Apr 9, 2014 06:58 UTC

China tech rout sifts IPO haves from don’t-needs


By John Foley 

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

Falling prices of internet stocks are a headache for companies yet to join the market. The sell off that began in the first week of March and broke on April 8 hit Chinese companies particularly hard. It may leave investors pickier about coming initial public offerings of tech companies from the People’s Republic. The haves will be sorted from the don’t-needs.

Apr 8, 2014 15:04 UTC

Russia would pay steep price for Ukraine invasion


By Pierre Briançon

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

Vladimir Putin wants to destabilise Ukraine, but he may balk at the economic price Russia would pay for a full-blown invasion. The seizure of government buildings in several eastern Ukrainian cities has rekindled fears of military intervention in the mostly Russian-speaking parts of the country. A major consideration before sending in troops would be the price paid by Russia’s economy. Putin can expect to be severely punished by both markets and Western governments.


This article missed the fact that Ukraine was, is, and will be, badly unstable; in fact, it was Russia that provided the stability that kept the place on life support and kept it whole. It is a social and economic basket case. Neo-Fascists and Anti-Semites are a big part of the new government in Ukraine. It is really scary. Their country is hugely in debt, and instead of Russia paying those debts the US and the IMF and the EU are going to foot the bill. Ukraine is the Greece of two years ago.

Russia stands to benefit economically, and the ones who should be worrying are the Europeans. Germany needs Russian natural gas to fuel its industry. Germany depends on Russia for 30% of its natural gas needs. That is a lot.

Putin is enjoying huge domestic support. Obama will never see those kinds of approval ratings. And Putin is cleaning up the Russian military and making it leaner and stronger. Today in the Russian press one can learn that Putin just fired 14 useless Generals. Despite what one reads in the Western press it sure looks like a win-win for Putin and Russia, and that is obviously why they did it. Obama looks helpless. Maybe he should not have said that Putin was like a kid skulking and sitting in the back of a classroom. The ineptitude of those remarks challenges anything G.W. Bush ever let drop from his mouth.

Putin is not skulking in the back of the class, and he never was to begin with. And President Obama calling Russia a mere “Regional Power” is another titanic misunderstanding. Mere local powers do not have the power to wipe the US off the map. That is why the wise course would be to show Mr. Putin some respect like G.W. Bush did. Sometimes one just has to conclude that the current administration is completely lost in the sauce, and that is no good for anyone.

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Apr 8, 2014 06:02 UTC

Modi win is blow for Tesco, good for investors


By Andy Mukherjee 

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

A win for Narendra Modi would be bad news for Tesco and its rivals, but good news for other investors. The Indian opposition leader’s party says it won’t allow foreign supermarkets to enter the country if it wins the general election. But that is just one discordant note in a manifesto that is sweet music to financial markets.

Apr 4, 2014 11:13 UTC

Euro crisis 2.0 will need a new shock absorber


By Neil Unmack and George Hay

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Future euro zone crises will need a different shock absorber. European banks kept yields down during 2010-13 by buying sovereign debt. New capital rules make this an altogether dicier affair.

Apr 4, 2014 10:20 UTC

Review: Zero margin call


By Robert Cole

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

Seismic shifts in the organisation of human civilisation have occurred only twice in the last 10,000 years. Or so says Jeremy Rifkin in his new book, “The Zero Marginal Cost Society.” We are, he writes, in the throes of a third transition. It is one that will bring the death of capitalism and the onset of the “Collaborative Commons.”

Apr 4, 2014 05:43 UTC

China stock market opening is opposite of Big Bang


By Peter Thal Larsen

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

China’s approach to opening up its stock market is the opposite of a Big Bang. Investors are once again getting excited about the prospect of mainland shareholders being allowed to buy Hong Kong stocks. But such hopes have proved premature before. As with any loosening of China’s capital controls, progress is bound to be gradual.

Apr 3, 2014 11:38 UTC
Edward Hadas

Central bankers live in silent fear


By Edward Hadas

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

It’s scary to think what higher policy interest rates might do to a financial system habituated to virtually free money. Central bankers, though, profess not to be too worried about this risk. They are either overconfident – or living in silent fear.

Apr 3, 2014 06:20 UTC

Alibaba shopping spree needs better explanation


By Robyn Mak

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

Alibaba’s shopping spree needs better explanation. The Chinese e-commerce giant has spent $3.8 billion on acquisitions and investments since 2013. The land grab may excite prospective investors ahead of its long-awaited initial public offering (IPO). But Alibaba will eventually have to justify its purchases.

Apr 2, 2014 14:56 UTC

The question ECB hasn’t answered: why wait?


By  Pierre Briançon

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

There is only one question worth asking Mario Draghi right now: what does he intend to do to boost inflation? The European Central Bank of which he is president is failing at its only mandate – maintaining price stability in the euro zone, defined as a rate of inflation “below but close” to 2 percent. The most recent numbers – inflation last month was at an annual rate of 0.5 percent, and prices  have risen 1.2 percent in the last 12 months – is nowhere near the target. And judging by the ECB’s own forecast, the rate won’t get much nearer by 2016. Real deflation remains, so far, a low-risk scenario. But economies like Spain or Greece are suffering from the ECB’s inaction. And is even a small risk of dangerous deflation worth taking? Acting now could spare the ECB more aggressive policies later. What’s the upside of playing with fire?


Mr. “Whatever it Takes” is really “Whatever I can say”

seriously what kind of conflict do you think it would setup with the German high court if they did QE?

LTRO is only useful if liquidity was a problem which it isn’t

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Apr 2, 2014 07:26 UTC

Noble China joint venture still faces market test


By Una Galani

The author is a Breakingviews columnist. The opinions expressed are her own.

Noble Group’s joint venture with China still faces a test from market forces. The Singapore trader is selling 51 percent of its agricultural business to a consortium led by state-backed COFCO for around $1.5 billion. China’s desire to control its food supply should guarantee volumes for the joint venture. But it’s less clear that will translate into healthy margins.

The precise size of the COFCO’s investment depends on how the unit, which processes everything from grains to coffee, performs over the next nine months. The final price will be equivalent of 1.15 times its book value in 2014. The headline price implies a valuation of $2.94 billion for the business, which accounted for 16 percent of Noble’s revenue last year.