Review: “Gray Rhino” rambles into financial lexicon 24 Jun 2016 A new book uses the nose-horned beasts as a metaphor for obvious threats ignored by corporate and political leaders. Myriad examples enlisted by author Michele Wucker are engaging, but the solutions come off oversimplified. The gray rhino may not keep pace with the black swan.
Breakup of the UK is question of when, not if 24 Jun 2016 England saw 53 pct of voters opt to leave the EU, but in Scotland and Northern Ireland, a majority wanted to stay in. A second referendum on Scots leaving the UK now looks logical, while a united Ireland poll has been mooted. Economic issues will stop these occurring soon.
Cox: How about a referendum on ending referendums? 23 Jun 2016 Rather than take hard decisions, politicians are putting issues like Brexit, constitutional reform and even peace treaties directly to the people. How democracy works best is an ancient debate, but plebiscites undermine the representative variety. They’re also bad for business.
America is squandering a big immigrant investment 23 Jun 2016 Nearly $10 bln gets spent each year educating undocumented children legally in public schools. Two valedictorians and a Supreme Court ruling shine a light on the human capital being wasted. With employers braying for skilled workers, fixing this policy could deliver big returns.
Yellen’s fidelity to low rates may be all relative 21 Jun 2016 Reluctance to move beyond a 0.25-0.5 pct range smacks of excess caution. Yet the Fed seems persuaded by a “new normal” with low growth, high employment and little inflation. Right or wrong, the gap between U.S. policy and Japan and the EU also could be part of the equation.
Congress, not Fed, has more to do on job creation 21 Jun 2016 U.S. hiring has slowed, yet there are millions of openings going unfilled. Janet Yellen says there is an imbalance between less-educated people looking for work and more skilled positions available. Addressing training and education needs is lawmakers’ business.
Brexit: Making Sense of Britain’s EU Vote 21 Jun 2016 Breakingviews has covered the British referendum on EU membership from the start. Here’s a collection of our best articles - which should appeal to all but those Leave campaigners that dislike the opinion of “experts”.
Newly reliable Argentine data show Macri challenge 17 Jun 2016 Consumer prices rose 4.2 pct in May alone, indicating the scale of the new government’s problems as it seeks to fix Latin America’s No. 3 economy. It’s a race between inflation and restoring growth. But after years of statistical fantasy, at least the numbers are now credible.
Brexit would be double whammy for Spain SA 17 Jun 2016 A UK exit from the European Union would be a headache for Spanish companies. For one thing, it could increase risk premiums as confidence in the EU wanes. For another, Spain’s biggest companies - Santander, Iberdrola and Ferrovial - have made big bets in the UK.
Review: Mapping China’s economy for outsiders 17 Jun 2016 Arthur Kroeber’s guide to the Chinese economy punctures the myth that it is governed from on high. He describes the competing interests and political bargains that underpin its growth in layman’s terms. It’s a valuable source for anyone trying to make sense of People’s Republic.
Fed turns next rate hike into its Godot 15 Jun 2016 The U.S. central bank again held interest rates steady at 0.25-0.5 pct. The risk of Brexit may be a factor. Yet there will always be unknowns. Janet Yellen and her colleagues seem to be waiting for perfect conditions in global markets. That convergence may never come.
China can afford to quit infrastructure binge 13 Jun 2016 State backed enterprises stepped up fixed-asset investment by a fifth in the year to May. Much of this spending will be wasteful and will add to the country’s huge debts. Given a fairly robust labour market, China could safely take a much harder line on inefficient SOEs.
Cox: Slicing global trade with a GE carving knife 9 Jun 2016 Much of the discourse surrounding the U.S. election and Brexit makes free trade and labor mobility sound like terrible things. Individual tales of dislocation are manifold and moving. The shared benefits of globalization are huge, though – as one humble appliance illustrates.
Trade slowdown raises bar for economic catch-up 8 Jun 2016 That’s the grim message from the World Bank’s latest reduced forecast for global GDP growth. Governments in the developing world will have to rely on domestic consumption rather than exports to deliver improved living standards. Investing in infrastructure should help.
Money-for-nothing idea will survive Swiss rebuff 6 Jun 2016 Welfare systems once seemed as outlandish as the proposed guaranteed basic income for all that has been rejected by Swiss voters. Advocates must provide more details on funding and the potential social impact. Other countries, such as Finland, will be the lab for the experiment.
Fed can raise rates despite one bad jobs figure 3 Jun 2016 Only 38,000 new U.S. positions were added in May, the worst monthly report in six years. Even so, payrolls have increased by a solid 116,000 jobs on average over three months and hourly wages rose again. The bigger picture demands more serious consideration.
Chancellor: Helicopter money risks financial chaos 1 Jun 2016 Some investors, including fixed-income supremo Bill Gross, have been advocating a central-bank cash drop. Inflation would burn off the world’s excess debt. But bond markets might collapse and asset values sink. Protecting capital under such circumstances would be nigh impossible.
Japan is right to choose growth over higher taxes 1 Jun 2016 Prime Minister Shinzo Abe’s decision to delay a planned consumption tax increase is a sensible gamble. While the budget deficit may now fall more slowly, a hike could have jeopardised growth. This would have posed an even bigger risk to the long-term health of public finances.
Brazil government’s original sin may slow reform 31 May 2016 Naming a “transparency minister” was a risk for interim President Temer, given the threat a huge graft probe poses to his pro-business administration and the unedifying way he came to power. The minister’s embarrassing exit weakens the credibility Temer needs to fix the economy.
Qatar’s debt bonanza stores up problems for future 27 May 2016 Too much of a good thing could be bad for the Gulf state. It has just raised a whopping $9 billion in the bond market thanks to investors’ hunger for yield. Loading up on debt will help Qatar cope with lower energy prices, but just dodges its biggest problem: lavish spending.