Government borrowing worst October figure in six years

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Public sector net borrowing (PSNB) rose £1.1bn in October compared with the same month a year ago to £8.2bn, official figures show. BBC That is the highest level of borrowing in October in six years. The government has borrowed £54.3bn so far this year and is making slow progress on meeting the Office for Budget Responsibility’s (OBR) forecast. These figures mean Chancellor George Osborne will need to restrict borrowing to just £15bn between now and April. While not impossible – ... Read More »

The rise of robo advisers

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The notion of robots delivering financial advice is one of the hottest  topics in financial planning circles. Even Australian Securities and Investments Commission chairman Greg Medcraft has weighed in, saying “robo advice” could slash investment costs and eliminate conflicts of interest. Judging by the number of new offerings coming on the market, this will be a growth sector, but how easily will people accept advice delivered by rules-based algorithms? The Sydney Morning Herald – Adam Courtenay Low cost Robo advisers are designed to take market share from humans ... Read More »

The Federal Reserve Finds a New, Global Way to Evade Transparency

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Both the European Central Bank and the Bank of Japan figured out long ago that the “Yellen Accord” could help them achieve their own mandates. The National Interest – Samuel Rines * Policy transparency from the Federal Reserve, otherwise known as the Yellen Accord, allows other central banks to anticipate its actions and respond accordingly in their best interest. But forward guidance and transparency are now posing a problem for the Fed, and its recently articulated global mandate is a mechanism ... Read More »

Lippo’s James Riady looks to leave rocky past behind

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JAKARTA — Ask aides to Lippo Group CEO James Riady about his management style, and they will tell you he is a “visionary.” They may then pause for a moment before whispering that he is also “very hands-on” and “aggressive.” Nikkei Asian Review – WATARU SUZUKI, Nikkei staff writer Indeed, when the Indonesian conglomerate’s tie-up talks with Japanese trading house Mitsubishi Corp. went nowhere for nearly a year, Riady flew to Tokyo in April and negotiated the deal himself. In ... Read More »

Irish economy to grow at fastest rate in Europe, says EU

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Commission predicts GDP to grow by 6% this year and by 4.5% in 2016 The Irish Times – Suzanne Lynch in Brussels Ireland’s economy is set to grow by 6 per cent this year, the fastest rate in the European Union, according to the European Commission. In its Winter Economic Forecast published this morning, the European Commission predicts that gross domestic product (GDP) will grow by 4.5 per cent in 2016 before slowing to 3.5 per cent in 2017. The ... Read More »

Downer EDI reaffirms 2016 profits guidance but says markets “challenging”

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Downer EDI chairman Mike Harding has warned 2015-16 will be “extremely challenging” as customers cut back on spending but the contractor reaffirmed its existing profits guidance at its annual general meeting in Sydney. The Canberra Times – Jenny Wiggins Mr Harding said Downer’s customers were “coming to the end of a major capital spend era,” especially in the oil, gas and mining industries. But he argued Downer was “well placed” to weather tough conditions because it had good underlying businesses, a ... Read More »

Turkish lira and stock market jump after election result

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The Turkish lira and the Istanbul stock market rose sharply on Monday after the surprise win by the ruling Justice and Development Party (AKP) on Sunday. BBC – The lira was up 3% against the US dollar to 2.817 in morning trading after falling by 25% this year. The main index in Istanbul jumped 5% in morning trading. A coalition government had been expected, so the prospect of a potentially more stable administration has boosted confidence. Turkey’s political problems and ... Read More »

British banks cash in as Visa Europe sells for €16.5bn

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Visa’s purchase of European sister firm will result in a windfall for British banks The Telegraph – By Tim Wallace Visa Europe is now in American hands after Visa Inc snapped up its sister company for €16.5bn, potentially rising by another €4.7bn if the firm performs well over the next four years. The European credit and debit card firm is owned by more than 3,000 members, including the big banks and other payments firms. As a result Britain’s biggest banks ... Read More »

The great chain of being sure about things

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Blockchains The technology behind bitcoin lets people who do not know or trust each other build a dependable ledger. This has implications far beyond the cryptocurrency. The Economist | From the print edition WHEN the Honduran police came to evict her in 2009 Mariana Catalina Izaguirre had lived in her lowly house for three decades. Unlike many of her neighbours in Tegucigalpa, the country’s capital, she even had an official title to the land on which it stood. But the ... Read More »

Editorial: Economic benefits take front seat amid warmer Sino-UK ties

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Chinese President Xi Jinping’s visit to the U.K. earlier this month led to a number of agreements, which will work to deepen bilateral economic relations, through his summit talks with British Prime Minister David Cameron and other meetings. Nikkei Asian Review – Editorial Particularly noteworthy is a deal for the installation of a Chinese-built nuclear reactor in a power station to be built in southeastern England, which marks the first adoption of a Chinese reactor by a developed country. The ... Read More »

Moody’s warns of CHF moral hazard

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Ratings agency Moody’s warned on Monday that the forced conversion of Swiss franc mortgages would cost the banks at least €250 million, create a ‘moral hazard’ and make the restructuring of NPLs more challenging. Cyprus Property News – By: Editorial FORCED conversion of Swiss franc mortgages would create a moral hazard and make restructuring of non-performing loans (NPLs) more challenging, Moody’s ratings agency said on Monday. According to a Central Bank report submitted in parliament, conversion of these mortgage loans ... Read More »

EU, US open new round of free trade talks

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EU and US negotiators have started a new round of trade talks to advance the Transatlantic Trade and Investment Partnership (TTIP). The negotiations come after the US and 11 Pacific nations finalized a trade pact. Deutsche Welle – EU and US negotiators in Miami on Monday started the 11th round of trade talks seeking to create a trade and investment zone encompassing 800 million people and nearly half of global economic output. The five-day negotiations will seek to bridge differences ... Read More »

‘Pro-cyclical’ budget could lift economic volatility, Fitch says

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Ratings agency sees overall plan as being consistent with stronger public finances The Irish Times – Arthur Beesley Credit rating agency Fitch said the stimulus provided by Budget 2016 was likely to fan economic volatility as it declared the overall package was consistent with improving public finances. In a note on Thursday, the agency said the strengthening fiscal performance since the start of the year made room for stimulus in the Budget without putting the original deficit target in danger. ... Read More »

A move away from new coal mines adds up

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Coal’s days are numbered and the sooner we face up to that the better. The Sydney Morning Herald – Ross Gittins, The Sydney Morning Herald’s Economics Editor What are we meant to do about coal? For some time now it has looked like Australians face a painful choice between doing the right, moral thing by the rest of the world and continuing to make a living from our rich endowment of natural resources. The burning of coal is by far ... Read More »

Faith in an Unregulated Free Market? Don’t Fall for It

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Perhaps the most widely admired of all the economic theories taught in our universities is the notion that an unregulated competitive economy is optimal for everyone. Economic View The New York Times – By ROBERT J. SHILLER In this optimal economy, each person is said to be a free actor who makes decisions purely in his or her own self-interest. Economists on both the right and left commonly say that these fundamental ideas tie our values of freedom and individuality ... Read More »

Paid or not, women have always contributed to the wealth of nations

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Economists have had it wrong for centuries about the worth of women’s work The Guardian – Katrine Marcal * Invest in girls and growth will take off – this has become a bit of a mantra in the last few years. From the UN to the IMF, international organisations pen beautiful press releases about how women are the key to economic development. Girls can fix the global economy, we hear, and the experts have numbers to prove it. Economists have ... Read More »