U.S. energy boom spurs economic vs political clash 18 Oct 2012 Meaningful exports of oil are banned. But with output surging and crude fetching a 20 pct discount at home, producers want to ship it overseas - a red flag in Washington. There are similar reasons to export gas, but big practical hurdles. Unblocking trade could benefit everyone.
China’s mild slowdown dims hope for big stimulus 18 Oct 2012 Third-quarter GDP growth of 7.4 percent was the lowest for three years. However, expansion picked up in September, investment is rebounding and exports improved. Though Beijing will want to keep policy loose, the case for a big economic boost is fading.
South Africa risks being overtaken by region 18 Oct 2012 Zambia’s recent Eurobond success highlights how cellphones, the Web and cheap money are allowing Africa to leverage its resources and labor more effectively. But growth needs decent governance and civil peace too. Higher-cost South Africa looks shaky on both counts.
ECB’s "market access" is in the eye of beholder 17 Oct 2012 The European Central Bank’s bond-buying programme requires countries to keep market access. Defining market access is tricky and even circular. But the concept is so vague that it allows the ECB to keep governments and markets guessing.
Murphy’s law means something new for Big Oil 17 Oct 2012 The U.S. energy company’s value jumped 8 pct after executives said they would split off its retail business. Sure, they only acted after pressure from activist investors. But if larger players like Marathon follow suit, it could unlock billions of value for shareholders.
Spain’s bad bank will require financial acrobatics 17 Oct 2012 The next stage in cleaning up the financial system will be hiving off rotten assets into an off-balance sheet asset management company. Madrid has two conflicting objectives: minimising the state’s debts and maximising the clean-up. It should prioritise the latter.
Corporate China beating banks at their own game 17 Oct 2012 Banks and bondholders aren’t the only ones working to keep the country’s debt-fueled party from crashing: companies are also lending more to each other, for longer. As growth slows, the risk is that rising past-due bills make it hard for the private sector to repay mounting debt.
Stock investors vault ahead of housing recovery 15 Oct 2012 Economic signals point to a U.S. property rebound, but the bulls may be chasing a mirage. Last week saw a big bump for a real estate agency’s IPO. Home Depot trades well above its bubble-era highs. Fundamentals suggest the market has bottomed, but a boom still looks distant.
Nobel economics prize a welcome nod to match-makers 15 Oct 2012 Americans Alvin Roth and Lloyd Shapley won the 2012 Nobel prize for economics for their research on efficient match-making. It shouldn’t come as a shock. Unlike sexier fields like finance, successful matching can claim it fixes systems - and even saves lives.
Bernanke’s Asian defence is an implausible yarn 15 Oct 2012 The Fed chief claims money printing by advanced nations is not the “dominant” force behind surging capital flows to emerging economies, and that they benefit from stronger demand in the West. Evidence suggests his first claim is wrong, while the second is impossible to verify.
Hugo Dixon: Spanish circle getting hard to square 15 Oct 2012 Mariano Rajoy’s government has taken important steps to reform the economy. But the recession is deepening, the PM is a poor communicator and his political capital has plummeted. Madrid will also find it harder than first thought to access help from its euro zone partners.
Global economy hobbled by coordination failures 15 Oct 2012 Political wrangling in the euro zone and United States dominated debate at last week’s IMF meetings. But a longer-term concern is the slowdown in emerging markets. Though the developed world needs to work off its excess debt, it’s hard to see other countries picking up the slack.
Europe’s Nobel award is a pleasing surprise 12 Oct 2012 Don’t laugh, the EU deserves its Nobel Peace Prize. Its faults and flaws are many, and financial strains may yet scupper the whole project. But the Norwegian judges correctly laud its past achievements and rightly underscore the value of the cooperation and stability it fosters.
Review: Bairing the strain of failed regulation 12 Oct 2012 Former U.S. bank regulator Sheila Bair is by no means perfect, as several incidents in “Bull by the Horns” demonstrate. But she put taxpayers first and argued for banks to shoulder more of the burden for the industry’s failures, which is how the system is supposed to work.
New York festival features Hollywood’s new finance 12 Oct 2012 Amid blockbuster debuts of Steven Spielberg’s “Lincoln” and Ang Lee’s “Life of Pi,” the Big Apple’s 50th annual movie jubilee is showcasing small-budget productions like “The Last Time I Saw Macao.” Such indie and foreign films are reshaping the industry’s investment model.
Turner-like monetary ideas could spur next crunch 12 Oct 2012 The UK’s outgoing financial regulator upped his profile in the race to head the Bank of England by admitting mistakes and suggesting “more innovative” policies may be needed. The BoE could buy other assets or even monetise government debt. But the risks are large.
"Crisis over" signals are deceptive 12 Oct 2012 For the first time since 2009, banks in the euro zone can issue bonds more cheaply than companies. Lower borrowing costs should spur lending and prevent messy deleveraging. But it’s all driven by central bank largesse. And for many financial issuers, markets remain hostile.
U.S. banking overhaul gets a second wind 11 Oct 2012 Two years after Dodd-Frank thudded onto desks across Wall Street, regulators are on the stump with ideas from the cutting-room floor. Fresh on the heels of the hoopla to break up banks, the Fed’s top cop is pushing to cap their size. Too big to fail clearly hasn’t been resolved.
Too bad Lagarde’s not credible because she’s right 11 Oct 2012 The IMF managing director has reiterated the organisation’s view that austerity may have been too harsh too fast, crimping growth. She is right, although her case would be stronger if, as French finance minister, she hadn’t been an austerity cheerleader for so many years.
Italy to keep Monti, in name or spirit 11 Oct 2012 Mario Monti has hinted he may stay on beyond next year’s elections. If he doesn’t, a new government may pursue his policies anyway. But the worst case scenario - government paralysis, or a stalemate on reform - is still possible, and would trigger a bailout.