India shows China the way to deal with bad debt 6 May 2016 State-backed banks in both countries have lent too much to politically connected companies that are now in trouble. While India is pushing lenders to come clean, China is still not admitting the extent of the problem. Future growth depends on a proper cleanup.
Meirelles’ magic touch may offer Brazil new hope 4 May 2016 The former central bank chief, an investor favorite, is likely to become finance minister of Latin America’s No. 1 economy if President Rousseff steps down. At best, he could restore confidence and kick-start a recovery. But political discord and scandal may stymie his efforts.
Financiers may want to keep a closer eye on Trump 4 May 2016 The bellicose real-estate mogul has all but sewed up the Republican presidential nomination. Markets are pricing in a Hillary Clinton victory, however, as Carlyle’s David Rubenstein told an elite Beverly Hills gathering. Trump doubters have learned how the odds can swing quickly.
Euro zone needs better glue than Canadian kindness 29 Apr 2016 Portugal’s eligibility for ECB bond-buying hangs on the rating of Toronto-based agency DBRS. Effectively, the ECB has outsourced the decision of whether to cut off a country. It works to a point: it’s hard to imagine the ECB abandoning Italy or France whatever their ratings.
Investment is real star of strong French growth 29 Apr 2016 GDP increased by a surprisingly robust 0.5 percent in the first quarter, boosted by the biggest rise in household spending in more than a decade. Nationwide shopping sprees may just be the flipside of the frugal end to last year. The pickup in investment is far more cheering.
Will retirees get just 4 pct long-term returns? 28 Apr 2016 That’s a scenario laid out in a new McKinsey Global Institute report. The idea is that returns in recent decades – and expectations that are still above 7 pct – have been inflated by effects that are now disappearing. If so, Gen Xers will retire even poorer than they expect.
Sterling and UK economy tell different stories 27 Apr 2016 British growth slowed in the first quarter and negative economic surprises are surpassing positive ones by a fair margin. Yet Brexit-focused traders have pushed up the pound. The problem is that sterling’s bounce hinges on politics, which is even more fickle than economics.
Saudi Arabia’s post-oil reform vision looks blurry 25 Apr 2016 Riyadh’s new plan to reform the economy, Vision 2030, entails creating a giant SWF and listing a stake in state oil firm Aramco. It will raise cash, but won’t solve the kingdom’s crude problem. To truly advance as an economy, Saudi needs greater economic and social openness.
Impeaching Rousseff is weak tonic for bad headache 18 Apr 2016 The vote to oust Brazil’s president from office makes a new, pro-business administration more likely. Stocks and the currency have already soared on the prospect. But the economy is a mess and the probable new government will be hobbled by protest and scandal.
Hollande is just a scapegoat for French stasis 15 Apr 2016 The Gallic president’s labour reform efforts are earning him ultra-low poll ratings and spurring street protests. The IMF reckons such changes are best rolled out during economic upswings. But recent history shows there’s rarely a good time to overhaul French job rules.
China and India reform hopes are on hold 15 Apr 2016 New leaders in both countries raised hopes for restructuring banks and state-owned companies. But current plans are not bold enough while the window for action is narrowing. Beijing’s investment habit and New Delhi’s obstructive bureaucracy are proving stubbornly hard to shift.
Swallow IMF’s medicine with spoonful of bank sugar 12 Apr 2016 The international lender is again reducing its forecast for 2016 global growth, to 3.2 pct. Hardly a ray of sunshine sneaks through its gloomy outlook. Goldman Sachs bosses, though, are more optimistic in their annual letter. Read the documents together for a sanity check.
Peru’s presidential vote bodes well for economy 11 Apr 2016 Investors cheered the Andean nation’s inconclusive election, which left front-runner Keiko Fujimori in a runoff against pro-business economist Pedro Pablo Kuczynski instead of a leftist legislator. The outcome underlines rising rejection of failed Chavista policies in the region.
U.S. jobs offer election fodder for all candidates 1 Apr 2016 Hillary Clinton and other Democrats can point to another month of solid job creation – and promising details. But Republicans and Donald Trump may focus on the slow pace of gains and anemic wage inflation. The two-sided coin will probably still be spinning come November’s vote.
Big Data cuts into red tape of official statistics 30 Mar 2016 Government figures for inflation and the like benefit from consistency, but they come late and sometimes adulterated. Using people wielding mobile devices, tech firms can add bottom-up figures, speed and global comparisons. A World Bank test may help win over wary civil servants.
Post-Rousseff Brazil may enjoy only brief respite 29 Mar 2016 The president’s bid to avoid impeachment is faltering as badly as the economy. Her likely replacement, Michel Temer, might win backing from the markets. But he may only have two-and-a-half years in office, and possibly far less. Brazil’s problems will take longer to fix than that.
Cox: The social costs of financial returns 24 Mar 2016 That’s the tension at the center of “Dry Powder,” an off-Broadway play about private equity. Like most dramatizations of high finance, it engages in caricature. But the show also offers genuine insight into the emerging risks Wall Street faces from rising income inequality.
A steady Fed would hike rates another notch 15 Mar 2016 The U.S. central bank raised the overnight cost of money in December, then stood pat in January. At 0.25-0.5 pct, rates are still super low. And conditions look similar to late 2015. If Janet Yellen and colleagues don’t move again, they’re listening too hard to the markets lobby.
Lula scant help to Rousseff, hindrance to reform 15 Mar 2016 Brazil’s powerful ex-president will join his successor’s leftist government. Even if there’s more to it than a tawdry bid to shield him from a graft probe, Lula’s tarnished magic may not help the unpopular Rousseff much. And just the idea is giving markets heartburn.
Japan index: Modest beginnings for the new year 15 Mar 2016 Our Abenomics Index rose slightly in January compared with the year-end, creeping closer to a 15-year high. Gains in manufacturing production and a slight uptick in loans, consumption and wages helped. But falling stocks and consumer prices were still a drag.