Top trades of 2016: Clinton, Mayer, Isis and Uber 18 Dec 2015 A survey of Breakingviews readers suggests that a year from now, the U.S. will have its first female president and Yahoo’s CEO may be free to give her a hand. Uber’s valuation will stall, as worries about Islamic State accelerate. In other news, Twitter hasn’t made us any happier.
U.S. OK for IMF reforms could come just in time 17 Dec 2015 Congress has wedged ratification of five-year-old changes into a deal to keep Washington running. The measures would give China and other emerging economies more say. With Venezuela one country that looks close to default, the IMF may soon need all the unity it can muster.
Global corporate profit is under serious threat 17 Dec 2015 U.S. companies are earning close to the most in five decades as measured against national income. It’s a worldwide trend, with bottom lines far larger as a share of GDP than in 1980. Competition, disruption and tax policy – along with weaker growth – are set to change all that.
Global economy depends on more than India in 2016 17 Dec 2015 The subcontinent’s expanding GDP is one of next year’s few economic bright spots. But the sluggish United States and decelerating China will still account for nearly half of global growth. Any negative shocks from the two sputtering engines will reverberate widely.
Japan index: Onwards and upwards 16 Dec 2015 Business confidence is holding up and revised data shows Japan dodged a technical recession. Our index also suggests the economic picture may be improving. In October the gauge reached its highest point since 2000: prices, stocks, lending, wages and consumption all crept up.
Zuma is making South Africa’s bad situation worse 10 Dec 2015 Local markets are diving after the president sacked his finance chief. Domestic woes include acute electricity shortages, drought and strikes. Investors are apt to lump the country in with the likes of recessionary Brazil. Firing the money man will only confirm their prejudices.
Jobs in Japan outweigh recession-that-wasn’t 8 Dec 2015 Revised data show Japan avoided six straight months of economic shrinkage after all. Bravo. But GDP figures are always volatile and technical recessions count for little in low-growth countries. For Japanese policymakers, the priority is ensuring a healthy labour market and boosting inflation.
Review: Another "Minsky moment" may be on the way 27 Nov 2015 Hyman Minsky didn’t just predict the global financial crisis 10 years in advance, a new book on him argues. The maverick economist also explained how the cure – bailouts by the Federal Reserve and other central banks - would drive the financial system to the brink yet again.
UK’s Osborne is less austere than he makes out 25 Nov 2015 Finance minister George Osborne isn’t quite the budget zealot his Nov. 25 spending cuts suggest. The UK has run bigger deficits relative to GDP than France during his tenure. He has also executed tax and spending U-turns when required. It helps that gilt investors buy the hype.
Argentina’s vote for Macri may show Brazil the way 23 Nov 2015 The pro-business mayor of Buenos Aires has won the presidential runoff after promising to break with the unsustainable populism of outgoing leader Cristina Fernandez. He plans to push through reform in Latin America’s third-largest economy. It’s a process Brazil can learn from.
Argentina faces choice between magic and realism 20 Nov 2015 Voters look likely to choose uncharismatic, pro-market Mauricio Macri as their next president in Sunday’s runoff election. Latin America’s No. 3 economy needs a dose of orthodox management after years of Kirchnerist magical thinking. But he could become unpopular very fast.
Cox: Drought, not just of ideas, challenges Africa 12 Nov 2015 The sub-Saharan region, once a bright spot for global growth, faces a worrying triple whammy. A lack of rainfall threatens agriculture and hydropower. Low commodity prices are taking a bite. Fold in sliding currencies, and inflation threatens stability and economic prospects.
White House wannabes give Wall Street much to fear 11 Nov 2015 The fourth GOP presidential debate unleashed many fanciful notions about the financial crisis and its aftermath. Ben Carson blamed stock buybacks, Jeb Bush botched bank capital and Ted Cruz flubbed monetary policy. It’s modern history whose lessons are too dangerous to repeat.
Job data rarely work as gauge of economy’s health 6 Nov 2015 U.S. employers did lots of hiring last month, but that means less than investors may think. Nonfarm payroll numbers are volatile, imprecise and prone to revision. They’re important mostly because traders, analysts and journalists give them outsized attention. A demotion is overdue.
Why China’s graft probes don’t rattle investors 3 Nov 2015 Corruption scandals would hammer shares in Western firms. Not so for those caught in China’s crackdown like Dongfeng and AgBank. That’s because the campaign is so sweeping, and targets people rather than companies. Besides, the whole market already suffers an integrity discount.
BOJ opts to remain conventionally unconventional 30 Oct 2015 Japan’s central bank decided not to add to its already huge bond-buying scheme. The bet is that prices will keep rising once the impact of cheaper oil fades. But with its 2 pct inflation target still distant, a nasty slowdown could yet force the BOJ to take more extreme measures.
Argentines may risk austerity to get change 26 Oct 2015 Presidential elections will go to a runoff after business favorite Mauricio Macri surprised ruling-party candidate Daniel Scioli in Sunday’s vote. Scioli will now say Macri wants to slash social programs. But voters may rather see Cristina Fernandez’s economics as unsustainable.
Be careful what you wish for from China reforms 26 Oct 2015 Economists and trade partners have long pushed for greater liberalisation. As the ruling party debates its new five-year plan, market forces may come to the fore again. Yet even a small devaluation spooked investors. If reforms do arrive, they will make China even more uncertain.
After Cristina, a more investor-friendly Argentina 23 Oct 2015 No matter who emerges victorious in Sunday’s vote, Latin America’s third-biggest economy will end up more welcoming to investors than under President Fernandez. That’s not saying much. Front-runner Scioli offers a gradual fix for the nation’s woes, but may need to move faster.
Review: Breaking central banking’s last taboo 23 Oct 2015 Policymakers are struggling with a debt hangover while trying to avoid another crisis. Current methods won’t work, Adair Turner argues in “Between Debt and the Devil”. He wants to drop the prohibition on printing money. But that still requires placing our faith in central banks.