Uncle Sam must not play fool on corporate taxes 29 Mar 2011 When Japan cuts the rate companies pay on April 1, America's will be the highest among advanced economies. Even its effective tax rate is way above average despite the likes of GE spending billions to game the labyrinthine code. A smarter approach would be to substitute a VAT.
U.S. gets religion on adopting mortgage standards 29 Mar 2011 In a sense, it's back to the future. Regulators are championing the return of 20 pct down payments and other sensible, if relatively conservative, lending practices to housing finance. Some banks may squawk since it effectively ends a path to easy profits, but it's worth it.
Four reasons to hedge against Japanese equities 28 Mar 2011 The bright side, so hard to see in the wake of the disaster, is now the consensus in Japan's market. But politics, power shortages, consumer conservatism and the unresolved nuclear crisis are chipping away at the optimism. It is time to hedge against disappointment.
Obama should get in New York fiscal state of mind 28 Mar 2011 Governor Andrew Cuomo struck a budget deal without raising taxes and five days ahead of deadline. It's the latest example of how leftofcenter politicians, often considered profligate, can be better placed to cut spending. The president is missing a Nixon to China moment.
Fringe U.S. candidates just might win ideas race 25 Mar 2011 Odds are long for real estate magnate Donald Trump or libertarian Rand Paul to secure the 2012 Republican presidential nod. But their Tea Partyfriendly proposals are generating interest. Even if they don't run, the buzz suggests there's a populist economic niche to occupy.
Canada’s political drama no match for Portugal’s 24 Mar 2011 Both nations' minority governments face snap elections after failing to secure support for budgets. Though Canada's economy is about five times as large, all eyes are on tiny Portugal. That's not surprising, but it's a reminder of how fiscal reserve can be a quiet defense.
Europe can, and will, give Portugal time 24 Mar 2011 The resignation of premier Jose Socrates means the euro zone must address Portugal's debt problems in a political void. But the shortterm pressures two major funding deadlines in April and June are manageable. Allowing Portugal to default isn't remotely on Europe's agenda.
Extra Fed transparency might keep Congress at bay 24 Mar 2011 Ben Bernanke must know quarterly press conferences won't hurt the central bank's effectiveness. After all, JeanClaude Trichet gives one after each of the ECB's monthly meetings. And more openness could dissuade lawmakers from trying to exert influence on monetary policy.
U.S. bank watchdogs face leadership vacuum 23 Mar 2011 Just as the critical rulewriting and implementation of 2,000plus pages of financial reform is taking place, key bank regulators, including the FDIC and OCC, are without settled chieftains. Add vacancies at the housing and consumer finance agencies and it could spell trouble.
Blocked BofA divi at least shows Fed using teeth 23 Mar 2011 The regulator was right to squash the bank's payout plan. BofA lost money last year, remains deep in recovery mode and has a history of paying too much though new boss Moynihan pledges prudence. However, the Fed should still reveal more about its rationale.
Fed’s $82 bln windfall reveals policy dilemma 23 Mar 2011 That's how much the U.S. central bank made on its $2.4 trln book of assets in 2010 partly thanks to the carry trade created by its own ultralow interest rates. But with the next move inevitably upward, the Fed could find that fighting inflation dents its balance sheet.
Bahrain takes aim at business-friendly credentials 23 Mar 2011 The government has revoked the licence of a telecom firm with links to the opposition, adding to the woes facing businesses on the island. The violent crackdown on protesters and sustained blows to its financial centre could drive away its most important international residents.
U.S. tax holiday idea not so different from QE2 23 Mar 2011 The White House is right that an amnesty for firms repatriating profit might distract from broader reform. But its economic objection is confused. Even if the cash goes to shareholders, that adds to the wealth effect hoped for from the Fed's bondbuying, which it supports.
Finland throws electoral wrench in euro debt pact 22 Mar 2011 The euro zone can't boost the capacity of its current bailout fund if Finland opposes larger guarantees from stronger members. Finance isn't the issue. But with a far right party threatening to upset Finnish politics, the country's leaders don't seem in the mood to compromise.
Medvedev takes on Putin over Libyan war 22 Mar 2011 The Russian president says Vladimir Putin likening the Libyan air strikes to the Crusades was unacceptable. This shows he seems ready to defend his proWestern agenda against conservatives linked to the prime minister, and raises the stakes of next year's presidential contest.
U.S. fiscal outlook may hinge on GOP tax fight 22 Mar 2011 Arguably since 1990 and certainly of late, the party has rejected any hint of higher taxes. But America's yawning budget shortfall is cracking that political unity. The outcome of this brewing Republican civil war may decide whether a fiscal fix is possible any time soon.
Citi crafts a well-timed show of health 21 Mar 2011 The bank is slashing its share count by 90 pct. Reverse stock splits are often feeble attempts to mask problems. But Citi looks secure, the split would remove another crisis scar, and a surprise albeit token dividend rebirth may lure in more buyers than short sellers.
White House becoming holdout against austerity 21 Mar 2011 The U.S. fiscal scorekeeper reckons President Obama's 2012 budget would be even worse for America's finances than continuing current policies. Meanwhile, both parties in Congress are showing signs of embracing discipline. The administration is in danger of getting left behind.
Treasury offers test case for Fed’s exit strategy 21 Mar 2011 Tim Geithner's department is set to offload $142 bln of mortgage bonds it accumulated during the crisis. The Federal Reserve should take note. The gradual sale of Treasury's portfolio could hint at how markets will react when the Fed comes to sell its nearly $1 trln stash.
First Obama contender tries milquetoast over Tea 21 Mar 2011 Tim Pawlenty became the first Republican to throw his hat in the 2012 ring. The former governor is a virtual unknown. But with the Tea Partyfueled GOP brashly pushing an austerity agenda, Pawlenty's Minnesota nice and bland economic views might be enough to land him the nod.