Dec 17, 2014 21:42 UTC

M&A “clear day” defenses can cloud investor rights

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By Reynolds Holding

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

Corporate defenses can hurt investors, rain or shine. Anti-takeover measures adopted on so-called “clear days” – before threats arise – are more likely to weather legal scrutiny. It’s one reason Allergan was able to beat back Valeant’s unwanted $52 billion advance. When such protections are triggered in the heat of battle, though, they’re considered unfair surprises. Either way, shareholders usually get unneeded cover.

Dec 17, 2014 20:19 UTC

Sony email shareholders would like to see

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By Rob Cox

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

The hacking scandal at Sony’s Hollywood studio isn’t just embarrassing. It’s a business problem for the $23 billion Japanese conglomerate already struggling to turn itself around. Herewith, a selection of internal messages Sony’s board and executives ought to be fielding this week.

Dec 17, 2014 16:58 UTC

Europe could edge past U.S. in race to courthouse

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By Reynolds Holding

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

Europe’s companies could edge past Uncle Sam’s in the race to the courthouse. New rules and bank scandals are boosting fraud and class-action filings in Britain. Patent combatants are flocking to German judges. And spats over failed investments are clogging courts across the EU.

Dec 16, 2014 19:52 UTC
Edward Hadas

Sorry, this is as good as the global recovery gets

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At the beginning of 2014, many people were optimistic about the world economy. For the fifth straight year, it had seemed safe to declare the lingering effects of the 2008 financial crisis over and done with. This time is different: 2015 is likely to begin in a merited atmosphere of gloom.

Investors are looking at the financial system with increasing dismay. Monetary policy has never been so loose for so long in developed economies, and yet lending, investments and consumer spending are still restrained. A beefed-up banking system is not yet funding rapid hiring or strong GDP growth. Abenomics – the stimulative policy package of Japanese Prime Minister Shinzo Abe – seems to be losing its shine, commodity exporters have big problems and the United States may just be bumping along a bit better than the rest.

COMMENT

Let’s quit confusing the state of the economy with the job market and income distribution. While once strongly correlated, they are no longer coupled. The economy itself may be the only thing going well. The job market is a shambles because technological advances and offshoring have permanently eliminated most of the middle class factory jobs for the minimally educated. This and failure to regulate financial markets have resulted in massive problems in income distribution. External shocks such as Russian aggression and OPEC lowering prices to eliminate competition, could cause economic problems if politicians react according to partisan ideology.

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Dec 16, 2014 16:58 UTC

EU insurers’ solvency is shakier than it looks

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By George Hay

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

The capital strength of European insurers is shakier than it looks. Recent stress tests by the European Insurance and Occupational Pensions Authority found that only 14 percent of insurers fell below a baseline level of capital strength under so-called “Solvency II” reforms. That’s not the end of the story, however.

Dec 16, 2014 16:50 UTC

Solar upstarts and utilities head for uneasy truce

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By Kevin Allison

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

Solar power upstarts and U.S. electric utilities may reach an uneasy truce in 2015. The soaring popularity of solar installations is helping to cut carbon emissions. But the trend upsets big electricity providers trying to make a return on grid investments. Utilities’ attempts to slap fees on solar users sparked uproar in 2014. Cost-sharing may take some heat out of the debate.

Dec 15, 2014 23:28 UTC

Uber’s law flouting could bring joyride to a halt

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By Robert Cyran

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

Uber’s law flouting could bring its joyride to a screeching halt. The taxi app company is covering its drivers’ fines for illegally picking up passengers. That may be just another business expense to a firm that earned a $40 billion valuation by moving quickly and breaking the rules. But the legal, lobbying and public relations costs of reckless behavior are accelerating fast.

Dec 12, 2014 15:52 UTC
Guest Contributor

Review: “Forgotten Depression” worth remembering

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By Edward Chancellor

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

“The central irony of financial crisis is that while it is caused by too much confidence, too much lending and too much spending, it can only be resolved with more confidence, more lending and more spending.” This post-crisis advice from Larry Summers – a former U.S. Treasury secretary, presidential economic advisor and president of Harvard – represents the conventional wisdom of the economic policymaking elite. This is the same elite, you may recall, that failed to see the global meltdown coming in the first place. Could it be that they’ve got things wrong yet again?

COMMENT

Grant keeps peddling his snake oil about a brief and painless 1921 depression. If wages would only collapse we could have growth and prosperity again! In fact, the pain of the 1921 Depression continued until the back end of the 1920′s. Overproduction, deflation and political chicanery by the New York Fed caused the 1924 and 1927 bond buying programs. The two programs were responsible for a great increase in credit that fueled the boom and bust of 1929. Old economic texts from that time provide examples of a great many firms just barely holding on and making little or no profits even in 1929. Today their solution is propagate the old scheme of much lower wages and skimpy benefits as the way to fuel a new economy of revived growth and prosperity for all. It is the old retreaded scheme of the 1800′s- boom and bust with depressions and wars as the main course. We have a good example of slashed wages today in the form of Iceland. Average people working for a small fraction of what they made before the Krona collapsed. This is the old model peddled by Austrian, Laissez-faire and Hoovernomics advocates. The old models are wrong in so many ways. The last act of the New Deal known as Lend-Lease, produced The Golden Age of America. So many decades have passed everyone has forgotten. I enjoy nearly all of James Grant’s writings but Neoliberal snake oil will make a bigger mess than we find ourselves in today.

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Dec 3, 2014 11:53 UTC

Sinking rouble puts debt squeeze on Russia Inc

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By Pierre Briançon

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

Russia does not have an external debt problem. At around 37 percent of GDP – versus 1.5 to three times GDP, say, for developed European economies – it should be easily manageable. For Russian companies and banks, it’s a different story.

COMMENT

Once the economy starts contracting, and prices of food start rising- support for Mr. Putin will slowly fade.

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Dec 2, 2014 19:17 UTC

Wall Street in grip of Geithner nostalgia

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By Rob Cox

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

A week before Thanksgiving, Wall Street’s top brass were forced to reckon with an entirely new sensation: nostalgia for their former overlord, Tim Geithner.