Edition:
United Kingdom

John Foley

Breakingviews - Goldman Sachs’ 1MDB scar is already fading

24 Jul 2020

NEW YORK (Reuters Breakingviews) - Goldman Sachs faces two drubbings for its role in Malaysia’s 1MDB bribery scandal. The first one came on Friday, as the Wall Street firm pledged to pay the new Kuala Lumpur government $2.5 billion in cash. The second one, a reckoning with the U.S. Department of Justice, will now be easier to wind up. The bill for working with 1MDB is looking big enough to sting, but small enough to become just another item on Wall Street’s mile-long rap sheet.

Breakingviews - How U.S. made Covid-19 tests a profitable disaster

23 Jul 2020

NEW YORK (Reuters Breakingviews) - A U.S. patient with Covid-19 symptoms gets tested, then waits over a week for the results. The story is by now familiar and sometimes tragic. Yet the stock market is telling a different tale. Shares in companies like Quest Diagnostics and Laboratory Corporation of America are soaring. Quest’s Chief Financial Officer Mark Guinan said on Thursday that detecting Covid-19 brings “good margins.” In other words, testing has become a profitable disaster.

Breakingviews - Corporate boycotts expose an inconvenient truth

26 Jun 2020

NEW YORK (Reuters Breakingviews) - Boycotts can really work. Think of what happened to the Montgomery city transit system in Alabama in 1955, when Black passengers stopped taking buses for over a year to protest racial segregation. Or its British counterpart in Bristol eight years later, triggered by the local transport company’s refusal to hire Black workers. Both shared a similar recipe: large numbers of customers willing to make short-term sacrifices, and businesses that couldn’t function without the cash they provided.

Breakingviews - LGBTQ ruling adds to the great American workaround

15 Jun 2020

NEW YORK (Reuters Breakingviews) - The U.S. Supreme Court has once again joined in a game that can be thought of as the “Great American Workaround.” When politics fails, companies, consumers and others with influence get creative to keep the country functioning. A legal ruling that outlaws workplace discrimination due to sexual orientation or gender identity shows that judges know their roles, too.

Breakingviews - China can live with a less special Hong Kong

29 May 2020

NEW YORK (Reuters Breakingviews) - Hong Kong’s unique brand of autonomy has been a gift for China. The city has been a channel for the world’s most populous nation to get moderately richer without Beijing having to relinquish control over its economy and people. It is no longer essential to the mainland’s future prosperity, however. Stripping it of the right to be treated differently from the People’s Republic, as the United States has proposed, only shows how disposable that special status is.

Breakingviews - Warren Buffett may have met his match: the Fed

04 May 2020

NEW YORK (Reuters Breakingviews) - For Warren Buffett, there are inconveniences, and then there are actual challenges. Moving the annual shareholder meeting of his conglomerate Berkshire Hathaway online, and reporting a gargantuan loss because of stock market ructions are minor matters for a man with over 50 years of successful investing under his belt. The Federal Reserve’s ultra-loose monetary policy, though, could become a bigger problem.

Breakingviews - America could actually shirk its debts to China

04 May 2020

NEW YORK (Reuters Breakingviews) - With all the economic damage China wrought by covering up Covid-19’s spread, why should Uncle Sam pay back the $1.1 trillion it owes the People’s Republic? To do otherwise would cause market chaos, potentially trash the dollar’s status as a reserve currency and fail to slow the pandemic’s course. But President Donald Trump would find it surprisingly easy to effectively renege on those obligations. And as he sets out on a re-election campaign themed on blaming China for all his troubles, it’s only a matter of time before this bad idea gains wider traction.

BREAKINGVIEWS-GE boss’s options are to shine or shrivel

27 Apr 2020

NEW YORK, April 27 (Reuters Breakingviews) - General Electric boss Larry Culp has a choice: shine or shrivel. The U.S. conglomerate he runs has a mountain of debt to pay down, yet its main businesses are being pummeled by the Covid-19 pandemic. Culp could just hunker down and wait for the storm to pass, or take matters into his own hands.

Breakingviews - NFL draft is an anti-capitalist oddity to treasure

23 Apr 2020

NEW YORK (Reuters Breakingviews) - The NFL draft, a three-day bonanza in which U.S. professional football teams sign up rookie players, is as American as apple pie. It is also a total repudiation of the country’s most fiercely held principles about how markets should work. It should be treasured, and copied.

Breakingviews - Earnings forecasts are rosy and reliably wrong

13 Apr 2020

NEW YORK (Reuters Breakingviews) - Earnings will be grim, then get grimmer, then recover briskly. That’s the message from Wall Street analysts as companies prepare to disclose their first-quarter financial performances, with lenders JPMorgan and Wells Fargo due to report on Tuesday. Based on their track record, the stock-pickers are likely to be wrong.

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