Cameron’s speech could leave Europe indifferent 17 Jan 2013 The UK prime minister will explain his European strategy at last on Friday. He’s expected to demand reforms and threaten to leave the EU if he can’t get a deal. Other member governments may just yawn. They are losing interest in the possibility of a “Brexit”.
Rich country services deal looks worth the effort 17 Jan 2013 With global trade talks stymied and bilateral deals proliferating, a multilateral services deal among mostly rich countries could cover a lot of trade and address numerous knotty problems. Even without the BRICs, it would fight creeping protectionism and should bring big returns.
China’s growth model disrupts the world order 17 Jan 2013 China has made mercantilism seem sustainable, shown that poor countries can be powerful, and provided leadership without ideas. If those disruptions prove successful, economists will have explaining to do. Either way, it leaves the world with a financial problem.
Gold move shows Buba can cave in to pressure 16 Jan 2013 Germany’s central bank will repatriate some of its gold reserves. That could mean that the institution famous for its indifference to outside criticism does listen to the wider world at times. It would be nice if it showed the same humility on more important matters as well.
Ethical economy: The then and now of pensions 16 Jan 2013 Pensions concern a “then” - they are a repayment for past contributions. They are also a “now” - an allocation out of current income. Politicians struggle to find acceptable compromises between the two approaches. But the state is ill placed to resolve this philosophical debate.
UK inflation shambles can’t be left to fester 16 Jan 2013 The decision to maintain the flawed RPI inflation metric perpetuates an unfair transfer from taxpayers to bondholders and pensioners. Meanwhile, the UK is needlessly creating another inflation measure. The national statistics body has been tarnished. The mess needs cleaning up.
Mervyn King exit may detoxify BoE/bank relations 16 Jan 2013 Lenders and their regulators shouldn’t be best buddies. But banks feel the outgoing governor’s recent vim partly reflects his previous mistakes. Mark Carney offers a clean slate. Given the Bank of England’s new structure could make it harder to manage, that’s just as well.
Thailand’s unsustainable boom is piling up risks 16 Jan 2013 After seven anxiety-filled years, the Southeast Asian nation is awash with optimism. Populist fiscal policies are stuffing citizens’ pockets with cash, which they aren’t coy to spend. But inflation pressures are rising, and government mollycoddling is hurting competitiveness.
Digital TV revolution gets a fresh spark 15 Jan 2013 U.S. cord-cutting has been a slow migration not a stampede. However, a launch into 22 big cities for Aereo, which bypasses cable operators with broadcast channels, could nudge the herd. When mixed with the likes of Netflix, it renders traditional pay TV far less compelling.
Dismal Q4 won’t derail German economy 15 Jan 2013 Europe’s largest economy fared worse than expected at the end of 2012. But the fourth-quarter contraction will be a quickly-forgotten brief dip. Forward-looking indicators suggest that the euro zone’s economic engine is still humming.
U.S. manufacturing could use some long-term help 15 Jan 2013 Rising global labor costs have brought jobs back to America in a sign of how markets are helping. Impatient investors, however, won’t allocate the capital needed to jumpstart the sector. New proposals urging the government to invest in research and training are smart next steps.
German real estate upswing is not for everyone 15 Jan 2013 After years of stagnation, the German residential property market is showing signs of life. Rents and prices are on the rise. Listed landlords are outperforming the stock market and IPOs are in the pipeline. But investors should not get carried away. This market has major pitfalls.
China nears its own “Great Stink” moment 15 Jan 2013 Bad air stands in the way of good development. The damage to health and buildings undermine the benefits of rapid economic growth. Victorian London’s sewage problems offer a blueprint for change. There, reform became a priority when the smell got up the elite’s noses too.
Arab Spring makes region $225 bln poorer 15 Jan 2013 Ousting dictators doesn’t come cheap. In 2010, the IMF forecast total 2011-2015 GDP in Egypt, Libya and Tunisia at $2.2 trn. That figure is now 10 pct lower. The hope is that less wealth will be more evenly spread. The fear is that new governments will be less growth-friendly.
India in depth: Crying out for corporate bonds 15 Jan 2013 Using the country’s bank-dominated financial system to fund a $1 trillion infrastructure plan will be risky. Corporate bonds could be a good alternative, and might help cushion the current investment slump. But India’s authorities are stifling the market.
Flu epidemic exposes U.S. risk management flaws 14 Jan 2013 The virus kills about 36,000 Americans and inflicts $90 bln of economic damage annually. While one year’s death toll is 10 times greater than all terrorist attacks since 2000, the government spends far more on homeland security. Poor resource allocation can be a hard thing to cure.
Trade drives Germany and the world on 14 Jan 2013 The latest German export figures are a disappointment, with sales to the euro zone sharply down. But sales to emerging markets have quintupled in the past decade and will continue to power the German economy - and make the global one more balanced and healthier.
Hugo Dixon: EU positive contagion hinges on growth 14 Jan 2013 Mario Draghi says the euro zone is now experiencing “positive contagion”. The ECB president is right that the vicious cycle in financial markets has given way to a virtuous one. But until Italy and Spain stop shrinking, the risk of tipping back into negative contagion remains.
Singapore property curbs show Asia’s fear of yen 14 Jan 2013 The city-state is bracing itself for more hot money inflows - this time from Japan. Higher stamp duties and new lending limits are designed to cool Singapore’s soaring real estate market. They may also set the tone for Asian policy makers’ reaction to an abundance of cheap yen.
Breaking debt cap is best of bad options for Obama 11 Jan 2013 He must meet U.S. obligations, and he can’t cut spending without Congress’s say-so. But some lawmakers want to stop him borrowing more. Trillion-dollar coins aside, breaching the debt ceiling is legally the president’s safest bet. That could force his critics into hard choices.