U.S. Treasury drafts helpful Wall Street guide 6 Oct 2017 The administration’s latest proposals for reforming markets regulation overplay the drop in IPOs and fixate on a couple of needless changes. Overall, though, the report’s recommendations on everything from securitization to shaking up watchdogs make a fair degree of sense.
Bad jobs data tests White House braggadocio 6 Oct 2017 The U.S. economy lost 33,000 positions last month, largely due to hurricanes Harvey and Irma. It’s probably a temporary blip. But President Trump and his aides have touted monthly employment gains and other snapshot economic figures when it suits them. They own the downturns, too.
Review: Dani Rodrik gives economists a better name 6 Oct 2017 The mildly iconoclastic Harvard professor’s “Straight Talk on Trade” runs through several controversial claims, from praise of diversity in economic models to support for curbs on capital flows and unfair trade. His humility is admirable, even if his pessimism may be overdone.
Economic odds stacked against Catalonia breakaway 6 Oct 2017 On paper, independence looks viable for a wealthy region with GDP roughly the same as Finland’s. In reality, divorcing Spain would trigger harmful disputes over tax and debt. A Catalan central bank would lack the reserves to maintain confidence outside the euro zone.
White House economist drinks Trump’s Kool-Aid 5 Oct 2017 Tax cuts will pay for themselves through economic growth, says Council of Economic Advisers chief Kevin Hassett. He also backed the U.S. president’s protectionist policies, despite being a “full-blown free trader.” That’s one aide fewer willing to dispute voodoo economics.
Trump gets Puerto Rico priorities in a muddle 4 Oct 2017 The president’s vow to wipe out the U.S. commonwealth’s debt sent its bonds plunging. The devastation wrought by Hurricane Maria may necessitate another restructuring. But it doesn’t address the island’s problems. Its citizens need money, supplies and services, not distraction.
Hadas: Road to calm finance is unsafe at any speed 4 Oct 2017 A decade after the last financial crisis began, central banks are finally moving to normalise interest rates and money supply. With governments weak and banks and businesses hooked on easy credit, risks are high. There’s a better way to run this system, but few seem interested.
Catalan banks fairly punished for wrong reason 4 Oct 2017 The prospect of Catalan independence has hit Barcelona-based lenders CaixaBank and Sabadell. A schism from Spain and the EU could trigger deposit runs and losses, but the risk of that is low. Stagnant interest rates and weak profitability are a bigger threat than self-rule.
Jerome Powell makes for a Goldilocks Fed choice 3 Oct 2017 The central bank governor is less hawkish than other candidates on President Trump's shortlist, including Kevin Warsh. Powell also aligns with the White House on regulatory reform. And his confirmation would be easier. Those factors could make him a Fed chair who is just right.
Fidelity apes hedge funds to play active defence 3 Oct 2017 The asset manager’s UK offshoot will charge clients more when funds beat their benchmarks and less when they underperform. The risk is that fees become more opaque. Yet a variation on alternative managers’ “2-and-20” model may help it resist the onslaught from cheap trackers.
Central bankers’ superpowers are looking spent 2 Oct 2017 Between taming inflation, fighting the financial crisis and averting a breakup of the euro, monetary policymakers acquired an aura of omnipotence. Their responsibilities are growing and their mandates have turned into a fetish. A painful collision with reality is overdue.
Catalonia crisis is painful distraction for Spain 2 Oct 2017 Despite violent police intervention, the region’s vote to leave Spain is unlikely to trigger a breakup of the country. Yet the political unrest has damaged an already weak government and could strain public finances. Spain’s recovering economy needs a bigger political discount.
Review: Ellen Pao cracked door for women in tech 29 Sep 2017 In "Reset," the venture capitalist recounts her decision to fight Kleiner Perkins in court over sexism, rather than settling. She lost, but several women have since publicly confronted the bro-culture of Silicon Valley at Uber, SoFi and beyond, yielding more promising results.
Crypto-currencies’ strength becomes their weakness 29 Sep 2017 Freedom from regulation was the big draw of bitcoin, ether and the like. But exchanges established to trade them often lack basic controls on identity, fraud, tech and even volume. Without fixes, digital currencies will stay on the financial fringe, prone to crime and bubbles.
Cox: Where are the taxpayers’ private jets? 28 Sep 2017 Corporations long ago learned that hangars full of airplanes present an easy target for activists. Even mighty GE is grounding its fleet. So it's puzzling to see Trump's civil servants flying in such high style. It makes firing HHS director Tom Price his easiest call to date.
Brazilian oil auction gives Temer some validation 28 Sep 2017 The president is doing his country's economy good even as his popularity craters over graft charges. A less nationalist energy policy paved the way for a record haul in a drilling-rights auction and bodes well for more. It may leave Mexico and its oil deals battling for bids.
White House pins tax cuts on fanciful economics 28 Sep 2017 Presidential adviser Gary Cohn says its costly plan will pay for itself because of the expansion it'll spark. Skepticism is warranted. GDP growth topped 4 pct for a bit following Reagan and Clinton reforms, but the correlation isn’t as strong as the GOP would like to believe.
Viewsroom: Trump tax overhaul will be a long slog 28 Sep 2017 The U.S. president and Republicans want to reduce the corporate tax rate to 20 pct from 35 pct. After a blistering defeat over Obamacare, the prospects of significant reform are slim. Meanwhile, Equifax’s CEO slinks out of the building. Plus: Puerto Rico’s prayer for relief.
Bond investors toss a coin on Saudi reforms 28 Sep 2017 The kingdom’s $12.5 bln bond was oversubscribed. Rising oil prices and low debt help explain the appeal. But the 30-year notes remain a bet that Crown Prince Mohammed bin Salman can wean Saudi Arabia off oil. Investors’ zeal is a benchmark of the demand for emerging market debt.
Charmed life for Indian IPOs may be short 28 Sep 2017 Huge inflows of domestic cash and a lack of healthy financial stocks have helped two insurers float at punchy valuations. At this rate, India is on track for a record year for new issues. But foreigners are selling and the economy looks shaky. Would-be issuers need to move fast.