Japan spent about £38bn today, selling yen to weaken its currency (which has gained 41% against the dollar and 47% against the euro since early 2008). The government is worried that a continuing strong yen would hurt exporters, encourage manufacturers to shift production overseas, hurting jobs, and thus have a triple negative impact on domestic …
Continue reading “Japan weakens yen, as outlook remains complex, volatile”
WPP has cut its sales growth forecasts for 2011, though margins have improved (implying that costs have been cut significantly). Chief executive, Sir Martin Sorrell, is expecting growth of around 3%-4% in 2012 (down on 4%-6% in 2011), though 2013 may present a greater challenge “when a newly elected president will finally have to deal …
Continue reading “WPP sees growth in 2012, challenges in 2013”
News that private investors will accept a 50% reduction in the face value of their loans to Greece, and that that country will be able to reduce its debt to 120% of GDP by 2020, were met by a rise in stock markets to around the levels of early August. Banking shares performed especially well. …
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 …
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 …
Continue reading “China has more internet users than population of EU”
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 …
Continue reading “Banking regulation may have negative side-effects”
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 …
Continue reading “India’s banks raise savings rates to attract local capital”
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 …
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 …
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 …