The strength of downward price momentum has surprised most experts. Central bankers keep trying to fight the tide, as if in denial. It would be better to accept that the demographic forces which create disinflation are too strong to turn. Mild deflation isn’t so bad anyway.
Global disinflation is creating room for the Reserve Bank to follow its counterpart in Beijing and cut borrowing costs. Unlike the People’s Republic, India doesn’t need to worry about triggering overinvestment. Monetary easing now would have few risks, and several benefits.
Like the anti-establishment wing of the GOP, the Independent Community Bankers of America has emerged as a highly vocal opponent of all things Wall Street, including a Lazard banker’s nomination for a Treasury role. These are the plaintive cries of a dying breed of banker.
The spectre of populism is haunting Europe. While the established political order is largely to blame, the cure of populism is worse than the disease. The best way of combatting the phenomenon is to fix the economy and put integrity centre stage in politics.
Failings in the foreign exchange markets should be surprising, and not only because cheating was hard. But when process-driven clients met the hard-to-repress urge to speculate, tempted traders crossed some ethical lines. The cure? Ensure financial markets make economic sense.
A Republican U.S. Senate puts a bullet in new federal firearms controls. Yet Colt, maker of the gun that won the West, is short of cash, Moody’s downgraded Remington and shares of Ruger and Smith & Wesson have been clobbered. The industry does better with guns in a corner.
The idea that companies should be run for the short-term gains of shareholders has no support in law or economics. Why is it still powerful? Managers and investors get away with their greed because too many people think companies are basically financial entities. They’re not.
The craze for this small-batch double IPA illustrates the potential for craft brewers to snaffle up both market and dollar share from Big Beer. That’s why AB InBev and others are on the prowl to buy indie brands. It’s great for drinkers, but makes for a very competitive dynamic.
Reform has ground to a halt, unemployment is way too high, corruption scandals are popping out of the woodwork, many Catalans want independence, and a new left-wing populist party is leading in the opinion polls. The traditional political class is at a loss over what to do.
It has been a decade since I left my last job in finance. Much has undoubtedly changed since then. But it is not clear that a basic contradiction has been resolved. The economic purposes of financial institutions are out of whack with the way they actually increase revenue.