Asian fight against capital flight helps dollar

October 8, 2014

The region’s central banks fear foreign capital will flee when U.S. rates start rising. They hope higher rates at home will stem the flow. But domestic investment dips when interest costs rise. The result: spare Asian savings go into safe dollar assets, pushing the greenback up.

China has two bad role models on dealing with debt

October 6, 2014

Japan’s government shouldered the pain of corporate deleveraging, and the economy became comatose. South Korea crammed its debt onto households with only marginally better results. Now it’s China that has a problem with high leverage. The race is on to find a different strategy.

Asset price disinflation may be next big thing

October 6, 2014

Iron ore led the way, oil is following and stocks may be joining the bandwagon. Even some hot property markets are cooling. Less ultra-loose U.S. monetary policy is blamed, but this looks more like the spread of a disinflationary tide. If so, safe bond prices will keep rising.

Rocket and Zalando call top of Europe’s IPO market

October 3, 2014

Despite being heavily subscribed, the tech incubator and the online retailer performed badly after listing, together wiping out 1.5 bln euros. The stock market has been the easiest exit route for European asset sales this year. Hereon, vendors won’t be able to name their price.

Chinese banks learn Western capital tricks

October 3, 2014

The country’s largest lenders have changed the way they measure the riskiness of their loans. That has made their capital ratios look healthier. Western lenders have long taken the same approach. Even so, it’s another reason to question Chinese banks’ balance sheets.

Double-digit oil forces majors into more self-help

October 2, 2014

The Big Oil groups already had a profitability issue before prices started falling. There’s no quick fix. They will have to step up efforts to boost cashflow by cutting costs and capex, and selling assets. At least balance sheets aren’t stretched, so dividends are safe – for now.

Occupy misses real threats to Hong Kong’s future

October 2, 2014

Most citizens have shied away from protests calling for electoral reform. Universal suffrage deserves public support, but erosion of rule of law and creeping censorship are bigger threats to prosperity. It’s unlikely these issues will erupt into an open standoff with Beijing.

Cameron takes deficit amnesia to a new level

October 1, 2014

The UK prime minister crowed when opposition leader Ed Miliband forgot the deficit in a keynote speech. Yet David Cameron has gone further, insisting on the need to tackle the country’s biggest problem and then pledging a tax giveaway. It’s an electoral bribe he can’t afford.

Ebola sets clock ticking on West African economy

October 1, 2014

Growth may yet survive the deadly epidemic. The last four years’ 28 pct pace isn’t realistic, but controlling the outbreak soon should at least preserve investment. That won’t be easy, given the virus has now spread to the U.S. In saving lives and the economy, every day counts.

Hong Kong harmony hits Beijing’s worst fears

October 1, 2014

The tens of thousands of protesters occupying Central send a disturbing message to authorities: unrest can be both disruptive and peaceful. That resonates far more than images of violent conflict. Little wonder China is trying to make sure citizens look the other way.