Reuters blog archive
Although UK house prices will head steadily higher in the next two years, analysts polled by Reuters are divided over whether the Bank of England can restrain the market if it overheats. Here's what they said in the latest Reuters poll, taken this week: How confident are you in the BoE's ability to moderate the housing market if necessary?
PETER DIXON, COMMERZBANK: "Not very. A cynical interpretation would be that the government wants to see a decent rise in house prices over the next couple of years and would not be best pleased to see the BoE take the steam out of it. Nor is it clear that the BoE has the policy instruments to target the housing market without causing collateral damage elsewhere in the economy. Finally, it would call into question the thrust of policy if Help to Buy is giving to the housing market with one hand whilst the BoE is taking away with another."
PHILIP LACHOWYCZ, FATHOM FINANCIAL CONSULTING: "Not at all. The Bank of England through the FPC does now have the instruments and mandate to take specific action in the housing market. However, we find it unlikely that it will take any action as it would mean directly working against government policy."
AZAD ZANGANA, SCHRODERS: "The Bank of England is not in the business of moderating house prices, only stopping financial instability as a result of bubbles. There is no evidence to suggest that a speculative bubble is building, for example, mortgage equity withdrawals. A fundamental lack of supply in housing is driving up prices, and the only sustainable solution to this crisis is to build more homes. "
By Una Galani
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Giant Interactive’s $2.9 billion buyout is hard to resist. Chairman Shi Yuzhu is leading a consortium with Baring Private Equity Asia to take the U.S-listed Chinese computer gaming group private. At almost 13 times this year’s earnings, the group’s offer to buy the 53 percent that it doesn’t already own is a chunky premium to peers. Besides, independent investors have few alternatives.
from Global Investing:
By Shadi Bushra
Yet another sign of the growth convergence between developed and emerging markets. Two of the "BRIC' countries have dropped out of the Top-30 in a growth index compiled by political risk consultancy Maplecroft, while several Western powerhouses have nudged their way onto the list.
Maplecroft's 2014 Growth Opportunities Atlas showed that Brazil and Russia -- the B and R of the BRIC bloc -- had dropped 26 and 41 places, respectively - due to slow economic reforms and diversification. The United States, Australia and Germany meanwhile broke into the top 30 on the index, which evaluates 173 countries on their growth prospects over the next 20 years.
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Recently, John Cassidy posted six charts presented by various researchers from the launch of the Washington Center for Equitable Growth, a new think tank that will fund research into inequality. “Taken together, the pictures convey a good deal of what we know about inequality”, he writes. However, he also says that there’s plenty we still don’t know, particularly about the relationship is between inequality and growth.
Belgium came a step closer on Wednesday to introducing the right to grant euthanasia for terminally ill children, breaking what is an almost universal taboo, when a parliamentary committee voted it through by a large majority.
The law, which still has to go to a vote of the full parliament that analysts say is likely to pass, would make Belgium the first country in the world to remove the age limit for the procedure.
A French appeals court, ruling in a hotly debated religious rights case, on Wednesday upheld the dismissal of a Muslim daycare worker for wearing a headscarf at a creche that demanded strict neutrality from its employees.
from Alison Frankel:
On this Thanksgiving Eve, as we recall the generosity of the Wampanoags who helped early Bay Colony settlers learn how to survive in the New World, securities class action lawyers may want to spare a thanks or two for 12 members of the Ute tribe as well. Why? Because if the U.S. Supreme Court ends up eliminating fraud-on-the-market reliance in the Halliburton case to be heard later this term, one of the few remaining avenues for securities class actions is open because of a case those Utes brought to the Supreme Court back in 1971.
The court's 1972 ruling in Affiliated Ute v. United States established that securities fraud plaintiffs do not have to prove reliance to sustain claims based on a defendant's failure to disclose material information. The 12 so-called "mixed-blood" Utes who brought the suit alleged that two officials at First Security Bank of Utah deceived them about the true value of their shares in a corporation established to manage tribal assets. The bank was serving as transfer agent for the corporation, and two of its officials had the good fortune to work at a branch office in a Utah town with a large population of Utes. Without telling the sellers about hot demand for the restricted shares in the secondary market, the two bankers snapped up stock for between $300 and $700 (sometimes not even paid for in cash but in goods such as used cars). When they resold the shares to white people, they realized tidy profits. The Utes accused the bankers of defrauding them about the true value of their stock, filing a suit under the fraud provisions of the Exchange Act of 1934.
By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Wall Street bigwigs often lean economically right and socially left. In what looks like a manifesto for his papacy, Pope Francis takes the opposite stance. He might not, however, object to the relatively uncommercialized American Thanksgiving holiday. And over their turkey on Thursday, the rich might ponder a financial system that the pope says “rules rather than serves.”
This week we give thanks to those who have worked to ensure a clean and beautiful environment in America. We are fortunate that our air and water is sanitary and safe. It is healthy for us and it has profound economic consequences for the nation.
China recently moved to address its enormous and complex environment problem. From e360 at Yale:
from Data Dive:
The US is considering a complete troop withdrawal in Afghanistan in 2014 if the country's president, Hamid Karzai, refuses to sign a security deal. Without the deal, National Security Advisor Susan Rice said that the US will have no choice but to pull out all troops by next year, Reuters reports. While the US has been drawing down its presence in Afghanistan since 2011, it still has almost 50,000 troops in the country:
Reuters suggests that Karzai's reluctance to sign the security agreement may have to do with the upcoming spring presidential elections: