Asia’s reform spotlight swings to Indonesia

August 22, 2014

The election of a charismatic leader raises hopes for overdue change. Joko Widodo’s rise invites comparisons with India’s Narendra Modi and Shinzo Abe in Japan. In some ways, Indonesia’s new president faces the more daunting challenge. But the rewards for faster reform are large.

U.S. farm credit looks safer than houses

August 20, 2014

Washington’s $200 billion-plus subsidized agricultural lending complex includes Farmer Mac, a rural copy of ill-fated Fannie Mae and Freddie Mac. Despite a hot farmland market, though, the system looks ruggedly capitalized enough to avoid the bailout fate of the home-loan behemoths.

Fed adds urgency to Indonesia’s fuel reform test

August 20, 2014

President-elect Joko Widodo’s first big challenge will be to rethink the country’s $30 billion energy subsidy. Though higher fuel prices will be unpopular, the handout boosts the trade deficit. That makes Indonesia extra vulnerable to capital flight when U.S. interest rates rise.

Venezuela digs way to distressed seller status

August 14, 2014

The country wants to offload Citgo, its U.S. refinery and pipelines unit. It may be worth up to $15 bln, money that’s sorely needed thanks to President Nicolas Maduro’s barmy economic policies. And the drop in value of heavy-oil assets like Citgo owns makes it a bad time to sell.

Japan’s GDP sacrifice is price well paid

August 13, 2014

The 6.8 pct drop in second-quarter output was a direct consequence of the country’s April sales tax increase. But for Prime Minister Shinzo Abe, taking a temporary hit on private demand was an acceptable cost of mending public finances. Besides, a recovery may have already begun.

German stocks price in sanctions tail-risk

August 12, 2014

Tension with Russia may slow growth in Europe’s powerhouse. But Germany’s domestic momentum should offset the drop in bilateral trade. Still, the DAX’s underperformance makes some sense. The economy would really suffer if Moscow cut back on gas exports.

Pure politics can’t revive Italy’s coma economy

August 11, 2014

Prime Minister Matteo Renzi offers promises and constitutional change, but has delayed tough reforms. Europe’s fourth-biggest economy is stuck in perma-recession. To awake from its deep sleep, Italy needs far more radical changes than are on offer.

Ushering Eric Cantor to revolving door

By Rob Cox
August 7, 2014

The summer parlor game from Wall Street to K Street to Meadow Lane in the Hamptons is guessing where the former U.S. House majority leader will work after decamping from Congress. It’s easy to imagine how a recruiter might try to put his experience to good – and lucrative – use.

China index: Beijing cleans up skies, not its act

August 7, 2014

Air in the capital is the cleanest it has been since 2011, data shows. Dirty industrials are leaving town or even shutting down amid a weak economy, but that’s no real fix. Clean, sustainable growth across China needs robust institutions with persuasive carrots and sticks.

Vladimir Putin is the new bad weather

August 4, 2014

The bogeyman of Ukrainian unrest is replacing snow as a reason to expect worse earnings. Just ask VW, Adidas or McDonald’s. The World Cup goes the other way, helping Adidas (again), Twitter and maybe Disney. The message could be muddled when Russia and soccer converge in 2018.