Bernanke can’t be the sorcerer behind every ill 11 Feb 2011 So far, the Fed chairman hasn't turned anyone into a newt. Yet detractors do seem to think his policies have bewitched the world in realms far beyond central banking. Bernanke is influential and his policies open to criticism. But not every global problem can be laid at his door.
Kevin Warsh could become the next Paul Volcker 10 Feb 2011 His departure from the Federal Reserve board removes one of Ben Bernanke's closest advisors and almost certainly the most hawkish of his inner circle. If current policies produce inflation in 70s fashion relative spring chicken Warsh could be well placed to take over.
Brazil’s new boss is keeping the money flowing 10 Feb 2011 President Dilma Rousseff's first budget plans up to 50 bln reais in trims but offers no cutbacks in state company spending or BNDES lending. In this inflationary boom, Brazil should run a real budget surplus. It's a long way off that, storing up trouble for future rainy days.
Vast U.S. housing lobby ready to stall GSE fixes 10 Feb 2011 Fannie Mae and Freddie Mac, seized by the government in 2008, don't wield the political clout they used to. But the mortgage giants still have a network with shared interests. That's a big reason they or possibly similarlooking offspring will be around for a while longer.
UK banks got better end of government showdown 9 Feb 2011 Imposing targets for small business loans and basing executive pay on whether they are met smacks of state intervention. But the reality is the targets aren't enforceable and bonuses will still be paid. If the UK coalition does not meddle further, banks have got off lightly.
Brazil can ill afford to join U.S. China-bashing 9 Feb 2011 Washington wants Brazil to join the call for China to strengthen the yuan. Yet the Latam economy's problems, including its strong currency, are not China's fault. There is little to gain from taking on its largest customer and investor. If anything, Brazil should blame the U.S.
Leadership void plagues U.S. mortgage reform 9 Feb 2011 The White House has had more than two years to sketch out a future for the $11 trln market. Now leaked reports suggest a punt to Congress where once decided Republicans now want more debate. Sure, housing is practically and politically complex. But taxpayers deserve a plan.
U.S. could put its creditors first in line 8 Feb 2011 If Uncle Sam's selfimposed debt cap is reached, some Republicans want to make debt service the priority. That could happen anyway, and it might only buy time. But contrary to the Treasury's view, a government shutdown would spook markets far less than missing interest payments.
Desperate bribes deepen Egypt’s financial mess 8 Feb 2011 The 15 pct hike in publicsector pay buys the support of a small section of the population and further pushes up the deficit. It also comes on top of costly pledges to tackle high food prices. With financing costs rising, it's another big strain on the public purse.
Reaganomics created more jobs 7 Feb 2011 Ronald Reagan, born 100 years ago on Feb. 6, presided over the creation of 4.7 mln U.S. jobs in the 15 months after the 1982 unemployment peak, against under 1 mln so far this cycle. Tax cuts helped, but Paul Volcker's much higher interest rates had a lot to do with it, too.
Why Geithner is right to go easy on China 7 Feb 2011 The U.S. Treasury Secretary didn't call China a currency manipulator in his new report to Congress. Doing so might have hurt trade, and added an antiAmerican edge to China's upcoming leadership change. Better to sit tight: China has reason enough to let the yuan strengthen.
How should the euro zone boost competitiveness? 7 Feb 2011 A FrancoGerman initiative looks like it contains some good points notably on pension reform even though it was too rigid for most other countries meeting at Friday's summit. But other ideas need to be injected too, especially more competition.
U.S. individuals may get tax makeover, too 4 Feb 2011 Overhauling corporate taxes will be politically tough. But it's looking as though it might be impossible without extending reforms to individual taxes. That at least is the mood in Congress for now. But without compromises from Obama and Republicans, neither may end up happening.
U.S. housing reform at risk of stopping way short 4 Feb 2011 America's mortgage market almost sank the world economy, yet no one has done anything to fix it. The government's ideas, due out this month, will frame the debate. But the danger is they will be premised on dogma that should in fact be seriously questioned.
Productivity growth keeps U.S. recovery jobless 4 Feb 2011 Weak job creation in January was adversely affected by winter weather, and the decline in the unemployment rate to 9 pct was encouraging. But despite stronger economic data of late, job growth remains slower than in previous cycles. One culprit may be cheap capital.
New York Mayor Bloomberg to Uncle Sam: Try this 3 Feb 2011 The ever ambitious mayor isn't letting a good budget crisis go to waste. Bloomberg wants to get rid of excessive public pension perks. Unions will resist, making the battle worth watching. If successful, hizzoner may defuse the nuclear option some in Washington are mulling.
France hopes debt brake will help it skirt crisis 3 Feb 2011 The French government wants to change the constitution to restrict budget deficits. Emulating Germany should help persuade other EU countries to follow suit. But the main aim is to convince markets that France, now one the most profligate euro zone members, is on the right track.
If the UK needs a boost, taxes should be cut 3 Feb 2011 How bad must it get for the UK to change tack on the economy? Only if there are three quarters of negative GDP and if unemployment pushes 9.5 percent. But if if new stimulus does become unavoidable, it would be better to cut taxes than abandon cuts to public spending.
Techies need plan to deal with despots 2 Feb 2011 Vodafone suspended its Egyptian service after demands from the authorities. Google, on the other hand, chose to pull back in China. There are no easy answers on how to deal with autocratic regimes. But being transparent about the reasons for complying or exiting helps everybody.
U.S. Congress may tie its own hands on spending 2 Feb 2011 If only U.S. Treasuries had covenants like corporate debt does. Instead of linking to EBITDA, metrics like borrowing or spending as a share of GDP could be used. That might be a stretch but lawmakers are still trying to implement new fiscal rules. It's a concept long overdue.