Breakingviews

Venezuelan political folly is a cue for investors

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

The political folly in Venezuela is a cue for investors. Allies of ailing President Hugo Chavez seem to be taking even greater liberties interpreting the constitution than expected. There’s no inauguration, caretaker government or sign of a new election. If markets truly hate uncertainty, then animus toward Venezuela should be off the charts.

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.

A how-to guide for Japan to escape deflation

By Andy Mukherjee

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

Japan has a real chance of ending deflation. But the authorities need to act boldly. It will be hard for the Bank of Japan to dispel a decade of accumulated pessimism by merely adopting a formal inflation target. The goal of the central bank and the finance ministry should be to make people believe that price gains that didn’t occur in the past 10 years will now take place. A de facto currency peg may be the way to engineer those expectations.

Ping An flop could leave HSBC red-faced but richer

By Peter Thal Larsen

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

A failed Ping An sale could leave HSBC red-faced, but richer. If regulators veto the UK bank’s $9.4 billion plan to offload its near-16 percent stake in the Chinese insurer, HSBC’s reputation will take a knock. But it could still end up financially better off.

Chuck Hagel is good choice for U.S. deficit hawks

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

Chuck Hagel, President Barack Obama’s pick for U.S. defense secretary, is a good choice for deficit hawks. He mixes dovish foreign policy views – at least for a Republican – with budget-cutting fervor. The combination could actually slash Pentagon spending. Reducing it to the proportion of GDP seen in the late 1990s would save Uncle Sam a quarter of a trillion dollars a year.

CDB highlights China’s dysfunctional finance

By John Foley

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

China Development Bank is on a roll. The policy lender raised 1.2 trillion yuan ($193 billion) in net domestic funds in 2012, according to Reuters data. The proceeds funded high-profile foreign takeovers, allowed U.S.-listed Chinese companies to go private, and helped Indian billionaire Anil Ambani refinance bonds. Such activities have less to do with development than with China’s financial dysfunction.

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.

Depardieu would find heaven in Putin’s Russia

By Pierre Briançon

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

Tax heaven can’t wait. Vladimir Putin has seized on an inebriated joke from his good friend Gerard Depardieu and granted the French actor Russian citizenship, by presidential decree. Depardieu announced a month ago he was leaving France for Belgium because of the 75 percent tax rate sought by the French government on higher incomes. The uproar that followed – from both supporters and outraged critics – only confirmed Depardieu’s intention, which he maintained even after a French court struck down the new tax rate.

Liberal economists aid Tea Party in cliff debate

By Edward Hadas

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

If everyone agreed that outsized fiscal deficits present a clear and present danger, the American politicians who object to tax increases would be in serious trouble. But the anti-tax zealots are given intellectual cover by their ideological enemies, the deficit-loving liberals.

Global relief on fiscal cliff misses the point

By Edward Hadas

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

The fiscal cliff has been averted. Asian and European stock markets rose 1-3 percent after the U.S. Congress managed to avoid the previously mandated spending cuts and tax increases. The rally is unlikely to last long.