Money‚ Markets & Macroeconomics

Capital Calls: US debt deal

30 May 2023

Concise views on global finance: The pending deal for raising the debt ceiling would shift $20 billion out of the government’s tax collector. The move eases some short-term budget pressures, but could surrender a seven-fold payoff down the road.

India’s moment is obfuscated by its jobs deficit

30 May 2023

The country is establishing itself on the global investment map. In this Exchange podcast, author and ex-IMF director Ashoka Mody talks about why executives should look at India’s underemployment problem instead of focusing on its 7% GDP growth as they size-up the opportunity.

Biden gives little, gets less in debt ceiling deal

28 May 2023

The White House reached an agreement with Republicans to raise the debt limit for two years. The deal will avoid a big knock on Biden’s reelection plans, but the victories end there. Spending caps and social-aid restrictions give Democrats little else to cheer.

AI speed benefits now apply to EU boycott U-turns

26 May 2023

On Wednesday Sam Altman threatened to quit Europe if it “over-regulates” his booming startup OpenAI. He’s now rapidly rowed back. As with their disruptive new technology, AI mavens may have a shrewder sense than older US peers of when to stop poking the Brussels bear.

Central bankers face a balance sheet reckoning

26 May 2023

Assets held by central banks have exploded since 2008. As interest rates rise, some of those institutions are slipping into the red. We’re told normal accounting rules do not apply. However, losses erode inflation-fighting credibility and independence, argues Edward Chancellor.

Capital Calls: Russian cash, Chinese car feud

25 May 2023

Concise views on global finance: European plans to divert Russian money to Ukraine are ill-thought-out; a feud between China’s BYD and Great Wall Motor is spooking investors.

Macron’s neglect is France’s main fiscal problem

25 May 2023

National debt is above 110% of GDP and will keep rising if the government’s rosy forecasts don’t pan out. Austerity isn’t the answer now, but the president doesn’t seem interested in crafting a long-term plan to cut indebtedness. That will hit the economy and future generations.

Debt ceiling crash will have few victims

25 May 2023

President Joe Biden is trying to hammer out a deal with Republican lawmakers to ensure the United States can keep its lights on. In this Viewsroom podcast, Breakingviews columnists explain how even if the world’s largest economy defaults on its debts the damage will be limited.

Debt ceiling debacle is ultimate winner’s curse

23 May 2023

The US government is sailing perilously close to a moment when it cannot both service its debts and pay its dues. Political dysfunction could trip into market mayhem. Yet in monetary terms the US remains the only game in town. The debt showdown is the flip side of that privilege.

Strongmen are riskier the more they stay in power

22 May 2023

Autocrats often seduce investors with promises to be good for business. But Turkey’s Tayyip Erdogan, Russia’s Vladimir Putin and Xi Jinping in China show this effect doesn’t last. The longer leaders stick around, the greater the risk of poor decisions, says Hugo Dixon.

Benched legislation has hidden costs

19 May 2023

Washington is laser-focused on raising the debt ceiling. But as spending debates rage, Congress’s back burner is getting crowded. Pending legislation, like one that secures bank services for cannabis businesses, enjoy broad support, but the window for easy passage is closing.

Russia sanctions become a high return investment

19 May 2023

As older penalties lose their bite, Western powers are preparing a new round of measures to tighten the screws on Vladimir Putin. That will hurt the Kremlin and be a marginal sacrifice for Europe, which no longer depends on Moscow for its energy – a good cost-benefit balance.

Asia tech’s next challenge is resetting the bar

19 May 2023

Singapore’s Grab raised its guidance, compatriot Sea navigated choppy waters, and China’s Tencent beat estimates. Investors still dumped their stock. Some caution is justified but high expectations throw up a new set of problems for a battered industry on the mend.

How do you solve a problem like AI? Tax it

18 May 2023

Generative artificial intelligence could put a rocket up company profits, and potentially leave millions jobless. The economic and social disruptions could be profound. But fiscal distortions make it hard to tide over the losers. Closing obvious loopholes is growing more urgent.

Erdogan part three would be worse and the same

18 May 2023

The Turkish president is in a heated battle to lead the battered country. In this Viewsroom podcast, Breakingviews columnists discuss the risks Turkey faces if he stays in office, his rival’s offering and how the outcome of the election will impact the rest of the world.

Debt conundrum gives Italy weak hand in EU talks

18 May 2023

The pandemic and the war have taken the country’s indebtedness off investors’ radar. Yet high interest rates, slower growth and a budget deficit mean Rome will struggle to cut its fiscal burden. That makes it harder for PM Giorgia Meloni to ask for lenient European rules.

Debt-ceiling talks are more theater than substance

16 May 2023

The few areas being discussed on Tuesday – food stamps and drilling permits - are hot political buttons. But they would shrink the deficit by only 2%. Lawmakers either have a long way to go to solve the debt problem, or they are favoring pet projects at the expense of insolvency.

Ukraine rebuilding would be small wager for Europe

16 May 2023

The Ukrainian economy shrank by 30% last year but the war didn’t break it. Reconstruction will cost $410 bln over a decade, according to the World Bank. The European Union could fund the bulk of those efforts by spending just 0.1% of annual GDP. That would be a shrewd investment.

Oil’s feuding forecasters may both be wrong

15 May 2023

The International Energy Agency, which represents developed-world crude buyers, recently slammed producer club OPEC’s output cuts. Yet the pair share the same demand estimates for 2023. If they’re wrong, IEA fears and OPEC hopes of surging oil prices may prove wide of the mark.

Turkey votes for long-term market instability

15 May 2023

With President Erdogan and his rival set for a May 28 runoff, uncertainty is the main upshot of the country’s elections. That prolongs the agony for a $900 bln economy plagued by 44% inflation and wild fiscal policies. An even weaker lira and warier foreign investors will ensue.