Chuck Prince still doesn’t get what ailed Citi 8 Apr 2010 The bank s exCEO was apologetic in Congress, as was former consigliere Bob Rubin. But, incredibly, Prince still insists Citi wasn t too big to manage. That s just wrong in the face of the evidence look no further than his successor s strategy.
BoE should beware of debt monetisation 8 Apr 2010 For now, the UK central bank is in wait and see mode. But big purchases of government debt with printed money have risks, as the Fed s Fisher has pointed out. If investors think government debt is being monetised, disaster looms. The BoE shouldn t rush to add to its gilt pile.
U.S. bank fix impeded by false dual mandate 8 Apr 2010 Most bank regulators are supposed to focus on their charges' soundness. But they face political pressure to adopt a second mandate, namely promoting lending in the hope of boosting employment. Trouble is, one calls for banks to hold more capital against assets, one for less.
Yuan may not be one-way bet for traders 7 Apr 2010 The Chinese authorities seem to be set to depeg the currency. Beijing wants to protect exporters and kick speculators, so expect a complex managed float, not a single big revaluation. The yuan's ultimate direction is surely upwards, but the journey may not be a straight line.
Updated 1930s public works program might help U.S. 7 Apr 2010 Thursday is the 75th anniversary of the Works Progress Administration, the depressionera U.S. jobcreation program. It had serious design flaws, but was probably beneficial overall. With long term unemployment high, it may be time for a new WPA. But it shouldn t be too generous.
NY Fed chief holsters up for bubble-busting 7 Apr 2010 While he is appropriately wary of triggerhappy policymakers doing harm, Bill Dudley has finally shifted the debate beyond whether the Fed should fight bubbles. He has laid out how he thinks it might actually be done. It s the right kind of discussion to have.
Aussies need more than rate rise to check success 7 Apr 2010 Australia faces little nearterm danger of inflation. However high commodity prices, massive foreign investment, soaring real estate prices and low savings add up to a bubble whose bursting could be painful. Tapping the fiscal brakes as well as the monetary ones may be necessary.
Russia doesn’t obviously need postal bank 7 Apr 2010 The government plans to create a new bank with 40,000 branches at a cost of as much as $15 billion. In principle, it's not a bad idea. But Russia does not need another governmentcontrolled financial powerhouse. It sounds like a bad way to rescue the floundering post office.
Fed should know better that semantics do matter 6 Apr 2010 The economy, not timelines, will dictate when the Fed raises rates. Common sense yes, but investors have clung to the Fed s extended period security blanket as they take on more risk. One policymaker appears to understand words matter; more of them should.
Internet inches away from utility status 6 Apr 2010 A landmark court ruling means broadband operators won t need to treat all traffic on their networks equally. The blow to net neutrality gives the Internet a longer leash than its telco or electricity cousins. But it could spur an even more ambitious Washington power grab.
The UK should not waste its fiscal crisis 6 Apr 2010 As Britain embarks on its election campaign, Hugo Dixon argues that this is a perfect opportunity to engage in radical tax reforms designed not just to restore the country's fiscal balance but to boost its longterm productivity and competitiveness.
U.S. VAT may need another crisis to catch on 5 Apr 2010 The high cost of U.S. healthcare reform has sparked renewed interest in a valueadded tax. If history is any guide, the program will be even pricier than expected, and plunge the budget deeper into the red. But Americans are in no mood for the medicine.
U.S. jobs data show economic pit not bottomless 2 Apr 2010 The first decent rise in job growth since November 2007 suggests labor market recovery is genuine and 12 pct unemployment unlikely. However longterm unemployment rose while real wages declined. Recovery looks slow, with a higher jobless rate the new normal.
Obama embarks on all of the above energy policy 31 Mar 2010 Expanded oil and natural gas drilling off the U.S. coastline won't bring America energy security, much less independence. But by throwing a bone to the drill baby drill brigade, the president may increase political support for his overall climate change agenda.
Complacency seeps in as Fed stops buying MBS 30 Mar 2010 There are good reasons to expect private investors to fill the void after the central bank ends its $1.25 trn program. But with mortgage bonds trading at a premium and Fed officials talking about eventually selling their stash, buyers might want to exercise caution.
Malaysia needs to get out of its economy’s way 30 Mar 2010 A government economic report highlighted the country s relative economic slippage since the Asian crisis and justifiably blamed increased government intervention and cronyism. PM Najib s speech pressed the right reform buttons, but entrenched opposition may stymie change.
JPMorgan’s WaMu tax grab less greedy than it seems 29 Mar 2010 Going after $1.4 bln in rebates might look a bit rich for a bank that snapped up its defunct rival for a song in 2008. But the deal would help taxpayers too, by capping FDIC s potential liability from the WaMu sale. If lawyers can agree, it s a swap that sounds reasonable.
UK Tories panic with tax cut pledge 29 Mar 2010 Should they win the election, the Conservatives pledge to reverse a tax rise scheduled for 2011. Easing taxes on employment makes sense, but the move undermines their promise to cut sky high borrowing. It looks too like a jittery reaction to Labour's resurgence in the polls.
Uncle Sam’s Citi exit partly vindicates bailout 29 Mar 2010 The U.S. Treasury is set to unload its 27 pct stake in the banking behemoth two years after rescuing it. The exit should deliver billions in profit for taxpayers. That s a relief and a financial success. But Citi has hardly been turned around since the government stepped in.
Moscow attacks highlight Russia’s weak security 29 Mar 2010 After an initial shock, investors will probably shrug off the fatal terrorist blasts in Moscow's metro. But the incident is a reminder of the country's ineffective law enforcement system, which is a serious blot on the investment picture. There are few signs of improvement.