The euro crisis has exposed Europe’s interest rate flaws October 1, 2012 THE Eurozone is currently engulfed in a combined banking and sovereign debt crisis that threatens to unravel the single currency. The good news is that the essential pieces of a lasting solution are well understood: a banking union, recapitalisation of key banks, some debt write-offs and an inevitable transfer of wealth from creditors to debtors. [...]
As Xstrata and Glencore move closer to a merger, is it a good deal for shareholders? October 1, 2012 YES Jeff Largey Commodities remain a growth story, and there is industrial logic behind a merger between the world’s leading commodities trading house and one of the world’s largest mining companies. The deal will create a vertically-integrated mining giant, with industry leading copper volume growth, and the ability to increase margins in Xstrata’s existing operations. [...]
Rapid Responses October 1, 2012 GDP manipulation [Re: Time for MPs to summon statisticians over endless revisions, Friday] This article misses the point. The problem is not with statisticians, but with politicians and the media (and through them, the markets). They all give disproportionate attention to GDP figures which are, inevitably, far from a precise reflection of what is really [...]
Disruptive technology can rebuild manufacturing for the internet age September 30, 2012 BRITISH manufacturing is not finding it easy. Output shrank once again in the second quarter of 2012, having failed to deliver any significant growth in over a year. Once the workshop of the world, the UK has slipped down the manufacturing league tables. Does it matter? A few years ago, the answer from many economists [...]
More diverse financial services are critical to restoring trust in UK banking September 30, 2012 THE business of politics and the politics of business are rarely more intertwined than during the party conference season. Last week, the City of London was in the crosshairs of the Liberal Democrats, and it is likely to remain in sharp focus as Labour takes the stage in Manchester today. We all know that the [...]
Restraints on high frequency trading may hurt liquidity September 30, 2012 IT IS surprising that an event that took place in the US is causing a regulatory backlash in Europe. The now infamous 2010 flash crash, in which the Dow Jones plunged by about 9 per cent, is the main justification for various European regulatory initiatives against electronic market-making firms .These initiatives may, however, cause more [...]
As the euro crisis continues, could a country leave the single currency in the near future? September 30, 2012 YES Jonathan Loynes The recent reduction in the likelihood that one or more countries will leave the euro reflects the European Central Bank’s (ECB) pledge to do “whatever it takes” to save the single currency. But, there is still huge uncertainty over whether the ECB will follow up its words with decisive action. Problem countries [...]
Rapid responses September 30, 2012 The case of Estonia [Re: Estonia proves that it’s possible to cut spending and continue to grow, yesterday] While I envy Estonia’s finances and politics, its case merely proves that it’s possible to cut spending and recover from economic crisis if certain conditions are in place – and these are conditions that are almost entirely [...]
Estonia proves that it’s possible to cut spending and continue to grow September 27, 2012 THE on-going Eurozone crisis proves all those who highlighted the design flaws of the single currency were right. They said it would be impossible to maintain common competitiveness between disparate economies like Germany and Greece without fiscal transfers. The result would be significant and damaging imbalances. This was not inevitable, but it was always unlikely [...]
Facts may be slippery but the most important human qualities remain true September 27, 2012 FACTS aren’t what they used to be. When I started school, Pluto was a planet and carbon came in just three flavours: diamond, soot and graphite. By the time I left for university, a fourth kind of carbon had been announced, football-shaped buckminsterfullerene. And, thanks to Pluto’s reclassification six years ago, there are now just [...]