SEC’s speedy Potash Corp charges put FSA to shame 25 Aug 2010 Barely a week after BHP launched its $39 bln bid for the Canadian mining group, the U.S. watchdog has charged two Spaniards with insider dealing. The speedy international swoop makes the UK Financial Services Authority's muchhyped crackdown on whitecollar crime look vegetative.
Ireland’s bad bank needs full transparency 25 Aug 2010 The Irish Nationwide Building Society has dumped 591 mln euros of dud loans with Ireland's bad bank at a 72 pct haircut. There could be tidy gains on future sales. But without decent disclosure around the sale process, there's no way of knowing that taxpayers will get full value.
One easy cut for the UK: a 17 bln stg train set 25 Aug 2010 A new railway linking England s two biggest cities sounds like an extravagance at the best of times. But when UK public spending needs drastic pruning, such a project is totally divorced from economic reality. The government should scrap it.
100-year Treasuries could be tough sell 24 Aug 2010 If a U.S. railroad can issue 100year bonds, why not the U.S. Treasury? Longer maturities than the current 30year maximum would reduce refinancing needs and appeal to institutions. But investors might well demand more return for the risks than Treasury would be willing to pay.
U.S. house sales decline brings double dip closer 24 Aug 2010 The plunge in existing home sales in July owes much to the expiry of a home buyers' tax credit. But real house prices are still as high as in 2000, so their tentative recovery is vulnerable to another significant leg down. That in turn could bring a second recessionary downturn.
Peru faces choice of near-neighbors’ policies 20 Aug 2010 The Andean country has enjoyed standout economic growth in 2010, but this may not last. In next April s election, it will choose between resourcesled growth like Chile, state expansion like Argentina or full state control like Venezuela. Peruvians votes will really matter.
Soft-speaking investors may be handed bigger stick 19 Aug 2010 The SEC plans to vote next week on giving investors an easier way to challenge corporate boards. Longterm holders with a big enough slug of stock would be able to nominate directors on the company's dime. But instead of sparking battles, it may just help shareholders get heard.
U.S. deficit forecast masks true scope of problem 19 Aug 2010 Budget scorekeepers now predict a $1.34 trillion deficit for 2010, a tad less than forecast in March. Still, it's an enormous gap. And the headline number lowballs the shortfall. If America ran its books more like a business, the real state of its finances would be clearer.
Government guarantees won’t die with GSEs 18 Aug 2010 Bond guru Bill Gross warned on Tuesday that without government guarantees, only mortgage bonds backed by supersafe loans would interest him. He frets too much. It may be Fannie and Freddie's funeral, but housing support from D.C. will live on. The key question is how much.
For-profit colleges get schooled by new reality 16 Aug 2010 The likes of Washington Post s Kaplan and Corinthian Colleges fed happily on federal loans to students many of which default. New data suggested just how tough the future may be for the sector, sending shares down 1020 pct. More regulation and higher costs are coming.
Expiring U.S. tax cuts may get only brief reprieve 16 Aug 2010 Wall Street wisdom is that markets like political gridlock but not if inaction means hitting a weak economy with a big tax hike. When Congress returns from vacation, it needs to deal with the expiring Bush tax cuts. But Obama s deficit panel adds another political wrinkle.
Fannie, Freddie in danger of prolonged survival 13 Aug 2010 Whatever the future of U.S. housing finance, the two discredited institutions need to go. But with a key Aug. 17 conference on their future coming in the runup to November elections, common sense and taxpayers interests may once again lose out to political temptation.
Obama’s home state may beat California to default 12 Aug 2010 Illinois budget mess is worse than the Golden State s; its government is in arrears and borrowing to fund pensions. It does have a low income tax rate and restrained local governments. But its weak economy and erratic debt management could tip it first into crisis mode.
Austerity drive should hit guns along with butter 11 Aug 2010 America needs to tackle its deficit. That s an economic reality. There s a political one too: the military can t be spared in the cutting. So it s a good sign that Defense Secretary Robert Gates is already on the fiscal warpath. But it could be a bloody campaign.
Voters hope rich folks can put U.S. in the black 10 Aug 2010 Tuesday s U.S. primaries could add a wrestling multimillionaire to the growing ranks of wealthy business execs running for office in November. Voters seem to be betting a mix of independence and privatesector smarts is what America needs. So don t soak the rich, elect them.
Fed reinvestment decision points policy wrong way 10 Aug 2010 Spooked by slowing growth, the central bank has loosened money a bit by opting not to let maturing mortgage bonds run off. But weaker productivity has now joined rising global prices to add to US inflationary pressure. The Fed has put itself in position to lag any economic shift.
Colombia’s new leader can’t evade Andean terrain 9 Aug 2010 President Juan Manuel Santos free market policies should further fuel growth. And his detentes with leftist guerrillas and neighbors may improve security too. But Venezuela and Ecuador remain socialist, and their economic struggles may yet rekindle regional conflict.
Obama adviser change may reveal deficit strategy 6 Aug 2010 The short, strange Washington career of Christina Romer is over. The departing Obama economic aide began loved by conservatives and ended cheered by liberals. Whoever her replacement turns out to be could hint at just how debt averse the president will be going forward.
Rejection of Fed nominee sets a bad precedent 6 Aug 2010 The central bank has as much impact on the country as the Supreme Court. Yet its candidates are generally treated far more gingerly by Congress. The Senate's blocking of Peter Diamond's nomination hints this may be changing. It bodes poorly for the future of Fed independence.
No exit for ECB as zone basks in summer calm 5 Aug 2010 JeanClaude Trichet, president of Europe s central bank, can afford to be in a summer mood. The euro zone is calm; the euro has rallied; money markets and growth have improved. But the ECB isn t yet in a position to exit from the loose monetary policies prompted by the crisis.