Breakingviews

Dixon: Vote to quit EU could tip UK into recession

April 18, 2016

A victory for Brexit will trigger political turmoil and acrimonious divorce talks. Investment will grind to a halt as firms wait for the fog to clear. That could cause a recession.

Bank CoCos deserve all the brickbats

March 18, 2016

Deutsche Bank’s John Cryan thinks new hybrid bank bonds are flawed. Market turmoil is forcing regulators to clarify when baffled investors get coupons. Yet unless there is also standardisation of when they convert from debt to equity, CoCos will always be prone to death spirals.

Peugeot could rev revival by scrapping luxury line

February 24, 2016

The French group has become one of Europe’s most profitable mass-market carmakers under boss Carlos Tavares, with a 5 pct operating margin in 2015. But a costly plan for a new premium brand risks spoiling the performance. Junking the idea would speed an already healthy recovery.

Chinese banks start new year with old bad habits

February 16, 2016

Lenders dished out $385 bln in new loans in January as the authorities pumped cash into the slowing economy. Fresh credit can stimulate spending and help companies repay overseas borrowings. But adding to the overall debt pile only makes the eventual cleanup even more painful.

Unruly markets could derail Abenomics

February 12, 2016

A weak yen and buoyant stocks were key to Japanese Prime Minister Shinzo Abe’s fight against deflation. A flight from risk has reversed those gains and overwhelmed the Bank of Japan’s surprise shift to negative interest rates. The turmoil threatens Abe’s whole economic project.

Darkening German economy could be Merkel’s nemesis

February 9, 2016

Falling industrial production and weak exports suggest emerging markets may be chipping away at Germany’s economic miracle. Chancellor Angela Merkel has ridden out a refugee crisis. But if economic weakness is allowed to reach labour markets, her political fate could be sealed.

China index: Xi’s annus horribilis

February 1, 2016

Breakingviews’ Tea Leaf Index may have ended the year on a modest high, but a look back over 2015 shows China’s economy moving slowly. Sagging steel production, exports and rail freight contributed to the lowest 12-month average since President Xi Jinping first took office.

Ireland has limited shelter against Brexit storm

January 26, 2016

The Irish state is right to fret about a UK exit from the EU. It could knock 20 pct off trade between the two countries and hit Ireland’s economic recovery. Rebranding Dublin as a financial hub would help – but requires Germany to beef up the euro zone’s half-done banking union.

Davos presents human display of volatility

By Rob Cox
January 22, 2016

As markets swing up and down, so do the fortunes of those parading down the Promenade at the World Economic Forum. Some of last year’s lords of the Alpine dance, like Anshu Jain or Andre Esteves, have exited, making room for debutantes. For some, this will be their last Davos.

VW plea from Brussels confuses cause and effect

January 20, 2016

EU officials are urging the German carmaker to compensate Europeans like U.S drivers. VW’s two-tier scandal response, however, simply reflects the weaker emissions regime put in place by diesel-loving policymakers. Stricter standards will warrant tougher enforcement – next time.