Bitcoin mania heads into the end game 18 Dec 2013 The electronic pseudo-currency had a good run. Ideologues, speculators and scammers enjoyed it while it lasted. Now Chinese authorities are determined on a strict clamp down, maybe an outright ban. Common sense prevails. Bitcoin’s price is down 50 pct. It will fall much more.
Swift bad loan clean-up will beef up Indian banks 18 Dec 2013 Lenders should be better at dealing with bad credit, if new rules stick. That should make state-run banks more resilient. They’re not quite investment-ready yet though – there’s still the matter of pouring in capital to deal with the 10 percent of loans that have already turned.
100 years of Fed competence led to cursed workload 17 Dec 2013 After humble beginnings, lawmakers heaped more and more responsibility on the U.S. central bank. Though it hasn’t always been perfect, its increasing power came from screwing up least. But some worry those many mandates may become too much to manage – if they aren’t already.
Globalisation’s demise is greatly exaggerated 17 Dec 2013 Sceptics warn an iron law of economics has been broken. A long-standing link between global GDP growth and world trade appears to have weakened since the 2008 crisis. But a closer look shows the recession that followed can explain most of the trade slowdown.
Shale energy deficit will hit Europe hard 17 Dec 2013 American companies have a big advantage over European counterparts: abundant, cheap gas. Fracking is more difficult in Europe and requires a step-change in public perception. Cheaper energy could provide the old continent with the fillip it needs. But it’s a pipedream.
China web giants take the fight offline in 2014 17 Dec 2013 Chinese tech firms are leaving their comfort zones to win consumers. TV shows, logistics and electronics are all part of the arsenal for companies like Tencent, Baidu and Alibaba. These forays are as disruptive as they are risky, particularly for the sector’s high margins.
India in depth: Three quick fixes for Modi 17 Dec 2013 The opposition politician Narendra Modi is likely to win the mid-2014 election. The new prime minister will need time to set his agenda for economic reconstruction. In the interim, he should focus on repair jobs that do not require new laws and will pay quick dividends.
Fed needs 100-year inspection and tune-up 16 Dec 2013 A U.S. federal commission led to the central bank’s creation in 1913. Its structure and mandate have evolved, and since 2008 novel activities have enlarged its balance sheet to $4 trln. A fresh commission reviewing the past century and the Fed mandate would renew its legitimacy.
Asmussen’s ECB exit will hurt Draghi 16 Dec 2013 Mario Draghi will lose an ally when ECB board member Jorg Asmussen quits to join Germany’s new government. The central bank boss will miss Asmussen’s loyal support - against German hostility, including from Bundesbank chief Jens Weidmann. Draghi may become more timid.
U.S. and China will set global growth pace in 2014 16 Dec 2013 America produces a quarter of world GDP, China less than a tenth. But between them they will generate almost half the growth in global output next year. With Europe in the doldrums, Japan recovering and emerging markets subdued, the planet heavily depends on its twin engines.
Hugo Dixon: Europe’s post-crisis challenge 16 Dec 2013 The hot phase of the euro crisis may be over. But the zone will limp on for years with low growth and high unemployment unless further action is taken on three fronts: bank balance sheets must be cleaned up, monetary policy loosened and more free-market reforms adopted.
New German government to take chances on growth 16 Dec 2013 With Wolfgang Schaeuble still in charge of Finance and the pro-European Social Democrats in a position of influence, Angela Merkel’s new cabinet brings continuity for Europe. But the SPD will control social policy. Its plans for welfare reforms may hurt long-term growth.
Russian rock worse for Ukraine than EU hard place 12 Dec 2013 The Ukrainian president rejected a deal with the EU for fear harsh conditions would deprive him of victory in the 2015 elections. With no sign of an end to demonstrations against his turn to Russia, his days in power are numbered. He’d better stick with Europe.
There’s method in ECB sovereign debt muddle 12 Dec 2013 President Mario Draghi seemed to contradict ECB executive board member Peter Praet by hinting he’s not about to demand capital against euro zone banks’ sovereign debt. Investors can expect more mixed messages. It’s hard to gee up lending while trying to become a tough regulator.
EU hits bank creditors and hopes for the best 12 Dec 2013 European authorities have agreed to force losses on creditors of failed banks from 2016, in order to spare taxpayers the full cost of bailouts. It gives resolution authorities useful flexibility. The new regime isn’t without risks. At least banks and markets now know the rules.
Pain of China’s rising rates is well hidden 12 Dec 2013 Banks are paying more for their funding; so are borrowers in the bond market. Yet that’s not stopping credit from growing twice as fast as GDP. It shows how far China still is from having a properly market-driven monetary system.
Microsoft lucky to avoid Nokia’s India tax bill 12 Dec 2013 An Indian court has allowed the Finnish company to include its Chennai factory in the sale of its devices business to Microsoft. While the $7.4 billion deal wasn’t at risk, the software giant dodges Nokia’s hard-to-assess tax liability. Vodafone wasn’t so fortunate.
Stan Fischer at Fed a fine complement to Yellen 11 Dec 2013 The ex-Bank of Israel governor would provide a conservative balance to incoming Chair Janet Yellen. He’d also boost the Fed’s global and crisis credibility. Making Fischer vice chair would be a savvy choice by the president. Yellen would be smart to encourage him to come aboard.
U.S. budget mini-bargain beats no bargain at all 11 Dec 2013 A deal reached between the House and Senate replaces $63 bln in planned cuts and slices another $23 bln from deficits – but it fails to deal with long-term issues. It’s as close as this dysfunctional Congress gets to compromise, just in time for a midterm election year.
Why the UK is growing and the euro zone isn’t 11 Dec 2013 They both have austerity in varying degrees but UK growth is now pushing ahead of the euro zone’s. The UK’s flexible labour market and weakened pound are advantages. A Germanically strong euro weighs heavily on a euro zone where monetary policy can’t solve the profound problems.