Infrastructural upgrade belongs in US fiscal talks
By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
It won’t be long before Democrats will want to throw some form of economic stimulus into the discussions over righting America’s finances. Tactically, it could be a useful variable to add to the the negotiations with Republicans. Trouble is, most of them equate stimulus with waste. But there’s a way for the White House to square the circle by capitalizing on bipartisan disgust over the nation’s crumbling roads, collapsing bridges and insufficient sea walls. Call it the infrastructural upgrade card.
Corporate America fears taxes more than recession
President Barack Obama is seeking input from Corporate America on the so-called fiscal cliff. But whatever company honchos may be saying about the risk of recession in 2013 if tax hikes and spending cuts kick in on Jan. 1, it looks as if they actually fear higher taxes more than a downturn.
Exhibit A is the recent flurry of special dividends, including a $3 billion whopper announced on Wednesday by warehouse retailer Costco. Data group Markit says 112 firms so far this quarter have already pulled the trigger on special dividends. They include casino operator Las Vegas Sands, which will send more than $1 billion to Mitt Romney’s pal Sheldon Adelson, his wife and the trusts the billionaire controls. Markit expects 20 more firms to do something similar before the year is through.
Low valuations don’t make China stocks a bargain
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Conventional gauges of value make China’s stocks tempting, particularly amid signs growth may be picking back up. But even if the economic rebound lasts, stocks haven’t been great proxies for corporate growth. Even China bulls should be ursine on the country’s equities.
U.S. student loan trouble discredits their value
By Daniel Indiviglio and Robert Cyran
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The trouble U.S. graduates are having keeping up with payments on student loans is casting doubt on their value. If pricey education provided the hoped-for labor market edge, then 11 percent of student loan balances shouldn’t be delinquent. The proportion of debt in difficulties has surpassed even late payments among credit card users. Students may need better vetting.
Carney at BoE changes the game for UK banks
By George Hay
The author is a Reuters Breakingviews columnist. The opinions expressed are his own
Mark Carney’s appointment as governor of the Bank of England changes the game for UK banks. On the big issues – capital, liquidity, and structural reform – the Canadian central banker is unlikely to deviate significantly from current policies. But the new man’s different skills and interests, compared to current incumbent Mervyn King, could still make a tangible difference.
Olam should show, not tell in Muddy Waters fight
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Muddy Waters and Olam are trading punches. The U.S. short-selling firm has released a 133-page report that mixes forensic accounting with some shoe-leather sleuthing in Africa to claim that the Singaporean commodities firm is heading for an Enron-style collapse. Now Olam has hit back with a detailed rebuttal. But for a trading business, perception matters more than facts.
No offense, but you must be joking… How can you seriously suggest OLAM should sell off part of their inventories just to prove that they are a liquid asset. It is bad enough that OLAM management has to spend their valuable time writing a 45 detailed response to the MW report and go through the effort of having to sue MW for their baseless attacks. OLAM has done more than enough to show that they are a legitimate operation. Let them go back to do their business and create employment and shareholder value as they have done successfully for a long time already (unlike MW).
The burden of proof is on MWs side. Unlike OLAMs track record, CB so far got only one thing right in his career (Sino Forest) and plenty of failures (such as Focus Media, as well as his storage company). As far as I am concerned he is an arrogant 36 year old wanna be finance star, who is targeting companies with complex balance sheets to make a quick buck on the short side, as he knows there will always be some doubt left, after he attacks them.
There is nothing wrong with shorting stocks of companies you dont like. Many hedge funds do that successfully. There is everything wrong with building a large short position in a stock and then using you reputation to make aggressive public statements
about the company such as “the company will fail and shareholders will be left with nothing”.
I thought we had finally learned a lesson that employment creating, profit creating companies are more valuable to society than Gordon Gekko style short sellers. I find it absolutely appalling that a Reuters reporter is taking the MW side on this issue.
Euro zone gives Greece almost a good deal
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The stand-off between Greece’s lenders has ended – sort of. The deal isn’t perfect but it paves the way for further debt relief.
Australia can’t pin its growth hopes on property
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
As Australia’s mining boom sputters, the country is searching for a new economic engine. The leading candidate is property. But policymakers will be taking avoidable risks in stoking a real-estate bubble. It would be safer to accept lower GDP growth.
Obama’s got 99 problems and the SEC isn’t one
By Daniel Indiviglio and Agnes T. Crane
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
With apologies to Jay Z, U.S. President Barack Obama’s got 99 problems, but the Securities and Exchange Commission isn’t one. That’s the message sent by his pick of Elisse Walter as the watchdog’s new boss. For those who’d like to see a tougher beat cop on Wall Street, it’s not a particularly inspiring choice. But installing a bureaucrat reflects Obama’s need to conserve political capital for bigger fights on fiscal issues and his cabinet rather than attempting an upgrade of the SEC’s import.
Obituary: Ewing was archetype of Reagan-era excess
By Rob Cox and Christopher Swann
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
(Parts of the following obituary were first erroneously published on March 21, 1980).
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