Apr 2, 2014 07:26 UTC

Noble China joint venture still faces market test

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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.

Mar 31, 2014 06:04 UTC

Triple defence will shield Japan from tax burden

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By Andy Mukherjee

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

If history is a reliable guide, the Japanese economy will wilt when the country raises its sales tax on April 1. When Japan last increased the levy in 1997, consumer spending collapsed. But the three-pronged defence Prime Minister Shinzo Abe is putting in place makes a repeat doubtful.

Mar 27, 2014 14:37 UTC

Ukraine bailout can work if politics are fixed

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By Pierre Briançon

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

The International Monetary Fund has just invented delayed shock therapy. Its bailout package for Ukraine will help the country deal with financial emergency. The Fund hasn’t given up on conditionality, but it has been clever enough to recognise that political turmoil and the transitional nature of the Kiev government don’t allow for the type of tough love that could backfire. Ukrainians won’t have a credible administration capable of making long-term pledges until they choose a president on May 25.

Mar 25, 2014 08:15 UTC

Rich world exports its way to trouble

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By Andy Mukherjee

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

Rich nations are exporting their way to trouble. For eight straight quarters, advanced economies have exported more goods and services than they have imported, suggesting that as a group they are free-riding on world demand, most of which has come from emerging markets. But this growth strategy is both selfish and self-defeating.

Mar 20, 2014 06:19 UTC

Confused Fed adds to emerging market muddle

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By Andy Mukherjee

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

A confused U.S. Federal Reserve has added to the muddle in emerging markets.

At their meeting that ended on March 19, the nine voting members of the Federal Open Market Committee (FOMC) wriggled out of a previous commitment to start increasing interest rates after unemployment had fallen to 6.5 percent. To assure markets that overnight rates will stay at near-zero levels, the committee promised instead to seek maximum employment and 2 percent inflation.

Mar 19, 2014 17:34 UTC

UK’s political budget transfers from young to old

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By Ian Campbell

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

George Osborne claimed to have a big white rabbit up his sleeve. It turned out the UK chancellor had hidden a cuddly toy for pensioners. Osborne is running the budget for both the economy and the election.

COMMENT

Too many Brits have been taken in by this “rich deserve more” propaganda. Consider this info from across the pond: “Fact: One economist estimates that for every $1 we spent on unemployment insurance benefits, we get $1.61 in economic activity back.”

This comes from Moody’s Analytics chief economist Mark Zandi.

Not included in his formulae is the on going cost to the community of ill health incurred when on a tight budget, decay of property through lack of heating and investment, morale sapping inability to provide for dependents, loss of educational standards to the children etc etc. When people who are even relatively well off lobby for more we can be forgiven for shaking our heads in disbelief. Can’t we?

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Mar 19, 2014 06:35 UTC

Japan stock market selloff is a temporary setback

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By Peter Thal Larsen

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

Japan’s stock market has suffered a temporary setback. The country’s equity indices have dropped more than 10 percent this year in local currency terms. With the central bank on standby for more easing, however, Japanese stocks should benefit from home support.

Mar 18, 2014 06:24 UTC

Real risk to emerging markets lies in real rates

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By Andy Mukherjee 

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

The real big risk for emerging markets this year lies in surging real interest rates.

Mar 14, 2014 16:39 UTC
Edward Hadas

Review: An unreliable guide to inequality

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By Edward Hadas

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

Thomas Piketty is set to become a star. “Capital in the Twenty-First Century” – the new book from the founder of the Paris School of Economics – has received gushing praise from the New York Times and the Economist, even before the official publication of the English translation next month. The massive production, 577 pages of text plus voluminous supporting material, posits that economic inequality is a major social problem which is likely to get worse. Piketty’s arguments, however, fail to persuade.

Mar 14, 2014 15:06 UTC

Rouble hard to defend against Putin’s attacks

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By Pierre Briançon

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

Vladimir Putin isn’t waiting for the European Union’s sanctions on Russia and is already inflicting serious damage on the nation’s economy. The Russian president’s move on Crimea has sent Moscow stock markets down by 18 percent since the beginning of March, and the rouble has fallen almost 2 percent in the same period, and 12 percent since January, even with the Central Bank of Russia dipping into its $500 billion-odd worth of reserves to defend the currency. Yields on 10-year Russian government bonds now stand at 9.42 percent, up 1 percentage point since the events in Crimea.