UniCredit fire sale need not destroy its returns 27 Sep 2016 The Italian bank is selling its most profitable assets to plug a capital shortfall. New CEO Jean-Pierre Mustier can recoup some lost earnings by cutting costs. Even then, UniCredit's returns might not exceed its cost of equity - but they would be a good bit better.
U.S. election campaign wags global currency market 27 Sep 2016 Forex traders decided Hillary Clinton won the first debate. A stronger Mexican peso suggests President Trump is a bit less likely, while the safe-haven yen weakened. Further gyrations will follow. But as the Brexit referendum showed, markets are bad at predicting elections.
Trump debate win could torpedo Mexican peso 26 Sep 2016 The currency is near a historic low. Mexico has other problems, but the polling gains of the Republican U.S. presidential candidate – who has denigrated immigrants and trade relationships – have helped weaken the peso 9 pct in three weeks. Monday's debate may deal another blow.
Review: The bad and good of a world without work 23 Sep 2016 Will robots liberate everyone from boring labour, or will they make many workers redundant? Ryan Avent's "The Wealth of Humans" suggests they could do both. So it's up to governments to find new ways to share out the benefits. Past experience suggests this will not be easy.
Corbyn is global symbol not of rage but confusion 23 Sep 2016 The UK Labour Party leader, facing re-election this weekend, has split the left in two. Divisive figures like Jeremy Corbyn and Donald Trump reflect a new difficulty in identifying heroes and villains. An old foe, globalisation, is in retreat, yet perceived inequality persists.
Trump would follow in Obama’s debt footsteps 22 Sep 2016 The Republican presidential nominee's economic plan would add $5 trln in U.S. borrowing, a new study estimates. Barack Obama tallied about $8 trln during his two terms. Adding debt for infrastructure makes more sense than for cutting taxes on the rich. Both kick the can, though.
Irish budget handout spreads largesse beyond Apple 22 Sep 2016 The government may phase out an unpopular levy introduced during the financial crisis. A strong recovery gives it scope to part with a tax that brings in 8 percent of revenue. Offering goodies to workers may also quiet demands that it accept Apple’s 13 bln euros in back taxes.
Fed “forward guidance” blows too much smoke 21 Sep 2016 The U.S. central bank again declined to raise rates, leaving what hedgie Dan Loeb called the crack cocaine of loose monetary policy in place. The Fed counts talking to the market as one of its tools. But its story has changed so much that it might do better being less chatty.
Ukraine’s IMF bailout is a drop in the bucket 21 Sep 2016 The International Monetary Fund approved a $1 bln aid tranche after a year’s delay, waiving some criteria in the process. It’s a start. But the country has to overcome corruption and get back in business. An ongoing standoff with Russia makes that unusually tough.
Scarce bonds and bank pain limit BOJ’s next move 19 Sep 2016 The Bank of Japan faces a conundrum in its battle to revive inflation. It can’t keep buying $800 bln of bonds a year for much longer, but negative rates are deeply unpopular. This week’s big policy review might require the BOJ to make other concessions to the financial industry.
Viewsroom: Wells Fargo stagecoach hits a ditch 16 Sep 2016 The bank that steered clear of the financial crisis breaks down after creating 2 mln fake accounts. New evidence undermines Donald Trump's claims few benefit from the U.S. economic recovery. And why Hanjin's corporate capsize may prompt attempts to fix to shipping-industry woes.
Pentagon and Congress risk collision over climate 15 Sep 2016 The U.S. military, facing supply problems and sea-level rises, is eager to cut out fossil fuels. BlackRock is one asset manager on the same page. Some lawmakers and Donald Trump have no such concerns. Reports released ahead of Climate Week help identify the dangers of inaction.
Trump’s economic plan built on typical hyperbole 15 Sep 2016 The Republican White House nominee says his proposals to cut taxes and red tape would boost output growth to 3.5 pct a year and create 25 million jobs over a decade. The huge potential cost of Trump's plans only shrinks thanks to heroic assumptions about their likely benefits.
Myanmar is no longer too hot to handle 15 Sep 2016 The U.S. will end sanctions and accept duty-free imports from the Asian nation. It is a milestone. A blacklist of companies and individuals had made it difficult and costly to deal with the country. Scrapping that makes Myanmar a lot less scary for foreign banks and other firms.
India’s Silicon Valley finds H2O everyone’s worry 14 Sep 2016 A dispute over water shut down the tech hub of Bengaluru. The city’s IT giants and startups are not water-intensive, yet global firms like Accenture and Infosys suffered. It is a reminder that environmental issues are costly, indiscriminate, and evermore real.
U.S. quibble with Chinese corn is too late for TPP 13 Sep 2016 The U.S. has challenged China's support for wheat and corn, the latest trade spat with Beijing as Obama pushes for a trade deal that would give the U.S. more leverage. WTO complaints do buttress the argument for TPP, but agriculture is a weak place to rally support.
Income rise weakens Trump case for radical reform 13 Sep 2016 U.S. census data showed household income jumped in 2015 while poverty dropped, the first sign of recovery in the metric to show up since 2007. Evidence that Obama's programs are working will help Hillary Clinton's pitch for incremental change against Trump's radical economic populism.
Globalisation needs better cheerleaders 13 Sep 2016 Free trade and capital flows are often blamed for disadvantaging workers in the West. A new study suggests they have not all fared as poorly as many believe, and that domestic policies can make a difference. Still, statistics and studies alone won’t shake globalisation’s bad rap.
Chancellor: No hyperinflation, just Weimar malaise 13 Sep 2016 Central-bank money printing hasn't produced the spiralling prices that plagued the Weimar Republic. It has, though, delivered some of the social disquiet of 1920s Germany. Policymakers urging more extreme monetary actions need to exercise caution lest they get what they wish for.
Carney guessing game feeds bond market distortion 13 Sep 2016 The Bank of England has revealed corporate bonds eligible for its 10 billion pound buying spree. Its requirement that companies make a material contribution to the country still throws up some anomalies. Second-guessing the central bank makes capital markets less efficient.