China’s revived economy rests on borrowed pillow 17 Jul 2017 Gross domestic product grew 6.9 pct in the second quarter, capping a solid first half. Robust manufacturing, foreign demand, strong commodities and a softer dollar give the government time to attack bad debt and get housing prices under control. But Beijing needs to hurry.
Review: How justice lost its way on Wall Street 14 Jul 2017 The financial crisis had millions of victims but, unlike previous ones, no apparent perpetrators. Jesse Eisinger's "The Chickenshit Club" blames political timidity, lobbying and D.C.'s revolving door for the failure to prosecute top dogs. Investors may yet regret the change.
Mexico and Canada on the lookout for new friends 14 Jul 2017 Donald Trump will soon present demands for a revised trade pact. Uncle Sam's size gives it leverage, but America’s neighbors have been seeking out partners in South America and Europe. This could benefit firms like Adecoagro in Argentina and Germany’s Oetker over U.S. rivals.
Britain’s 5G auction puts customers before coffers 14 Jul 2017 Regulators capped incumbent BT’s participation in upcoming mobile-spectrum auctions. That may lead to less fevered bidding, and smaller takings with which to pay down the national debt. It’s a reasonable trade-off in order to ensure a competitive four-player telecoms market.
China finance powwow marks inflection point for Xi 14 Jul 2017 Officials gather today in Beijing for a major policy conclave. Challenges include high debt and poor agency coordination. President Xi Jinping is increasingly concerned about financial risk. The meeting offers a chance for the leader to refurbish his reform credentials.
Hong Kong’s regulator power grab is overdue 14 Jul 2017 The SFC will use little known rules to stop questionable listings after a spate of scandals. The bold move significantly undermines the stock exchange's role in approving IPOs and will complicate oversight in the short-term. Ultimately, the city needs a single strong regulator.
Cox: White House kitchen-sink job going down drain 13 Jul 2017 New CEOs often spend their first months at the helm ejecting all but the proverbial basin: strategy, assets and guidance. Donald Trump is aggressively using the approach to wash out his predecessor's legacy. It's taking too long, though, and impeding chances for fresh policy.
Macron’s choice: Europe or Gallic exceptionalism 13 Jul 2017 The French President and Germany’s Angela Merkel are keen to revamp the euro zone. It’s hard for Macron to be a role model as long as France’s budget deficit is too big – and harder still given the pressure to cut taxes quickly. This fiscal dilemma is the euro zone’s problem.
Long-term optimists give Goldman too much credit 13 Jul 2017 Slow trading may doom the $90 bln firm to a ho-hum Q2. But analysts see its profit growth over the next 18 months far outpacing Wall Street rivals. Its valuation implies an even rosier outlook. The likes of JPMorgan, reporting on Friday, might reasonably feel under-appreciated.
Aramco exemption bends London IPO rules to limit 13 Jul 2017 The UK regulator wants to change its listing regime to lure state-controlled groups like the Saudi oil giant. The watchdog has to keep markets clean while protecting London’s competitiveness. But making policy for a single company - especially one as big as Aramco - is a mistake.
Why Europe can’t beat Google on corporate taxes 13 Jul 2017 A court has ruled the search giant is not liable for French back-tax after all. Google will face other battles over how it arranges its profits. Tech companies will always have an advantage, though. Unlike competing European countries, they can put their global interest first.
Lula graft conviction is a sad boon for Brazil 12 Jul 2017 At his popular peak, the ex-president offered a magical moderate leftism that both markets and the poor could love. He hoped to regain power in 2018. Positive investor reaction to his prison sentence shows how dead that dream is. Brazilians face harder, more realistic choices.
Protest to keep internet weird is worthy fight 12 Jul 2017 Amazon, Netflix and 100,000 others are urging resistance to a U.S. watchdog's plan to scrap rules on so-called net neutrality. Broadband provider AT&T is among them, with its own arguments. The common thread is that companies shouldn't be able to choose which content gets online.
Canada treads a fine line in following the Fed 12 Jul 2017 The central bank raised its key interest rate for the first time in nearly seven years, saying growth looked healthy. Inflation remains below target, though, and a housing bubble threatens to deflate. It's hard for Canada not to match tighter U.S. policy, but it carries risks.
Only in Trumpland is Gary Cohn suitable Fed chair 12 Jul 2017 The former Goldmanite and White House adviser is tipped as top contender to replace Janet Yellen. Though not an economist, his years in finance put him ahead of other cabinet picks lacking relevant résumés. But a Wall Street trader's temperament is no match for the staid job.
Bank of England puts price on bond fund stupidity 12 Jul 2017 Regulators worry that the growth of open-ended bond funds could cause fire sales. A central bank paper estimates that could add nearly half a percentage point to companies’ funding costs. Pointy-headed analysis should reinforce the case for more sensible investment models.
Hadas: Fear not, you can get economics right 12 Jul 2017 The dismal science struggles to explain such basic issues as persistent disinflation, lingering post-crisis trauma and rising inequality. Unsuitable methodology is the primary culprit. A new “Blackfriars School" can help by asking better questions about what’s really going on.
Britain learns how not to think about work 12 Jul 2017 A review of the UK “gig economy” suggests some jobs have conditions that make them little better than having no job at all. Others appeal much more than pay levels would suggest. Employment data does not capture the difference. Developing countries have known this for decades.
Temasek’s garage sale highlights capital dilemma 12 Jul 2017 The Singapore state investor sold more assets than it bought for the first time since 2009. The trend may continue with valuations high and stiff competition for assets from cash-rich private equity players. It will also make it hard to redeploy capital efficiently.
Holding: Judges owe investors principle, too 11 Jul 2017 The U.S. Supreme Court has been paying greater interest to securities-related cases. One against tech firm Cyan is the latest. Yet narrow and unpredictable rulings have confused shareholders about everything from insider trading to filing deadlines. Clearer standards are overdue.