Politics

Hadas: Turkey shows damage of fading world order

14 August 2018

The country and its foreign creditors have had an irresponsible relationship for decades. The latest crisis is different because one-time supporters like the U.S., EU and IMF are less willing to help, and there are no credible replacements. Prepare for more currency crises.

China’s stealth housing support is looking wobbly

14 August 2018

Officials are tweaking a $470 bln liquidity scheme by which the central bank effectively helps upgrade housing in smaller cities. Even a modest change could cause real estate markets to shudder. Little wonder that Chinese property developers tremble with every update.

It’s time to take away Trump’s tariff toys

13 August 2018

Using steel duties to punish Turkey over a detained U.S. pastor is an abuse of the president's powers. While national security is a legitimate reason to restrict trade, doing so on a whim hurts America. Congress can be more muscular even if it's not yet prepared to rein Trump in.

South Korea offers cautionary Trump trade tale

13 August 2018

Seoul dodged U.S. steel tariffs by agreeing to a quota. The limit, however, was then applied retroactively and prevented exemptions. American manufacturers are now cut off from materials. EU President Jean-Claude Juncker and others will have to keep a close eye on the fine print.

Guest view: ESG ratings aren’t reliable enough

10 August 2018

Socially responsible investing has become a $20 trln-plus industry, but how do we know if firms are actually doing well by doing good? Shiva Rajgopal and Richard Foster pinpoint four big problems in measuring the environmental, social and governance impact of investments.

Saudi’s fund manager-in-chief veers off-piste

10 August 2018

Mohammed bin Salman wants to diversify the desert kingdom away from oil. Buying pricey Tesla stock while selling Canadian assets seems a strange way to do that, though. To stop further net outflows of capital, the crown prince could do with sticking more closely to his mandate.

China’s U.S. energy blow is effective but risky

8 August 2018

Beijing is slapping a levy on liquified natural gas, a booming American export. Iran’s LNG could fill the void. But that would flout U.S. sanctions, may spark criminal investigations and could bar Chinese firms from accessing dollars. The gamble relies on Trump blinking first.

Hadas: Higher is better for capital-gains taxes

8 August 2018

The Trump administration wants an inflation adjustment to reduce investors’ tax bills. Indexing makes sense, but the goal is wrongheaded. Lower taxes on gains don’t encourage investment. Higher rates on capital and lower ones on labor can reduce socially dangerous inequality.

White House’s small trade deals don’t add up

7 August 2018

U.S. officials hailed Morocco’s opening to U.S. poultry, just as they did recent moves by Colombia on rice and Argentina on pork. But projected export gains of $35 mln are chicken feed relative to the $114 bln in American goods threatened by other countries’ retaliatory tariffs.

Zimbabwe’s renewal hinges on trio of tricky fixes

3 August 2018

Emmerson Mnangagwa has won the presidential elections. His challenge is to devalue the national currency while convincing global institutions to extend credit and tackle a spiralling debt load. That’s a big ask, but the country faces a dark future if he doesn’t at least try.

Luxury investors take benign view on trade wars

3 August 2018

A growing spat between China and the U.S. threatens sales in the sector’s two most important markets. A weaker yuan would make overseas shopping pricier for spendthrift Chinese tourists too. With share prices near record highs, investors are exposed to anything but all-out peace.

Imran Khan’s Pakistan vision is beyond reach

30 July 2018

The former cricket hero and likely new premier wants to fight corruption and improve the lives of the poor. It’s fanciful given the likely demands of a bailout of the $300 bln economy by China or the IMF. Khan’s agenda is also hard to reconcile with Pakistan’s powerful army.

Predicting U.S. GDP more exciting, more pointless

27 July 2018

The U.S. economy grew at a healthy 4.1 percent pace in the second quarter. A surge in exports ahead of retaliatory tariffs helped. Consumer spending, aided by tax cuts, was also a factor. The trade war and fiscal stimulus could result in zig-zagging GDP figures for some time.

Indian tycoon winner of Trump-China metals scrap

26 July 2018

Hindalco is snagging aluminium producer Aleris for $2.6 bln after CFIUS concerns torpedoed a previous bid from a Chinese buyer. Hindalco’s U.S. arm Novelis is paying more, but the numbers stack up. Mogul Kumar Mangalam Birla is smartly taking advantage of the trade war for now.

Hadas: U.S. radicals are a fit for EU mainstream

26 July 2018

Alexandria Ocasio-Cortez is considered ultra-left wing in her home country, but the New York politician’s economic leanings are standard centrist policies in much of Europe. Americans would gain from a globalization of their debates about healthcare, jobs, housing and education.

Trump and Juncker revive Obama-era trade goals

25 July 2018

The EU will buy more American soybeans and LNG while U.S. steel tariffs may be resolved. The two also want to cut barriers in services and harmonize rules. Such issues featured with the last White House. Revisiting them in a new guise offers hope but auto levies may still loom.

Holding: M&A lawsuit cures could turn toxic

24 July 2018

Delaware’s efforts to cut frivolous U.S. deal litigation have pushed cases from state to federal courts, a new study shows. There, too, marginal suits that benefit only lawyers should be discouraged, but cracking down runs the risk of letting dodgy transactions off the hook.

Bank of Japan’s trial balloon shot down on runway

23 July 2018

Bond yields and the yen rose after Reuters reported the central bank was debating whether to scale back monetary stimulus. The move would be good for bank investors. But the scale of the market reaction and economic reality will make it hard for Governor Haruhiko Kuroda to act.

China’s pharma scandals sully healthcare cleanup

23 July 2018

Quality control problems at two drug makers in July have angered politicians, frightened consumers and destroyed over $2 bln in shareholder value. They come despite an earnest campaign to toughen standards. Big heads will probably roll. Better medicine may result.

Hadas: Global case of baby fever is easily cured

18 July 2018

From China to Hungary, governments are concocting financial incentives for women to bear more children. The efforts are doomed, because kids these days are an economic drag. Declining populations may be a problem for creditors, but they do not really threaten national prosperity.