Breakingviews

 
The financial network’s global downtime may have been a problem only for the very rich – and a boon for City pubs. But it prompted the Bank of England to remind banks it’s there as a lender of last resort, raising questions about traders’ heavy reliance on a few fallible systems.

Blackstone brandishes its long-term bona fides

Nearly eight years after going public, the buyout shop is taking a victory lap. Its shares finally trade noticeably above the IPO price, and Q1 results suggest Blackstone’s model is working. Even so, owners of the firm’s equity may prove more fickle than investors in its funds.

Review: Some of what is wrong with economics

Meghnad Desai mocks his fellow economists for not seeing trouble ahead during the early 2000s credit bubble. The retired professor wisely calls for more study of history and a less narrow perspective, but he is still too conventional. He ignores the crucial financial cycle.

Tax shockers ramp up India investor risk premium

The country wants $6.4 billion in what it says are unpaid taxes from foreign funds. Private equity firms could be the next target. The frequent adjustments to tax policy raise a red flag. Investors will have to demand higher returns to insure against future fickleness.

Goldman's improved returns come at higher risk

The bank left behind years of ho-hum profit with an estimate-beating $2.75 bln in the first quarter. The firm kept costs down, but trading accounted for much of the boost. That raises the issue of whether such earnings are sustainable – and how shareholders should value them.

Bernanke musters maximum revolving-door dignity

The Fed boss turned blogger will advise $25 bln hedge fund Citadel. Critics may object, and the move won’t help the U.S. central bank’s image of being above the fray. But former public servants deserve to work for pay. At least Bernanke waited over a year and didn’t join a bank.

Europe’s credit boom locks in mediocre returns

Investors are throwing money at European companies. Carrefour and Danone paid little over 1 pct a year to borrow for a decade; Novartis got 20-year funds at similar levels. A Breakingviews calculator shows how bond buyers’ generosity could backfire.