Latam’s poor need institutions more than saviors 26 Feb 2016 Leftist Bolivian leader Evo Morales, in office since 2006, lost a referendum that could have let him preside over the Andean nation until 2025. Self-perpetuation in power, even by pragmatists who slash poverty, shortchanges the poor. Good governance and rule of law matter more.
Central Asia needs life support as Russia suffers 25 Feb 2016 Tajikistan has appealed to the International Monetary Fund for help. Falling oil prices and sanctions have hit remittances from migrant workers in Russia that are the lifeblood of its economy. Other countries in Moscow’s economic orbit may need similar treatment.
Wage restraint hurts Japan’s battle with deflation 22 Feb 2016 Japanese bosses reckon the world is too uncertain for wages to rise much this year. Oddly, the country’s unions basically agree – despite a robust labour market. This is another setback to Prime Minister Shinzo Abe’s efforts to stoke inflation, consumption, and economic growth.
Japan index: Losing momentum 17 Feb 2016 Our index held near a 15-year high in December, underscoring Japan’s turnaround under Shinzo Abe. But this looks increasingly fragile: recent annual gains are among the weakest since the PM took power. Manufacturing and housing are weakening. And market turmoil is a new threat.
Venezuela plows the sea with tardy reform measures 16 Feb 2016 The Andean nation’s effort to boost its crude income via a production deal with Saudi and Russia is a desperate play to hold the economy together. So is naming a somewhat less radical economy czar. Moderates might try to temper the worst, but the Bolivarian revolution is dead.
Unruly markets could derail Abenomics 12 Feb 2016 A weak yen and buoyant stocks were key to Japanese Prime Minister Shinzo Abe’s fight against deflation. A flight from risk has reversed those gains and overwhelmed the Bank of Japan’s surprise shift to negative interest rates. The turmoil threatens Abe’s whole economic project.
Congress and markets need more mirror, less Yellen 11 Feb 2016 American lawmakers like to pepper the Fed chair with nitpicky questions and sweeping advice. Monetary policy can modify economic cycles, but so can fiscal initiatives, which are conspicuously lacking. Investors who blame the Fed for trouble can also do more to help themselves.
Guest view: An upside to Brazil’s downturn 10 Feb 2016 The recession has something of a silver lining: the external accounts of Latin America’s biggest economy have improved, and some of the gains will last, writes Itaú Unibanco chief economist Ilan Goldfajn. Brazil’s current account deficit could even reach zero in 2017.
Chancellor: Heed the threats to globalization 9 Feb 2016 As the woes of emerging markets increase, 1930s-style protectionism and exchange controls are back on the agenda. A warning from the Bank for International Settlements of an “epoch-defining seismic rupture” in the financial system may be more than just hyperbole.
Decent U.S. jobs report leaves Fed in quandary 5 Feb 2016 Wage growth may finally be taking hold. Americans are getting better-paying work, spurring more people to seek it. January’s headline figure of 151,000 new jobs undershot estimates, though. And Janet Yellen et al know they’ll be blamed for global market volatility, too.
Breakdown: The cost of China’s capital outflows 5 Feb 2016 Foreign currency reserves shrank by $513 bln last year, reversing two decades of cash flooding in. The decline has spooked global markets, put pressure on the yuan and prompted a renewed rush for the exits. Breakingviews looks at the causes and consequences of the exodus.
Marco Rubio must walk a fine line with donors 2 Feb 2016 The Republican U.S. senator’s third-place finish in Iowa’s presidential caucus could be enough to lure financiers fed up with his extreme rivals. Voters are wary, though, of candidates closely tied to Wall Street. His challenge will be to avoid biting the hands that feed him.
China index: Xi’s annus horribilis 1 Feb 2016 Breakingviews’ Tea Leaf Index may have ended the year on a modest high, but a look back over 2015 shows China’s economy moving slowly. Sagging steel production, exports and rail freight contributed to the lowest 12-month average since President Xi Jinping first took office.
Finance wrestles with post-millennial tension 22 Jan 2016 Youngsters dominate the workforce, and the conversation at Davos. Fearful of losing talent, investment banks are giving millennials fewer hours, faster promotion and more leisure. What looks like a new trend is just a reversion to the mean – with some confused thinking thrown in.
China’s just-so growth no balm for slowdown fears 19 Jan 2016 The world’s second-largest economy grew 6.9 pct last year, in line with government targets. The official picture of a gradual slowdown is at odds with market jitters. Yet the numbers do little to ease investors’ key concerns: yuan devaluation and the risk of a messy debt crisis.
Newest tech fad: countries chasing startups 15 Jan 2016 Prime Minister Narendra Modi wants India to be a magnet for new companies. Hong Kong and Singapore have similar hopes. Politicians have long struggled to emulate Silicon Valley. The spreading government ambition is another measure of runaway enthusiasm for technology.
Weaker yuan would be no panacea for China Inc 14 Jan 2016 A sharp devaluation would yield some winners and losers: machinery-makers would gain and airlines would suffer. But overall this would do little for the real economy. Exports are a declining driver of Chinese growth.
Behavioral economics wins $1.5 bln U.S. lottery 13 Jan 2016 The biggest-ever jackpot for a single ticket-holder hangs in the balance. State officials helped engineer the Powerball frenzy by tapping into the sorts of theories advanced by Nobelist Daniel Kahneman and others. It takes more than a dollar and a dream to woo punters these days.
China’s troubles catch Japan off-guard 12 Jan 2016 Japan is highly sensitive to its larger neighbour’s economic health. Market turmoil is also strengthening the yen, threatening profit and prices. This could hardly come at a worse time: policymakers already battling deflation and stagnation have few levers left to pull.
U.S. jobs bring gorging market bears up short 8 Jan 2016 Strong employment gains in December support the Fed’s planned gradual rate hikes. The global New Year stock slide stalled, too. Chinese markets stabilized, and investors relished the 292,000 American jobs added last month. The outlook may be murky, but it’s not all bad.