GOP attacks make Bernanke’s credibility vulnerable 2 Mar 2011 The Fed chairman's easy money approach, backed by most of his Fed fellows, still rules U.S. monetary policy. But the new Republican House majority's demand for tighter money and claims that inflation is understated raise the stakes for Bernanke's position.
Portugal’s ducking and diving won’t avoid bailout 2 Mar 2011 The Portuguese government claims investors' takeup of its offers to buy back shortterm debt is a sign of confidence. That's only partially true. Investors aren't rushing to sell, but they won't lend to the country at affordable rates either. A bailout still looks inevitable.
Saudi outflows are worrying omen in Mideast crisis 1 Mar 2011 A 7 pct fall in the Saudi stock market, the Middle East's biggest, marks a significant deterioration in sentiment. It suggests the local wealthy are moving capital as it becomes harder to argue that unrest in Saudi is an unthinkable scenario.
Bloated U.S. programs can easily show way on cuts 1 Mar 2011 The government's auditor has found duplication and overlap that may be wasting $100 billion or more a year. As long as Washington is inefficient, Americans are justified in resisting service cuts and higher taxes. Uncle Sam doesn't need either one to make a start on austerity.
Insider trading scandal rattles trust at the top 1 Mar 2011 What started in the dark underbelly of the hedge fund world just burst into bluechip America. SEC allegations against Rajat Gupta drag Goldman Sachs, P&G, McKinsey, American Airlines and even Harvard into the mud. Confidence in U.S. boards just suffered a massive blow.
Argentine lesson: don’t fiddle with fudged figures 1 Mar 2011 Buenos Aires may fine a consultancy $120,000 for publishing inflation estimates that were twice the official figure. As inflation, output and productivity estimates determine huge money flows, governments are tempted to fiddle them. Economists beware, the problem is worsening.
Renegotiating EU bailout can’t mask Irish pain 28 Feb 2011 Irish voters have given its new government a mandate to seek cheaper European loans and burn bank bondholders. Neither move would do much to dent Ireland's debt burden, or make its fiscal cuts less severe. Still, sharing the pain may help make austerity more palatable.
Economic sanctions irrelevant to Libya’s plight 28 Feb 2011 Imposing travel bans and asset freezes on Muammar Gaddafi and his inner circle, as well as an arms embargo on the country, is better than nothing. But at this stage of violent unrest, economic sanctions won't do much to end civilian bloodshed or help topple Gaddafi.
U.S. needs to keep in competitive shape 28 Feb 2011 America's best days may lie ahead, as Warren Buffett says. But past results don't guarantee future success and plenty of folks, especially corporate bosses, worry the U.S. is becoming a less attractive place for multinationals to do business. Washington can help prove them wrong.
Banks can do more to block dictators’ money 25 Feb 2011 Switzerland and others have frozen assets of deposed North African dictators. While they are right to seize accounts, not accepting the cash would have been better. Banks and governments have the power to investigate suspect funds. They should apply the rules more forcefully.
Saudi Arabia just buys time with $37 bln handout 24 Feb 2011 The raft of financial goodies announced by the house of Saud shows it doesn't underestimate the risk of unrest. But it merely buys time. The onus is on the kingdom's rulers to show they understand the need to address the mounting social, economic and political grievances.
U.S. cost-cut fight merits the effort 24 Feb 2011 The battle in Congress will affect maybe a sixth of spending, with bigticket items like defense and Social Security getting a bipartisan pass for now. But tackling even that slice would save money and reassure markets. It might even be worth a temporary government shutdown.
Middle East could open window for Fed QE2 exit 24 Feb 2011 The St. Louis Fed boss says an improving U.S. economy renders the central bank's $600 bln bondbuying program less useful. But reversing it is tricky. As long as Libyan unrest doesn't become a fullblown oil crisis, a dose of safehaven buying may give the Fed some cover.
FDIC offers hope for the anti-too big to fail crew 23 Feb 2011 The biggest U.S. banking institutions are still benefiting from the perception that the government will always come to their rescue. But a slight narrowing in the gap between what megabanks and others in the industry pay for deposits may suggest a hint of progress.
Investor concerns over Libya’s SWF are justified 23 Feb 2011 There's no knowing what would happen to Libya's $70 bln sovereign fund if the regime falls. A rapid liquidation of investments, including stakes in UniCredit and Fiat, is the worstcase scenario. That wouldn't be in anyone's interest. Investors can only hope rationality prevails.
Fiscal generals beat new path to U.S. presidency 23 Feb 2011 Six members of the Civil War top brass got elected to the White House. But a new kind of union battle of the labor variety provides the latest crucible. How governors fare in this war and making peace within their parties could produce a future national leader.
Why Wisconsin matters to global financial markets 23 Feb 2011 The Midwestern state best known for its cheese is ground zero for a pitched battle between public sector unions and cashstrapped governments over collective bargaining. If the governor can end the practice he will set a precedent for fiscal reform that will spread nationally.
Arab revolutions test China’s economic bargain 22 Feb 2011 Chinese protests inspired by Libya and Egypt were limp, but worrying. The Communist Party has created wealth, health and opportunity for 30 years while restricting political freedoms. But as people become richer, their demands will be increasingly hard to gratify.
IMF tarnished by praise of ousted despots 22 Feb 2011 In recent months the International Monetary Fund has applauded the likes of Libya, Egypt and Tunisia for their reforms and economic policies. As protests spread and regimes topple, the IMF's reports don't look so good. Next time around, it should check the democracy indicator.
Obama’s new focus on primary deficit is a fudge 22 Feb 2011 It would be a start for the U.S. government to get revenue and noninterest spending balanced. But while eliminating the socalled primary deficit is a helpful goal, it's a measure that ultimately misleads as to the true scope of America's debt problem.