The Bank of England is beginning to wonder why wages aren’t rising. Just delay? Or something structural? It’s both. Self-employment explains almost all the gain in jobs. Austerity cuts and recession have bitten hard. Pay, inflation and interest rates will take time to recover.
The share of rich-nation GDP going to labour has fallen, and depressed the “natural” interest rate that maximizes employment at steady inflation. But if central banks peg rates at the new level, cheap money foments financial instability. It’s a problem only governments can solve.
Four years after the Dodd-Frank law passed, the derivatives market is still reeling. The changes made swaps cheaper for some and enhanced transparency. But the market is prohibitively expensive for others, Chatham Financial’s Luke Zubrod says, and some rules are still fuzzy.
Alibaba’s founder, chairman and spiritual sultan will continue to exert near-total control of the Chinese e-commerce giant even after its massive IPO. For prospective shareholders, the question is whether Ma can be trusted to act in their interest. The answer is a qualified yes.
During the 2000s, speculating in commodities became the new fad, contributing to soaring prices and increased volatility, says Kate Kelly in a new book. She oversimplifies some of the dynamics of this complex world, but the powerful club she exposes should not be overlooked.
Many books about China strive for a sweeping overview. Evan Osnos’ “Age of Ambition” adopts a refreshingly human perspective. Despite some inevitable gaps, his close-up portraits of people in the People’s Republic are as revealing as a torrent of statistical superlatives.
Central bankers and economists say the official cost of money in the post-zero rate era will remain cheap by historic standards. Their prognostications rely on a theory which is unsound, unsupported by evidence and impossible to apply. Future rates are as likely to be high as low.
The five-year average crude price is in triple digits for the first time. Global growth has been sluggish but not disastrous. The period also brought better efficiency, the fracking boom, cheap solar, and new products like Tesla’s. It’s a score for innovation against pessimism.
Stephen Roach presents the relations between the world’s two largest economies as a dangerous codependency. The former Morgan Stanley economist’s national parallels are not always persuasive. But his criticism of America’s irresponsible policymaking rings true.
Brett King’s account of how smartphones are changing retail banking suffers from an excess of acronyms and advertorial. Still, King explains how compliance costs make the emergence of an Amazon of banking unlikely, and how internet data can help banks provide better services.