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.
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.
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.
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.
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.
Investor concerns over Libya’s SWF are justified 23 Feb 2011 There's no knowing what would happen to Libya's $70 bln sovereign fund if the regime falls. A rapid liquidation of investments, including stakes in UniCredit and Fiat, is the worstcase scenario. That wouldn't be in anyone's interest. Investors can only hope rationality prevails.
Arab unrest will be a test for OPEC 23 Feb 2011 The oil cartel has enough spare capacity to cope with disruption in Libya and beyond. However, the quality of crude differs, and supply could be squeezed if other members are threatened. Producers can't afford to turn off the taps for long. But the shortterm ride will be bumpy.
Game theory at play in UK interest rate puzzle 23 Feb 2011 Would the Bank of England's chief economist have favoured a rate increase this month if his vote had been decisive? Former members of the UK's interest ratesetting committee suggest game theory influences their decisions. Feints may help achieve individual and collective goals.
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.
Obama’s new focus on primary deficit is a fudge 22 Feb 2011 It would be a start for the U.S. government to get revenue and noninterest spending balanced. But while eliminating the socalled primary deficit is a helpful goal, it's a measure that ultimately misleads as to the true scope of America's debt problem.
EU needs imaginative approach to North Africa 22 Feb 2011 Europeans want to police the frontiers to stop a flood of immigrants from countries in turmoil. But the ideal response, in line with the EU's longterm interests, would be free trade in goods, services and even labour as with Eastern Europe after the Berlin Wall.
Arab revolutions test China’s economic bargain 22 Feb 2011 Chinese protests inspired by Libya and Egypt were limp, but worrying. The Communist Party has created wealth, health and opportunity for 30 years while restricting political freedoms. But as people become richer, their demands will be increasingly hard to gratify.
Vulture funds can still find tasty morsels 22 Feb 2011 Credit markets, once the damsel in distress, are no longer hollering for help. Low interest rates and fatter earnings have helped companies clean up their balance sheets. But that doesn't mean distressed debt investors are out of luck. Opportunity calls, just not as loudly.
IMF tarnished by praise of ousted despots 22 Feb 2011 In recent months the International Monetary Fund has applauded the likes of Libya, Egypt and Tunisia for their reforms and economic policies. As protests spread and regimes topple, the IMF's reports don't look so good. Next time around, it should check the democracy indicator.
Bahrain tumult could destabilise Gulf region 22 Feb 2011 The tiny island is poor but strategically crucial to its oil rich neighbours, most importantly Saudi Arabia. It is also a key U.S. ally. Bahrain was the first Gulf country to discover oil and build a financial centre. It could become a template for how tensions unfold elsewhere.
Hot coal puts risky Mongolia back on the map 22 Feb 2011 The windswept nation may raise $5 bln by floating a piece of its hottest coal deposit in London or Hong Kong. It's a smart time to cash in on high prices, without selling big stakes to the megaminers. Investors should demand a decent discount given the peculiar political risks.
Libyan chaos could threaten Mediterranean economy 21 Feb 2011 Major disruption in the oilrich North African country would present serious strategic challenges for Western governments and corporate titans that recently embraced the former pariah state. But Italy looks set to bear the brunt of a fallout if Libya descends further into chaos.
India corruption travails could presage catharsis 21 Feb 2011 Investors are understandably worried given that tycoons, such as Anil Ambani, are being hauled in by investigators, inflation is rampant and the government seems paralysed. But the outcry offers the best chance of tackling corruption that has plagued the country for decades.
G20 progress is much too slow to matter 21 Feb 2011 Finance ministers painstakingly agreed on a set of indicators that could help them monitor global financial imbalances in the future. But differences remain as big as ever on the best way to deal with a crisisprone global monetary system, and on how to stabilise capital flows.