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Nov 1, 2013
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Review: Dissecting America’s manufacturing retreat

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By Kevin Allison

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

Those who believe that making physical things is a superior vocation will find themselves nodding through much of Vaclav Smil’s “Made in the USA”. Smil, a prolific Canadian academic, challenges the widespread view that in mature economies a shrinking factory footprint is inevitable – or even desirable. He blames short-termism and bad policy choices, not just changing economic tides, for the retreat of U.S. manufacturing. The book’s call for smarter industrial policy is appealing, but Smil comes too close to advocating protectionism.

Oct 31, 2013
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PwC-Booz merger adds up to a major culture clash

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By Kevin Allison

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

PricewaterhouseCoopers’ proposed takeover of strategy firm Booz & Co would be the most prominent example yet of a Big Four auditor bulking up on consulting. But restrictions enacted after the massive Enron scandal of 2001 mean advisory-services staffers could end up brawling with accountants over clients. While mid-sized Booz may feel pressure to compete with rivals like Boston Consulting Group and McKinsey, the proposed deal with PwC risks a huge culture clash.

Sep 11, 2013
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Big Oil’s growth addiction is counterproductive

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By Kevin Allison

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

Big Oil has a growth addiction. The industry pours billions of dollars into projects with marginal returns to keep production rising. But the oil majors’ huge size means even huge new fields barely move the needle. Petroleum bosses would do better to follow Royal Dutch Shell, and ditch output targets. The best option may be to plan for shrinkage.

Sep 4, 2013
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Commodity decoupling hints at return to old normal

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By Kevin Allison

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

Commodity markets are rediscovering a semblance of normality. After a sustained period of tight correlation, the prices of raw materials have diverged from equities. Different commodities are charting different paths too. If the trends hold, it suggests that familiar forces of supply and demand are regaining the upper hand after years of crisis-driven trading.

Aug 30, 2013
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Belarus-Russia spat clears way for potash plunge

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By Kevin Allison

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

Before the arrest of a top Russian fertiliser executive in Belarus this week, there was a slim chance that two of the world’s biggest potash producers might revive their alliance setting the prices of the soil nutrient. The ensuing diplomatic bust-up between Minsk and Moscow now makes reconciliation unlikely. Farmers and consumers will benefit from lower potash prices.

Aug 20, 2013
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Big miners adjust, slowly, to austere times

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By Kevin Allison

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

Glencore and BHP Billiton sit on opposite sides of the big mining camp. The former is an aggressive trader and opportunistic acquirer of resources, now greatly enlarged after the $44 billion acquisition of Xstrata in May. The latter has spent years cautiously assembling a portfolio of low-cost, large-scale mines. Financial results on Aug. 20 showed both groups girding themselves for a long, slow period for the industry.

Aug 15, 2013
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Markets are poor judge of Egyptian violence

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By Kevin Allison

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

Investors responded to the violent crackdown in Egypt by bidding up the price of oil and of insuring the country’s sovereign debt. The reaction is understandable, but not insightful. Political risk is just too difficult to price.

Aug 15, 2013

Metals warehouse mess: a guide for the perplexed

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

By Kevin Allison

LONDON, Aug 15 (Reuters Breakingviews) – Drab sheds full of
aluminium ingots aren’t a natural place to go looking for a
financial conspiracy. But industrial users say the warehouses -
or more exactly the way they are used by big traders which own
them – have artificially inflated prices for the metal. A flurry
of class action lawsuits have accused Goldman Sachs (GS.N: Quote, Profile, Research),
JPMorgan (JPM.N: Quote, Profile, Research), and Glencore (GLEN.L: Quote, Profile, Research) of manipulating prices
by encouraging big stockpiles and long wait times.

Aug 9, 2013
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Angry aluminium users should sue the Fed as well

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By Kevin Allison

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

Commodity traders’ warehouse chickens may be coming home to roost. A bevy of class-action lawsuits allege that JPMorgan, Glencore Xstrata, and Goldman Sachs conspired with the London Metal Exchange to pump up the price of aluminium by trapping it inside LME-approved warehouses. The users’ ire is understandable, even if the metal is about 10 percent cheaper than it was when big commodity traders entered the metal storage business in 2010. But warehouse owners don’t deserve all the anger.

Aug 1, 2013
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Shell faces reality: it’s not about the barrels

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By Kevin Allison

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

Disappointing results at Royal Dutch Shell partly reflect an outdated way of thinking. Oil majors have long obsessed simultaneously about reserve replacement, production growth and profit. The Anglo-Dutch energy giant’s decision to ditch its production goals shows it’s wising up.