Breakingviews

U.S. student loans could need $500 bln bailout

February 27, 2015

Borrowing for education has soared over the past decade, ballooning to $1.2 trln and growing far faster than GDP. With serious delinquencies at 11 pct and Washington on the hook, there’s a mess in the making. A Breakingviews calculator shows how big Uncle Sam’s exposure could get.

Time Warner Cable’s deal risk goes down to wire

February 20, 2015

A $45 bln sale to larger rival Comcast hangs in regulatory balance. Time Warner Cable’s stock price implies a 40 pct chance of collapse. A Breakingviews calculator shows how longer odds of success might hurt investors. The lack of a break fee would add insult to injury.

Yahoo’s Alibaba spinoff attracts big discount

February 12, 2015

The company’s plan to distribute its stake in the Chinese company hasn’t excited investors. A Breakingviews calculator suggests they are attaching a 34 pct discount to the U.S. tech firm’s Alibaba shares – assuming Yahoo’s core business is worth something. That’s too cautious.

Centre-left may have UK election edge

January 5, 2015

Britain’s three main parties are weak. Its two nationalist groups are stronger. The economy might help the in-power Tories – or give voters confidence to swing left. If they also want public spending, a new Breakingviews calculator suggests a Labour-led coalition could win sway.

Japan index: Tightening the purse strings

November 12, 2014

Unexpected growth in manufacturing output helped our alternative economic index to a new high in September. But it wasn’t enough to lift consumers: stagnant wages and higher sales taxes left spending in the doldrums. No wonder the central bank decided to ramp up bond purchases.

China index: Home truths upset economy

October 31, 2014

Our alternative growth index hit its lowest levels since April 2009 last month. Housing investment is leading the downturn with the slowest pace of growth in over two years. In the past, more bank lending was seen as the answer. This time, it doesn’t seem to be helping at all.

QE gave emerging markets brief gains, lasting pain

October 30, 2014

Six years of money-printing in the United States have ended. The $4 trillion splurge may have averted a deeper slump. But for developing countries it fueled a credit binge while bringing only a fleeting boost to growth. Many will now struggle to boost output and repay the debt.

Sinopec’s petrol station revamp is an uphill job

September 25, 2014

The Chinese oil giant wants to sell more from its 23,000 pump-side stores. But even if non-fuel sales rise sixfold, the unit won’t be worth a lot more than the $58 billion valuation put on it by outside investors. Breakingviews’ calculator spells out the scale of the challenge.

China has not one property problem, but many

September 18, 2014

Rank the biggest cities by riskiness, and huge differences become apparent. Some places face heavy oversupply, others look unaffordable, while in most prices are sliding. A national correction is unlikely, but a conflagration of local ones could be pretty nasty.

Japan’s GDP sacrifice is price well paid

August 13, 2014

The 6.8 pct drop in second-quarter output was a direct consequence of the country’s April sales tax increase. But for Prime Minister Shinzo Abe, taking a temporary hit on private demand was an acceptable cost of mending public finances. Besides, a recovery may have already begun.