Money‚ Markets & Macroeconomics

Economic nationalists still linger in White House

18 August 2017

Steve Bannon, who advocated protectionist, "America first" policies, is out. That's a plus for the economy. But other foes of trade and immigration continue to influence Donald Trump. The centrists’ fight waged by Gary Cohn and others will get easier but it’s not over.

Barcelona attack targets Spain’s strongest spot

18 August 2017

Tourism is a pillar of the recovering Spanish economy, making the deadly assault on Las Ramblas a strike on prosperity as well as people. But previous attacks elsewhere in Europe show confidence bounces back, and the domestic economy is more resilient than it has been for years.

Bondholders can play hardball with Portugal’s Novo

18 August 2017

Bailed-out lender Novo Banco wants creditors to take a haircut, to smooth a sale to Lone Star. But creditors have numbers to block the swap, and could recapitalise the bank themselves. Novo has a history of scrapping with bondholders. This time creditors may have the upper hand.

Merkel matters less than her next coalition allies

18 August 2017

The German chancellor is poised to win a fourth term in September’s vote. However, Angela Merkel may well be forced to govern with a small majority in partnership with the Free Democrats. That party’s trenchant calls for even more austerity are bad news for Germany and Europe.

South Korea’s Moon, 100 days in, moves too slowly

18 August 2017

The president's bold plans to revitalise the economy are off to a slow start, even allowing for distractions from North Korea and Trump. Populist handouts to boost consumption are no substitute for reforming the family conglomerates that dilute the nation’s economic energy.

Viewsroom: Corporate America dumps CEO president

17 August 2017

Donald Trump’s inflammatory comments about white supremacists have lost him the support and advice of business leaders, leaving him increasingly isolated and ineffectual. Qatar’s stake in the LSE may prompt Saudi Aramco to shun the exchange for its IPO. Plus: M&A for the MAGA era.

Gary Cohn faces worst career investment dilemma

17 August 2017

He steered Goldman Sachs during the financial crisis. Now he’s under pressure to abandon Trump. Remaining hurts his brand. He’s been a moderating influence on trade and point man on taxes. Losing his Wall Street savvy would be a blow to the White House - and the country.

Britain tries Trojan Horse trade tactic in Ireland

17 August 2017

The EU wants the Northern Ireland border issue resolved before the UK’s wider exit terms can be agreed. New proposals from London effectively couch Britain’s trade agenda in concern for the peace process. Having Dublin onside raises the chances of Britain getting what it wants.

UK bank upstarts are already priced for downturn

17 August 2017

Shares in buy-to-let lenders, such as Aldermore, have fallen in the past three months due to fears about the housing market. Even if more loans sour, these newcomers can grow earnings by wresting market share from older high-street peers. The drop in their valuation is overdone.

Etihad’s airlines fail, but odd CDO remains aloft

17 August 2017

Air Berlin and Alitalia are insolvent. Their debt is probably worthless, except for an unusual collateralised debt obligation that part-owner Etihad used to fund them. It is trading at a price that suggests Etihad might bail it out. Fuzzy guarantees often end badly.

China’s telco overhaul is oddly engineered

17 August 2017

State-backed China Unicom will get $11.7 bln, including from Tencent and other tech stars. Less encouragingly, this flagship “mixed-ownership reform” also includes public money. And the funds are going through another unit in Shanghai, effectively limiting influence by outsiders.

Market shows faith in U.S. institutions, not Trump

16 August 2017

The president disbanded his advisory councils after a raft of CEOs quit. They are the latest to abandon a leader who has been defied by Congress, courts and the military. These bodies will be crucial in ensuring the nation’s stability. Investors so far appear confident they will.

U.S. blunt force ill-suited to NAFTA intricacies

16 August 2017

President Trump’s trade chief demanded changes to reduce the country’s trade deficit at the renegotiation kickoff. He also wants to speed up talks given upcoming elections. The America First tone fails to recognize that Canada and Mexico have leverage, and face pressure at home.

Hadas: A lesson for the Brexit mess from Obamacare

16 August 2017

The British vote to leave Europe and the vow by Republicans to cut back government health insurance were triumphs of dreams over reality. Facing the unpopular prospect of actually reducing benefits, the Americans blinked. The UK, with even worse choices, could do the same.

British wage mystery has non-British explanation

16 August 2017

The jobless rate has fallen to 4.4 percent, its lowest in over four decades, yet wage growth is tepid. Two things help explain the anomaly: a pool of people on zero-hour contracts available to switch into permanent jobs, and a surprising rise in EU nationals working in the UK.

ECB weakens Italy doom loop by bending bond rules

16 August 2017

The European Central Bank is buying more Italian bonds than its rules allow. That helps lower the country’s borrowing costs and allows its banks to cut exposure to their sovereign. With elections and political risks looming, it may have to take an ever more pragmatic approach.

What CEO would dare to join Trump now?

16 August 2017

The U.S. president reckons he can easily replace the bosses of Merck and Intel as advisers. Backlashes, though, put the likes of Pepsi and Campbell in awkward positions. His credibility-boosting executive brain-trusts are more likely to keep shrinking or disband than be rebuilt.

Pyongyang nudges Seoul onto Trump’s bad-boy list

15 August 2017

The U.S. president is unhappy with South Korea's softer approach to hostile North Korea, putting pressure on other disputes. America is scrutinizing its ally over currency manipulation and trade barriers. With China squeezing the economy, compromise would be advisable.

Exchange Podcast: Jason Furman

15 August 2017

There is almost nothing that the Trump administration is doing right on tax, trade, immigration, infrastructure, energy or regulatory policy. At least that's the view of economist Jason Furman who spent eight years working for the previous White House.

Washington has infrastructure backwards

15 August 2017

What’s needed to plug a $2 trln investment gap for U.S. airports, roads and such isn’t taxpayer cash. It’s the removal of hurdles to private financing and a change in the mindsets of authorities and consumers. There are good ideas to borrow from the likes of Canada and Australia.