Apr 17, 2015 18:26 UTC

Bloomberg outage highlights another bank weakness

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

Bloomberg’s global outage on Friday highlights yet another banking sector weakness. The financial data network’s downtime may have been a problem only for the richest fraction of the top 1 percent. But it prompted enough worry for the Bank of England to remind banks that it’s there as a lender of last resort, raising questions about traders’ heavy reliance on a few fallible systems.

Apr 17, 2015 18:23 UTC

Blackstone brandishes its long-term bona fides

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

It makes sense for a firm that thinks in blocks of seven to 10 years to take about eight before hitting its stride. The listed units of Blackstone, the buyout shop run by Stephen Schwarzman, finally trade noticeably above their 2007 initial public offering price. Owners of the equity, however, may yet prove more fickle than investors in Blackstone’s funds.

Apr 16, 2015 18:58 UTC

Goldman’s improved returns come at higher risk

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

Goldman Sachs is replacing one earnings problem with another. The bank left behind years of ho-hum profit with an estimate-beating $2.75 billion in the first quarter. That equates to an annualized return on equity of 14.7 percent, which is arguably at the upper end of what a player like Goldman can expect to earn. The firm kept costs down, but trading accounted for much of the boost. That means the improved returns come at a higher risk.

Apr 15, 2015 17:25 UTC

Agnellis pay up to claim mini-Buffett status

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Elkann, chairman of Fiat Chrysler Automobiles, speaks with the media before ringing the closing bell to celebrate the company's listing at the New York Stock Exchange

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

The Agnellis are paying up to do an impression of Warren Buffett. The Italian family’s holding company Exor is offering $6.4 billion to buy PartnerRe out of a merger with fellow Bermudan insurer Axis Capital Holdings. If the Fiat owners can pull it off, they could use Berkshire Hathaway-style stable cash flows to fund further acquisitions. They’re even using Buffett’s adviser of choice, Byron Trott, on the deal.

Apr 15, 2015 16:54 UTC

EU’s competition sprawl as worrying as Google’s

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EU Competition Commissioner Vestager addresses a news conference in Brussels

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

The European Union’s competition sprawl is as worrying as Google’s. Trustbusters on Wednesday accused the $360 billion web giant of favoring its own shopping search results – and broadened the case to include its Android mobile operating system. Investigations and appeals may take a decade. Brussels is going down the same treacherous path as ever-expanding Google.

Apr 13, 2015 17:15 UTC

Wall Street bids slow farewell to GE fee darling

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

Wall Street probably will have to bid farewell to its fee darling, General Electric. The U.S. aviation-to-healthcare conglomerate has been the best corporate client for investment bankers over the past 15 years, spending some $5.1 billion for advice and assistance. Shrinking GE Capital will keep M&A practitioners busy for a while. Borrowing by that operation, however, has been the biggest moneymaker.

Apr 10, 2015 19:48 UTC

Immelt’s SIFI escape route is tough to follow

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

Jeffrey Immelt has plotted an escape for GE Capital from onerous regulation. The General Electric chief executive is offloading most of the conglomerate’s finance unit, which should allow it to ditch the tag imposed by watchdogs of being a systemically important financial institution, or SIFI. Big U.S. banks might fancy similar liberty, but they are more tightly hemmed in.

Apr 10, 2015 19:26 UTC

GE finally exorcises Jack Welch’s financial demons

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

At long last, General Electric is on its way to exorcising the financial demons of Jack Welch. It took 14 years, a near-death experience and a flat-lined stock price, but Welch’s successor Jeff Immelt is now getting out of the banking business and returning GE to its industrial roots. It may have taken too long, but the timing works now on many levels.

Apr 9, 2015 16:59 UTC

Investment banks within reach of adequate returns

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

Investor redemption may be nearing for investment banks. Most lenders’ wholesale units have destroyed value for seven years. Some may have done so again in the first quarter of this year. JPMorgan kicks off results season next week and Chief Executive Jamie Dimon said in his April 8 annual letter to shareholders that returns could be attractive in the long run, if not the short term.

Apr 7, 2015 07:22 UTC

Tencent’s discount to Facebook harder to justify

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

Tencent’s discount to Facebook is getting harder to justify. The Chinese social media giant brought in roughly the same amount of revenue as its U.S. counterpart last year and was more profitable. Yet it trades at a lower multiple of earnings. The valuation gap warrants a rethink.