NEW YORK (Reuters Breakingviews) - The bond market may be throwing investors a curve ball. The difference between two-year and 10-year U.S. Treasury rates is the smallest since before the financial crisis. The possibility of an inversion, when long-term yields fall below short-term rates, has raised recession fears. Yet it’s a flawed indicator.
LONDON (Reuters Breakingviews) - UBS has reaffirmed its familiar exalted position in the European bank pecking order. The Swiss lender’s investment bank earned a 24 percent return on equity in the three months to end-March. One driver of its status is management’s decision back in 2012 to cut fixed income trading, which came up trumps. The other is the haplessness of rivals.
LONDON (Reuters Breakingviews) - Arsène Wenger’s career is instructive in many ways. The studious Frenchman helped revolutionise British soccer following his arrival as Arsenal manager in 1996. His focus on nutrition, precise training and mental discipline produced a golden age of victories for the North London club. As Wenger hangs up his boots after 22 years in charge, however, the main takeaway for corporate leaders is this: don’t hang around too long.
HONG KONG (Reuters Breakingviews) - Renowned social scientist Robert Putnam was so horrified by his research results that he almost binned them. His vast, meticulous survey, which ended in 2000, found that Americans living in ethnically diverse communities became less trustful than their peers in homogenous neighbourhoods. They not only became sceptical of people from other races, but of their own ethnic group too. Placed in proximity with those from different backgrounds, humans did not become
TOKYO (Reuters Breakingviews) - Japan would take a turn for the worse without its chief reformer. Scandals have badly hurt Shinzo Abe; public support for the prime minister since 2012 has fallen to a record low. It looks increasingly likely that he could be forced out of his position. That would weaken an ambitious overhaul of the world's third largest economy.
NEW YORK (Reuters Breakingviews) - Upstarts like LendingClub and SoFi need to find ways to keep customers returning – just as traditional banks are fighting back and Goldman Sachs’ digital push into consumer lending takes off. Also: how Malaysia’s prime minister may be re-elected despite the 1MDB scandal.
LONDON (Reuters Breakingviews) - Buying stuff is not the standard prescription for companies under pressure from activist investors. Procter & Gamble’s 3.4 billion euro splurge on Merck KGaA’s consumer unit, the maker of Seven Seas vitamin pills, will need a booster shot to earn the support of newly appointed board member Nelson Peltz.
DALLAS, HONG KONG (Reuters Breakingviews) - Wynn Resorts is tossing three women into an escalating boardroom brawl, adding Betsy Atkins, Dee Dee Myers and Wendy Webb as independent directors. The $21 billion casino giant is trying to move beyond a sex scandal involving founder Steve Wynn. But his ex-wife Elaine Wynn wants a full overhaul. With a battle brewing, the new additions had best come ready to rumble.
NEW YORK (Reuters Breakingviews) - Raul Castro's scheduled handover of Cuba's presidency this week is an effort to prolong the communist revolution he built with his late brother Fidel. Trying to modernize the creaking, incompetent bureaucracy could also destroy their lives' work. Yet with ally Venezuela getting less able to provide cheap oil, economic reform can't wait long.
LONDON (Reuters Breakingviews) - China may yet become a world leader in patent protection. That would be the natural result of becoming a world leader in many technologies. But Beijing’s approach to intellectual property may become part of a larger change in the world’s approach to the control of knowledge.
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