ABB, seen with other infrastructure and engineering groups as a bellwether of global economic conditions, has posted profits and sales up in the third quarter, benefitting from acquisitions, foreign exchange (FX) movements, and cost cutting and in spite of price pressures. Revenues showed a slight increase after acquisitions FX were taken into account. The order backlog …
Author archives: Permabusiness
China has more internet users than population of EU
The modernisation of China continues apace, as measured by the number of citizens with access to the Internet, which has transformed western lifestyles and economies. China now has over half a billion people using the Internet, more than twice the number using it in the US, and more than the entire population of the EU. Growth in …
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Limited liability is a ‘faultline’ in more than just banking governance
John Plender writes a piece in today’s FT on a recent speech by Andrew Haldane, executive director for financial stability of the Bank of England. He describes how “bank equity is treated as a call option on bank assets by investors, because the upside payoffs are unlimited while downside risks are capped by limited liability. …
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Banking regulation may have negative side-effects
The EU wants to prevent speculation on credit defaults by banning short- or naked-selling of Credit Default Swaps. Unintended consequences could be either that the entities that wanted to take the short positions would then switch to shorting other instruments, such as government bonds or bank equity, which pushes government borrowing costs up. And/or that …
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India’s banks raise savings rates to attract local capital
While the west continues to deal with the fallout of deregulated banks, the Reserve Bank of India has deregulated the interest rates paid on savings accounts. Rates in the largely state-controlled sector have been regulated at 3.5% for the past eight years, while inflation has been as high as almost ten percent. Commercial lending rates …
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Rethinking our brains
For a long time it has been understood that the left half of our brain does ‘reason’ and the right half does ’emotion’; or that language and visual imagery each reside only in one hemisphere. In fact, it turns out that this is not correct. Both halves carry out both functions, but in different ways. …
The energy and economic fundamentals
Here is a series of fundamental points, and then a question: To pay off our existing debts we need the economy to grow Economists are expecting there will be a source of energy to power that growth But cheap oil has run out, oil is ‘peaking’ — supply may match but will no longer exceed …
Aligning economy and society
Tying European countries together to form a single currency was always going to be difficult. Productivity is different in each country. And deeper than that, attitudes, lifestyles, and cultures are different. This is probably the reason why productivity levels across Europe have not converged. In the past decade productivity in Germany grew by 9.4%, while …
In favour of banking transparency
A short story about a bank that in the 1930s published a complete list of all its assets and liabilities, and showed how these made it a sound bank which therefore did not need to be tightly regulated. As the writer points out, steps towards greater transparency and disclosure would no doubt be resisted by …
Will China’s bubble burst?
Local governments have over-borrowed and are having cash flow problems. Beijing has allowed them to raise new money, via bonds (which previously were banned). This will help with short term cash flow issues, and buy time to get their borrowing in order. But the trend is that the situation is worsening. Much of the local …