Germany raises bar in fight for equal pay 12 Jan 2017 A new law will force companies to tell female employees how much their male equivalents earn. Companies complain it’s clumsy and costly. But they only have themselves to blame: despite anti-discrimination rules and voluntary pledges, the gender pay gap is still unacceptably wide.
Accounting tweaks could spark bank bond panic 2.0 12 Jan 2017 In 2016, fears Deutsche Bank's junior bonds would switch into equity caused market turmoil. Now, new solvency rules will force lenders to take bigger and faster losses in a downturn. If that pushes the debt near trigger points, it could spook investors all over again.
China bullies South Korea at its own risk 12 Jan 2017 Beijing looks to be exacting economic revenge against Seoul over a U.S. military pact. Sectors riding the "Korean wave" in China, like cosmetics and entertainment, are in the crosshairs. But deep manufacturing ties are harder to break. Excessive harshness would backfire on China.
Pharma pays for getting too comfy with Trump 11 Jan 2017 The president-elect accused the industry of "getting away with murder" on drug prices. Investors had dismissed his earlier pledge to renegotiate costs as campaign rhetoric easily outweighed by tax cuts. The stock drops caused by his latest stance should force a broader rethink.
Tillerson misses chance to overcome Putin problem 11 Jan 2017 A U.S. Senate hearing mostly made the nominee for secretary of state look like a model candidate. Mealy-mouthed answers on sanctions against Russia, though, and his concern for their impact on businesses, betrayed his decades at Exxon. It's a flashpoint even for some Republicans.
Trump business-conflicts failure lines up gridlock 11 Jan 2017 Restricting dealmaking and putting his sons in charge of his firm falls short of the blind trust ethics standards demand. It's a gift to Senate Democrats, whose criticism of any lapses could stymie the president-elect's plans for everything from the economy to the Supreme Court.
Beware cracks in Trump’s infrastructure plan 11 Jan 2017 Two of the president-elect's advisers have drafted a superficially appealing outline, but tax credits involved are giveaways to businesses and investors. The assumptions are fanciful, too. While new ideas are welcome, spurring $1 trln of funding demands a bigger government role.
Czech currency cap will go way of the Swiss 11 Jan 2017 A peg tethering the crown to the euro has served its purpose by fending off deflation and nurturing growth. It's now becoming a magnet for speculative flows. As Switzerland showed policymakers two years ago, it's best to ditch doomed currency caps sooner than later.
Britain’s true income gap is between young and old 11 Jan 2017 Labour Party leader Jeremy Corbyn's clumsy plans to rein in executive pay overlook an inconvenient fact: UK income inequality has fallen. Since the crisis retirees have done better than workers, though. Tackling the tensions caused by this divide makes a better political target.
Ma’s job offer to Trump is no Chinese peace pipe 11 Jan 2017 Alibaba founder Jack Ma met with the U.S. president-elect and pledged to create 1 mln jobs. Trump, well-pleased with this tribute, says he and the Chinese e-commerce tycoon will do "great things" together. There is less to both statements than meets the eye.
Fiat and GM show limits of shareholder optimism 10 Jan 2017 The surge in sales of U.S.-made trucks and SUVs is boosting the two automakers' profit and stock prices. It should also help keep the "America first" president-elect at bay. Longer-term challenges, though, are keeping most carmakers' valuations deflated.
Bets against Iraq’s OPEC cuts are premature 10 Jan 2017 Traders may have jumped the gun betting Baghdad won’t stick to an output deal. The cartel's second-largest producer has little to gain reneging on the pact and could struggle to maintain record shipments without investment. Higher prices help its cause more than extra barrels.
India’s next big experiment could be basic income 10 Jan 2017 A direct cash transfer to citizens could replace a plethora of subsidies and benefits. That would reduce corruption and waste, especially if the handout only goes to the poor. But identifying the worthy will be tough, even with India’s impressive biometric identity database.
EU banks handed new way to lose business 9 Jan 2017 The European Central Bank will set tougher rules than American peers to limit risky lending. The limits could make it harder for Europe’s banks to compete with U.S. or UK ones in lucrative private equity deals. The upshot may be safer lenders – but ones that make even less money.
Anglo-U.S. trade exposed to specialness deficit 9 Jan 2017 The UK’s “special relationship” with America gets more crucial as it moves towards a clean break with Europe. Transatlantic imports and exports are balanced – which should please President-elect Donald Trump – yet Britain has more to lose. Finance looks particularly vulnerable.
China can ignore ill-advised flight to bitcoin 9 Jan 2017 Beijing has cracked down on people converting yuan to dollars, but seems relatively relaxed about them piling into the virtual currency. That's probably because the bitcoin market is tiny, volatile, and dominated by local speculators: an unreliable channel for capital outflows.
Banks whiplashed by Asia’s distrust of hot money 9 Jan 2017 Indonesia plans new rules to ensure research is "factual", after a downgrade led it to cut ties with JPMorgan. Malaysia is clamping down on currency trading. The moves only highlight Southeast Asia’s vulnerability to capital flight rather than the region's impressive growth.
Obama leaves Trump with a tough job on jobs 6 Jan 2017 Creating nearly 16 mln new positions since the post-crisis nadir is pretty good. So is an unemployment rate under 5 pct. Not all labor indicators are so positive, but wages may finally be on the march. The new president's bold plans could clash with late-cycle economic realities.
Review: Undermining the foundations of rationality 6 Jan 2017 Economists Daniel Kahneman and Amos Tversky changed our understanding of how people make decisions. "The Undoing Project" by Michael Lewis is a vivid and insightful account of their partnership. However, it also raises questions about why faith in rational humans is so enduring.
NYC infrastructure plan years late, billions short 9 Jan 2017 The New York-New Jersey transport quango has set out a $32 bln plan to upgrade airports, railroads and tunnels. These and ongoing projects like new subways are overdue – and influenced too much by politics rather than real needs. Like trains, officials need to move faster.