Edition:
International

Gina Chon

Fed plan for U.S. default would be step into abyss

Sep 22 2021

WASHINGTON (Reuters Breakingviews) - The Federal Reserve could do without the latest arguments in Washington about the U.S. government’s borrowing limit. Failure to agree could leave Uncle Sam unable to pay its bills. If lawmakers allow any debt to go unpaid, the central bank would be in a seriously tough spot.

U.S. deficit hawks in exile 20 years after 9/11

Sep 10 2021

WASHINGTON (Reuters Breakingviews) - U.S. deficit hawks have become a relic since Sept. 11, 2001. Over the last 20 years, federal debt held by the public grew by nearly seven times to more than $22 trillion. Stimulus spending during several crises was needed, but financial discipline didn’t follow. A race to please voters ensures that trend will continue.

Today's Theranos would have gone public via a SPAC

Sep 08 2021

WASHINGTON (Reuters Breakingviews) - At least the damage at Theranos was confined to professional investors. Elizabeth Holmes’ blood-testing outfit touted novel technology and big future sales before its collapse. Holmes, whose trial starts on Wednesday, blurred the lines between marketing and fraud, and Theranos' multibillion-dollar private-market valuation dwindled to nothing. Fast forward and Trevor Milton, founder of electric-truck firm Nikola, is facing similar charges. Nikola, though, has publicly traded shares.

Crypto poses systemic risks that need swift remedy

Sep 07 2021

WASHINGTON (Reuters Breakingviews) - Cryptocurrency businesses are getting big enough to have their problems spill over into the broader financial system. Yet U.S. regulators aren’t keeping up. U.S. Securities and Exchange Commission Chair Gary Gensler told the Financial Times on Wednesday that digital asset trading platforms are now a $2 trillion industry while some coins, like Tether, are backed by fiat currencies. Regulators need to get on the horn reigning in assets.

Robinhood is vulnerable to disruption

Aug 31 2021

WASHINGTON (Reuters Breakingviews) - Before Robinhood Markets came along, the retail investor complex controlled by firms like Fidelity, Wellington, Charles Schwab and E*Trade was sitting pretty. But the online trading platform run by Vlad Tenev has upended that, and like any good disruptor, made its fair share of enemies along the way. That’s come in the form of mountains of lawsuits, regulatory scrutiny, and distracting Washington gadflies that promise to reshape Robinhood. The backlash may be enough to leave the disruptor vulnerable to some disruption of its own.

Soothing Zoom filter will suit Powell speech

Aug 26 2021

WASHINGTON (Reuters Breakingviews) - A calming prairie landscape would be a good Zoom backdrop for Jerome Powell’s virtual speech on Friday. The annual Federal Reserve confab, once again forced online from its traditional Jackson Hole, Wyoming, location, is usually a place to make news, as the U.S. central bank chair did in 2020. Now amid a Covid-19 resurgence, it's an occasion to avoid surprises.

Riches await BlackRock in demystification of DeFi

Aug 24 2021

WASHINGTON (Reuters Breakingviews) - The new buzz in cryptocurrencies could use some old-school help. Trading using decentralized finance, or non-traditional platforms for cryptocurrencies known as DeFi, has exploded 10-fold from 2020 to $150 billion in total value at its peak this year. But reducing hacks, as evidenced by some recent whoppers, are just one way that traditional financial firms like BlackRock can reshape the market.

Companies offering child care get grown-up payback

Aug 20 2021

WASHINGTON (Reuters Breakingviews) - It’s an opportune time for U.S. companies to think big about employees’ little ones. The pandemic hit women particularly hard, with about 2.4 million of them dropping out of the labor force, according to the Pew Research Center. At the same time, businesses are scrambling for talent and rethinking office space. Providing child care at workplaces is a response that fits the bill, and Washington can help. Organizations like clothing company Patagonia have found the return justifies the cost over time.

Time to demolish old ideas about infrastructure

Aug 10 2021

WASHINGTON (Reuters Breakingviews) - A once-in-a-generation vote on U.S. infrastructure means it might finally be time to stop talking about infrastructure – or think more creatively about what the word means.

Square backs a truck onto Wall Street’s front yard

Aug 02 2021

WASHINGTON (Reuters Breakingviews) - Square is reversing into Wall Street’s front yard. The $29 billion purchase of buy-now-pay-later firm Afterpay announced on Sunday makes Jack Dorsey’s financial technology outfit look more like a bank. Only unlike JPMorgan, Citigroup or Bank of America, Square comes without historical baggage, dense regulation and a lengthy rap sheet. The big lenders can’t help but take this threat seriously.

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