UK sets out on US house bust trail 2 May 2008 The UK's households, like their American cousins, were able to consume more because house prices boomed. Now the broken home trail on which the UK is just setting out looks as bitter as the one the US has been treading.
April bond bonanza looks another false dawn 2 May 2008 Debt issuance last month was the most since June 2007. Companies, led by banks, rushed through a window cracked by tighter credit derivative spreads, which persuaded some investors to get off their hands and lend. But cash spreads hardly budged, meaning risk aversion persists.
Saudis prefer inflation to independence from US 2 May 2008 The Gulf kingdom followed the Fed with a cut in the overnight rate to 2%. That sounds crazy in the face of 10% inflation. But the Saudis worry more about losing friends in Washington. Bank reserve requirements will be the weapon of choice against inflation. It won t be easy.
Wall Street can’t innovate itself out of mortgage mess 1 May 2008 Lewis Ranieri, godfather of the mortgagebacked securities market, hopes it can. But he offers a bleak outlook nonetheless. The global distribution of subprime mortgage securitisations has made them nearly impossible to restructure. Financial skunk works can offer little help.
UK commercial property slump isn’t over yet 1 May 2008 The 17% fall in values since last summer seems to be easing off April s decline was the mildest this year. But while yields on commercial property have risen close to their longterm average, rents could tumble if the economy slows. That s beginning to look more likely.
Bank of England too mistrustful of the market 1 May 2008 The latest Financial Stability Report argues market prices of credit are too gloomy. That was almost certainly true in March, but credit spreads have been cut in half since then. The BoE is optimistic. but the leverage megabubble is likely to yield to an extracostly mopup.
Dubai doesn’t need two stock exchanges 1 May 2008 A pulled IPO is just another blow for the Dubai International Financial Exchange. In three years it has attracted just three primary listings, and they ve all done badly. The emirate should merge it with the more buoyant local exchange, the Dubai Financial Market.
On US petrol tax, there’s only one grownup in the race 1 May 2008 The gas tax holidays of Senators McCain and Clinton are economically nonsensical. They'd increase consumption, worsen dependence on the Middle East, raise oil prices and speed global warming. Clinton s Exxonbashing further distances her from the economicallysensible Obama.
The economics of obesity 1 May 2008 Will the market finally apply a bit of discipline to Americans' bulging waistlines? Rob Cyran looks at the economics of obesity.