Prepare for a moody, grungy and defiant year 28 Dec 2012 The 21st century becomes a teenager in 2013. It will talk to you in barely decipherable grunts. It will say you don’t understand. It will laze around in bed. It will complain, and it will pester you endlessly about iPhones.
U.S. doesn’t need Washington for economic stimulus 27 Dec 2012 President Obama’s planned one-time jolt has been stymied. But a divisive corner of the energy industry has many hallmarks of a boost to the nation’s wallets. Shale oil and gas production pumped $140 bln into 2012’s economy. It won’t cure America’s ills, but it can ease the pain.
Euro-practice awaits stronger theory 27 Dec 2012 Peter Kenen, who died on Dec. 18, helped develop the theory behind the single currency. The ideas - trade, transfers, shocks - remain pertinent, but Kenen’s successors will have to deal with unions which are more incremental, nuanced and political than the current theory allows.
US housing doesn’t need another government bailout 26 Dec 2012 The White House is mulling allowing homeowners with underwater private mortgages to refinance into cheaper government-backed loans. But Washington should be planning its exit from home finance, not extending its occupation. Luckily, these latest plans look like a pipe dream.
Mexico may teach U.S. a lesson on good government 26 Dec 2012 The country needs fiscal and energy sector reform. Its rival political parties have little history of working together, so that might sound hard. But they look set to reach a compromise with far less rancor than their counterparts north of the border.
Fading power of oil autocrats will aid growth 24 Dec 2012 Democracies are starting to outclass countries like Iran, Venezuela and Russia in energy production. That should reduce the economic and political influence of such authoritarian states. The West’s booming output should steady fuel prices, a rare boon for the global economy.
Monti tries to rise above political fray 24 Dec 2012 Italian outgoing premier Mario Monti has published a manifesto but isn’t backing any party in next year’s election. The move falls short of the engagement some had expected. But it may win broader backing for his reforms, and pressure the main parties to embrace his agenda.
Europe’s two challenges: economy, unity 24 Dec 2012 The euro crisis will become the European crisis as governments realise that among all the things they’ve done in the last two years, austerity is what has failed. And the split will widen inexorably between the 17-member zone and the rest of the EU.
Xmas overspending doesn’t breed higher returns 24 Dec 2012 If Christmas gifts were an investment, they would fall under the law of diminishing returns. Overspending is unproductive and small presents may be more efficient, behavioural economists suggest. A case where stinginess makes sense. At least economically.
Washington may finally take up mortgage reform 21 Dec 2012 Assuming Congress settles the deficit debate, housing finance should be its next stop. Lawmakers have postponed reforming the government’s role in funding home loans for four years. Some hurdles still remain. But economic, regulatory and political obstacles are dissolving.
Modi’s Gujarat win doesn’t mean he will rule India 21 Dec 2012 The right-wing leader’s third electoral win in his home state has boosted his stature. But Narendra Modi’s chequered past and autocratic personality could prevent him from becoming prime minister. Investors betting on Modi to provide effective governance could be in for a shock.
Made-in-China inventors may have eureka moment 21 Dec 2012 More patent applications were filed in China than any other country in the world in 2011. Government targets and subsidies doubtless helped to inspire inventors. Yet while the country’s mass-manufacturing of patents merits skepticism, it could also produce some bright ideas.
Upward U.S. GDP revisions explain a few surprises 20 Dec 2012 The boffins’ first stab at the Q3 growth rate was 2 pct; the third and final estimate is a much healthier 3.1 pct. That makes unexpectedly good jobs figures seem less odd and may help account for Obama’s win in November. Stronger growth makes the fiscal cliff less scary, too.
A guide for the perplexed: U.S. MBS lawsuits 20 Dec 2012 Banks, trustees and even investors had a hand in the debacle surrounding repackaged home loans. With lawyers running up against post-crisis filing deadlines, the last lawsuits are in sight - but the end of the fallout is years away. Breakingviews explains where things stand.
Narrowing French-UK yield rings hollow for Hollande 20 Dec 2012 Yields on 10-year debt issued by the UK government may soon rise above those on French state bonds of the same maturity. But François Hollande has nothing to brag about: it is more the sign of a deteriorating UK economy than proof of investors’ confidence in Paris.
Ireland gets welcome back-up from IMF 20 Dec 2012 The IMF is urging the euro zone to help Dublin restructure its bank bailout, and warns there are limits to austerity. The Fund is moving to a more pro-active role as bailout partner. With markets slumbering and the crisis abating, Ireland needs all the help it can get.
Fed’s foreign bank crackdown is price of stability 20 Dec 2012 Forcing overseas lenders to properly capitalize their U.S. arms is necessary to protect the local - and global - financial system. The Federal Reserve’s unilateral approach could prompt others to follow suit. But fears that fragmentation will stifle global banking are overblown.
It’s 20.12.2012; and it’s the end of a magical era 20 Dec 2012 One doesn’t have to be a Mayan to believe that tomorrow represents a numerological end of an era. It may not mark the end of the world - as some users of the Mesoamerican Long Count Calendar suggest - but after a fertile period for adorable dates, we are now entering a desert.
Shadow banks lead China towards a dark place 20 Dec 2012 The secret sauce in the country’s growth is no longer bank lending, but an explosion in off-balance sheet credit. The troubling expansion of funds extended through wealth management products - many of them short-term and dependent on confidence - may force a moment of reckoning.
Bank of Japan needs new rules of engagement 20 Dec 2012 The central bank has agreed to print more money. But ending deflation requires it to adopt a government-mandated price target, and for lawmakers to boost its firepower. That need not undermine the BOJ’s independence, provided the new system is transparent and has legal sanctity.