Water woes could open taps on corporate risk

January 5, 2015

Two-thirds of the world’s biggest companies are worried about access to water. But few are well prepared for problems. That should change as ways to track and address concerns grow. And if bosses don’t take the initiative, activist investors may force them to.

Current account is key Africa factor in 2015

January 2, 2015

Rapid African growth is likely to continue. But too much spending and borrowing has led many countries into trade deficits. As lenders become more discriminating, the state of the balance of payments, along with freedom from Ebola, will become keys to continued growth.

Review: Two centuries of trust, frauds and finance

January 2, 2015

Ian Klaus’ entertaining account of 19th century financial deceptions carries a serious lesson. As financial markets became more sophisticated, trust had to be built on stronger and more objective supports. The implication: honesty can always win out, but not without hard work.

Europe returns to Franco-German axis of neurosis

January 2, 2015

A prolonged economic slump highlights Europe’s core problem: a crisis in the French-German partnership. Populist parties are rising and the UK could leave the EU. Although many countries still want to join, it’s up to Paris and Berlin to make the case for a rejuvenated Europe.

Vienna offers a model for stable foreign policy

December 31, 2014

The 1815 Congress of Vienna ended the Napoleonic Wars, and its participants worked together over the next decade to prevent destabilizing regime change. This principle could have reversed many bad intervention decisions over the last 40 years. Its lessons are worth studying.

UK faces risk of cold-weather blackouts

December 30, 2014

Britain’s electricity system is ageing and the mix of generating technology is changing. Both factors increase the danger of power cuts at peak times. Contingency plans include paying companies to accept temporary grid outages. New capacity can’t come soon enough.

Accounting fraud is ripe for fresh scrutiny

December 30, 2014

Dodgy numbers will replace insider trading as U.S. watchdogs’ preferred prey in 2015. New auditing and analytics arms give the SEC a head start, even if SarbOx reforms make cases harder to track down. With the likes of SAC chastened, it makes sense to refocus on the next Enron.

Bad ideas catching up with Latin America in 2015

December 29, 2014

For four years, the region has mostly lagged world economic growth. The IMF predicts another year of the same. While Pacific-oriented countries will shine, Brazil, Argentina and Venezuela will suffer. With a couple of exceptions, misguided policies are coming home to roost.

Ukraine crisis forced into suspended animation for 2015

December 29, 2014

Markets worried about Europe’s economy in 2014. They will worry about Europe’s security in 2015. EU sanctions over Ukraine will weigh heavily on Russia’s economy. A lot depends on Vladimir Putin, but Europeans need to define what they want sanctions to achieve.

U.S. housing demand is building

December 26, 2014

The post-crisis rebound boosted home prices 25 pct even as sales and construction lagged. Increasing household formation, job creation and easing credit look set to give the market another leg up, despite rising interest rates and the headwind of sliding affordability.