Money‚ Markets & Macroeconomics

Texas governor unlikely small government champion

19 Aug 2011

Rick Perry likes to boast of the jobs created on his watch. Yet while he wants to make the federal government “inconsequential,” he has presided over more new government jobs per head than Washington. If nothing else, it’s a reminder that economics can’t be reduced to soundbites.

Mexico needs to open door to its oil wider

19 Aug 2011

Bringing foreign firms into a few wells is a positive, if overdue, development. But more radical action is needed if the country is to make the most of its reserves. Only juicier deals for outsiders and better management of its state monopoly Pemex will revive ailing output.

Downgrade of U.S. debt upgrades risk to raters

19 Aug 2011

Credit rating firms have somehow alienated both parties in Congress. And government investigations of S&P may spur legislative efforts. On partisan lines, these range from tightening Uncle Sam’s grip to removing his helpful imprimatur. Either result could change the rating game.

Finnish favouritism could unravel Greek rescue

19 Aug 2011

Greece’s bailout allows Finland to secure its loans with cash. Now other member states want the same deal, which would undermine the whole exercise. With either the rescue package or euro zone unity at stake, the EU’s biggest players may have to knock some heads together.

Is Hugo Chavez ahead of the investment curve?

17 Aug 2011

Venezuela plans to move billions of cash reserves from developed nations to BRIC countries, according to media reports. This may reflect politics, or the need to keep creditors sweet. But given U.S. and EU budget and bank woes, Chavez may not be alone seeking alternatives

Targeting Sun Belt should be on Obama’s new list

17 Aug 2011

Swathes of the U.S. South and Southwest have replaced the Rust Belt as the nation’s economic runt. Housing-bust states like California and Nevada now have worse unemployment. The president’s fresh plans to jump-start the economy would do well to aim support at the region.

ECB’s dollar-swap safety net should cap bank pain

17 Aug 2011

The central bank has activated a facility that allows EU banks to access dollar funding. An unnamed lender has highlighted the stress in bank funding markets by paying up for seven-day liquidity. But the ECB’s ready supply of dollars should help prevent a Lehman-style crunch.

Merkel and Sarkozy live down to low expectations

17 Aug 2011

The Franco-German summit produced proposals for further euro zone integration. But the demand for balanced budgets was unmatched by any promise of more aid for peripheral states, while the mooted tax on financial transactions misses the point. Investors are rightly sceptical.

Barclays’ star trader exit won’t be the last

17 Aug 2011

The UK bank is parting company with big-shot commodities trader Todd Edgar. Curbs on proprietary trading are one factor, and his contract terms may make it logical to go now. But with revenues in trading under pressure, the underlying trend is shrinkage in any case.

India’s botched crackdown may be turning point

17 Aug 2011

Arresting an anti-corruption hunger striker has cost the Singh government political capital. That could jeopardise reforms hanging in the balance, and may worsen supply bottlenecks and inflation. But it could also be a spur to tougher action on graft - another big economic drag.

Europe shouldn’t dally on Syrian oil boycott

17 Aug 2011

Proceeds from the country’s oil exports are helping to prop up an increasingly brutal regime. Global markets can withstand the loss of Syria’s supplies. Even if there is a chance that Syria can circumvent sanctions, they remain the best tool available to weaken the regime.

Balanced budget laws are flawed but not useless

16 Aug 2011

Sarkozy and Merkel like them, and they feature in America, too. But politicians often fudge the numbers, or just change the rules. Nonetheless, in reasonably honest systems such laws slow the build-up of deficits. Perhaps as importantly, they also stigmatize bad behavior.

James Murdoch’s perch gets shakier by the second

16 Aug 2011

First, Rupert says Chase Carey is his under-the-bus replacement. Now, the onetime heir apparent faces fresh allegations about News of the World phone hacking. A News Corp law firm even joined the attack. Being an effective boss in the media empire looks much tougher for James.

Rick Perry needs to backtrack on Fed charge

16 Aug 2011

The Texas governor and GOP White House candidate, like the U.S. central bank’s Dallas branch, doesn’t much like its money-printing policies of late. But words like “treasonous” cross a line and further dent Fed independence. Perry could struggle if he doesn’t tone it down.

Battered U.S. junk deserves high-yield name again

16 Aug 2011

With markets volatile, typical junk bonds are yielding north of 8 pct. That’s tasty for those starving on the Fed’s zero-rate diet. And default rates look low, refinancing needs limited and the deal flow manageable. Despite investor wariness, today’s junk looks almost nutritious.

Over-reaction to BP Gulf spill costing U.S. jobs

16 Aug 2011

Oil regulators may have swung from gung-ho to too cautious. Painfully slow drilling approvals mean America could be missing out on 230,000 jobs - and tax revenue, too. Safety matters. But with unemployment and the deficit top national concerns, red tape should be kept in check.

German slowdown adds to pressure on euro zone

16 Aug 2011

Weak Q2 GDP confirms fears that the EU’s largest economy has entered a soft patch. That makes it harder for Europe to grow its way out of crisis. The euro zone can’t afford to relax near-term fiscal austerity just yet. But further rate hikes by the ECB must now be on hold.

World must let U.S. win currency war

16 Aug 2011

With the Fed bent on inflating the U.S. economy with cheap dollars, export economies may be tempted to suppress their currencies in response. They must resist. Painful as it seems, stronger currencies are a necessary cost of reviving customer No. 1 and preserving global growth.

Solar firm’s demise signals gray industry forecast

16 Aug 2011

Onetime investor darling Evergreen Solar, among the first U.S. green energy companies to go public, just went bankrupt, victimized by a global supply glut. Growing Chinese competition and waning European subsidies mean the solar sector will probably get darker before the dawn.

Google’s $12.5bln insurance buy may worry partners

15 Aug 2011

Paying up for Motorola Mobility locks in patents to help ensure Apple and Microsoft can’t stifle Google’s Android mobile operating system. But the search giant’s plans for its new hardware company will be the key concern for regulators and current Android handset makers alike.