Democrat primaries may be nearing resolution 6 May 2008 Obama won North Carolina and Clinton won Indiana, but Obama's margin was larger and he has a big delegate lead. Clinton's chances may soon be less than the likelihood of a continued battle destroying Democrat election hopes. That will settle matters, to the US economy's benefit.
Turkey should prepare for stormy weather ahead 6 May 2008 Politically and economically, Turkey s position is perilous. It survived a scare in 2006, when markets were liquid. Currently it has balance of payments and budget deficits and inflation is climbing. If debt markets tighten or a political crisis occurs, Turkey will be in trouble.
Capital rules cause more pain for US borrowers 5 May 2008 An unprecedented number of banks have tightened loan terms for US borrowers in recent months. A third of them say it s due, in part, to worries about their own deteriorating capital levels. Regulators shortsighted capital rules have increased the burden on borrowers.
Bernanke’s new gambit may ease consumer finance woes 2 May 2008 The Fed chief is still having a hard time getting banks to lend. His decision to accept assetbacked securities in exchange for treasury bonds could help. It will allow banks to squeeze welcome cash out of their big and increasingly wobbly credit card and car loan portfolios.
UK sets out on US house bust trail 2 May 2008 The UK's households, like their American cousins, were able to consume more because house prices boomed. Now the broken home trail on which the UK is just setting out looks as bitter as the one the US has been treading.
Saudis prefer inflation to independence from US 2 May 2008 The Gulf kingdom followed the Fed with a cut in the overnight rate to 2%. That sounds crazy in the face of 10% inflation. But the Saudis worry more about losing friends in Washington. Bank reserve requirements will be the weapon of choice against inflation. It won t be easy.
Dollar takes a break from its long decline 2 May 2008 The US currency has reversed almost 40% of its 2008 fall in just 10 days. Traders are responding to a slowdown in the pace of financial bad news. But the ultimate sources of dollar weakness the huge trade deficit and loose monetary policy remain firmly in place.
Brown can’t blame election drubbing on economy 2 May 2008 Sure, people are anxious about rising bills. But that doesn t explain the scale of last night s humiliation for the UK prime minister. The really damaging charge is that he squandered the proceeds of the boom. There s not much he can do about that now.
On US petrol tax, there’s only one grownup in the race 1 May 2008 The gas tax holidays of Senators McCain and Clinton are economically nonsensical. They'd increase consumption, worsen dependence on the Middle East, raise oil prices and speed global warming. Clinton s Exxonbashing further distances her from the economicallysensible Obama.
Eurozone will suffer from ECB’s inflation failure 30 Apr 2008 Most of the eurozone may have avoided USstyle housing troubles, but excess money has brought excessive inflation. That has hurt consumer confidence and retail sales. The likely price of the central bank s weak control of money growth is a sustained slowdown.
Fed neglects key lessons from history 30 Apr 2008 In suggesting inflation will moderate, the US central bank is assuming weak growth will reduce upward pressure on prices. However this relationship could be overwhelmed by rapid money growth and soaring commodity prices. Before long, the Fed may be scrambling to raise rates.
Putin’s job offer to Prodi was just too crude 29 Apr 2008 Gazprom s offer to the outgoing Italian premier to chair the South Stream pipeline project was another attempt to drive a wedge between EU members. At least it shows that Russia is still taking the rival Nabucco pipeline project seriously. If only Europe did, too…
UK rebalances by tipping towards recession 29 Apr 2008 Mervyn King says the UK economy needs to rebalance. The Bank of England s governor is right, but the process looks painful. The financial engine is crunched and the consumer is holing up, while manufacturing isn t much of a motor. Recession and a slow recovery threaten.
Calpers departures highlight SWF-like conflicts 29 Apr 2008 The pension fund s CIO is leaving to pursue green investing. The CEO is leaving as well. The political noise surrounding the departures underlines that it's not just foreign staterun funds that have agendas beyond financial returns.
New spotlight may threaten muni bond prices 29 Apr 2008 A new index on municipal debt default swaps might add some transparency to the $2.6 trillion market, but it could also pressure prices. If shortsellers push down the index, those who use it to value their muni bond holdings will suffer.
Subsidies and quotas make food problems worse, not better 28 Apr 2008 France s farm minister wants programmes like the EU s agricultural policy in Asia and Latin America. That won t help the world food shortage. Subsidies and so on depress food production in poor countries and cause waste. Freer trade and global buffer stocks are better answers.
Rare SEC success brings only slap on wrist 24 Apr 2008 The US regulator finally got some sort of win on market manipulation charges. It has been promising to crack down. But it only wrung some $150,000 out of the shortseller whose alleged rumourmongering temporarily erased $1bn of value. That may not be enough of a deterrent.
UK shouldn’t be spooked by overseas tax exodus 24 Apr 2008 A string of UK companies including Shire, United Business Media and WPP are up in arms about proposals for taxing foreign income. The proposals clearly need more work. But their broad thrust is right and should create more winners than losers.
Policy-makers divide as UK heads down US road 23 Apr 2008 The minutes of the Bank of England s April meeting show policymakers split three ways. Meanwhile the Chancellor, Alistair Darling, is unwisely trying to persuade banks to pass on rate cuts. The UK s road is unhappy, and policymakers unsure.
Brown’s credibility is further shredded 23 Apr 2008 The UK PM's climbdown in the 10p tax row buys him time. But the episode has reinforced questions about this proclaimed conviction politician's ability to stick the course. At a time of economic crisis, that is really damaging.