Could the banking union have avoided Monte’s mess?
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.
TPG runs rings around Li Ning shareholders
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.
Apple finally succumbs to uncreative destruction
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.
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.
Fog of Bumi’s battles may be just too tiresome
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.
Caterpillar’s Chinese lesson: dig below top line
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.
Citi, BofA give investors only reasons to fret
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.
“But that – and the end of BofA and Citi’s post-crisis hangover – could be a long way off” Brilliant
Rio’s snap succession makes bad news look worse
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.
JPMorgan board goes soft on Jamie Dimon over whale
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.
Renault job cuts test France’s industry fetishism
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.
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?
Shifting trade winds catch Li & Fung off-guard
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.
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Reuters Breakingviews: FirstGroup hits debt brick wallMay 20 - The rail and bus operator is raising £615 million to stave off a ratings downgrade. Debt may be cheap, but too much of it is holding FirstGroup back, says Breakingviews.Video
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Breakingviews: Bank boss bingoMay 17 - Breakingviews editors namecheck Wells Fargo's John Stumpf, who is venturing onto the anti-regulation soapbox, and Jamie Dimon of JPMorgan, who faces a potentially contentious annual meeting.Video
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