Beijing spreads tension with Tomorrow selloff 6 Jul 2017 Authorities are compelling Tomorrow Holdings, owned by a missing Chinese billionaire, to sell insurance and banking units, Reuters says. It is not clear if this is about politics, crime or systemic risk. Still, it is a worrying template for other conglomerates also under scrutiny.
Hadas: Currency flexibility is overrated 5 Jul 2017 The pound’s post-referendum drop has done little to enhance Britain’s balance of payments. No surprise there – in developed economies, exchange rates are a relatively minor factor in trade relations. Fixed currencies have more benefits than costs, as the resurgent euro shows.
Retail click jobs can brace only so many bricks 5 Jul 2017 The next decade threatens to doom U.S. workers at the likes of Macy's, Staples and Foot Locker. E-commerce should offset a good portion of the losses. Even assuming a healthy 40 pct increase in such roles, though, a Breakingviews analysis suggests some 600,000 jobs may vanish.
Beijing-Trump relations enter dangerous phase 4 Jul 2017 Chinese and U.S. leaders misread each other. Beijing overinvested in a few relationships, while it ran up the trade surplus and failed to rein in North Korea. Trump's team is now pushing back with sanctions, tariff threats and military moves. The risks of a trade war are rising.
Theresa May’s dilemma is Mark Carney’s opportunity 3 Jul 2017 The British Prime Minister is under growing pressure to loosen fiscal policy. Higher wages for public sector workers would worsen the deficit. But boosting growth would give the Bank of England chief more freedom to fight inflation. Necessity may force May to do the right thing.
Overhaul pits taxman against Indian ingenuity 3 Jul 2017 The rollout of a nationwide goods and services levy has been surprisingly smooth. The real prize would be shrinking the informal economy. Yet citizens have circumvented Prime Minister Modi's previous big reforms. That makes it too soon to hail GST a success.
Review: What really creates the value of money 30 Jun 2017 Christine Desan’s “Making Money” is not only a fine monetary history of England. The 2014 book is relevant today. It shows cash and governments go together, the gold standard was a misnomer and central banking is political. And we should stop outsourcing money-creation to banks.
Spectre of old normal gives investors a fright 30 Jun 2017 Financial markets have grown used to sluggish growth, low inflation and rock-bottom interest rates. Now the hint of tighter global monetary policy has pushed up yields and knocked stocks. Though better economic prospects are welcome, a shift will be painful for investors.
Hadas: Time for a big rethink on interest rates 28 Jun 2017 Central banks are told to worry first about prices. The long-term global trend of low inflation makes that a distraction. The right focus now is on weaning investors off the false highs of easy credit and rising asset prices. Part of the withdrawal is making money more expensive.
Hong Kong finds Beijing flunking soft-power test 28 Jun 2017 The central government is investing heavily overseas and touting itself as a benign benefactor. But in 20 years it has alienated many Hong Kongers. The bad PR is a blot on China’s image. It suggests Beijing has a lot to learn about winning friends and influencing people.
Breakdown: A graphic portrait of Hong Kong 28 Jun 2017 The city’s fortunes have become ever more entangled with China’s. Breakingviews shows through graphics how the turbulent relationship has shaped the economy and markets, whilst stoking property prices and political tensions.
Time for Hong Kong to steer a new economic course 27 Jun 2017 The fragrant harbour has long been China’s gateway to the world in trade, finance, and much else. Two decades after the handover, some traditional middleman roles are waning. Reinvigorating the economy means playing to existing strengths - and fixing some glaring problems.
Merkel’s best economic policy belongs to her rival 26 Jun 2017 The German Chancellor has a record of swiping others’ ideas. She could usefully repeat the trick with the Social Democrats’ Martin Schulz. His pledge to invest more and cut taxes for those on low incomes is better than anything her centre-right party has come up with so far.
Hong Kong market is caught between two worlds 26 Jun 2017 Twenty years of Chinese listings have turned the ex-colony into a $3.7 trln market and a top IPO venue. But valuations are low. And while it has first-world regulations, it cannot effectively police rogue mainland firms. To clean up its act, Hong Kong will need more Chinese help.
Review: We’re all behaviorists now – so what? 23 Jun 2017 A decade after the financial crisis started, the lessons are still being debated. Two new books by leading financial practitioners say human irrationality and unpredictability hold the key to understanding. Their reasoning is compelling, but the practical takeaways are slim.
Argentina grinds toward economic credibility 22 Jun 2017 Within just a couple of days Latin America’s third-largest economy sold a rare 100-year bond and was then surprisingly snubbed for inclusion in a major stock index by MSCI. Amid all the noise, President Mauricio Macri is slowly asserting the dullness of competence.
Hadas: The constant challenge of deep-set problems 21 Jun 2017 The deadly fire in London’s Grenfell Tower has exposed the UK’s deeply flawed approach to housing. But serious policy flaws aren’t exclusively British. Americans fail in healthcare and Greeks won’t pay taxes. The only cure is a values revolution.
Public housing pressure builds for next HK leader 20 Jun 2017 The city's real estate bubble, buoyed by low rates, limited supply and mainland money, is stoking social unrest. House prices are out of reach for most; rents are punitive. Like prior leaders, Carrie Lam promises more affordable housing. It's better policy that's in short supply.
Greece still dancing to Europe’s political discord 16 Jun 2017 Euro zone governments have rewarded Greek reforms and austerity with 8.5 bln euros of loans and promises of future relief. Political factors, including German elections, mean losses must remain vague. The lack of clear debt restructuring denies Greece the boost it needs.
India’s RBI boldly pulls trigger on bad loan mess 14 Jun 2017 The central bank will order lenders to tip 12 companies into bankruptcy. They account for 25 percent of the nation's total bad loans. That will be a big test for a new insolvency regime. Still, it shows the RBI's determination to clean up the shambles and defend its credibility.