UK government’s sternest critic takes a risk 9 Sep 2010 It's one thing to savage the coalition's inaugural budget, but quite another to raise the credibility of the official forecasts. The wellflagged appointment of Robert Chote to run the Office for Budget Responsibility makes sense for the government, but it's a gamble for him.
Ideology helps make Obama stubborn on taxes 8 Sep 2010 Peter Orszag, Obama's exbudget chief, thinks all Bushera U.S. tax cuts should be temporarily extended. So does the goto economist of congressional Democrats. But the president still vows to let highend rates go higher again ASAP. His thinking is as much politics as economics.
Gillard win turns thumbscrews on miners 7 Sep 2010 The Australian PM hung on to power by her fingernails, making her tax on miners' profits more likely. How hard and widely it hits hinges on yet more horsetrading. But Rio Tinto and BHP Billiton can probably forget hopes of returning to the superprofitable status quo.
Europeans stumble on the way to fiscal discipline 7 Sep 2010 EU governments are still far from agreeing on serious ways to reform the stability pact and ensure that budget deficits will be contained within 3 percent of GDP. They're quicker to tax and regulate banks. This is the wrong message to send if they want to avoid another crisis.
Obama’s offensive may not charm business or GOP 7 Sep 2010 The president's plans to spend $50 bln on roads and railways and grant businesses $300 bln of investment tax credits have merit. But they don't look enough to sway disillusioned executives. And Republicans are in no rush to pass a second stimulus before midterm elections.
Shielding savings should be Afghan banks’ top goal 7 Sep 2010 Kabulbank's crisis seems to stem from dodgy loans on Dubai mansions. But even domestically, longterm real estate lending isn't desirable. Contrary to some international advice, banks in poor countries like Afghanistan need to protect savings and make only safe, shortterm loans.
Disclosing banker pay is too much of a good thing 6 Sep 2010 George Osborne says he's committed to making banks disclose how many staff are paid a million pounds. But the UK finance minister would be right to rethink the idea. Disclosure is generally a good thing, but banks are right when they say the plan could drive up pay inflation.
UK deficit doves should be ignored 6 Sep 2010 It's not just the five Labour leadership candidates who are arguing that the coalition is going in too hard with cuts. Boris Johnson, the Conservative mayor of London, has joined the chorus. While the economic case for the hair shirt isn't watertight, the political case is.
New Rosneft CEO cements political control 6 Sep 2010 While investors may welcome the end of uncertainty, the replacement of independentminded Sergei Bogdanchikov with career bureaucrat Eduard Khudainatov shows that Russia's largest oil company is more politicised than ever. This should temper enthusiasm about privatisation plans.
China needs political reforms for future growth 6 Sep 2010 President Hu Jintao said economic zones should test political reforms. China's authoritarian system has shown its merit during the crisis. Although changes may be disruptive in the short run, more checks and balances and rule of law are indispensable for sustainable growth.
U.S. jobs figures provide subdued reassurance 3 Sep 2010 The private sector employment gains in August, together with positive revisions for previous months, should dispel fears of an economic doubledip for now. With just one more jobs report before November's elections, the latest data also offer a glimmer of hope for Democrats.
A Labour leader who could upset the UK coalition 2 Sep 2010 Two Eds, two Milibands, and about half a policy between five candidates. One will lead Britain's opposition Labour party, but only David Miliband, front runner ahead of his younger brother Ed, appears to have grasped the scale of the UK's problems.
Reviving recovery story puts bonds at risk 2 Sep 2010 The market mood has swung back from double dip to recovery. Solid U.S. manufacturing was the chief catalyst, though fast growth in exportoriented Australia is another sign that Chinese growth is holding up. Bonds that are priced for a deflating world now look vulnerable.
Obama pulled two ways on stimulus 2.0 2 Sep 2010 Departing White House economic adviser Christina Romer says last year's $814 bln package fell short. That may suggest those arguing for more are gaining ground with the administration. But short of a renewed economic slump, electoral politics are working against more spending.
Fuld may have a point mixed in with his Kool-Aid 1 Sep 2010 Blaming Lehman s demise on the lack of a bailout neglects years of hubris. It was Fuld s job to watch his firm s back. But his charge that regulators were damagingly inconsistent is fair. The U.S. crisis commission should get to the bottom of why and how to avoid it next time.
It may be too late for Obama to cut taxes 1 Sep 2010 The administration is possibly warming to the idea of tax breaks to boost the economy. Such a plan would have landed plenty of Republican votes 18 months ago. But with the president s popularity falling and elections looming, congressional support won t be so easy to coalesce.
State capital sounds alarm on muni defaults 1 Sep 2010 Harrisburg, Pennsylvania, is skipping a general obligation bond payment. The default is small but the significance potentially much larger. The struggles of municipalities tend to lag the economic cycle and a sluggish recovery could very well produce a surge of them.
FDIC’s cautious optimism at odds with the market 31 Aug 2010 Bank investors digested the Q2 positives the regulator is just pointing out weeks ago. Now revenue shortfalls and chances of a double dip worry them enough to drive many bank stocks below book value. The FDIC s report is a handy historical snapshot, but may already be outdated.
Decent Canadian recovery outshines sluggish U.S. 31 Aug 2010 The annualized Q2 growth rate of 2.0 pct north of the border didn t much beat the U.S. pace, but final demand growth at 3.2 pct was much stronger. That s an indication that Canada s economy, though weighed down partly by its neighbor s weakness, is recovering more robustly.
Strong yen is not Japan’s main problem 30 Aug 2010 The BOJ's latest moves failed to weaken the currency. In any case, the tradeweighted yen is weaker than its real 19902010 average and Japanese exports are still rising. Export lobbies may have the government's ear, but intervention could make Japan's domestic predicament worse.