Breakingviews

China Inc helps AIG streamline, at a price

By John Foley

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

Bob Benmosche is making AIG more aerodynamic – at a price. The U.S. insurer has agreed to sell its aircraft leasing business to a Chinese-led group for a valuation of $5.3 billion. AIG’s own shareholders will probably forgive their chief executive for the mean headline number and the lack of a clean exit, and focus on the fact that AIG is a step closer to independence from its government shareholder.

China shadow bank shakeout would be welcome

By John Foley

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

A wealth product goes wrong; a bank blames a rogue employee. It sounds trivial. But in China, the crisis at lender Hua Xia could be the beginning of a shadow-bank shakeout. The country’s $2 trillion off-balance sheet financing channel may not stay off the balance sheet for much longer.

Boris Johnson intervention reduces Brexit chances

By Hugo Dixon

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

Boris Johnson’s intervention in the European debate reduces the chance of a British exit from the European Union – or Brexit. The Mayor of London, a popular Conservative politician, says he will campaign to keep Britain in the EU provided it can negotiate a pared-down relationship based on the single market.

SEC learns true cost of China accounting goodwill

By John Foley

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

China’s shaky accounting practices are a sound target for U.S. regulators. Or at least, they would have been ten years ago. The Securities and Exchange Commission’s action against China-based auditors, including affiliates of big accountants like KPMG and Deloitte who refuse to hand over files on U.S.-listed companies, comes too late. If the SEC pushes the point, it could bring a moral victory, but a financial mess.

UK could raid the rich to boost a poor economy

By Ian Campbell

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

George Osborne has his hands tied. Britain’s Chancellor of the Exchequer wants to boost a flat economy but he needs to tighten policy to hit his targets and meet his own fiscal rules. He may well be able to square the circle in next week’s Autumn Statement – by taking from the rich and putting money into poorer hands that are eager to spend.

HK exchange plays it safe with equity finance

By Peter Thal Larsen

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

Hong Kong’s stock exchange is playing it safe. The bourse’s $1 billion share placing will allow it to repay more than half the debt it took on to buy the London Metals Exchange earlier this year. Ultra-low yields might make bonds look tempting. But a recent share rebound, and HKEx’s hefty dividend payout, justifies its cautious approach.

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.