Finance

Xi Jinping will Give Donald Trump a Victory on Trade

Expect Trump to declare a “triumph” in a great trade deal that will feature China’s purchase of more than a trillion dollars of additional U.S. products. Graham Allison The National Interest With the conclusion of the first round of negotiations yesterday in Beijing, the way ahead for the United States and China to avoid a full-scale tariff war has become clear. With fifty days remaining before the March 1 end of the truce Trump and Xi announced to prevent U.S. ... Read More »

Erdogan’s $2 Billion Reason to Thank the Saudis

Turkey shrewdly took advantage of the spillover demand from Riyadh’s bond sale this week. Investors may well be underpricing the economic risks. Marcus Ashworth Bloomberg There are opportunistic financing deals, and then there’s Turkey. A $2 billion 10-year bond sale appeared out of nowhere for the country on Wednesday, with no roadshow and… But there was one big helping hand. Saudi Arabia had just launched $7.5 billion of new 10- and 30-year notes and had elected for tighter pricing rather ... Read More »

The US could lose its crown as the world’s most powerful economy as soon as next year, and it’s unlikely to ever get it back

The United States of America could lose its position as the world’s biggest economy as soon as next year — and once that happens, it is unlikely to regain the top spot as developing Asian economies power… Will Martin Business Insider According to research released this week by Standard Chartered Bank, China is likely to become the world’s biggest economy at some point in 2020, when measured by a combination of purchasing-power-parity exchange rates and… Using PPP alone, China is ... Read More »

Even Dutch planning can’t avoid the chaos of a no-deal Brexit

Rotterdam: The Hook of Holland, a stretch of land outside Rotterdam sliced by canals, functions in many ways like Britain’s backyard. Michael Birnbaum WAtoday The Washington Post Greenhouses stretch for miles, nurturing tulips, tomatoes and other supermarket specialties. The bounty is gathered into warehouses and sorted under signs denoting destinations such as Sheffield and Gateshead. Then trucks whisk it all onto ferries headed across the North Sea. Thanks to this precisely calibrated ecosystem and the European Union’s borderless trading zone, ... Read More »

Venezuela Supreme Court judge Christian Zerpa flees to US

Venezuela Supreme Court judge Christian Zerpa has fled to the US to protest over President Nicolás Maduro’s second term in office. BBC Last year’s election “was not free and competitive”, the former Maduro loyalist told a Florida radio station. And he accused President Maduro of systematically manipulating the affairs of the Supreme Court. In response, the court said Mr Zerpa was fleeing allegations of sexual harassment. Opposition parties boycotted the 2018 vote, calling it a sham. Mr Zerpa had been ... Read More »

Goldman Sachs Asks What If Lebanon Is Forced to Restructure Debt

Goldman Sachs Group Inc. still sees an imminent debt restructuring in Lebanon as unlikely but is already turning its attention to how much investors could recover as one of the world’s most indebted countries teeters on the brink of financial crisis. Paul Abelsky Bloomberg Under Goldman’s base scenario, foreign investors would recover 35 cents on the dollar, Farouk Soussa, an economist at Goldman Sachs, said in a report. But he said any debt overhaul would put the country’s banks first, meaning “the ... Read More »

The euro at 20: An enduring success but a fundamental failure

New Year’s Day 1999 saw the largest monetary changeover in history. Barry Eichengreen The Conversation On that date, just 20 years ago, 12 members of the European Union formally adopted a brand-spanking-new currency, the euro. Today seven additional EU member states use it, along with Montenegro, Kosovo, Andorra, Monaco, San Marino and Vatican City. If survival is the ultimate gauge of success, then this grand monetary experiment can be said to have succeeded. But as investment advisers say, past performance ... Read More »

Seven minutes of chaos: The ‘flash-crash’ that rocked currency markets

It took seven minutes for the yen to surge through levels that have held through almost a decade. WAtoday Bloomberg Traders are still seeking to piece together what happened just before 9:30 a.m. in Sydney, when orders came to sell Australia’s dollar and Turkey’s lira against the yen. While some pointed to risk aversion triggered by Apple cutting its sales outlook, others said Japanese retail investors were behind the trades. Whatever the cause, the moves were exacerbated by algorithmic programs ... Read More »

How to negotiate infrastructure deals with China: four things African governments need to get right

“You don’t negotiate with China !” I was quickly told when I started interviewing African public servants about their infrastructure deals with Beijing. Folashade Soule The Conversation There is a widespread view in Africa that you accept whatever terms are offered, for fear that the money might go somewhere else instead. China is the leading infrastructure finance provider on the continent – as demonstrated by a recent pledge of US$60 billion (£47 billion), most of which is for infrastructure projects. Big projects on the slate include hydropower plants ... Read More »

Ending austerity: give everyone a pay rise

In 2018 real earnings were 4% below what they were in 2008 in the UK. The decade since the global financial crisis was a lost decade for British workers; their living standards have stagnated. Engelbert Stockhammer The Conversation Wages have not even kept up with inflation. This is in sharp contrast to numerous decades before 2008. For example, from 1998 to 2008 wages, adjusted for inflation, grew by 25%. For most households, wages are the most important source of income, ... Read More »

Wall Street finishes worst year since 2008 with gains

Wall Street advanced in low-volume trading on Monday as revelers gathered to ring in 2019, marking the end of the worst year for US stocks since 2008, the height of the financial crisis. WAtoday Reuters Wall Street entered correction territory in late January and was challenged for much of 2018 by tariff jitters, rising interest rates, and fears of diminishing corporate profits. “Investors got complacent,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta. “People were positioned for ... Read More »

Govt extends loan subsidy for first-time homebuyers

NEW DELHI: The government on Monday extended the interest subsidy scheme till March 2020 for first time urban homebuyers who have annual annual income between Rs 6 lakh and Rs 18 lakh. The Times of India TNN This will enable new home buyers to avail up front financial assistance of about Rs 2.5 lakh from the central government, which they can use for down payment while booking, construction or re-purchasing the flat. Announcing this Union housing minister Hardeep Singh Puri said, “The growth and performance of credit linked ... Read More »

Energy price cap could mean people missing cheapest deals, warns consumer champion

Which? said the cheapest tariffs had vanished from the market as suppliers prepared for the cap’s implementation Joe Watts Independent Theresa May’s energy price cap which comes into force on Tuesday could mean people missing out on the cheapest electricity and gas prices, the UK’s foremost consumer group has warned. Which? said some of the cheapest tariffs available had been vanishing from the market as suppliers adjusted their operations in the run-up to the cap’s implementation. The prime minister argued the cap would cut bills for millions ... Read More »

You can’t get public service ethics from bankers

When Matt Comyn, now chief executive of the Commonwealth Bank, was a slightly more junior bank executive, he had qualms and scruples about the bank’s shameful practice of selling virtually useless personal loan insurance to its… Jack Waterford The Canberra Times His then boss, Ian Narev told him to “temper your sense of justice.” Mr Comyn, the successor and protégé of Narev, apparently followed this advice. It wasn’t until about 10 months ago, after it was clear that the banking ... Read More »

The Center Left and Globalization

After promising to reform both France and the European Union, President Emmanuel Macron is now struggling to reclaim the public’s confidence and prove that he is not the “President of the Rich.” Kemal Derviş and Caroline Conroy * Project Syndicate By pursuing a business-friendly reform agenda, Macron has fallen into a trap that center-left reformers everywhere seem incapable of avoiding. WASHINGTON, DC – Popular uprisings across France are threatening to shatter the hope that so many had placed in French President Emmanuel Macron ... Read More »

Whiff of Extinction Blows in Bull Market That Outlived Them All

It’s been derided as a house of cards, a gift to the one-percent, an experiment in monetary policy taken way too far. By Sarah Ponczek,  Elena Popina, and Vildana Hajric Bloomberg Now a bull market that for 10 years has confounded and chastened its detractors — by outlasting all its predecessors — is staggering up to death’s door. And haters and admirers alike are turning out to pronounce last rites. The fall has been swift, a spasm of nearly uninterrupted selling that dragged the S&P ... Read More »