Jun 26, 2013 14:03 UTC

France’s poisonous politics bound to hit economy

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By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The string of political scandals hitting all French mainstream political parties couldn’t come at a worst time. The economy is in a recession, and fiscal austerity is amplifying the structural weaknesses which developed long before the financial crisis.

Jun 26, 2013 04:23 UTC

China bank rout favours big lenders over small

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By John Foley

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

A pledge of support for cash-strapped lenders should take the fear out of China’s interbank market. After two weeks of spiking rates, the People’s Bank of China (PBOC) said on June 25 it had extended liquidity to some lenders, and would stand ready to help others. Its new stance will most benefit those in least need: China’s big banks.

Jun 25, 2013 07:21 UTC

Asia’s pain unevenly spread as China slows

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By John Foley

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Asia’s falling markets reflect the belief that a slowdown in China will take its toll on the region. But things aren’t so straightforward. Look at what proportion of the region’s largest economies goes to China, and how important those exports are to domestic GDP. Despite a decade of rapid growth, the world’s second-largest economy has had a smaller impact on its neighbours than might be expected.

COMMENT

Every dollar invested into the PRC only helps the PRC manufacture more bullets, tanks, bombers and missiles to arm its Peoples “Liberation” Army.

Every dollar spent on a cheap product from the PRC (Made in China) is a spit in the face of Tibetans whose freedoms have been taken away by the PRC through its Peoples “Liberation” Army.

The PRC would not be in a position to intimidate and bully nations like Japan, Vietnam, India, the Philippines, etc, if it were not for the massive injection of western dollars into the PRC economy.

Today the PRC is trying very hard to hide or minimise the fact that it is facing a credit bubble so massive that it will drain most of its dollar reserves when the bubble pops.

It is trying to hide or minimise the fact that many Chinese did not benefit from the so-called PRC boom times since only those families with close contacts within the PRC government have benefited.

In return, these cronies have squandered the economic riches by lapping up foreign luxury goods, traveling to the most expensive cities in Europe, sending their children to posh schools abroad and buying property in Australia (reputed to be the world’s most expensive country).

All this while poor provincial Chinese flock to PRC cities where they are treated like annoying 2nd rate denizens and foreigners in their own land. Discontent and petty riots are commonplace. Is this really where investors should place their money?

This is a plea for investors to invest in your own countries first. Invest in your own peoples education and job security first. If you have to invest abroad, then please invest in nations that are friendly to yours.

Please do not let some banker use your money to prop up an un-elected regime that will only threaten your country and other countries, in return.

Thank you very much.

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Jun 24, 2013 10:27 UTC

China’s bonfire of liquidities claims first victim

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By John Foley

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

China’s bonfire of the liquidities has claimed its first victim: equities. Stocks in Shanghai and Shenzhen tumbled more than five percent on June 24 after the central bank published a letter suggesting it’s in no rush to help overstretched lenders continue in their bad habits. This tough new approach could mean a little more chaos will be injected into China’s financial system. For the economy overall, it’s both positive and helpful.

Jun 21, 2013 07:04 UTC

China credit squeeze challenges “age of ambiguity”

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By John Foley

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Silence has been good policy for China. The authorities’ penchant for relying on the unsaid, especially when it comes to financial obligations, has been a useful tool for channeling funding to banks and companies. But recent ructions in the interbank market, where lenders turn for short-term funding, suggest the age of ambiguity may soon have to end.

Jun 20, 2013 05:03 UTC

Fear of Fed: Where to hide in Asia?

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By Andy Mukherjee

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

The end of the cheap-cash era may not be good news for Asian equities, but it need not lead to an across-the-board stampede. The end of the U.S. Federal Reserve’s bond-buying programme has triggered fears of a liquidity drought. However, not all markets are equally vulnerable.

Jun 18, 2013 13:29 UTC

G8 shouldn’t just act on tax – it should preach

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By Viktoria Dendrinou

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The G8 is likely to take some action on corporate tax avoidance. But action by the leading rich nations isn’t enough. They need to preach.

Jun 18, 2013 08:53 UTC

Indonesia subsidy cut is right plan for wrong time

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By Andy Mukherjee

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Indonesia’s overhaul of energy subsidies is the right plan, but its timing is highly suspect. Hiking state-controlled diesel and gasoline prices by 22 and 44 percent, respectively, will lift prices when investors are already jumpy: $4.7 billion in financial capital left the country in the last quarter. To prevent higher inflation from spooking investors further, the central bank will have to raise interest rates. That means sacrificing GDP growth.

Jun 17, 2013 14:39 UTC

Iranians put hopes for change in pragmatic insider

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Iranians have voted for an end to the conservative status quo. The surprise victory of Hassan Rohani, the sole moderate candidate, in the presidential race has shown the level of public discontent with the Islamic Republic’s hardliners, whose voices silenced others in the last few years. The high turnout also returns legitimacy to the electoral process after the rigged vote of 2009. Iran’s complex power structure means that radical shifts at home or abroad are unlikely. But the mood in Tehran has shifted.

Jun 17, 2013 07:57 UTC

Singapore’s creative bank penalty may be a one-off

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By Peter Thal Larsen

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Singapore has come up with a creative way of penalising rate-rigging banks. Regulators are forcing lenders implicated in manipulating the city-state’s borrowing and currency rates to set aside up to S$12 billion ($9.6 billion) in extra central bank reserves. With rates low, however, the costs will be much lower than recent mega-fines.