Jan 31, 2013 10:25 UTC

Japan helps Nomura put a bad year behind it

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By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Who wants to be a global investment bank anyway? Not Nomura. The Japanese financial group delivered a solid quarter-on-quarter boost in underlying pre-tax profit in the final three months of 2012, driven largely by a recovery in its home market. Last year’s insider trading scandal and subsequent resignations punctured the global dreams Nomura was pursuing when it bought parts of bankrupt Lehman Brothers in 2008. For investors, that may be no bad thing.

Jan 25, 2013 12:48 UTC

Could the banking union have avoided Monte’s mess?

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By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Derivative blow-ups of the type that happened at Banca Monte dei Paschi di Siena are here to stay – even in the brave new world of the euro zone’s planned banking union.

Jan 25, 2013 07:26 UTC

TPG runs rings around Li Ning shareholders

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By John Foley

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

TPG is running rings around shareholders in Li Ning. The buyout firm has renegotiated the terms of a convertible bond it bought from the Chinese sports brand a year ago, and agreed to underwrite a deeply discounted capital raising. The deal leaves other investors in second place.

Jan 24, 2013 04:02 UTC

Apple finally succumbs to uncreative destruction

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Apple has finally succumbed to uncreative destruction. A five-year run with the iPhone and iPad catapulted the company to investment royalty, but it’s coming to an end. Over $50 billion of market value – nearly the equivalent of HP and Dell combined – vaporized in the hours after Apple reported flat fourth-quarter profit. Copycats are gaining and margins are shrinking. Chief Executive Tim Cook needs a real innovation to escape this Red Queen’s race.

COMMENT

Like in baseball, it’s possible to hit back to back grand slams and even within the realm to do this three times in a row. To expect that player to hit a fourth is wishfull thinking and naive.

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Jan 22, 2013 15:10 UTC

Fog of Bumi’s battles may be just too tiresome

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Bumi’s minority shareholders are ill-served by the open conflict raging between the coal miner’s board, its founder Nat Rothschild and Indonesia’s Bakrie clan. They deserve an adult debate about the merits of competing plans to unwind a tie-up with its Indonesian backers. They need clarity about the nature of alleged financial irregularities. They are getting a juvenile shouting match.

Jan 21, 2013 07:55 UTC

Caterpillar’s Chinese lesson: dig below top line

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By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

As a company that makes excavators, Caterpillar should know the importance of digging. The U.S. machine maker has taken a $580 million write-down on a Chinese mining equipment producer it bought less than a year ago, erasing three quarters of that deal’s value. The accounting fraud that Caterpillar claims to have found at ERA Mining may not have been visible at the time of the purchase. But the low quality of its target’s rapid growth was.

Jan 17, 2013 19:07 UTC

Citi, BofA give investors only reasons to fret

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By Antony Currie and Agnes T. Crane

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Bank of America and Citigroup are giving investors nothing but reasons to fret. The two U.S. banks’ stocks were among the best performers last year – BofA’s doubled, while Citi’s jumped by 50 percent. But their fourth-quarter earnings, which both unveiled on Thursday, offer little to support further optimism.

COMMENT

“But that – and the end of BofA and Citi’s post-crisis hangover – could be a long way off” Brilliant

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Jan 17, 2013 14:56 UTC

Rio’s snap succession makes bad news look worse

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By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It was time for Tom Albanese to go. But the snap succession at Rio Tinto which dismissed its chief executive on Jan. 17 as it took a $14 billion writedown on the value of its coal and aluminium businesses, makes a bad situation look even worse. Although Albanese’s successor, Rio iron ore boss Sam Walsh, is experienced and capable, the decision to install a new CEO immediately looks rushed.

Jan 17, 2013 14:05 UTC

JPMorgan board goes soft on Jamie Dimon over whale

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By Agnes T. Crane

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

JPMorgan has gone soft on Jamie Dimon over the so-called whale trade. The bank’s 132-page report into $6.2 billion-worth of losses dishes out blame to several now departed managers. But it just echoes the chairman and chief executive’s own mea culpa. The more than $10 million docked from Dimon’s pay will sting, but the board could do more – like removing one of his hats.

Jan 16, 2013 11:59 UTC

Renault job cuts test France’s industry fetishism

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By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Renault was known in the old days, as France’s “social laboratory”. The carmaker’s powerful unions and state ownership guaranteed high pay, generous benefits, and short working weeks, occasionally interrupted by legendary strikes. Then globalisation, privatisation and a five-year slump in European car sales made the lab’s experiment unaffordable.

COMMENT

This opinion applies universally – the real problem comes to the fore when pandering politicians court union support by keeping the playing field unlevel and tilted towards the unions. Politicians pass legislation favorable to unions and block legislation unfavorable. Unions give money and votes. The real question is why do “the people” put up with it?

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