Zimbabwe’s new quasi-currency fails the smell test 29 Nov 2016 The sub-Saharan state is issuing dollar-backed "bond notes" as a means of payment. It's an attempt to ease the huge trade deficit which is sucking hard currency out of Zimbabwe. But it requires citizens to trust the central bank responsible for the country’s hyperinflation.
Trump can make or break global growth hopes 28 Nov 2016 Tax cuts and more spending in the United States could help lift world growth to 3.6 pct by 2018, the OECD reckons. But President-elect Donald Trump could reverse the boost with protectionist policies. The rosy scenario rests on shaky assumptions about international cooperation.
Brexit transition headache has EEA painkiller fix 28 Nov 2016 UK courts could rule that Britain can stay part of the European Economic Area when it quits the EU. If so, ongoing single market access could numb Brexit's impact. If lawmakers also pledged to quit the EEA in, say, 2025, the more rational Brexiteers might even support it.
Francois Fillon is test of French reform appetite 28 Nov 2016 The former prime minister's win in conservative primaries makes him a theoretical shoo-in to become president in 2017. But his economic platform is more radical than anything French voters have been willing to countenance up until now. The race will be closer than anticipated.
S&P faces Catch-22 over South Africa downgrade 28 Nov 2016 The rating agency will soon decide whether the emerging economy's debt merits junk status. President Jacob Zuma's weakening of state institutions strengthens the case. Yet a downgrade could further undermine respected Finance Minister Pravin Gordhan - making the situation worse.
A weakened free press comes at a price 25 Nov 2016 Donald Trump's antagonism toward the media keeps rising. Turkey, meanwhile, has jailed more than 140 journalists. Struggling publishers are cutting staff. Research suggests less restraint on news gathering helps GDP growth. That makes the current environment an economic threat.
Too soon for Spain to be a role model for others 25 Nov 2016 The country's deputy prime minister thinks others see the domestic economy as a case study for its rapid recovery. GDP has risen and Madrid deserves credit. But with growth likely to slow and unemployment and a big budget deficit both problems, there's no room for complacency.
Britain’s productivity fund is a long shot 24 Nov 2016 As in other Western countries, output per worker is growing less quickly than before the financial crisis. There is little agreement about the reasons for the slowdown, however. That means the UK government's new 23 billion pound productivity fund is throwing darts at a board.
Overdue market renovations bite UK estate agents 24 Nov 2016 Letting agents’ share prices plunged as the government said it might stop tenants from being billed directly for admin fees. Agents don’t have much chance of passing those costs on to landlords. Even if the government is micromanaging, the effect will be a more efficient market.
Brexit means UK is wise to defer budget handouts 23 Nov 2016 Leaving the European Union means lower growth and more borrowing. Dumping previous constraints enabled Chancellor Philip Hammond to invest a bit more in housing and research. Though he has wiggle room, Brexit negotiation uncertainty means there are grounds to hold back for now.
EU’s “Chapter 11” bankrupts Brexit assumptions 23 Nov 2016 Brussels wants to introduce protection for bust companies, similar to the U.S. model. British lawyers have tended to be dismissive of continental restructuring laws. If these changes go through, the UK may have to copy its neighbours to keep up. So much for sovereignty.
Hadas: Trump effects might reach to finance theory 22 Nov 2016 The next U.S. president may not be interested in the conceptual underpinnings of the risk-free rate of return. But his election could expose the idea's fundamental flaws. Financial risk is unavoidable and no asset is truly safe. Radical policies would make that painfully clear.
EU unwise to play at banking tit-for-tat 22 Nov 2016 Brussels could insist foreign lenders trap more capital locally. There's logic from a stability point of view in forcing U.S. banks to do what European lenders already have to in New York. The risk is that American lenders don't see the EU as quite so integral to their business.
Trump crony capitalism jars with Modi’s India 22 Nov 2016 Donald Trump's meeting with Indian real estate tycoons gives the impression he's using the presidency to further his business interests. That's exactly the type of dealings that Prime Minister Narendra Modi is trying to stamp out, and more tarnish on U.S. moral leadership.
Europe’s anti-austerity swerve faces uphill climb 17 Nov 2016 The European Commission wants euro zone countries to boost spending by 0.5 pct of GDP next year. It's a belated attempt to head off a Trump-style populist revolt. To make a difference, however, wealthy countries like Germany would have to help struggling ones like Italy.
Markets keep climate-change fight alive 15 Nov 2016 Having Donald Trump as global warming's denier-in-chief is a big setback for reducing emissions and a blow to the Paris accord. Other countries are still committed to action, though. Renewable energy is mainstream. And a strong financial case will keep green investment humming.
Economists: try fewer forecasts, more planning 11 Nov 2016 The great recession exposed many shortcomings in the dismal science. Economists are exploring new strands of thinking - and reviving old, discarded ones. One good outcome would be to worry less about predicting the future, and spend more time preparing for what might go wrong.
Trump may embody his own isolationist policy 9 Nov 2016 The reality-TV star clinched an unlikely White House victory. In winning over a majority of the electorate, he alienated nearly everyone in a position of power. That means checks and balances on his presidency could mark a huge test for the American experiment and economy.
American institutions are biggest election loser 9 Nov 2016 The modern era's most rancorous campaign damaged the legitimacy of several pillars of democracy and free markets. Congress was already at a nadir. Fold in the idea of a rigged system, where the FBI and free press are politically biased, and governing will be nearly impossible.
Risk markets bear brunt of Trump volatility 9 Nov 2016 Mexico's peso, a barometer of sentiment throughout the White House race, plunged 11 pct to a record low against the dollar, which also fell. Stocks in Asia sagged along with U.S. index futures. Treasuries and gold rose. The next president's calling card is uncertainty.