Money‚ Markets & Macroeconomics

The Exchange: A chat with Gary Cohn

18 September 2018

President Trump’s first National Economic Council director and former Goldman Sachs No. 2 discusses the financial crisis and its aftermath with Gina Chon. He also gives his take on tax cuts and trade, and explains why JPMorgan boss Jamie Dimon would make a “phenomenal” president.

Investors can ignore glimmers of China trade hope

18 September 2018

The latest round of U.S. tariffs on $200 bln of its goods, and China’s response, could have been worse. That buoyed markets. But investors are missing the bigger picture. Talks and hearings haven’t stopped things getting to this point, and they are likely to escalate further.

Gary Cohn too quick to vote for President Dimon

18 September 2018

JPMorgan chief Jamie Dimon would be “phenomenal” in the White House, the former Trump adviser says, adding that running the country is like heading a global firm. There are parallels. But Dimon isn’t restrained by an unwieldy Congress – or strict limits on what he can pay.

Trump makes and breaks case for new global order

18 September 2018

The U.S. president’s propensity to impose tariffs and ditch multilateral accords may prod developed and emerging countries to plan sturdier safety nets for the world economy and financial system at the G20 and elsewhere. Trump is also the reason they will struggle to succeed.

U.S. utilities face decades of perfect storms

17 September 2018

Carolina power companies grapple with hurricane damage while a Massachusetts gas firm is reeling from explosions. California’s push for green energy could hurt credit. Even after decades of rising investment, power companies will struggle to strengthen and modernize networks.

Speedier FX markets offer muddier signals

17 September 2018

Electronic trading and automation has made the foreign exchanges even zippier, a BIS report says. That has both increased fragmentation in the $5-trillion-a-day currency market and given more clout to the biggest banks. Knowing who is doing what and why is even harder to discern.

The Exchange: Congresswoman Maxine Waters

17 September 2018

The senior Democrat on the U.S. House Financial Services Committee recalls the lack of answers that lawmakers had in the wake of the 2008 financial crisis. The Exchange went to Congress to discuss that period and find out her priorities if she takes over the banking committee.

U.S. Congress requires banking boot camp

17 September 2018

More than 60 pct of lawmakers were first elected after the 2008 financial crisis, and a good chunk after Dodd-Frank was passed. So the meltdown’s causes are lost on many, as is how banking works. With regulatory change on the docket, Breakingviews has drawn up a bluffer’s guide.

Trump’s China tariff weapons are getting blunter

17 September 2018

The U.S. administration is set to move forward with duties on another $200 bln of imports. Initially, it deftly avoided consumer goods. The expanded list, though, is more policy sledgehammer than scalpel. The pain will be felt by American households and Chinese exporters alike.

Chancellor: The carry trade that followed Lehman

14 September 2018

The subprime crisis was born from yield-chasing in the Greenspan easy-money era. Even lower interest rates since the Lehman bust revived the global carry trade. Another maelstrom will be hard to avoid.

Review: The mess at the heart of economic theory

14 September 2018

Robert Skidelsky wrote a three-volume biography of John Maynard Keynes. His new book brings a Keynesian slant on the financial crisis, its antecedents and its aftermath. He argues against fiscal austerity. Fine, but the global economy is too complex for any simple diagnosis.

Norway power failure a rehearsal for bigger shocks

14 September 2018

The 114 mln euros Einar Aas lost betting on energy markets was not enough to sink the clearing house backing the trades. But the damage wreaked by one man implies deeper frailties. An increasingly volatile carbon price would make the commodities market vulnerable to a repeat.

China investors coming to terms with changed world

14 September 2018

The tone at this year’s CLSA powwow in Hong Kong was notably reserved as attendees wrestled with trade tensions, a cooling economy and the 20 pct fall in Shanghai stocks. General pessimism seems overdone, but the Asia-focused financial community senses a new normal taking hold.

The Exchange: Greg Fleming

13 September 2018

On the day Lehman Brothers went belly-up, Merrill Lynch sold itself to Bank of America. As president of the “Thundering Herd,” Fleming was the architect of that transaction. In conversation with Rob Cox, he defends the deal, reminisces on the crisis and discusses his new venture.

Turkey’s outbreak of common sense has limits

13 September 2018

The central bank has hiked rates more than markets expected, a welcome sign of independence after attacks by President Erdogan. The move may avoid a currency crisis, but Ankara’s political and economic vulnerabilities endure. And tensions between bank and state may get worse.

Guest view: Real rates matter more than inversion

13 September 2018

An inverted U.S. yield curve, with short-term interest rates higher than long-term ones, is seen as a recession warning. Myron Scholes and Ash Alankar of Janus Henderson Investments argue that monetary policymakers should worry more about the excess of yields over inflation.

Chancellor: “Haves” enriched most from Lehman bust

13 September 2018

Ultralow interest rates after the crisis may have lifted many boats, but the yachts of the wealthiest have been buoyed above all. Wall Street and the CEO class particularly benefited. This has come at the expense of the less fortunate, who are making their displeasure known.

Firefighters of last crisis see smoldering danger

12 September 2018

Former U.S. officials Ben Bernanke, Tim Geithner and Hank Paulson agree it’s hard to predict the next financial calamity. Defenses, such as a robust economy and strong institutions, would help. But inequality and a diminished civil service will make it harder to soften the blow.

New York’s trouble: a total lack of tunnel vision

12 September 2018

The city’s commuters already know that its transport system is hanging by a thread. A halted project to build new tunnels underneath the Hudson river shows there are ways to make things better, but maybe not the will. Political squabbling is an obstacle, but not the only one.

Chancellor: The legacy of ultralow interest rates

10 September 2018

This first in a series of "Ten Years After" essays argues the bold monetary experiment that followed Lehman’s demise unleashed speculative manias, carry trades, populism born of inequality, capital misallocation and a China bubble that pose grave threats to the financial system.