform is taking a baby step uphill. A much-needed overhaul of
mortgage giants Fannie Mae (FNMA.OB: Quote, Profile, Research) and Freddie Mac (FMCC.OB: Quote, Profile, Research)
has proven to be a Sisyphean task. At least their regulator,
Edward DeMarco, keeps pushing. He’s set to streamline
duplicative securitization businesses. It’s time for lawmakers
to get things seriously rolling.

Mar 4, 2013
via Breakingviews

Warren Buffett’s no-dividend policy on thin ice

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By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Warren Buffett’s stance against paying Berkshire Hathaway shareholders a dividend looks to be on thin ice. In his annual letter to shareholders the Sage of Omaha defended his long-held objection to cash payouts. But the firm performance over the past four years has been disappointing and Buffett reckons it won’t match its glory days again. That’s likely to increase the chances of a cash payout, whether from Buffett or his successor.

Mar 1, 2013

All together now, central banks do not go bust

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.) (Refiles to fix links.)

By Agnes T. Crane

NEW YORK, March 1 (Reuters Breakingviews) – Central banks
which control their own currencies do not go bust. Yes, the U.S.
Federal Reserve and other central banks with bloated balance
sheets are likely to book losses when interest rates rise. That
must be why U.S. Senator Bob Corker this week asked Fed Chairman
Ben Bernanke about the institution’s solvency. But no amount of
red ink should bleed them dry. That’s because despite their
name, central banks are monetary authorities, not really banks.

Feb 20, 2013

BofA structures Brian Moynihan’s pay just so

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)

By Agnes T. Crane

NEW YORK, Feb 20 (Reuters Breakingviews) – Bank of America
(BAC.N: Quote, Profile, Research) has structured Brian Moynihan’s pay just so. The bank
boss landed one of the biggest raises among peers for last
year’s work despite the lender’s many lingering problems. Even
so, return on assets and the share price soared. Bank of America
also now requires specific financial targets be met for the
chief executive to be paid in full. In this regard, the bank is
an industry leader.

Feb 14, 2013
via Breakingviews

Heinz deal gives taste of new buyout secret sauce

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By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Heinz ketchup is giving markets a taste of private equity’s new secret sauce. Buyout firm 3G Capital is swallowing the condiment king for $28 billion with Warren Buffett’s help. In the past, such mega-LBOs required multiple firms to work. With so-called club deals all but dead, the Heinz takeover shows the new way forward.

Feb 12, 2013

Fed’s extraordinary policy risks becoming ordinary

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)

By Agnes T. Crane

NEW YORK, Feb 12 (Reuters Breakingviews) – The Federal
Reserve’s extraordinary policy is at risk of becoming
dangerously ordinary. If the United States follows its historic
pattern, the period of ultra-stimulative policy could last far
longer than markets expect. That’s sure to seriously irritate
savers – and trouble the world.