Headless Belgium ticks on in vulnerable state 13 Jun 2011 Unhappy anniversary. It is a year since Belgium has been ruled by a caretaker government. At least the economy is growing unlike in weaker euro members. But bank exposure to the periphery is high and any credit event there could whack up Belgium's deficit and bond yields.
Obama’s CEO panel should go bigger or stay home 13 Jun 2011 American workers might be better off if the bosses on Obama's jobs council, including GE's Immelt, spent more time back at HQ. The group's first batch of ideas seems unlikely to dent U.S. unemployment. To be gauged as more than a PR stunt, the CEOs will need to be bolder.
Fed gets a taste of painful exit strategies 13 Jun 2011 Auctions of some $30 bln of toxic assets once owned by AIG haven't gone too well. Only half the latest crop sold, as a fatigued Wall Street fretted about depressed mortgage bond prices. The bigger worry, however, is what it says about the fate of the Fed's whopping balance sheet.
Erdogan’s victory suggests Turkey may not need EU 13 Jun 2011 The AKP has scored a big victory, but it will need to compromise on constitutional change. This is the best possible result for Turkey. The success of its promarket, regionallyoriented policies could show it doesn't have to lock itself into a politically unresponsive union.
Lifting GDP growth key to U.S. debt, job fixes 13 Jun 2011 Tim Pawlenty and Larry Summers, otherwise unlikely bedfellows, seem to agree on that. Forget Pawlenty's fanciful 5 pct growth rate. Just historically average growth 3.3 pct or so would shrink deficits and boost employment. But getting even there requires the right policies.
Irish finance minister faced mission impossible 10 Jun 2011 Brian Lenihan, who has died at 52, ran Ireland's economy from the onset of the crisis to its bailout. A hasty decision to guarantee the banks in 2008 proved fateful. But Lenihan inherited a badly run and bloated financial sector.
China’s forbidden market lures global blue-chips 9 Jun 2011 Coke joined HSBC and NYSE to say it wants to list in China, even though the market isn't yet open. Capital controls add difficulty while branding benefits may be limited. But China may still get good business as long as global multinationals feel the need to please regulators.
PRC may blunt next U.S. defense chief’s budget ax 9 Jun 2011 Leon Panetta is more accountant than warrior. And he'll need the numbercrunching skills earned as President Clinton's budget chief to trim U.S. defense spending. But fear of an awakening China means cuts as deep as in the postCold War 1990s probably won't be in his armory.
IMF snub points to an overheating Turkey in denial 9 Jun 2011 Ankara has told the IMF not to publish in full its latest report on the economy, saying it was written by inexperienced analysts. Turkey is an emerging market success story, but supercharged growth has risks. No doubt that was the IMF's conclusion. The government should listen.
Brazil at risk of wasting its boom 9 Jun 2011 It's the flipside of wasting a good crisis. While interest rates are rightly high to ward off inflation, they have brought an overvalued currency. Brazil should be running a big budget surplus and building reserves. But President Rousseff doesn't seem to be making it happen.
Spain must clamp down on spendthrift regions 8 Jun 2011 Spanish regions particularly Catalonia will probably miss their fiscal targets again this year. Even if the central government can compensate for the shortfall, the system is not sustainable. In the meantime, Madrid must set strict spending limits.
Berlin takes on the ECB over Greek restructuring 8 Jun 2011 Germany's finance minister says a debt deal must go beyond a soft Viennastyle rollover, and include a substantial contribution from bondholders. This puts him at odds with the European Central Bank. It also doesn't bode well for a swift agreement on Greece's second bailout.
Jamie Dimon picks wrong forum to carpet Bernanke 8 Jun 2011 The JPMorgan boss asked the Fed chairman whether new financial regulations have been put under proper costbenefits scrutiny. The question is fair. But Dimon knows that politicians made the rules. Publicly calling out Bernanke doesn't do him or his industry any favors.
U.S. default deniers could get what they wish for 8 Jun 2011 Fitch is the latest rating firm to warn of the consequences of Uncle Sam delaying a debt service payment. Maybe only the mess that would follow could persuade the Washington brinkmen to back off. At least it would explode the false choice they are presenting.
What’s Greek for default? 8 Jun 2011 The euro zone wants holders of Greek bonds to help solve the country's funding problems while avoiding a default. It will be hard to get accountants, rating agencies, derivatives traders and the European Central Bank to agree. But some opinions count for more than others.
Doggedness earns U.S. Treasury boss grey hairs 8 Jun 2011 Timothy Geithner hasn't gained prominence through his charisma or intellectual flash. Instead, he has shown quieter qualities of persistence and prudence. The guy many thought would be the first of Obama's top economic team to go is now the sole survivor and a senior voice.
Pawlenty hopes unlikely growth will fund tax cuts 7 Jun 2011 The U.S. Republican presidential contender's economic plan hinges on a decade of 5 pct annual GDP expansion. That's a very tall order, though the blueprint would boost growth. But it could get interesting if his assumptions for longterm pensions and healthcare are as ambitious.
Peru narrowly votes to imperil commodity wealth 6 Jun 2011 Ollanta Humala promises Lula's Brazil, ushering in growth despite leftwing tendencies. But investors expect something more like Chavez' Venezuela. Peruvians missed a chance to reinforce freemarket wealth, and instead should brace for an unhappy turn of the commodity cycle.
Withdrawal of Fed nominee sets bad precedent 6 Jun 2011 Nobel laureate Peter Diamond won't be joining the U.S. central bank board, and neither might anyone else for some time. Washington is making the Fed almost as much of a political target as the Supreme Court. The result could be lengthy vacancies and perhaps less independence.
Delivering Plan A should be UK’s priority 6 Jun 2011 The British government is being urged to change economic course. The latest attack envisages a green new deal and job creation. But it's imperative that the deficit is cut because that is the best way to keep interest rates low. It's hard. But it's the only way.