India loan waiver opens financial doors for Modi 19 Apr 2017 The country's biggest state will write off farm loans worth $5.6 bln. Pressure is building for a nationwide move that might cost 2 pct of GDP. That would be bad for credit and fiscal discipline but help win votes, ease rural economic stress, and give cover to any bigger bank bailout.
Buy American crackdown may hurt Build America push 18 Apr 2017 The White House wants to curb the use of foreign goods in U.S. construction projects and procurement. Disregarding global supply chains and relying on arcane definitions of what qualifies as domestic add risk of rising prices. The same is true of Trump's infrastructure plans.
Mallya arrest could energise India bad debt fight 18 Apr 2017 Liquor baron Vijay Mallya fled to the United Kingdom after banks sued to recover $1.4 billion. If his arrest leads to extradition it would make an example of the poster child of India’s bad loan problem. That would help New Delhi sell any bailout of state banks to the public.
Theresa May cashes in at peak political valuation 18 Apr 2017 Calling an election on June 8 is the British prime minister’s best chance of securing a personal mandate. Her opponents are weak or divided and the pain of leaving the European Union has yet to bite. A big majority will give her scope to take a tougher stand in Brexit talks.
Online retailers betray limits of the internet 18 Apr 2017 Websites like Amazon and furniture seller Made.com are opening physical showrooms so punters can look before they buy online. Being footloose remains better than having old retail’s cost bases. But the new entrants wouldn’t be hiking their own expenses if they didn’t have to.
Private sector tells awkward truth on China growth 18 Apr 2017 First-quarter growth beat expectations at 6.9 pct. But investment and consumption were unhealthily focused on property and infrastructure. Wariness among retailers and service providers illustrates the difficulties China still faces in rebalancing its economy.
Brazil’s Temer steers white-knuckle reform route 17 Apr 2017 The "Car Wash" corruption probe is increasingly denting the president's government as he tries to drive crucial changes to an unsustainable pension system through Congress. The nation's economic recovery may hinge on his ability to ease off the gas just enough to ensure passage.
Fed’s new bank overseer could rattle rates process 17 Apr 2017 Randal Quarles looks headed to lead regulatory oversight at the central bank. He worked at Treasury but left before the crisis. He's expected to have a pragmatic view, despite Trump’s Dodd-Frank dissing. He may make more waves on monetary policy with a rules-based approach.
Trump finds markets, too, are complicated beasts 13 Apr 2017 The U.S. president no longer wants to label Beijing a currency manipulator. He belatedly learned the yuan hasn’t been purposely devalued for a while. He's also warming to the dovish Janet Yellen and the Export-Import Bank. As with healthcare, he seems to be learning on the job.
China’s money squeeze is making market suspicious 13 Apr 2017 The central bank is lifting short-term rates and draining liquidity to target speculators. Anxious banks and institutional investors are doing less business with each other as a result. This could cause rate spikes to intensify - and trouble could spill over into the stock market.
Dodd-Frank fight sends dangerous cues to watchdogs 12 Apr 2017 Congressman Jeb Hensarling’s latest plan gives banks even more regulatory relief and includes ratings agencies. Trump doubled down on his promise to get rid of finance rules. Democratic lawmakers stand in the way. Still, those signals could prompt officials to go easier on Wall St.
Hadas: Fed leak and Libor lie expose bigger issue 12 Apr 2017 Jeffrey Lacker’s resignation from the U.S. central bank and reports of Bank of England pressure to dissemble are signs of the special struggles monetary authorities have with regulatory capture. They’re worryingly symbiotic with the lucrative industry they’re supposed to guide.
Review: The demise of unions and the rise of Trump 11 Apr 2017 The new Broadway hit "Sweat," about a Pennsylvania steel plant’s closure, offers insight into the forces that put the U.S. president in office. Yet economic insecurity need not necessarily have fueled nativism. The dwindling power of organized labor is a compelling contributor.
Cox: Grover Cleveland offers timely trade lesson 11 Apr 2017 The pro-trade U.S. president delivered a prescient 1887 speech deriding protectionism during his first term in office. He lost re-election but took the White House four years later as tariffs skewered the economy and the GOP was wiped out. Take note, Donald Trump and Paul Ryan.
Libor did hit bank bosses, just not the right ones 11 Apr 2017 A leaked recording has reopened the question of how much senior bankers knew about interbank rate fiddling in 2012. Junior traders who were jailed say they didn't act in a vacuum. Their partial consolation is that today’s bank bosses are now much more under the gun.
Life Down Under is good – maybe too good 11 Apr 2017 Australia is enjoying its 26th recession-free year, thanks to insatiable demand from China. Yet household debts have soared and housing markets are overheating. Taming a runaway property market without nasty accidents would make the economic achievement even more impressive.
U.S. brokers surprisingly still on fiduciary hook 10 Apr 2017 Asset managers are scrambling after a Labor Dept rule requiring them to put clients' interests first unexpectedly survived, although delayed. Donald Trump ordered a review, but that hasn't killed the measure. Even if the rule takes effect in June, the fight probably isn't over.
Indonesian tax amnesty odd help for private banks 10 Apr 2017 A tax amnesty that saw citizens declare $365 bln in assets has been a blessing in disguise for top private banks. The ultimate outflows to Indonesia were a fraction of the headline amount. More importantly, the scheme gave lenders the excuse to do some overdue spring-cleaning.
Weak U.S. hiring looks like blip in steady economy 7 Apr 2017 For Donald Trump, who touted strong jobs growth in February, a mere 98,000 new positions last month was a reversal. The 12-month average is still over 180,000, though, and key unemployment rates declined. One month of data, good or bad, rarely tells the whole story.
Trump’s Syria strikes don’t justify crude worries 7 Apr 2017 Oil spiked after U.S. missiles rained on Syria. The fear isn’t that supplies will be disrupted but that Syrian ally Iran, which has been increasing its output of crude, will be hit with renewed sanctions. Even if that happens, other forces could keep markets well supplied.