Uncle Sam’s seizing of Fannie Mae and Freddie Mac in 2008 marked one more failure in a sorry decades-long history. Their misdeeds ranged from strong-arming politicians to cooking the books. They shouldn’t now get a pass just because their profits are again helping Washington.
Can one crisis solve another? Securitisation could help small companies. That slicing and dicing of credit risk also caused the last credit boom. Getting it moving fast would require support from the ECB and governments, and the belief that past mistakes won’t be repeated.
The economy is shining after a decade of stability and reform under Prime Minister Tayyip Erdogan and his Islamist-rooted AK Party. A peace deal with Kurdish militants could be the key to ensuring that he stays in power beyond his current term, while Turkey continues to rise.
As the Great Stagnation stretches out into the indefinite future, the debate on how to respond is loud but inconclusive. Some want stimulus, others austerity, while structural reformers lock horns with monetary activists. Here are five rules for a more productive dialogue.
Even if the EU probe into the manipulation of published energy prices comes to nothing, it highlights a strange market. In the global energy trade, billions of dollars change hands on the basis of “best guess” benchmarks. More is at stake than fines for rogue traders.
The youngest crop of American adults is showing some tendencies that could prolong stagnation. Their bloated education debt is a headwind to prosperity, and they have weaker earning power and lower fertility than their elders. That’ll make tackling deficits tougher.
Fracking and the sliding cost of renewable energy offer America a chance to curb reliance on foreign fuels and boost growth. But pointless partisanship puts these gains at risk, says Michael Levi in “The Power Surge.” Democrats and the GOP can at least agree to avoid mutual sabotage.
Three decades after Michael Milken mastered raising money he now trades mostly in intellectual capital. This year, the likes of Carlos Slim and Tony Blair joined old friends at his annual Beverly Hills jamboree. These growing networks are a better sort of crony capitalism.
The country’s rising debt and slowing economy point to the kind of financial meltdown theorized by economist Hyman Minsky. But China’s closed, state-controlled system can delay such market panics. The bigger challenge is managing social tensions arising from slower growth.
It already dominates the country’s online retail market, and holds a trove of consumer data. Alibaba has yet to reveal detailed finances, but if it can time stock market, technology and China cycles, number-crunching suggests a twelve-digit valuation isn’t out of the question.