Gina Chon
ReutersBreakingviews
Washington, DC, United States
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Past articles by Gina:
Investors pick old Walmarts over new Amazons – Breakingviews
The usually steady U.S. retailer cut its profit outlook after being hammered by inflation. Its shares fell 9%, but Amazon, which has similar problems, has done worse. Other old-versus-new pairs are following a similar path. In some cases punishment is being meted out unfairly. → Read More
Twitter brinkmanship favors Musk exit for a price – Breakingviews
The Tesla boss is worried about well-known erroneous user figures. The company appears to be preparing a defense if it were to stay independent. Both parties need to act like they want a deal, and Twitter needs it more. But Musk can probably convince Twitter to call off the ball. → Read More
Fed has a spreading inflation problem – Breakingviews
U.S. consumer prices rose at an annual rate of 8.3% in April. While that was lower than the four-decade high seen a month earlier, food costs leapt by the most since 1981 and shelter grew more expensive. Broadening price pressures mean there’s no respite for Chair Jerome Powell. → Read More
Twitter board is dangling over hot water – Breakingviews
The social media company’s directors did not conduct an auction to seek rival offers to Elon Musk’s $44 bln bid, and some have overlapping interests. That leaves them open to accusations of conflicts of interest. Whether the deal goes ahead or not, the board looks exposed. → Read More
Post Roe-leak, it’s not the economy, stupid – Breakingviews
Republicans were in a sweet spot ahead of November’s U.S. elections. Joe Biden’s early presidency has brought inflation, a failed attempt to tax the rich, and little help for the middle class. A leaked Supreme Court opinion on abortion, though, changes the calculus. → Read More
Fed jumps into field of financial land mines – Breakingviews
The American central bank has little choice but to hike interest rates and cut its balance sheet to fight inflation. But Chair Jay Powell’s moves make the $24 trln U.S. Treasury market more vulnerable to shocks. Bigger future increases could even tip the U.S. into recession. → Read More
Elon Musk probably won’t buy Twitter – Breakingviews
Sure, the Tesla boss will be on the hook for at least $1 bln if he walks away from the $44 bln deal. But shares in his electric-vehicle firm could rise by more than he loses. The risks to Musk’s China business, regulatory pushback, and Musk’s general flightiness further lengthen the odds. → Read More
Dollar is worst reserve choice except for the rest – Breakingviews
Sanctions on Russia raise questions about the U.S. currency's reliability for foreign governments. But options like the euro are also tied to restrictions. And the Chinese yuan lacks convertibility, rule of law and safe-haven appeal. Reports of the dollar's demise are premature. → Read More
Big Tech’s growth story faces a one-two punch – Breakingviews
Inflation means advertisers and subscription clients have less money to spend at places like Google and Microsoft. Meanwhile, a tight labor market makes hiring more difficult and expensive. Without new business to sell or people to sell it, tech companies lose their shine. → Read More
Russia risk is ghost of banks’ sanctions future – Breakingviews
In the hunt for oligarchs and blacklisted firms, U.S. authorities are treating lenders as allies rather than adversaries. Prospective prosecutors may take a different view. Banks with past legal troubles might prefer to shun Russian business. Still, there are lots of grey areas. → Read More
Biden may pay big price for surging grocery bills – Breakingviews
The U.S. president is trying to mitigate the pain of soaring gas costs. But he has fewer tools to address dearer food. Grocery prices rose 10% in March from a year ago, with meat jumping 15% and milk up 13%. That might add up to an expensive midterm loss for Democrats. → Read More
Ex-Goldman conviction is partial justice for 1MDB – Breakingviews
A U.S. jury found Roger Ng guilty of corruption linked to the Malaysian fund. His ex-boss who helped organize the scheme may get a lesser penalty for cooperating with prosecutors; the Wall Street firm got off with a $5 bln fine. It’s an imperfect deterrent for future miscreants. → Read More
Telegram’s Russia performance is a one-man show – Breakingviews
Pavel Durov’s messaging app has resisted President Vladimir Putin’s edicts and survived them. The app’s popularity has surged, setting it up to double its $30 bln valuation. Yet for skeptics of transparency at Twitter or WhatsApp, Telegram arguably presents even starker risks. → Read More
Fed’s 5-year balance sheet plan may be interrupted – Breakingviews
The U.S. central bank aims to reduce its $9 trln of assets by $95 bln a month. At that pace, even already fat pre-pandemic levels might not be reached until early 2027. That's a long time in economics, and in politics. Like the last attempt to slim down, it risks being thwarted. → Read More
Strong U.S. jobs are blessing and curse for Fed – Breakingviews
The unemployment rate fell to 3.6%, near pre-pandemic levels. Dining out is back, and even travel is returning to normal. That all gives the central bank room to fight inflation. But employers are still short of workers, and continued robust hiring may make price pressures worse. → Read More
China-U.S. ties will degrade regardless of Russia – Breakingviews
Beijing and D.C. have squabbled over the invasion of Ukraine. But longer-running disputes are still brewing. That could reignite a trade war with more tariffs, while screening U.S. investments in China would choke off access to that market. The economic decoupling may get worse. → Read More
Russia’s gold reserves buy Putin a few options – Breakingviews
The Russian leader has a $140 bln stash of the yellow metal. Using it, however, can require shell companies and middlemen. Putin’s regime may have some experience helping Venezuela turn bullion into euros. Though U.S. prosecutors will give chase, the gold trail is hard to follow. → Read More
Joe Biden nods at fiscal discipline – Breakingviews
The U.S. president is pitching a 2023 budget that would make America's deficit about $1 trln smaller than it would otherwise become over a decade. One proposal is a billionaires’ tax. Though that's a tough political sell, the package is a modest tilt toward a healthier ledger. → Read More
Markets may do Powell’s job for him – Breakingviews
The U.S. central bank chair is speaking aggressively about rate hikes. The Eurodollar yield curve implies it will lead to swift increases that will then be cut. Investors and companies respond to expectations by trimming spending and investing. That makes the Fed’s task easier. → Read More
Hot war thaws formerly frozen trade routes – Breakingviews
Algeria shunned imports of French wheat in a diplomatic row. That has changed because of shortages after Russia invaded Ukraine. The U.S. has even talked to vilified Venezuela. Amid political hype about self-reliance, globalization still matters – even if it requires compromise. → Read More