Olaf's Feed
Nov 19, 2013
via Breakingviews

EasyJet’s growth will get harder to replicate

Photo

By Olaf Storbeck

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

EasyJet is turning improved customer service into bundles of cash. The numbers are especially impressive in the context of the millions being lost by many of Europe’s legacy airlines on short-haul flights. It also makes a stark contrast with the low-cost rival Ryanair, which has issued two profit warnings since September.

Nov 5, 2013
via Breakingviews

BMW profit miss just a bump on safe road

Photo

By Olaf Storbeck

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

BMW shares tanked more than 3.5 percent on Nov. 5 after the carmaker released third-quarter earnings that fell slightly short of expectations. Investors should pause and relax. Even though earnings before interest and taxes are down 6 percent year-on-year, the results actually reflect the company’s strengths more than its weaknesses. Profit is down for a good reason.

Nov 4, 2013
via Breakingviews

Ryanair shares still expensive despite rapid descent

Photo

By Olaf Storbeck

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

Ryanair is well known for the cheapness of its flights. But its shares are expensive and that remains true even after a 12 percent dive on Nov. 4.

Oct 30, 2013
via Breakingviews

Porsche performance disguises VW’s weak spots

Photo

By Olaf Storbeck

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

Volkswagen is doing well. It increased operating profit by 20 percent in the third quarter. It reiterated its guidance for the full year. Cheerful investors pushed Volkswagen’s shares up by 4.5 percent on Oct. 30. But Europe’s largest carmaker cannot yet claim to be a high-performance vehicle.

Oct 16, 2013
via Breakingviews

Merkel can build coalition with minor left turn

Photo

By Olaf Storbeck

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

Germany’s Green party has abandoned coalition talks with Angela Merkel, so the German chancellor is back to square one – and to the most credible option from the beginning: an alliance with the Social Democrats of the SPD party. Two-thirds of Germans favour such a “grand coalition”, which would control more than 80 percent of the seats in the Bundestag, the lower house of parliament.

Oct 14, 2013
via Breakingviews

Split Nobel prize shows bubbles are worth watching

Photo

By Olaf Storbeck and Viktoria Dendrinou

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Economics is the only field in which two people can share a Nobel prize for saying opposing things. This old joke, provoked by the 1974 prize that went to ideological antagonists Friedrich August von Hayek and Gunnar Myrdal, is proving relevant again. Eugene Fama, Lars Peter Hansen and Robert Shiller all worked on financial markets efficiency and drew separate, if not opposing, conclusions. This is a welcome reminder that the dismal science has few absolute truths to offer – mostly questions to explore.

Sep 23, 2013
via Breakingviews

Merkel’s triumph maintains Europe’s muddle-through

Photo

By Olaf Storbeck

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

The German election has brought big shifts at home, but it will not shake up the country’s approach to European issues. Angela Merkel’s next government will look different to the last. However, it will be just as focused on structural reforms and fiscal discipline in the periphery. Europe’s muddle-through is not going away.

Sep 20, 2013
via Breakingviews

Review: Merkel’s hidden European agenda

Photo

By Olaf Storbeck

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

Angela Merkel is usually described as an utterly pragmatic politician, lacking either strong convictions or a grand political vision. Stefan Kornelius, foreign editor of Germany’s Sueddeutsche Zeitung, takes issue with this view. In his biography of the German chancellor, published in English on the eve of the Sept. 22 German elections, he claims that Merkel has a bold blueprint of Europe’s future. She just stays mum about it in public.

Sep 16, 2013
via Breakingviews

Memo to Fiat on Chrysler listing: Drop it!

Photo

Fiat’s Chief Executive Sergio Marchionne passes for a tough and canny negotiator. These skills have brought him control over 58.5 percent of Chrysler at a bargain basement price of less than $2 billion. However, in his attempt to buy the remaining 41.5 percent currently owned by VEBA, a healthcare trust affiliated with the United Auto Workers, Marchionne may over-egg the pudding.

Fiat and VEBA have been embroiled for more than a year in a spat about Chrysler’s appropriate valuation. The tussle, which already involves a court case, may lead to the listing of a 16.6 percent Chrysler stake in the coming months.

Sep 10, 2013
via Breakingviews

Beware the Italian risk in German elections

Photo

By Olaf Storbeck

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

Germany’s parliamentary elections are expected to bring continuity and stability. In fact, they may well usher in a period of paralysis and uncertainty. German politics turning Italian is a possible scenario. Europe’s biggest economy might be stuck in protracted and difficult coalition negotiations – and it could be months before there is a working government in Berlin.