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.
Beware bond-equity rotation and focus on value
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.
This time it’s different for capital-markets cycle
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.
Porsche’s real legal crash test is yet to come
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.
Rights issue rethink could ease sting for Deutsche
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.
Liquidity U-turn is sell signal for bank shares
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.
India’s corporate governance cleanup is welcome
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
India’s corporate culture is about to witness a shakeup. A new law will make it mandatory for most Indian companies to separate the role of the chief executive and the chairman of the board. The shift, already the norm in the United Kingdom but long resisted elsewhere, should help to narrow India’s governance discount.
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FEATURED VIDEO
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Breakingviews: Markets too sanguine on QE threatMay 22 - The bursting of the gold bubble is just a harbinger of how vulnerable markets are to a tapering of quantitative easing, says Breakingviews. Other asset classes are also at risk.Video
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Breakingviews: Dimon's losing winMay 21 - JPMorgan's Jamie Dimon has secured enough votes to keep both the chairman and CEO roles. Rob Cox and Breakingviews columnists discuss why it's a defeat for governance.Video
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