Breakingviews

Stick with BRIC

By Edward Hadas
December 23, 2014

It’s easy to mock the idea that the four biggest emerging markets – Brazil, Russia, India and China – will reshape the world economy. But the balance is still moving their way, even with slowdowns and Russian turmoil. Markets say otherwise because they were too keen at first.

India’s growth spurt could be for real this time

December 23, 2014

The country’s decade-long obsession with GDP expansion has proved costly. It stoked inflation and damaged balance sheets due to a lack of effort to boost production. By contrast, Prime Minister Narendra Modi’s reforms promise a slow buildup to a more enduring increase in output.

First case against algorithm could reboot U.S. law

December 22, 2014

A market manipulation prosecution essentially turns on whether one program duped another. That makes proving criminal intent seem futuristic at best. Similar obstacles could trip up other cases where software is the de facto defendant. Judges will tackle the issue in 2015.

China-U.S. shift will end Cold War peace dividend

December 22, 2014

The PRC’s military outlays may match Uncle Sam’s in 15 years, while U.S. policy paired with Russian aggression could force up EU spending. Western defense firms face more competition, but added demand. Governments may have to choose between just rearming and an all-out arms race.

China will make 2015 year of missed opportunities

December 22, 2014

Foreign investors hope for a more open, balanced China. Its leaders have other ideas. They favour reforms that minimise financial instability, punish bad eggs, and nurture national champions. President Xi Jinping’s popularity quest will raise tensions with the rest of the world.

M&A “clear day” defenses can cloud investor rights

December 17, 2014

Anti-takeover protections adopted before threats arise are more apt to weather legal scrutiny. It’s one reason Allergan was able to resist Valeant’s $52 bln bid. When triggered reactively, they’re considered unfair surprises. Either way, shareholders often get unneeded cover.

Europe could edge past U.S. in race to courthouse

December 17, 2014

New rules and bank scandals boost financial fraud and class-action filings in Britain. Patent combatants flock to German judges. And spats over failed investments clog EU courts. The upshot: a lawsuit boom that may topple America as the world’s business litigation capital.

Sony email shareholders would like to see

December 17, 2014

The hacking scandal at the Japanese conglomerate’s Hollywood studio isn’t just embarrassing. It’s a business problem for a company already struggling to turn itself around. Herewith, a fictional selection of internal messages Sony’s board ought to be fielding.

Sorry, this is as good as the global recovery gets

By Edward Hadas
December 16, 2014

Since 2009, each new calendar year has brought declarations of the end of the crisis and predictions of an economic upswing. This time the mood is gloomy, and with reason. Weak growth turns out to be the new normal, not part of the transition.

EU insurers’ solvency is shakier than it looks

December 16, 2014

A quarter of Europe’s insurers would fail to meet a basic gauge of capital health if Japan-style low-yield conditions were to persist, recent stress tests found. But actual euro zone yields are even lower. With the bloc on the brink of deflation, that’s not a reassuring sign.