Breakingviews

Antonin Scalia’s death challenges U.S. leadership

February 14, 2016

The conservative justice leaves behind a Supreme Court vacancy amid a nasty presidential election campaign. There’s already Republican talk of blocking any Obama nominee to replace Scalia. A governance stalemate threatens to rattle already shaky global investors and economies.

Chancellor: Negative rates, negative implications

By Edward Chancellor
February 12, 2016

The latest weapon brandished by central banks is supposed to boost economic growth and ward off deflation by punishing cash hoarders. In practice, this radical policy damages credit creation, fuels bubbles, threatens civic freedoms and spooks the living hell out of markets.

Deutsche makes investors offer they should refuse

February 12, 2016

The German bank is offering to buy back 5 billion euros of bonds. A big take-up means more capital for Deutsche, but could also imply a lack of confidence in the bank’s solvency. Given the potential for bond prices to snap back, it may be better for investors to sit it out.

Dear Draghi: Time to buy bank bonds

February 12, 2016

Bank shares have slumped and bank bond yields are up. ECB chief Mario Draghi can stop the rout from damaging the economy by buying lenders’ debt. The moral hazard concerns are big, but manageable. Breakingviews imagines a memo from a bank CEO.

Unruly markets could derail Abenomics

February 12, 2016

A weak yen and buoyant stocks were key to Japanese Prime Minister Shinzo Abe’s fight against deflation. A flight from risk has reversed those gains and overwhelmed the Bank of Japan’s surprise shift to negative interest rates. The turmoil threatens Abe’s whole economic project.

Overdue Mylan deal is not the one investors wanted

February 11, 2016

Three months after rival Perrigo refused its $26 bln offer, the drugmaker has agreed to buy Sweden’s Meda AB. Though the $7.2 bln transaction makes strategic sense, the 92 pct premium is hard to justify. Mylan might have been better served by trying to sell, rather than buy.

SocGen triumphalism rings hollow

February 11, 2016

Boss Frederic Oudea hailed the “good” full-year result for the French bank’s main business lines as he hiked dividends to half of earnings. But new legal provisions put Societe Generale’s fourth-quarter return on equity at 4.7 pct. With costs up, his confidence seems misplaced.

Facebook India row shows limit of tech favouritism

February 11, 2016

Regulators blocked the social network’s plan to offer free limited internet to the poor. Ill-judged comments from Facebook director Marc Andreessen highlight the gulf between Silicon Valley and the wider world. Big tech groups can no longer expect a free pass for bold plans.

Twitter lacks love more than numbers in its flock

February 11, 2016

Users at the $10 bln social-media platform have topped out at about 320 mln. Getting 25 pct more dollars out of each in the fourth quarter than the third isn’t bad. CEO Jack Dorsey wants a better user experience, but he also needs to turn more of his pricey R&D into revenue.

Anheuser rolls Asahi on middling beer brands

February 10, 2016

Though the $2.9 bln price tag is a bit lower than expected, the Japanese brewer’s acquisition of Peroni, Grolsch and Meantime from Mega-Beer clocks in at some 25 times probable EBIT. It’s only justifiable under the demographic logic of the buyer’s shrinking home country.