Breakingviews

Gazprom/Ukraine dispute is proxy for Putin’s whims

By Pierre Briancon
June 16, 2014

The Russian energy group will deliver only pre-paid gas to Ukraine, after talks on $4 bln of overdue bills collapsed. Combine that with renewed hostilities by Russian separatists in the east of the country, and markets were premature in believing that the Ukraine crisis has ended.

Samsung software bet rests on future beyond phones

June 16, 2014

The Korean group has launched a smartphone running its own operating system instead of Google’s Android. Samsung is unlikely to challenge the search giant’s lead in handsets. But it may have more success with software that can control televisions, appliances - and even cars.

Review: “House of Debt” diagnosis beats remedies

June 13, 2014

Atif Mian and Amir Sufi make a compelling case that excess consumer debt caused the U.S. Great Recession’s severity, but their mortgage bailout proposal would make matters worse. Their shared value mortgages might help, but old-fashioned tight money is a simpler and better way.

China’s Hong Kong experiment faces biggest trial

June 13, 2014

Economic tensions and coming “Occupy Central” democracy protests are testing a two-system formula that has thrived for 17 years since the former colony returned to the People’s Republic. Hong Kong’s stability and China’s patience can no longer be taken for granted.

Harvard could get smarter about its endowment

June 12, 2014

Jane Mendillo, who ran the Ivy League university’s $33 bln portfolio for six years, is leaving. Predecessor Mohamed El-Erian is partly to blame for crisis losses, but Harvard overpaid for mediocre returns. Less of both Yale model investing and Wall Street pay may be in order.

Obama student loan fix spares rod, spoils borrower

June 11, 2014

Extending repayment caps and debt forgiveness to older graduates gives too many high earners a break. Making everyone pay a flat percentage of income would be simpler, fairer – and cheaper for taxpayers. It could also deliver a valuable lesson in financial responsibility.

China’s vanishing metals corrode confidence

June 11, 2014

Traders may have pledged copper or aluminium as collateral for multiple loans. Lenders can’t always spot such behaviour, and may have reasons not to complain too much or pull back too quickly. But metal-related antics are another sign of the weakness in China’s financing chains.

Investors cheer for Brazil World Cup rout

June 10, 2014

Each dip in Dilma Rousseff’s poll numbers bumps the Bovespa. Markets are hoping her experimental economic policies will come to an end at the October ballot. With labor tight and millions lifted from poverty, however, it will take crushing defeat on the pitch for that to happen.

China’s mini-stimulus verges on micro-management

June 10, 2014

A tweak that lets some banks lend more to the rural sector will boost growth a bit, and maybe create some jobs. The cost is ever more complexity. That might suit regulators looking for more influence, but fine-tuning takes China further from its goal of being market-driven.

China-U.S. cyber spat risks corporate casualties

June 9, 2014

Beijing has responded to spying charges by taking aim at American tech companies. An escalating dispute could lead to blocked deals in the U.S. and lost sales in China. Though companies can try to ease security concerns, it’s hard for them to escape a political escalation.