No easy path for international aid in Middle East 20 Apr 2011 Financial institutions like the IMF or the World Bank will find it hard to help the region out of its economic problems. Loans with tough conditionality seem unrealistic. And any grand plan to encourage democracy risks being perceived as encouraging rebellions.
Cuba reforms point more toward Ukraine than China 20 Apr 2011 This week's modest central planning reforms don't look enough for a Chinastyle takeoff. Without reformist leadership to unclog bottlenecks they will be bogged down by regulation and corruption as in the 1990s. In such systems, the only successful capitalists are cronies.
Buy Korea is risky play on Japanese/U.S. dynamic 19 Apr 2011 Seoul stocks have gained amid postquake supply chain tangles and a reviving U.S. economy. But the rally is vulnerable to a rapid Japanese rebound or an end to Fed money printing. And relative merits aside, Korea's fundamentals are not compelling.
S&P warning may have wrong effect on Washington 19 Apr 2011 Prodding Obama and Congress to agree on a debt plan might achieve just the opposite. S&P's dour take on Treasuries could inflame the debtceiling debate, leaving little energy for a grand budget compromise. And the austerity the agency desires would have few takers anyway.
S&P states the much-needed obvious on U.S. debt 18 Apr 2011 The rating agency's shift to a negative outlook on Uncle Sam's AAA credit shouldn't come as any surprise. But both lawmakers and markets deserved the reminder. S&P's move should be a reality check for political pointscorers in Washington and headinsand investors alike.
Nigeria’s decent election lifts economic outlook 18 Apr 2011 High oil prices have brought growth, but corruption and population increases have impeded takeoff. Goodluck Jonathan's genuinelooking win in the weekend's presidential election could change that and spur foreign investment as long as the chance to clean house isn't wasted.
Finns drill hole in euro zone consensus 18 Apr 2011 The populist right's success in Finland's parliamentary elections, and the government's ousting, will complicate rather than kill Portugal's bailout. But acrimony between the euro zone's savers and the spendthrifts threatens the consensual decisionmaking that helps it function.
Overheating China threatens global inflation 15 Apr 2011 Growth and prices are running too fast, and wages spiralling. The cheap exports that long helped keep global inflation down will soon get more expensive. China's likely response to its own inflationary pressures to strengthen the currency will make the West's problem worse.
Five years from U.S. housing peak, still no bottom 15 Apr 2011 April marks half a decade since the highwater mark for American house prices. After rising from a trough in 2009, prices are falling again and activity is very thin. It's another complexity for policymakers eyeing inflation: hiking interest rates could further squash housing.
Brazil can lure manufacturing jobs away from China 14 Apr 2011 Foxconn, the Taiwanbased Apple iPad maker, is mulling a $12 bln investment in Brazil. China can't be complacent as its costs rise. The Latin American nation still can't compete on efficiency, but advantages won by tariffs and market potential may start to outweigh other factors.
Greek restructuring chatter doesn’t stack up – yet 14 Apr 2011 When should Greece restructure? With debt at 143 percent of GDP and rising, a restructuring looks desirable and inevitable. But the political and economic stars must first be aligned for the euro zone to embark on its first live experiment in sovereign debt default.
Ayn Rand gets ready for another close-up 14 Apr 2011 A film version of her capitalist opus Atlas Shrugged is coming out just as a populist U.S. political movement embracing her philosophies takes hold. Rand's economics are fairly conventional and the story turgid. But the silver screen may yet help her speak to a new generation.
New Obama budget still leaves fiscal future fuzzy 13 Apr 2011 The President's doover represents an upgrade. U.S. deficits a decade from now would be sharply lower than under his previous plan. But the approach still relies on gimmicks and avoids longterm fixes. That tactic may be good politics, but it suggests a worrying lack of urgency.
Global debt deflation yet to deflate debt burden 13 Apr 2011 The IMF's Global Financial Stability Report shows the U.S. and Japan making little fiscal progress. Liabilities are transferring to governments, with little overall improvement on the global debt position. Another financial crisis, concentrated in government, still looms large.
Divi upgrades give investors an inflation antidote 12 Apr 2011 Optimism about dividend payouts on European shares is running at its highest since the credit crunch, according to Morgan Stanley research. The evidence commends equities as an asset class well placed to defeat looming inflationary threats.
Softer inflation gives BoE time and pound may fall 12 Apr 2011 A surprise drop in inflation is one bit of good news amid a slew of poor UK data. Housing, retail sales and output are all weak. Expectations that the Bank of England will soon raise rates may now shift. That could lead the pound down and help the rebalancing the UK needs.
Civil War anniversary raises secession thoughts 12 Apr 2011 150 years since South Carolina split from the Union, Washington is again divided over issues social and fiscal. A secession by Tea Party states would give them smaller government and lower taxes. But as most are net recipients of federal largesse, the Union looks solid.
Iceland’s stance is self righteous and impractical 12 Apr 2011 Voters in Iceland think they are acting out of principle. They should be more pragmatic. By rejecting a deal over compensation for failed bank Landsbanki, they risk paying more in future. It's a gamble the country may win, but shouldn't be taking.
Syrian crackdown stamps on economic dream 11 Apr 2011 Bashar alAssad's regime had an ambitious plan to quadruple foreign investment and boost tourism in order to drive growth in a poor country with dwindling oil. But the violent suppression of protestors will scare off both investors and tourists.
ECB steps in where euro governments failed 8 Apr 2011 Its advice to Portuguese banks to stop lending to the government made the ECB the puppet master behind Lisbon's sudden decision to seek a bailout. This assertive, political role isn't that of a central bank. But in the euro zone's current vacuum, the bank didn't have a choice.