Review: “House of Debt” diagnosis beats remedies

June 13, 2014

Atif Mian and Amir Sufi make a compelling case that excess consumer debt caused the U.S. Great Recession’s severity, but their mortgage bailout proposal would make matters worse. Their shared value mortgages might help, but old-fashioned tight money is a simpler and better way.

Obama student loan fix spares rod, spoils borrower

June 11, 2014

Extending repayment caps and debt forgiveness to older graduates gives too many high earners a break. Making everyone pay a flat percentage of income would be simpler, fairer – and cheaper for taxpayers. It could also deliver a valuable lesson in financial responsibility.

Fed fundamentalists deserve fresh listen

June 3, 2014

After years of expanding policy and remit, the U.S. central bank risks biting off more than it can chew. Hawkish economists persuasively argue this creates a risk of failure, which could undermine Fed independence. More important, the Fed has to stop giving cover to a lazy Congress.

Predictions 2014: Reversals and Revivals

By Breakingviews Columnists
January 2, 2014

Breakingviews’ annual compendium of financial foresight sets the agenda for the next 12 months. From Wall Street to the Great Wall, who has most potential to surprise, where are markets heading, and which are the companies to watch? Plus, we predict the winner of soccer’s World Cup.

BoE’s small-firm stimulus is blueprint for Draghi

December 2, 2013

The European Central Bank is reportedly mulling cheap loans to banks to gee up lending. The newly tweaked UK Funding for Lending scheme shows this isn’t easy, and replicating it in the euro zone would be even tougher. But Europe’s businesses need a leg-up even more than the UK’s.

A trio of finance lessons from Bacon’s triptych

November 13, 2013

The record-busting $142 mln sale by Christie’s of the artist’s set of paintings of Lucian Freud shows a contemporary art market in heady territory. The mind-boggling price paid for Bacon’s extraordinary work suggests three tenuous extrapolations for the broader world of money.

China’s banks languish in valuation twilight zone

October 31, 2013

The likes of ICBC and CCB earn double the return on equity of global rivals, but trade on the same multiple of book value. Investors are suggesting those returns won’t last. Valuations will only adjust when Chinese banks address fears about what’s lurking on their balance sheets.

When will US stop acting like a fat spoiled brat?

October 17, 2013

Congress ended its phony war on the debt ceiling by setting up an even bigger showdown four months from now. The tragedy is that America has the natural resources, human and financial capital and demographics to resolve its fiscal problems yet continues to behave petulantly.

Debt deal may encourage Asia’s dollar craving

October 17, 2013

Washington’s drama made grim viewing for Asian central banks. But even with default averted, they are unlikely to cut their enormous U.S. debt holdings. There’s still no real alternative. They may even hoard more dollars as insurance against a future liquidity squeeze.  

Guest column: Why China’s bad banks are a bad idea

By Guest Contributor
October 16, 2013

The four companies created to take on $300 billion of toxic debt from China’s banks were unnecessary - and stopped China from having to allocate capital more effectively. Even if bad debts rise again, it would be a mistake to repeat the trick, argues micro-lender Joe Zhang.