Spanish reforms in doubt after socialist defeat 23 May 2011 In spite of a major defeat at the polls, Prime Minister Zapatero will try to hang until general elections next year. He may not be able to. And it's unclear what conservatives would do in power. The uncertainty won't help Spain's efforts to get its deficit under control.
U.S. states shouldn’t spend unexpected revenue 19 May 2011 The recovery has brought states like California modest windfalls. There's pressure to spend it right away. But longterm pension obligations, previous overspending and continuing shortfalls in property taxes for local governments are all reasons to be stingy.
Obama offers slim pickings for Arab spring 19 May 2011 A bit of debt relief here, a loan there, and the promise to support investment across the region. Barack Obama failed to wow in his muchanticipated speech. Perhaps more will come later. But the U.S. could do more to reassure the region's struggling economies in transition.
Medvedev further asserts reformist ambitions 18 May 2011 The Russian president's ambition to run for office again in 2012 is ever more obvious. He is advancing his liberal agenda and distancing himself from Vladimir Putin. Although his newfound energy is welcome, Medvedev can't go too far and antagonise his prime minister.
U.S. refiners would struggle to fix prices 18 May 2011 Not for the first time, politicians are accusing refiners of colluding to push up pump prices. If refiners conspired, they have done a lousy job. Margins have been wafer thin until recently, making up 2 cents on a $4 gallon of gasoline. The blame for rising prices lies elsewhere.
IMF should use crisis to toughen itself up 17 May 2011 Under Dominique StraussKahn, lending has multiplied tenfold, largely to basket cases like Greece. But recent IMF loans have failed to force change while damaging other lenders' standing. The fund would make the best of its crisis by replacing the soft DSK with a mean SOB.
Zombie utility plan may be Japan’s best option 17 May 2011 Setting up a fund to ensure Tokyo Electric can compensate victims of its nuclear fiasco avoids nationalisation or bankruptcy. But it keeps the company barely alive and puts shareholders in limbo. So long as power flows without big rate hikes, an undead utility may not be so bad.
French populism boosted by Strauss-Kahn’s problems 16 May 2011 The end of the IMF head's presidential dreams means Nicolas Sarkozy won't face an articulate marketfriendly socialist rival next year. It will boost populism right and left, and the country's main problems, fiscal insouciance and slowish growth, aren't likely to be addressed.
Muslim Brotherhood could harm Egypt’s economy 16 May 2011 With a former leading member of the organisation now running for president, the Brothers and their allies are closer to power. Though the Brotherhood's policies are still fluid, control by it poses risks to tourism, trade and aid.
Portugal serious at last on firing growth-boosters 16 May 2011 Lisbon and the EU are about to clinch a bailout that will plunge the country into recession in the short term. But serious reforms include an exportfriendly revenue remix and a clampdown on labour costs which should boost longerterm growth if its execution is watertight.
Questions for Strauss-Kahn raise more for world 15 May 2011 A hotel maid's allegations prompted New York police to take the IMF chief off a plane and into custody. The sordid affair throws Dominique StraussKahn's potential bid to lead France into disarray and may alter the IMF's course at a critical juncture in the sovereign debt crisis.
Romney White House bid pits policy vs PowerPoint 13 May 2011 During his private equity career, the early Republican frontrunner was known as a supersalesman who could dazzle with data. But presentation skills alone won't make him U.S. president. A slideshow defense of his Massachusetts health plan hasn't silenced conservative critics.
Hedge fund metric could answer Volcker Rule riddle 12 May 2011 U.S. financial reforms crafted by the former Fed boss were designed to keep banks from behaving like hedge funds. But isolating risktaking for clients from prop trading bedevils their enforcement. Measuring Wall Street trading desks' Sharpe ratios might just square the circle.
Volcker Rule may present Goldman unintended gift 12 May 2011 The bank is lobbying to ease proprietary trading limits imposed by the U.S. DoddFrank law. But as with most hastilycrafted legislation, some unintended effects are now becoming apparent. One may hand Goldman even bigger fees than before from managing private equity investments.
Russian blogger persecution should worry investors 11 May 2011 A criminal case against anticorruption blogger Alexei Navalny is just the latest blow to freedom in Russia, and flatly contradicts President Medvedev's investorfriendly rhetoric. His reform pledges will lack credibility until he tackles abuses of power by the security services.
China-U.S. too close for comfort on biggest issue 11 May 2011 Their Washington powwow achieved small pledges on tech exports and government procurement. The bigger topic, China suppressing its currency, fell off the agenda. That's because since the last round, the dollar has plunged too. It's those outside the dialogue who feel the pain.
Scottish independence appeals but has big risks 11 May 2011 Should Scotland choose independence? Oil revenue could cut the fiscal deficit painlessly but prices could fall and force austerity. And a small Scottish economy would be at risk from a big bank, like RBS. A new currency? Tricky. Scotland could stand alone, but it won't be easy.
AIG’s freedom looking less lucrative for Uncle Sam 11 May 2011 Exiting the insurance giant once seemed like it might turn into one of Treasury's more profitable deals. But the reduced $9 bln offering indicates it will make less than once thought on the first slug. That will make it harder for taxpayers to make a big profit on this bailout.
U.S. munis: no disaster, but still vulnerable 10 May 2011 Bad press and stressed state finances hammered local government debt last year, but the $3 trln market was never in as bad shape as the doomsayers made out. Still, today's improving market, helped by the Fed, isn't immune to stumbles as dysfunctional states tackle budget woes.
U.S. House Speaker sets achievable budget bar 10 May 2011 John Boehner's demand for more than $2 trln in cost cuts may seem an escalation in the battle over raising the U.S. debt cap by a similar amount. But it's over 10 years, it's in line with several budget proposals, and it would represent only a modest down payment on austerity.