Spain’s bad bank valuation looks ripe for fiddling 13 Aug 2012 Madrid wants to fix its lenders by selling their assets to a bad bank. Ireland’s efforts in 2009 to price duff loans before offloading them to its version, NAMA, provide a handy valuation template. But they also suggest ways in which the process can be manipulated.
Egypt makes big leap toward civilian rule 13 Aug 2012 The Islamist president’s ousting of the ruling military chiefs is a decisive move to end the country’s political deadlock. And his reclaiming of legislative powers may help Egypt out of its economic impasse. But until a parliament is in place, power will be too concentrated.
It’s the budget, not the economy, stupid 11 Aug 2012 Mitt Romney’s choice of Paul Ryan as running mate can transform his mealy campaign into something substantive: a referendum on fixing the U.S. balance sheet. It’s sad that it takes a VP to give Romney appeal. But righting America’s finances is long-term legacy-setting stuff.
Uncle Sam seeks to dance around own rules in Sudan 10 Aug 2012 The U.S. wants $3.5 bln for the African nation following a recent oil pact with its southern spinoff. But that could contravene 1997 sanctions, exposing aid providers and investors to a StanChart-like zap. It would be far better to just adopt a new policy altogether.
Review: Not another BRIC in the wall 10 Aug 2012 Ruchir Sharma wants to identify the next great emerging economies by throwing out well-worn labels. “Breakout Nations” reexamines markets one by one, case by case. Sharma draws original conclusions, though a whirlwind tour of the developing world leaves some lingering questions.
Italy starts to get serious on debt reduction 10 Aug 2012 Fears of relentless austerity have prompted a flurry of proposals from Italian politicians and academics on ways to cut the nation’s debt through asset sales. Some ideas may be impractical, others have failed in the past. But the chorus of calls for action gives reason for hope.
Public investors lose in Mongol mining battle 10 Aug 2012 The nomad state seems set on sinking Chinese state firm Chalco’s bid for coal miner SouthGobi. Wild as Mongolia is, a compromise is conceivable. All sides could come away with something, except for investors who bought SouthGobi shares when they were double their current value.
Romney only has one bold option for vice president 9 Aug 2012 An ideal running mate for the GOP ticket provides beauty and brains. Some politicos offer the U.S. presidential hopeful one or the other. But Paul Ryan has legit budget policy chops and might woo swing voters. The move would also help reorient the party toward fiscal probity.
Brazil bourse has more staying power than economy 9 Aug 2012 Bovespa’s been hit by delistings and a dearth of IPOs. Rival exchanges may soon arrive, too, though that’s not easy. And Bovespa has a lock on other business while expanding elsewhere. Operating leverage is wobbly, but the bourse is well placed to weather the economy’s headwinds.
As the euro steadies, safe havens look more risky 9 Aug 2012 The single currency is being bolstered by tentative European Central Bank moves towards greater policy activism which make imminent crisis less likely. Global growth fears are another concern that may ease. Expensive safe havens look more vulnerable now than risk assets.
India begins the post-Mukherjee clear-up 9 Aug 2012 The former Indian finance minister’s reign was stained by economic meddling and political favouritism. Now he is gone, and some of his excesses are being reversed. An enemy has been pardoned and a friend has not received a plum job. This could be the beginning of a better era.
Uncle Sam still living well beyond his means 8 Aug 2012 While June consumer credit just missed its 2008 peak, overall debt in the first quarter was 250 pct of GDP against 232 pct four years ago. While the consumer has deleveraged a bit, business debt is flat and government debt has soared. At some point, this has to end.
Ethical economy: Tame the persistent elites 8 Aug 2012 Egalitarians around the world have spent the last century trying to limit the power of privileged elites. The campaigns have worked, up to a point, in most countries. But though they probably cannot be eradicated, the evils of inequality must be tamed.
Atomic halt leaves U.S. short on energy options 8 Aug 2012 A regulator is refusing to approve new reactors until there’s a plan for storing nuclear waste. With proposals to shutter a tenth of coal capacity, loud protests over gas fracking and little support for green tech, America seems to favor a none-of-the-above approach to energy.
StanChart anti-U.S. rant will resonate 8 Aug 2012 The reported denunciation of “f—ing Americans” shows a disrespectful attitude to the U.S. ability to impose financial rules well beyond its own borders. It’s hard to fight against the economic superpower, but the cavalier U.S. approach could eventually be self-defeating.
How to afford bailouts for Italy and Spain 8 Aug 2012 Until now, markets had assumed that Rome and Madrid were too big to bail. But the European Central Bank’s pledge to restart bond buying for countries that seek help could keep the bill below 300 billion euros. That would make rescuing the countries a bit easier.
Egypt’s economy is running on empty 8 Aug 2012 A $1 bln fall in foreign reserves in July underscores the growing fragility of Egypt’s finances. Aid from the Gulf has been a poor lifeline, and the country’s economy has seriously weakened since the uprising 18 months ago. That’s unlikely to change soon without outside help.
Indian telcos need a regulatory boost to grow 8 Aug 2012 Bharti Airtel, the market leader, has reported a 10th straight decline in quarterly profit. Overcrowding is forcing prices to rock bottom, and uncertain regulation is preventing consolidation. More data usage will be a boon. Healthier telcos will make a healthier economy too.
Argentina’s leader sabotages her own energy goals 7 Aug 2012 YPF needs funds to lift production and develop shale deposits. Yet Cristina Fernandez already scared investors by seizing Repsol’s stake in the state-controlled energy group and she is still holding back the industry. That makes YPF’s ambitious targets look far-fetched.
Japan Inc’s earnings tell worrisome global story 7 Aug 2012 Yes, operating profits at the country’s four biggest manufacturers - Toyota, Nissan, Honda and Hitachi - quintupled in the latest quarter as U.S. and in Japanese growth overwhelmed weaker economies in Europe and China. But the post-tsunami rebound is unlikely to last.