The volatility we have come to expect in oil showed its face again as oil closed up around 8%-10% on the week on news of a nearing deal on the Eurozone crisis. We can expect this to continue. High oil prices will dampen the economy, which drive prices down again, so will grow the economy …
Continue reading ““Oil surges on hopes of bank rescue deal””
It is not only low income families who are struggling at the moment — billionaires have their problems too. The Bakrie family in Indonesia has a track record of buying companies, mortgaging them and using the new capital to buy more businesses. Its debt now stands at more than $3bn and the family has interests …
Following yesterday’s story about the fragility of the Chinese banking sector, the Chinese government today announced that it is increasing its stakes in the country’s largest banks. Chinese bank shares have fallen around 30% in the past few months. http://www.ft.com/cms/s/0/2caa65ec-f329-11e0-8383-00144feab49a.html
Having battled on party lines over the domestic budget, members of US Congress are now continuing those divisions into discussions of bilateral trade agreements with Brazil, Russia, India, South Korea, and most especially China. This will affect the performance of US companies there, but conversely also has implications for “export of US domestic jobs”. This …
Continue reading “US Congress divided over international economic policy”
The European Banking Authority is to set a higher than expected capital threshold of 9%. http://www.ft.com/cms/s/0/e555e7e8-f427-11e0-bdea-00144feab49a.html Global regulators insist that the new bank capital requirements will have a “tiny” impact on global growth — around 0.3%. http://www.ft.com/cms/s/0/04f5977c-f38f-11e0-b98c-00144feab49a.html
Volatility is making it difficult for fund managers to predict the future, and as a result they are trending towards pessimism. The focus is less on earnings growth and more on “balance sheet strength and sustainability”. At the same time, steel companies are still braced for falling prices as buyers delay orders because of nervous …
These include army recruitment, construction and running of bases, and catering. The aim is to save £250m over ten years, by removing expensively-trained combat troops from administrative roles. The reality is that the new jobs will likely be taken on by the more than 10,000 soliders (of 101,000 today) who are expected to lose their jobs …
Continue reading “Ministry of Defence to outsource more activities”
Here’s a story you don’t hear every day. In 2009 China encouraged local government to borrow heavily to finance local infrastructure projects. The low interest rates they set to fund this spending spree (and keep the renminbi down) have led investors to place their savings with “shadow banking system”. That has now grown larger than …
Syria’s foreign ministry has threatened “tough measures” against any state that recognises the council of opposition, announced last month in Istanbul. http://www.ft.com/cms/s/0/096b5de6-f28b-11e0-824e-00144feab49a.html
But it assumes that 4-5% growth will return, boosting taxes, in 2014-15. The FT thinks this is unlikely, but sees the realisation as something that will help force through tax increases and spending cuts, as well as a focus on creating growth and jobs as the best way to grow tax income. What the FT …