Finance

Japan thinks Brexit is an ‘act of self harm’, says former ambassador

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Sir David Warren says Britain’s withdrawal from EU could have ‘grave’ consequences for bilateral relations Chris Baynes The Independent Japan sees Brexit as an act of economic and political “self-harm” that will weaken the UK as a world power, according to the former British ambassador to Tokyo. Sir David Warren, who served in the post between 2008 and 2012, said Britain’s withdrawal from the EU could have “grave” consequences for relations with Japan. His comments came after the Japanese ambassador to London warned Prime Minister Theresa ... Read More »

Capitalism isn’t an ideology — it’s an operating system

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Bhu Srinivasan researches the intersection of capitalism and technological progress. Today’s TED Talk Instead of thinking about capitalism as a firm, unchanging ideology, he suggests that we should think of it as an operating system — one that needs upgrades to keep up with innovation, like the impending take-off of drone delivery services. Learn more about the past and future of the free market (and a potential coming identity crisis for the United States’ version of capitalism) with this quick, ... Read More »

Why our obsession with GDP ignores harm done to welfare and the world

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One of the first things economics students learn about is Gross Domestic Product (GDP) GDP is also a central concept in many political debates, including Brexit. The Converstion Will it rise? Will it fall? What effect will this have on our lives? Gross Domestic Product measures the total value of goods produced and services provided in a country, calculating the net value added by each economic “actor”. So if you produce a car sold for £10,000 but you bought parts ... Read More »

The U.K. Is Down Since Brexit. Guess Who’s Up.

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Greece is growing faster than the U.K. and is outperforming it in financial markets Matthew A. Winkler Bloomberg When British voters decided in June 2016 to exit the European Union, investors who had anticipated the opposite result stampeded out of sterling and the currency plummeted a record 8.05 percent to a 31-year low. Almost 20 months later, the pound has mostly recovered, providing some satisfaction to commentators who’d predicted that Brexit would prove more distressing to the… So much for wishful thinking. ... Read More »

Worried About the Stock Market? This Is Just the Beginning.

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The U.S. financial markets will become increasingly volatile as interest rates rise and credit spreads return to something approximating normal Christopher Whalen The National Interest Watching the financial markets gyrate over the past week, it is tempting to wonder if the global economy will ever return to an era when the decisions of private investors are more important than the policies of governments. Since 2008 and even before, central banks have been buying public and private debt and even private ... Read More »

Reserve Bank governor rules out interest rate hikes until wages rise

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The Reserve Bank governor has dismissed any chance of a rate hike any time soon, after a week of financial turmoil sparked by fears of rapidly rising inflation and interest rates in the United States. By business reporter Carrington Clarke ABC Philip Lowe said the recent market volatility would not have any impact on the growth outlook for Australia, which remains at “a bit above 3 per cent over the next couple of years”. But he also intensified his calls for higher ... Read More »

Brexit: ‘no deal would cut Scottish GDP by 9%’

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A ‘no deal’ Brexit would cut Scottish economic output by 9%, according to leaked UK Government analysis. Russell Jackson  The Scotsman The predicted hit to Scotland if the UK leaves the EU without a deal has been detailed in regional breakdowns that emerged on Wednesday. The figure is worse than the 8.5 per cent cut to GDP predicted by a Scottish Government study last month. At the time, the Scottish Government figure was described as “completely over-the-top scaremongering” by the ... Read More »

Truth about toxic banking culture may never be told

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Year after year, scandals revealing the ongoing unethical behaviour of banking senior management have shown the need for scrutiny of wrongdoing in our nation’s finance sector Julia Angrisano Brisbane Times The royal commission is an opportunity to shine a spotlight on these hidden practices, to improve the experiences of customers and finance workers. However, shadows are being cast over the process of the banking royal commission before it has even begun. Legal schemes that banks use to silence their staff ... Read More »

What Wall Street’s Ups and Downs Look Like

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Americans have pictured the stock market the exact same way for generations Photographs and Text by Sam Hodgson The New York Times Men in blue jackets scamper across a trading room floor at the New York Stock Exchange, alternatively delighted or despondent, following rises and falls of geopolitical turmoil, the specter of regulation or, perhaps, the whims of other investors. Most trading these days does not happen on the floor of the exchange. The majority are the result of selections ... Read More »

Diplomats Are Made, Not Born

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Diplomacy and politics may go hand in hand, but their partnership isn’t one of equals. It is logical — especially in a democracy — for a country’s diplomacy to serve its political leaders. By NICHOLAS KRALEV The New York Times Sometimes, however, smart leaders allow diplomacy to influence politics. For that influence to be truly worthwhile, governments around the world must solve an acute problem: Global diplomacy today is not very effective, in part because it is misunderstood and starved of ... Read More »

Stronger Aussie a bump on RBA’s slow path back to normal

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The Australian dollar is once again caught up in the shifting tide of global finance, with the currency pushing to two-and-a-half year highs and threatening to further delay the RBA’s tentative plans to move towards a more normal monetary policy setting. Patrick Commins Brisbane Times The Aussie has lifted by more than US6¢ since early December – or 8 per cent – to push firmly above US81¢, its loftiest level since May 2015. That brings its gains in 2017 to 3.9 ... Read More »

At Davos, the Real Star May Have Been China, Not Trump

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DAVOS, Switzerland — President Trump used the World Economic Forum meeting to woo investors and business leaders by reassuring them that “America first does not mean America alone.” Keith Bradsher The New York Times But it was clear in Davos, Switzerland, this past week that geopolitical momentum lay with Beijing, not Washington. At one end of town, President Michel Temer of Brazil welcomed an unexpected offer from Beijing for Latin American nations to work closely with a Chinese initiative, known ... Read More »

The Korean Peninsula Crisis: Beyond Fire and Fury

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Two Crisis Group reports detail how a nightmarish war on the Korean peninsula is closer than ever in recent history, and how the Winter Olympics and North Korea’s need to show economic progress in its 70th anniversary year offer opportunities for diplomacy and de-escalation. ICG North Korea’s nuclear and missile tests combined with bellicose rhetoric from the U.S. mean the risk of a catastrophic war on the Korean peninsula is higher than at any time in recent history. Yet a short ... Read More »

Australian property ‘severely unaffordable’, Sydney crowned ‘second least affordable market’

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There’s no arguing Australian properties are among the world’s priciest, but experts disagree on exactly how unaffordable the market has become. David Chau ABC Australia’s five biggest cities have “severely unaffordable” housing markets, according to an international housing affordability think tank. Sydney was ranked “second worst”, with house prices almost 13 times higher than the median household income, Demographia said in its 14th annual report. It was beaten only by Hong Kong, where property prices were about 20 times higher ... Read More »

Oxfam: Richest one percent banked 82 percent of wealth created in 2017

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Oxfam’s latest report on wealth inequality describes how a wealthy elite accumulates vast fortunes while the poorest go without Nik Martin DW But the charity has been criticized as offering a too simplistic view of the imbalances. Oxfam on Monday detailed how the richest one percent grew its wealth by $762 billion (€620 billion) in 2017, which it says was enough to end poverty seven times over. In its annual report on wealth inequality, the UK-based poverty and disaster relief ... Read More »

China’s record US trade surplus leaves Trump trumped

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The US president will hate the figures after saying he is getting ‘much tougher’ on the world’s second largest economy Gordon Watts Asia Times Whichever way you look at it, the latest trade figures from China will make uncomfortable bedtime reading for Donald Trump. In yuan or dollar terms, the numbers are dripping with red ink, which will fail to amuse the US President. Official data released by the General Administration of Customs on Friday showed that China’s trade surplus ... Read More »