Breakingviews

Bitcoin’s defects will hasten its demise in 2015

December 26, 2014

The leading crypto-currency’s economies of scale in mining and its transaction system’s vulnerability to subversion by a dominant miner make it unsound. As seignorage declines it will become cost-uncompetitive for transactions. Flaws may cause its price to lose further altitude.

Review: Fixing the CIA – a novel approach

December 26, 2014

Could an outsider best reform the CIA in the wake of torture revelations? In David Ignatius’ novel “The Director,” a pro-privacy tech CEO tries to drag an agency that has lost its way into a new world of tighter rules, leaky secrets and cyberthreats. Good idea, uneven results.

Uncle Sam stoked to hash out marijuana in 2015

December 24, 2014

Now that four U.S. states and D.C. have legalized recreational cannabis, commerce and safety warrant better regulation. But federal rules prohibiting the drug create obstacles. For the fledgling industry to mellow, Washington needs to tweak laws to consent to states’ will.

Euro zone will flit between crisis and catharsis

December 24, 2014

Elections in Greece or Spain could trigger fresh crises. Populist parties are on the rise, the economy is stalling and governments are paralyzed by their divisions. On the other hand, the euro zone has stronger banks and an activist ECB. There is cause for hope, but it is tiny.

Inflation could make a surprise comeback

By Edward Hadas
December 24, 2014

Price and wage increases look like endangered economic species. Falling commodity prices make it hard to imagine a comeback. But many policymakers would welcome a return of mild inflation. They might eventually get more than they want.

Cheaper oil no friend to Asia’s households

December 24, 2014

Real wages are growing 2 percentage points below their long-term average, reflecting labour’s weak bargaining power amidst slowing growth. Falling oil prices and low inflation could prompt employers to be even more tight-fisted in 2015. Household finances might wobble.

Bank cyberinsurance is overdue to come of age

December 23, 2014

It’s a confusing market, but growing fast. No wonder with a huge breach at JPMorgan in 2014, never mind monsters at Sony and Home Depot. Add a Washington campaign, and insurance may become standard. As well as financial cover, that could improve security – but only at the margin.

Positive U.S. momentum could grow in 2015

December 23, 2014

Jitters like recessions abroad seem unlikely to derail America’s economic recovery as late-year growth, jobs and incomes came in unusually strong. Lower gas prices and the possibility that housing ticks up make even inevitable interest rate hikes look easy to shake off.

Even a weaker Islamic State will drag on economy

By Edward Hadas
December 23, 2014

Cheap oil may now be the biggest worry for Middle Eastern economies, but the struggle against the radical group also has the potential to undermine growth. Even if IS has peaked, its ideology remains a problem, especially for Iraq and Turkey. Iran could end up gaining ground.

Meddling will be central banking’s new mantra

December 23, 2014

Monetary authorities haven’t stopped being responsible for financial stability. But weak output and the threat of deflation mean they can’t raise interest rates to fulfil their mandate. That leaves macroprudential policies – meddling, in plain English – as the preferred tool.