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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Jan 14, 2013 08:43 UTC

Shifting trade winds catch Li & Fung off-guard

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By John Foley

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

Once upon a time, manufacturing was relatively simple: China produced and America bought. That’s changing, and supply chain companies like Hong Kong-listed Li & Fung are doing their best to adapt. A Jan. 11 profit warning that wiped the equivalent of $2.2 billion from the company’s valuation shows there’s plenty of room for error.

Jan 11, 2013 11:02 UTC

Beware bond-equity rotation and focus on value

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By Robert Cole

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

Investors have started 2013 feeling bold. Equities are firm, bonds are weak and gold is soft. Is this the long-awaited rotation back to risk? Many market participants say so. But betting on a herd movement is a dangerous investment strategy.

Jan 10, 2013 11:58 UTC

This time it’s different for capital-markets cycle

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By Dominic Elliott

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

History rhymes, even in the capital markets. Global issuance in three major asset classes seems to follow a pattern after a financial crisis, Thomson Reuters data shows. And many equities bankers think it’s happening again. First there was a recovery in investment-grade debt. Then junk bonds picked up. If previous cycles are any guide, this year should see a revival in initial public offerings.

Jan 9, 2013 13:21 UTC

Porsche’s real legal crash test is yet to come

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By Olaf Storbeck

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

Porsche has enjoyed a smooth ride in the courts so far. The carmaker has avoided the potholes created by its epic and unsuccessful attempt to gobble up Volkswagen. Disgruntled investors accuse the company of systematic lying during the 2008 saga, and are suing for billions of compensation. Porsche rejects all accusations. But in spite of the significant hurdles investors who feel they’ve been duped are facing in the German legal system, the group isn’t out of the woods yet.

Jan 8, 2013 12:30 UTC

Rights issue rethink could ease sting for Deutsche

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By Dominic Elliott

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

A rights issue U-turn would be a bitter bill for Anshu Jain and Juergen Fitschen to swallow. Deutsche Bank’s co-chief executives vowed in September to strengthen the bank’s finances without tapping shareholders. But U.S. capital rules, non-core losses and a looming Libor settlement have upped the ante.

Jan 7, 2013 15:02 UTC

Liquidity U-turn is sell signal for bank shares

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By George Hay

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

Global regulators’ great liquidity U-turn is a sell signal for banks. That’s not the way investors chose to look at it on Jan. 7, as the share prices of global lenders rallied. Admittedly, the watering down of rules intended to protect banks against deposit-runs will mean higher short-term profit. But the economic slowdown that has caused formerly macho regulators to roll over is a more enduring negative force.