Sovereign doom loop haunts EU bank stress tests

October 1, 2014

The euro zone banking union was meant to start with a robust bank solvency test. Yet national regulators have successfully lobbied the ECB to count deferred tax credits as capital. That restores the state/bank dependency the single banking supervisor is trying to sever.

China house prices on brink of pessimism spiral

September 30, 2014

As prices fall in most big cities, developers and banks are trying to lure buyers back to the market. But cheaper mortgages and less red tape are no match for sagging real price expectations. Short of giving cash to buyers, it is hard to arrest negative thinking once it sets in.

Hong Kong shreds hopes for orderly disorder

September 29, 2014

Thousands of protestors have taken to the streets, at times clashing violently with police. Markets remain open, and the financial sector hasn’t been targeted directly. But the loss of control over a carefully planned disobedience movement has damaging long-term implications.

Rock star Modi needs more business-friendly riff

September 29, 2014

The Indian prime minister used a sold-out Madison Square Garden gig to make an emotional sales pitch. While Indian-Americans may want to take up Narendra Modi’s offer to invest freely in their ancestral land, the country’s business-unfriendly reputation remains a big obstacle.

Sam Waksal’s new biotech tests Wall Street amnesia

September 26, 2014

The former ImClone boss who went to prison for an insider trading scandal that also ensnared Martha Stewart plans to take his latest venture public this year. He follows second-chancers like Donald Trump and LTCM founder John Meriwether. Investors can be astonishingly forgiving.

World should steel for peak China demand

September 26, 2014

Chinese consumption of crude steel fell in August for the first time this century. Slowing housebuilding is adding financial strain to a troubled supply chain. A rethink of how much is enough for the world’s biggest steel user could also throw the global market off kilter.

Apple CEO Tim Cook gets $25 billion warning shot

September 26, 2014

That’s the value wiped off the stock after a botched system update and reports its new phones can be bent. It’s a small hit for a $600 bln company. But the 2012 Maps fiasco is a reminder that one-off issues may presage more pain. Cook needs to nip this one in the bud.

Wall Street needs sheriff more than toll collector

September 25, 2014

U.S. Attorney General Eric Holder is stepping down after squeezing multibillion-dollar penalties from banks. He had less success securing convictions, leaving law enforcement just an expensive cost of doing business. Next financial crisis, Uncle Sam should send in a tougher cop.

Sinopec’s petrol station revamp is an uphill job

September 25, 2014

The Chinese oil giant wants to sell more from its 23,000 pump-side stores. But even if non-fuel sales rise sixfold, the unit won’t be worth a lot more than the $58 billion valuation put on it by outside investors. Breakingviews’ calculator spells out the scale of the challenge.

Uncle Sam gets wires crossed on data privacy

September 24, 2014

A hacker went to prison for exposing personal information AT&T didn’t protect. Now prosecutors are defending the legality of doing essentially the same thing in the Silk Road drug website case. Online privacy laws are flawed when enforcers can’t decide what’s allowed.