Egypt stocks will struggle regardless of outcome 1 Feb 2011 Whatever the political result, it is hard to see Egyptian shares bouncing back to levels seen before the protests. Simply to undo the damage, the country will have to prove it is a better place to invest than it was before. Turkey might be the most encouraging model.
Spanish airports privatisation won’t be easy 31 Jan 2011 The Spanish government plans to raise 14 billion euros by selling off part of its lottery and airports. The lottery sale looks easy. But the privatisation of the world's largest airport group requires serious restructuring, and much higher tariffs.
CDS market shows U.S. risk-free status slipping 31 Jan 2011 Betting on Treasury yields rising is one thing; trading the chance of default is another. U.S. credit default swap volumes have spiked in recent weeks. The CDS game is still hardly mainstream. But unsustainable borrowing is tarnishing the debt market's once pristine benchmark.
GOP not scared to toy with U.S. debt limit 31 Jan 2011 Both parties now seem to agree that not raising America's debt ceiling would be a disaster. But brinkmanship looks likely as Republicans hold out for cuts far deeper than Democrats will easily accept. Pushed far enough, the tactic could still rattle Treasury markets.
Economy will test future Egyptian government 28 Jan 2011 A change of the political guard won't trigger a major financial crisis if the country can quickly establish a new government. But the exodus of foreign funds should remind Egypt's leaders new or old that only economic reforms will help them retain investors' confidence.
Time to avoid Uncle Sam’s debt, buy U.S. states’? 27 Jan 2011 State budget shortfalls have rattled municipal bond markets. Yet even with unfunded pensions added in, the federal government's burden dwarfs those of the states. There are big structural differences, but maybe investors should worry less about munis and more about Treasuries.
Obama’s tax reforms could get waylaid by business 26 Jan 2011 The president delivered on an idea he's been telegraphing for weeks: corporate tax reform. And there are hints he wants major changes. But some companies will lobby hard against losing tax breaks to pay for a rate cut. Even turning a smart proposal into law is no sure thing.
Fed is nearing a withdrawal symptoms problem 26 Jan 2011 The FOMC kept rates low and stuck to its plan to buy $75 bln of Tbonds each month until June. But an alarming new $1.5 trln forecast for the 2011 U.S. deficit lifts the chances that the end of Fed purchases could rattle the market. The monetary policy challenges are multiplying.
America’s bad asset plan did little good 25 Jan 2011 The scheme to help banks shed toxic loans has worked well so far Treasury's paper return is 27 pct and one buyer is up 60 pct. But fears of government clawing back gains sapped demand and setup delays hurt supply. That rendered the oncegrand PPIP a crisis footnote.
Latam exchanges can punch above their weight 24 Jan 2011 Linking the stock exchanges of Colombia, Peru and Chile should create a single bourse for a $500 bln combined economy. That's 1 pct of world GDP, giving the group the scale it needs to attract direct and portfolio investment, putting it on even Goldman Sachs' radar screen.
Bankruptcy would help U.S. states squeeze unions 24 Jan 2011 Being allowed to file in federal court would give profligate states a last resort. Practical problems would make them reluctant to pull the trigger. But they need to renegotiate unsustainable promises made to public unions. The threat of bankruptcy could help force the issue.
Does GE gain by lending the White House its CEO? 21 Jan 2011 Judging by the stock price, shareholders don't seem to mind that CEO Jeff Immelt will now head the president's jobs council. In one sense, it's payback for all the help GE has received. But while it has regained some lost mojo, GE still requires its boss's undivided attention.
Mandelson hire aims Lazard at government hearts 21 Jan 2011 The investment bank has hired Britain's former business minister as a special adviser. Mandelson is barred from lobbying UK officials until mid2012, but his European trade experience will open doors. As governments become a greater source of fees, he looks a canny hire.
Murdoch and the UK: the questions mount 21 Jan 2011 The UK government's top spin doctor has quit amid controversy surrounding the Murdoch paper he once edited. The twist may not alter the course of Murdoch's bid for broadcaster BSkyB. But it doesn't help the media mogul. Nor will it end questions about his links with Downing St.
RBS state insurance exit hinges on capital rules 21 Jan 2011 The UK bank will soon be paying 500 mln pounds a year for balance sheet insurance it probably won't need. But ditching the safety net will shrink its capital ratios just as regulators ramp them up. RBS will need to prove it has sufficient reserves before it can check out.
UK Labour Party’s revival needs more than Balls 20 Jan 2011 Gordon Brown's former henchman is taking over as the UK opposition party's economic spokesman. Ed Balls will mount a muscular critique of the ruling coalition's spending cuts. But Labour still lacks a credible alternative policy. For now, Britain's austerity drive will continue.
GOP budget-cutters need to expand their horizons 20 Jan 2011 A U.S. House Republican plan to slash government spending by $2.5 trillion over 10 years would require draconian cuts. Yet fiscal deficits would still remain at historic highs. Without also revamping social insurance and defense spending, the budget won't get balanced.
Volcker Rule’s many cooks still have no recipe 20 Jan 2011 This week's report from a council of U.S. regulators arguably narrowed down the list of available ingredients, after last year's DoddFrank Act specified the meal. But there's still little clarity surrounding what the rule to limit bank risktaking will actually taste like.
U.S. politicians could learn from Chinese moms 19 Jan 2011 Hu Jintao's visit has triggered debate about whether the U.S. should copy China's handson economic model. But the country's feisty tiger mothers may provide a better guide. A new book extolling their toughlove approach could help America escape its debt trap and boost growth.
Bankruptcy code won’t cure what ails U.S. states 19 Jan 2011 Today, there s no federal bankruptcy process for the states. Veteran Republican Newt Gingrich wants to change that. But so far, the plan smacks of politics rather than practical policy. The costs would be huge and there s no guarantee the federal government would be off the hook.