Uncle Sam should resist opening up oil reserves 7 Mar 2011 The government's strategic stock only covers 38 days' supply and so is useful only in brief and serious crises. Making it available to offset moderate but perhaps longterm supply constraints, like the current Libyan turmoil, would be premature and could even push oil prices up.
U.S. jobs still an issue for next White House race 4 Mar 2011 Even based on February's better data, it will take 39 months to replace the rest of the nearly 9 mln jobs lost and in that time the labor force will grow, too. Presidential candidates should reckon on joblessness still blighting the economy come November 2012.
U.S. spending deal won’t settle funding fight 3 Mar 2011 Democrats and Republicans have compromised to avoid an embarrassing temporary shutdown, and may cut a deal for the rest of the year. But even if this logically implies raising the statutory debt ceiling, it's not clear agreeing on that will be so easy.
Osborne should give King another tough Sentance 3 Mar 2011 Many assume that George Osborne, the Chancellor, will want a dovish economist to replace arch hawk Andrew Sentance, who leaves the monetary policy committee in May. What he needs is an external member that keeps the MPC transparent, intellectually challenged and independent.
ECB April rate hike could have some nasty effects 3 Mar 2011 JeanClaude Trichet, the ECB president, surprised markets with a blunt warning of a possible rate rise in April. Second round inflation effects from oil must be avoided, he said. But the move is risky. Economies and banks in the euro zone's periphery may suffer.
Growth, not inflation, is Asia’s bond market worry 3 Mar 2011 Rising food, fuel and property prices suggest Asia has a serious inflation problem. Markets tell a different story. Asian bond yields indicate investors are more concerned that the region's growth will slow and believe that the U.S. recovery offers more attractive opportunities.
Portugal’s ducking and diving won’t avoid bailout 2 Mar 2011 The Portuguese government claims investors' takeup of its offers to buy back shortterm debt is a sign of confidence. That's only partially true. Investors aren't rushing to sell, but they won't lend to the country at affordable rates either. A bailout still looks inevitable.
India misses opportunity in latest fiscal budget 1 Mar 2011 Projections of a moderately declining deficit make sense only by ignoring the funny accounting and assuming the economy keeps rocketing ahead. With state spending, inflation and commodity prices increasing, India appears to be going more Gordon Brown than Deng Xiaoping.
China’s lower growth target may be higher risk 1 Mar 2011 China has lowered its symbolic GDP growth goal to 7 percent, sacrificing speed for sustainability and fairness. That looks like an attempt to head off unrest. But the new target looks academic. If growth really fell that low, unemployment could rise, and create more tension.
Argentine lesson: don’t fiddle with fudged figures 1 Mar 2011 Buenos Aires may fine a consultancy $120,000 for publishing inflation estimates that were twice the official figure. As inflation, output and productivity estimates determine huge money flows, governments are tempted to fiddle them. Economists beware, the problem is worsening.
German boom carries a risk for euro zone 1 Mar 2011 Unemployment in Germany is falling faster than expected. Business confidence is at its highest level in 20 years. The economic vitality is good for Europe. But if it reinforces Berlin's conviction that others should emulate its model, the euro zone debt crisis could drag on.
Saudi outflows are worrying omen in Mideast crisis 1 Mar 2011 A 7 pct fall in the Saudi stock market, the Middle East's biggest, marks a significant deterioration in sentiment. It suggests the local wealthy are moving capital as it becomes harder to argue that unrest in Saudi is an unthinkable scenario.
Economic sanctions irrelevant to Libya’s plight 28 Feb 2011 Imposing travel bans and asset freezes on Muammar Gaddafi and his inner circle, as well as an arms embargo on the country, is better than nothing. But at this stage of violent unrest, economic sanctions won't do much to end civilian bloodshed or help topple Gaddafi.
Renegotiating EU bailout can’t mask Irish pain 28 Feb 2011 Irish voters have given its new government a mandate to seek cheaper European loans and burn bank bondholders. Neither move would do much to dent Ireland's debt burden, or make its fiscal cuts less severe. Still, sharing the pain may help make austerity more palatable.
Buffett has it both ways with Goldman Sachs 28 Feb 2011 In his annual letter the Sage of Omaha once again rails against Wall Street evils like hedge fund compensation, leverage and optionvalue pricing. Yet he also blesses the Fed for giving Berkshire more time with its investment in Goldman. It's hard not to see a contradiction.
Banks can do more to block dictators’ money 25 Feb 2011 Switzerland and others have frozen assets of deposed North African dictators. While they are right to seize accounts, not accepting the cash would have been better. Banks and governments have the power to investigate suspect funds. They should apply the rules more forcefully.
Markets must ready for pared-down euro zone reform 25 Feb 2011 Hopes are waning that the euro zone will next month agree substantial longterm reforms to solve the debt crisis. It may still alleviate some of Greece's and Ireland's pain. But a less than comprehensive solution could disappoint markets, and drag Spain back into the mire.
Saudi Arabia just buys time with $37 bln handout 24 Feb 2011 The raft of financial goodies announced by the house of Saud shows it doesn't underestimate the risk of unrest. But it merely buys time. The onus is on the kingdom's rulers to show they understand the need to address the mounting social, economic and political grievances.
Fiscal generals beat new path to U.S. presidency 23 Feb 2011 Six members of the Civil War top brass got elected to the White House. But a new kind of union battle of the labor variety provides the latest crucible. How governors fare in this war and making peace within their parties could produce a future national leader.
Why Wisconsin matters to global financial markets 23 Feb 2011 The Midwestern state best known for its cheese is ground zero for a pitched battle between public sector unions and cashstrapped governments over collective bargaining. If the governor can end the practice he will set a precedent for fiscal reform that will spread nationally.