Economics

Germany has chance to embrace new economic model

2 Jul 2020

Finance Minister Olaf Scholz is splurging to boost domestic demand as exports, the usual mainstay of growth, slump. Cutting taxes will help, as will upgrading crumbling infrastructure. It will make a real difference if Berlin sticks with its changed habits after the pandemic.

Ukraine central banker exit is nail in reform hope

2 Jul 2020

Governor Yakiv Smoliy quit, citing political pressure. He tamed inflation and stood up to the former owners of nationalised PrivatBank. His resignation scuppered a bond issue and puts a $5 bln IMF loan at risk. Opaque vested interests are winning out over transparency in Kyiv.

The Exchange: BIS chief Agustin Carstens

30 Jun 2020

It has been a hectic year for central bankers, who are on the front line of fighting a global recession. The head of the Bank for International Settlements joins Swaha Pattanaik to discuss how to unwind massive monetary stimulus, risks in the financial system, and regulation.

Corona Capital: Amazon, Car perks, College sports

29 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Companies are trying to bolster pocketbooks. Amazon makes extra payments to employees while car companies are offering major discounts. Plus: Under Armour ditches its UCLA deal.

Real-time economic data show Covid-19 wariness

25 Jun 2020

The pandemic has placed a premium on figures that give rapid hints about how the economy is doing. TomTom’s traffic flows and OpenTable’s restaurant data reveal the positive impact of U.S. states easing restrictions – but also how worsening outbreaks send people back home.

Chancellor: Inflation as the post-pandemic cure

25 Jun 2020

The massive fiscal deficits engendered by the virus should see off deflation. The spectre of rising prices now beckons. While its potential horrors shouldn’t be downplayed, inflation can resolve great imbalances and festering social discontents besetting the global economy.

Central banks have a way to spur greener recovery

24 Jun 2020

Fed chief Jerome Powell and ECB boss Christine Lagarde are purchasing bonds without taking account of whether they are supporting the carbon-intensive status quo. There are good reasons for that. But they can at least demand more disclosure of climate risks before buying.

Corona Capital: A tax on martinis

24 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Uncle Sam has bad news for those enjoying the libation during lockdown as it’s putting up import duties on gin, vodka and olives.

UK stimulus exit talk may do more harm than good

23 Jun 2020

Central bank boss Andrew Bailey is talking about how monetary easing will be unwound, while finance minister Rishi Sunak may later this year unveil deferred tax rises. Payback is inevitable. But when flagged so clearly, it undermines recovery efforts.

Corona Capital: UK debt, Oaktree, KKR, Chanel

19 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: UK government borrowing surges past GDP; Howard Marks is sceptical about the stock market revival; KKR bets on cheap and local European holidays; Chanel takes a gloomier view than rivals on the luxury rebound.

Virtual vouchers offer digital-payments stimulus

19 Jun 2020

Taiwan is issuing $1.7 bln of coupons to goose its economy. These types of handouts have worked to varied effect elsewhere, but often just replace one kind of spending with another. Making them electronic instead of paper should at least help accelerate efforts to go cashless.

Andrew Bailey can freeload on Fed and ECB largesse

18 Jun 2020

The Bank of England boss will buy an extra 100 billion pounds of bonds, but at a slower pace. His peers are being more open-handed. For example, banks just borrowed 1.3 trillion euros from the European Central Bank. Ample global liquidity will help Bailey contain UK debt yields.

Greening global recovery is cheaper than it looks

18 Jun 2020

Scattergun stimulus for virus-hit economies may increase carbon emissions. But new research suggests it would cost only a fraction of the $9 trillion mobilised to fight Covid-19 for policymakers to combat climate change and grow their economies at the same time. It’s worth a go.

New Zealand rebound depends on healthy contagion

18 Jun 2020

The $200 bln Kiwi economy suffered its worst quarterly contraction in 29 years. Prime Minister Jacinda Ardern’s lockdown worked, but her country will struggle with less tourism and immigration. It’s a prime example of how even successful virus control can have daunting costs.

Hadas: Virus debt will leave toxic residue

17 Jun 2020

Corporate borrowing breaks down when revenue dries up. Yet companies are taking on more leverage to survive the Covid-19 slowdown, inhibiting future growth. Ultra-low interest rates reduce the pain but bring other risks. There’s no safe way to recover from the debt overload.

Vietnam can build on its good crisis

17 Jun 2020

The Southeast Asian economy checked Covid-19 and is set to be one of the fastest growing economies in the world this year. It’s already a manufacturing dynamo. As global trade slumps, Vietnam looks like a good destination for companies as they shift supply chains out of China.

Corona Capital: Next crisis, Overvalued markets

16 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Deutsche Bank analysts sound a warning about future catastrophes, while investors try to square overpriced stocks with their hopes of a recovery.

Corona Capital: KKR, Rugby, Centene

12 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: KKR volunteers advisers to share the pain, Super Rugby heads back to the pitch, and Centene's best bet.

Crack in Hong Kong dollar peg is invisible

12 Jun 2020

U.S. investor Kyle Bass has bet the currency’s greenback link will snap within 18 months. The peg is vulnerable if Beijing’s new security law scares capital away. But that looks to be a long-term trend, and authorities for now are restraining a rally. Shorters are short on time.

“Lipstick effect” kissed off by Covid-19

11 Jun 2020

Estee Lauder’s ex-chairman once theorised that a downturn could be discerned by women buying the cheaper cosmetic over pricier items. Masked mouths, however, help explain a steep fall in lipstick sales during the pandemic. An economic-indicator makeover may be in order.