Future financiers condemned to repeat sins of past

June 7, 2014

Some 150,000 wannabe investment advisers, bankers and analysts take the CFA exam this weekend. Success hinges on understanding WACC and ROE. Knowledge of the South Sea Bubble or the Great Crash is not required. Vast ignorance of financial history is an overlooked systemic risk.

Three ways for FIFA to score on governance

June 6, 2014

Ugly allegations of corruption have caught soccer’s governing body offside. FIFA’s setup has improved lately but its congress is unrepresentative, its executive committee is too large, and its president is too powerful. The beautiful game should shoot for a hat-trick of reforms.

Review: China gives Africa handy investment lesson

June 6, 2014

Howard French’s new book paints an unflattering picture of the PRC’s heavy involvement in Africa. But China’s presence is not all bad. At a minimum, it gives African governments and businesses a benchmark for other offers now that the continent is attracting Western interest too.

Jack Ma soccer buy does Alibaba investors a favour

June 6, 2014

The internet giant’s founder hatched a $192 mln investment in China’s most popular team during a drinking session. Though the deal is immaterial to Alibaba’s value, it shows how the group works. It’s a reminder that investors in its IPO will be little more than spectators.

Chinese hiccup temporarily deflates dairy bubble

June 5, 2014

The price of milk-related products is down 25 pct this year, according to auction platform GlobalDairyTrade. While supply has improved, demand from China has also fallen. The lull is unlikely to last: even slower growth in the People’s Republic would outstrip domestic supply.

China wrestles with repression of financial sort

June 4, 2014

Incomplete political reforms led to violence and retrenchment twenty-five years ago today. China is stable now, but the financial system shows a similar tension between opening up and control. Missteps could lead to chaos. Yet savers may be harder to suppress than activists.

Central banks abet the complacency they fret about

June 4, 2014

Monetary policymakers worry that today’s torpid markets carry the seeds of tomorrow’s torrid moves. They’re right to worry, but the problem is of their own making. Cheap money is making investors complacent, so they underestimate the risk of big adverse price swings.

Fed fundamentalists deserve fresh listen

By Rob Cox
June 3, 2014

After years of expanding policy and remit, the U.S. central bank risks biting off more than it can chew. Hawkish economists persuasively argue this creates a risk of failure, which could undermine Fed independence. More important, the Fed has to stop giving cover to a lazy Congress.

China’s strikes not as bad as they seem

June 3, 2014

Adidas and Nike are among Western brands who have fallen foul of angry workers demanding better pay. Mostly they oblige. But manufacturers are gaining from better infrastructure and financial reform; workers naturally want a share. Strikes are more evolution than revolution.

China index: Property helps slowdown drag on

June 3, 2014

Our indicator stalled at 90.8 in April, just a touch up on March. The home front still looks sluggish. Rail cargo and truck sales fell while exports were flat. Property was a drag: average monthly sales growth from January to April was 17 pct, down from 22 pct last year.