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Jun 27, 2011
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Undead Tepco echoes U.S. housing zombies

Tokyo Electric Power is looking like an undead relative of America’s housing zombies. Shareholders of the Japanese utility meeting on Tuesday have seen the value of their holdings tumble 85 percent since the March earthquake caught them unawares, similar to the way the U.S. housing crunch eviscerated Fannie Mae  stock. Like those companies, it’s questionable whether Tepco’s next chapter involves public shareholders at all.

Tepco’s mess echoes that of Fannie and Freddie in significant ways. The utility — valued at 3.4 trillion yen ($42 billion) in early March, but now worth less than a sixth of that — is a central part of the industrial infrastructure underpinning Japan’s economy. The two U.S. mortgage giants boosted, and still support, America’s huge housing sector — though their shares, once worth well over $100 billion combined, are now essentially worthless.

Jun 23, 2011

How to make Greece more like GM than Lehman

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

By Rob Cox and Richard Beales

NEW YORK (Reuters Breakingviews) – Investors fixated on the possibility that a Greek default would deliver a shock akin to the Lehman Brothers collapse in 2008 may want to consider another analogy. A restructuring of Greece’s obligations could more closely resemble the orderly wind-down of General Motors. The U.S. carmaker’s bankruptcy filing didn’t spark the market or economic Armageddon that followed Lehman’s demise.

Jun 9, 2011
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U.S. default deniers could get what they wish for

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

Fitch Ratings is the latest credit watchdog to warn about the consequences of a missed interest payment by the United States. Yet there’s a faction in Washington that seems increasingly inclined to push the country’s debt fight that far. Maybe only the ensuing mess could persuade the brinkmen to back off.

May 27, 2011
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Microsoft’s Ballmer hardly the worst veteran CEO

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

Microsoft has missed too many opportunities under Steve Ballmer’s stewardship. It’s a fair criticism reignited this week by hedge fund boss David Einhorn’s call for the software giant’s chief executive to step down. But that alone doesn’t necessarily mean Ballmer will, or should, be in line for the chop. Using one significant measure, other long-time U.S. bosses — including Jeff Immelt at General Electric — have fared worse.

May 19, 2011
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Even LinkedIn’s bankers underestimate the hype

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

By Richard Beales

It looks as if even LinkedIn’s bankers underestimated the hype. Based on the doubling of the stock on its debut, underwriters left as much money on the table as they harvested for the professional social network and its selling shareholders. But if the hype doesn’t wear off soon, the scarcity value of social network investments surely will.

May 10, 2011
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Microsoft’s $8.5 bln Skype price is in the cloud

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

Microsoft has only recently embraced the Internet cloud. But from shareholders’ perspective, that’s certainly where its $8.5 billion deal to buy Skype belongs. In theory, there are potential advantages. In practice, Microsoft’s poor M&A track record and the high price mean the transaction is unlikely ever to connect for investors.

May 5, 2011
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Flagging bank reform could take heart from Nigeria

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

Nigeria isn’t the obvious source of sound financial advice. But as part of a post-crisis cleanup, the central bank of Africa’s most populous nation fired the bosses of flailing financial firms. If only Western officials would talk and act so plainly, financial reformers might take heart.

Apr 8, 2011
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Venture capitalists could be stifled by SEC share sale review

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

Facebook could wind up changing the way people invest as much as the way they interact. A fundraising round led by Goldman Sachs for the social networking giant earlier this year has put the rules surrounding the way private companies raise capital into sharp focus. One of them requires any firm with 500 or more shareholders to disclose information as though it’s publicly traded. The Securities and Exchange Commission is now reviewing the issue. It could be bad news for venture capital firms and investment banks.

Mar 10, 2011
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Regulatory arbitrage could go far beyond Basel III

Regulatory arbitrage is the latest buzz-phrase. The financial industry’s parlor game is guessing whether Swiss, British or U.S. banks will end up with the toughest rules on capital and liquidity. But as reforms play out around the world, for instance in derivatives, there’s also the possibility that entire business lines will migrate — raising a whole new set of systemic risks.

Headlines often focus on which country’s banks will win or lose. Here, one big issue is the Basel III rules boosting bank capital, especially the extra cushion national regulators may force the biggest banks to hold. Some in Europe, including this week Oswald Gruebel, chief executive of UBS, worry that the Americans, having dragged their feet in adopting Basel II, will crawl at snail’s pace this time around, too. Conversely Sheila Bair, chairman of the U.S. Federal Deposit Insurance Corp, seems to think it’s in parts of Europe that the political will is questionable.

Feb 18, 2011
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Hedgie mogul Paulson teases out hawkish Greenspan

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

Alan Greenspan has turned hawkish. The former Federal Reserve chairman, quizzed by John Paulson this week in a packed New York University hall now bearing the billionaire hedge fund manager’s name, admitted to gloom over President Barack Obama’s latest budget and concern that the government may be strangling the economy. It’s a pity he didn’t worry about the opposite effect while running the Fed.

    • About Richard

      "Richard Beales joined Breakingviews.com in 2007 from the Financial Times, where he was US markets editor and a Lex columnist. Prior to the FT, he spent more than 10 years as an investment banker, based largely in Hong Kong. He was a director in Citigroup’s mergers team, and before that head of Schroders’ regional project finance group. He has also lived briefly in Sydney, Australia, and began his working life in London at Mars & Co, a management consultancy, in 1989. Richard holds a masters in business journalism from New York University and a degree in biochemistry from St John’s ..."
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