Asia can’t escape Euro-contagion risk 27 Jun 2011 The cost of insuring Asian debt is rising as investors ponder the implications of a potential Greek default. Not that Asia has major exposure. But it has a sweet tooth for European credit. Pain for Athens' creditors and their insurers could mean higher borrowing costs for Asia.
How to make Greece’s opposition sweat 27 Jun 2011 Euro zone leaders want to pressure the Greek opposition into signing up to the country's austerity programme. Although it would be silly now to deny Athens bailout cash as a result of the conservatives' delinquency, Greece's lenders don't just have to roll over.
Wall Street may get temporary stay of execution 27 Jun 2011 With trading revenue falling, pressure is growing for investment banks to trim costs. But none wants to join those who slashed their ranks ahead of a turnaround. It may take another few months of bad numbers until they start showing traders the door.
China makes an uneasy saviour for Europe 24 Jun 2011 Helping fix the euro zone is writ large in Premier Wen's visit. No wonder: the single currency aids Chinese exports, buying periphery debt helps win friends on issues like the EU arms embargo. Europe's leaders won't like their China dependence, but their leverage is dwindling.
U.S. debt ceiling shouldn’t be hostage to taxes 24 Jun 2011 Talks to lift the limit on federal borrowing are in disarray over taxes. Republicans shouldn't fear concessions in return for major spending reforms, and the standoff may just be typical lastditch theatrics. But both parties should suffer if Congress misses Treasury's deadline.
Investors struggling to accept end of U.S. easing 23 Jun 2011 The Fed's $600 bln Treasury bondbuying program, known as QE2, is ending. Some investors are ready for QE3, despite no hint of it from the central bank. PIMCO's Bill Gross has even suggested the Fed could cap longerterm interest rates. But more monetary stimulus is a bad idea.
Indonesia’s economy chugs towards gridlock 23 Jun 2011 Investors have fallen for Indonesia's resourcesled transformation. But the country is rapidly outgrowing its highways, ports and power grid. The problem isn't financing but a parliament paralysed by corruption allegations. At this rate, the growth story could come under strain.
Why the World Bank is hiring Lehman’s ex risk boss 23 Jun 2011 It might sound like a bad joke. But Madelyn Antoncic was one of the few senior Lehman execs who consistently warned the Wall Street firm's top brass the firm was taking too much risk. They ignored her then removed her. She deserves a second chance.
How to make Greece more like GM than Lehman 23 Jun 2011 Investors are fixated on comparing a Greek default with the Wall Street firm's chaotic 2008 collapse. But it doesn't have to happen this way. With preparation, an orderly mechanism and financial support, a restructuring could be a General Motors, rather than Lehman, moment.
Afghan withdrawal may avert fiscal war in U.S. 23 Jun 2011 Obama's accelerated troop pullout helps pave the way for a deal to raise the federal debt ceiling. The budget savings go a long way toward closing the gap between the two parties. But the unexpected windfall also lessens the pressure to address needed structural fiscal reforms.
Money supply growth erodes Fed’s inflation logic 22 Jun 2011 The U.S. central bank again signaled no hurry to lift interest rates from their current nearzero level. It admitted that inflation had risen, but claimed it would fall again. The rising money supply, however, threatens the ground under the Fed's sanguine view on prices.
Texas economy not proxy for whole of America’s 22 Jun 2011 Rick Perry, the state's governor, may run for president. And Texas boasts belowaverage unemployment and decent growth. But it also has no state income tax, a large energy sector and not too much housing trouble. Thus Washington's bigger problems may not yield to Texan solutions.
Bank of England should set a high bar for QE2 22 Jun 2011 The central bank discussed adverse shocks from the euro zone periphery and mulled more money printing at its latest ratesetting meeting. A sudden Greek default would threaten the global recovery and the UK. But another round of quantitative easing should be a last resort.
UK equity market isn’t obviously in need of a fix 22 Jun 2011 It's easy to talk loosely about stock market shorttermism. But the UK government's probe into whether markets work against companies' longterm interest must be sure there is a case to answer. Perhaps a policy response is needed. The commission has to find convincing evidence.
The UK can’t wash its hands of Greece 22 Jun 2011 British eurosceptic politicians love the idea that Greece might leave the single currency. They should be careful what they wish for. A chain reaction default and breakup of the euro would put the UK's banks back in hospital and crush the European economy.
China scores points in Russia’s backyard 21 Jun 2011 Beijing is making a push into former Soviet states, using its growing financial muscle to tap the region's natural resources. Russia should benefit from this trend but has been far slower than its neighbours to take advantage. Meanwhile, Moscow risks losing regional influence.
Euro zone’s senior backtrack should help periphery 21 Jun 2011 The euro zone has dropped its original plan to make future bailout loans seniorranking to private debt. That should help peripheral countries, particularly Ireland, return to market in future. It may help ease today's crisis, even if taxpayers pay the price in future.
Syrian economy could be regime’s weak spot 21 Jun 2011 The vision for growth is shattered, financial reforms are being unwound, and key revenue streams look strained. A more marked decline in Syria's economic health may force the regime to reform or fall. But sanctions from the West are only a part of the answer.
Temporary U.S. tax tweaks risk unintended results 21 Jun 2011 Washington is toying with two quick fixes to boost the sluggish economy: a cut in payroll levies and a tax amnesty to bring home overseas corporate profits. Both concepts have some merit. But policymakers should be sure to consider the many possible consequences of such actions.
How the euro zone can save itself 20 Jun 2011 Greece is likely to receive another shortterm sticking plaster after Europe's leaders stared into the abyss. But a repeat of the drama of recent days is all too possible. The euro zone can, and must, protect itself against Athenian delinquency. Here's how.