Putin has strong defences against U.S. debt siege 15 Aug 2018 The rouble has slumped on fears that Russia’s sovereign bonds will be next in the crosshairs of U.S. sanctions. That would cause a stink, but the bill may not pass into legislation. If it does, oil prices and Moscow’s low debt mean President Vladimir Putin can weather a crisis.
Soybeans strain Beijing’s trade war messaging 15 Aug 2018 China is likely to buy more of the animal feed ingredient from the United States, even after tariffs. That's despite government assurances it can diversify away from more than $12 bln of annual U.S. purchases. Markets sense it coming; others might soon see through bluster too.
Hadas: Turkey shows damage of fading world order 14 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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 Jul 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.