Nov 12, 2014 14:46 UTC

FX fines are wake-up call on self-policing

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By Dominic Elliott 

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

The $3.4 billion regulatory settlement for currency market rigging is a big wake-up call to the banking industry on self-policing. The firms involved – Citigroup, HSBC, JPMorgan, Royal Bank of Scotland and UBS – are paying 20 percent more than the same authorities have levied from five firms for the Libor scandal. That cannot be dismissed as simple fine inflation. It reflects banks’ failure to learn their lesson. Misdeeds in FX went on as recently as October 2013 – well over a year after Barclays became the first bank to settle over Libor.

COMMENT

Banks never learn from the past; therefore they repeat the past.

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Nov 12, 2014 06:06 UTC

Chinese flirt app seeks undiscerning IPO investors

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By Robyn Mak

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

China’s latest tech initial public offering looks like a date from hell. Social network Momo has a fast growing user base and puts a flirtatious twist on location-based chat apps. But a recent history of widening losses and very peculiar governance risks suggest investors should commit at their own risk.

Nov 11, 2014 22:42 UTC

Steve Cohen’s loot could land in undeserving hands

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By Reynolds Holding

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

SAC Capital’s ill-gotten gains could be headed for undeserving pockets. A $600 million settlement between Steve Cohen’s hedge fund – now called Point72 Asset Management – and the U.S. Securities and Exchange Commission will go to investors on the other side of the illegal transactions. Better them than Uncle Sam. But the real victims were drug firms Elan and Wyeth, whose data SAC’s trader misappropriated.

Nov 11, 2014 07:47 UTC

China embraces troublesome cult of consumption

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By John Foley 

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

China has no more potent symbol of consumer power than “Singles’ Day”. Alibaba, the e-commerce giant that invented the shopping frenzy which takes place every Nov. 11, shifted $2 billion of goods on its websites in the first hour of trading. If consumers kept that up all year, retail sales in the People Republic would be five times bigger than they actually were in 2013. Fortunately, they don’t.

Nov 10, 2014 14:36 UTC

Global banks prepare for un-level playing field

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By George Hay

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

No bank should be too big to fail. The world has taken a step closer to that admirable goal with the Nov. 10 capital proposals from the Financial Stability Board, the body responsible for global coordination of bank regulation. But the latest plan has too many national carve-outs to do much for the FSB’s other aim of establishing a “level playing field.”

Nov 10, 2014 07:18 UTC

Obama and Xi compete to put the “I” in “APEC”

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By John Foley 

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

There is no “I” in “APEC”. Yet the leaders of China and the United States are both using the Beijing round of the Asia-Pacific Economic Co-operation this week to push their own agendas. Using the global stage to play domestic political games leaves room for dangerous mistakes.

Nov 7, 2014 20:29 UTC

Sears investors too giddy about slow-mo breakup

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By Kevin Allison

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

Sears investors are too giddy about the money-losing retailer’s slow-motion breakup. Shares in Eddie Lampert’s struggling store chain jumped 35 percent by early Friday afternoon on news it may create a real estate investment trust for many of its stores and lease them back. The move would raise significant cash, but shareholders, Lampert included, would finance the deal. And the prospects for the rump retailer remain pretty dim.

Nov 5, 2014 13:55 UTC

German carmakers tune up the basics of banking

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By Olaf Storbeck

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

The in-house finance operations of Volkswagen, Daimler and BMW are among Germany’s most prosperous financial institutions. Some rivals in auto finance, and some much larger banks, could learn from their example.

Nov 5, 2014 06:56 UTC

Bank of Japan bond vault may resemble a black hole

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By Andy Mukherjee

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

The Bank of Japan’s bond vault is starting to resemble a black hole: debt keeps falling in, never to escape. At least, that’s what investors want to believe. If their expectations change, the consequences for Japan’s bond market could be ugly.

Nov 4, 2014 16:03 UTC

Alibaba delivers chunky growth, but at a cost

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By John Foley

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

After pulling off the largest share offering in history, Alibaba has raised expectations through the roof. The Chinese e-commerce group came close to meeting them on Tuesday with quarterly results – its first as a public company – revealing a 54 percent annual growth in revenue. That may justify the 50 percent runup in its shares since September. But profitability has slipped, and the company’s explanation doesn’t offer much comfort.

COMMENT

Alibaba is the Chinese version of Amazon, and both are based on hope for a change to big profitability that hasn’t happened yet. Both are in essence investment Ponzi schemes. The CEOs at the top rake in a load of loot while the suckers at the bottom who hold out for the big hope and change get the goose egg. Neither are legitimate retail outlets, because you can’t really make up for selling below cost with volume, but you can get suckers to invest in this scheme that is ruining legitimate retail and putting people out of work. Hope and change anyone? Plop down your money…suckers.

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