China needs an SWF overhaul 28 Apr 2011 Its $300 billion sovereign fund wants a topup. But it would be better to set up new funds for China's swelling foreign reserves with separate boxes for natural resources, or politically backed foreign investment. Transparency should reduce controversy, and improve returns.
Bernanke’s star turn may win over Fed critics 27 Apr 2011 The debut of the central bank chairman's oneman show, BankerMan: Turn Off the Snark, was full of high drama. One flubbed line could have sent markets heading for the exits. And though the performance was impressive, it'll take a longrunning hit to make it worth the risk.
Russia holds promise for private equity players 27 Apr 2011 International private equity firms are expanding into Russia, and the Kremlin is rolling out a $10 billion fund to lure them. Even without this official blessing, the high growth and profitability potential of Russia's underdeveloped businesses deserves investors' attention.
Fed runs risk of losing control of markets 27 Apr 2011 The U.S. central bank may have missed its last chance to signal the possibility of a rate rise this year. Gold, oil, the dollar and many price data suggest the Fed's ultralow rates and benign view of inflation are behind the curve. It could be very tough to catch up later.
Look out Bernanke, Fed foe seeking White House 27 Apr 2011 Ron Paul was the town crank of the 2008 Republican U.S. presidential race. But his agenda of smaller government, restraint abroad and Fedbashing seems in tune with today's Tea Party. Paul has little chance in 2012, but his views may run strongly. The Fed boss should take note.
Rebranding tax reform could end U.S. budget logjam 26 Apr 2011 A political deal may depend on whether deficit hawk Republicans can sell the elimination of tax breaks as cutting spending rather than raising taxes. So far, most GOPers aren't buying. Voters might pass, too, once they see the effect on their tax bills. But it's worth a try.
China’s truckers sound bum note on reforms 26 Apr 2011 Sure, fuel price hikes and high fees penalise the truck drivers who staged last week's strikes. But pricier petrol is essential for a more balanced, less polluted China. If the authorities are too wary of upsetting vested interests, necessary reforms will be stifled.
West can find ways to pressure Syria 25 Apr 2011 The reluctance to get tough on Damascus may be due to doubts about the effectiveness of economic sanctions. But the delay in taking action mostly reflects Western powers' unfounded hopes that the country is a stabilising force in the region. This shouldn't make them powerless.
No easy path for international aid in Middle East 20 Apr 2011 Financial institutions like the IMF or the World Bank will find it hard to help the region out of its economic problems. Loans with tough conditionality seem unrealistic. And any grand plan to encourage democracy risks being perceived as encouraging rebellions.
Cuba reforms point more toward Ukraine than China 20 Apr 2011 This week's modest central planning reforms don't look enough for a Chinastyle takeoff. Without reformist leadership to unclog bottlenecks they will be bogged down by regulation and corruption as in the 1990s. In such systems, the only successful capitalists are cronies.
Gordon Brown’s IMF interest rightly scorned 19 Apr 2011 The UK's former premier has been slammed by his successor as a bad candidate to head the IMF. David Cameron calls him a deficit denier. But Brown's real problem is that he lacks the diplomatic savvy needed in the job. And the vacancy, when it arises, shouldn't go to a European.
White House in a pickle over its GM exit plan 19 Apr 2011 The Obama administration must relish selling Uncle Sam's remaining stake in the automaker before election season heats up. But with GM's shares wallowing below their IPO price, waiting would be fairer to taxpayers. As it stands, either option is a gift to Republicans.
Warring U.S. budget plans: ideology vs numbers 19 Apr 2011 S&P's rating warning this week suggested America's budget woes are partly political. Rival longterm plans involve sharply different mixes of tax reform and spending cuts. The trouble is, it's not a question of meeting in the middle to solve the problem. It's a clash of visions.
S&P warning may have wrong effect on Washington 19 Apr 2011 Prodding Obama and Congress to agree on a debt plan might achieve just the opposite. S&P's dour take on Treasuries could inflame the debtceiling debate, leaving little energy for a grand budget compromise. And the austerity the agency desires would have few takers anyway.
Nigeria’s decent election lifts economic outlook 18 Apr 2011 High oil prices have brought growth, but corruption and population increases have impeded takeoff. Goodluck Jonathan's genuinelooking win in the weekend's presidential election could change that and spur foreign investment as long as the chance to clean house isn't wasted.
SEC’s Gitmo-style Wall Street justice has flaws 14 Apr 2011 Accused fraudster Rajat Gupta is fighting the U.S. regulator for suing him in a strippeddown forum rather than federal court. The judge who may hear his challenge is also concerned. Cleaning up fraud needs decisive action, but legal shortcuts could weaken the impact of reforms.
Greek restructuring chatter doesn’t stack up – yet 14 Apr 2011 When should Greece restructure? With debt at 143 percent of GDP and rising, a restructuring looks desirable and inevitable. But the political and economic stars must first be aligned for the euro zone to embark on its first live experiment in sovereign debt default.
Banks need to guard against short-term debt creep 14 Apr 2011 Banks haven't let a good crisis go to waste and are now less dependent on shortterm funds. But rockbottom interest rates make it difficult to resist the lure of cheaper financing found by selling shorterterm debt. The slither to the bad old ways may already be underway.
Finance gets little but a history book from Senate 14 Apr 2011 Goldman Sachs, Moody's, WaMu and the OTS get slammed again in a colorful 650page autopsy by Senator Carl Levin's panel. But the TV show was better. Though there are 19 proposals and the DoJ is being enlisted to investigate further, this may be the tired last word on the crisis.
Ayn Rand gets ready for another close-up 14 Apr 2011 A film version of her capitalist opus Atlas Shrugged is coming out just as a populist U.S. political movement embracing her philosophies takes hold. Rand's economics are fairly conventional and the story turgid. But the silver screen may yet help her speak to a new generation.