Bond vigilantes will grab power from central banks 18 Dec 2017 Governments’ net debt issuance in 2018 is set to outstrip central bank buying for the first time in four years. That gives investors a welcome chance to hold profligates to account. Bond markets may, however, be prone to over-reaction as they rediscover their rusty powers of discernment.
Modi’s shrunken home-state win may slow reform 18 Dec 2017 The Indian premier’s BJP won in Gujarat, but with a reduced margin. That could signal a tougher-than-expected fight in the 2019 general election and prompt Narendra Modi to put his bigger, more disruptive initiatives on the back-burner for now in favour of more populist policies.
People vs. companies tax bill shafts U.S. expats 14 Dec 2017 Businesses are awash in riches in the Republican plan. Besides cutting the corporate rate, GOP lawmakers want to impose taxes based on where income is earned. But some 9 mln Americans working overseas won’t get that benefit. It’s another instance of corporations trumping humans.
Review: Why Brexit will ultimately please nobody 15 Dec 2017 Britons voted to leave the EU for myriad and conflicting reasons, according to “Brexit and British Politics”. It’s hard to see a settlement that addresses them all. The risk is that voters see Brexit as another betrayal by politicians, fuelling the disaffection that caused it.
Japan’s creative pay push contains mismatch flaw 15 Dec 2017 A fresh tax-rate cut rate gives employers an incentive to raise worker wages and invest in factories. The link recognises the folly of trusting companies to use a windfall to spread the wealth. One big hitch in the plan is that the corporate cost will far outlast the benefit.
Which CEO will make a move for the White House? 14 Dec 2017 Disney's Bob Iger may be off the list now, but other corporate chiefs can consider parlaying their careers into politics thanks to Trump. Think Starbucks’ Howard Schultz or Facebook’s Sheryl Sandberg. But shareholder approval isn't the same as voter awareness of business stardom.
U.S. online rules keep buffering despite FCC plan 14 Dec 2017 The watchdog will no longer require internet service providers to treat content equally. It’s a boost for the likes of Verizon and a setback for Netflix and others. But the decision will face lawsuits and many in Congress are opposed, which may leave regulations in flux.
Hadas: U.S. fails life, liberty, happiness test 14 Dec 2017 The country’s Declaration of Independence offers a pretty good way of measuring economic success, and failure. Life expectancy is stagnating. Liberty suffers from too-strong companies and too-weak government. And rising inequality undermines the pursuit of economic happiness.
The Exchange: NY Deputy Mayor Alicia Glen 13 Dec 2017 How bad will the Republican tax plan be for New York City? Alicia Glen, who looks after economic development for America's largest city, says it will hit 700,000 taxpayers and depress property values. But it won't make the Big Apple any less appetizing for the best and brightest.
M&A friction limits EU single-market opportunity 13 Dec 2017 Two Spanish ministries are interfering in a 16.5 bln euro Italian bid for local toll-road group Abertis. France and Italy similarly meddled in recent cross-border deals within the euro zone. Building scale isn’t proving as borderless as proponents of EU champions would like.
Alabama voters put anger before economics 13 Dec 2017 Democrat Doug Jones won the state’s U.S. Senate race in a stunning upset. Rival Roy Moore has unique troubles, namely allegations of sexual misconduct. But Trump’s approval has also fallen, despite Alabama’s low jobless rate. The Republican economic-growth message isn’t a magic elixir.
ECB could use Steinhoff mess to improve QE 13 Dec 2017 The EU central bank risks a loss after acquiring the South African retailer’s securities in its bond-buying scheme. Even investment-grade debt can go bad, and the hit is manageable. But in this case the ECB could have avoided trouble by requiring two credit ratings, not just one.
Bank of England is too sanguine on inflation 12 Dec 2017 Prices rose 3.1 pct in the year to November, the fastest pace in six years. The central bank blames Brexit and says inflation is near peaking. That’s convenient with further interest-rate hikes a risk to sluggish economic growth. But the BoE may not get off so easily.
Cox: Popping gun bubble to bring financial casualties 12 Dec 2017 Five years since Sandy Hook, the firearms trade has never had a better friend in the White House than Donald Trump. Yet the industry is in terrible shape, having already fulfilled years of future demand. Storied Remington, maybe others, will face bankruptcy in 2018.
UniCredit ups the ante on bad-debt cleanup 12 Dec 2017 Italy’s biggest bank by assets is vowing to run down a 33 billion euro portfolio of non-core loans by 2025. It also reckons it can withstand regulators’ drive to purge lenders’ bad credit, and still increase dividends. The move will put more pressure on rivals.
Trump’s anti-WTO rhetoric hurts America first 11 Dec 2017 U.S. trade chief Robert Lighthizer has a tough message for the body’s biennial confab. The White House is also blocking new WTO appellate judges. Reforms are needed but America has won most of its complaints, including against China. Weakening it has consequences for U.S. firms.
Bitcoin futures set scene for more gambling 11 Dec 2017 The 20 pct surge on new CBOE cash-settled contracts is sedate by crypto-currency standards. There’s still cause for concern. Rather than being a useful hedge, futures make it easier to trade bitcoin without actually owning it. For now they have little utility beyond speculation.
U.S. hands HSBC CEO perfect going-away gift 11 Dec 2017 The end of a five-year agreement over money-laundering lapses removes the threat of authorities yanking the bank’s U.S. licence. HSBC devoted 8 pct of its operating expenses to compliance last year. Though those costs will stay, departing boss Stuart Gulliver can leave on a high.
Bank of England transfer defies financial gravity 11 Dec 2017 Britain’s opposition Labour party says it may move parts of the central bank to Birmingham. That may appeal to voters, but both the BBC and HSBC have found relocating expensive and difficult. The idea also ignores the reasons London’s financial centre exerts such a strong pull.
The Exchange: Marcus Ruiz Evans 8 Dec 2017 The president of Yes California leads a campaign arguing that the Golden State should become an independent country – an idea increasingly referred to as Calexit. He explains why secession would be good for the state’s economy and how he’ll get the rest of the nation to buy in.