Spain is still struggling with its deficit maths

January 6, 2012

The new conservative government is scrambling to cut the deficit from more than 8 pct of GDP last year to 4.4 pct in 2012. The adjustment will be more difficult if the economy worsens. Madrid is taking the right steps, but there is no room for complacency.

U.S. recovery now not jobless, only homeless

January 6, 2012

Despite the 200,000 new jobs last month and another drop in unemployment, job creation is still slower than in recent recoveries and looks a bit like the early 1960s. That’s partly because the weak housing market means few new construction jobs. Still, Obama can breathe easier.

U.S. presidential race has a lone bank-buster

January 9, 2012

GOP hopeful Jon Huntsman’s desire to break up big banks sets him apart from other candidates in his party, and even President Obama. But his financial reform plan would require a fickle Congress to go along and poses practical difficulties. Dodd-Frank actually does the trick.

Taiwan voters should focus on growth, not China

January 10, 2012

A second term for President Ma Ying-jeou may push Taiwan faster towards its giant neighbour. But flagging exports are more pressing. With only Ma likely to spend what it takes to perk up growth, a decisive victory for his party in elections on Jan. 14 would be best for the economy.

Hildebrand shows stark exposure of central bankers

January 10, 2012

The Swiss National Bank chief has been forced out after his wife engaged in ill-advised currency trades. Hildebrand’s policies made him a political target. It’s a reminder to central bankers around the world that, to retain their independence, they have to be whiter than white.

Private equity skewered by Romney-bound arrows

January 10, 2012

The assault from fellow Republicans on the front-runner’s record at Bain makes for an absurd spectacle. Huntsman’s family business agreed to an LBO while Gingrich advised Teddy Forstmann. The slings won’t derail Romney, but the collateral damage could hurt the buyout industry.

Campaign-mode Obama leaves economy to luck

January 11, 2012

After the August debt ceiling fight, the White House said it would focus on jobs. But recent initiatives look like vote-grabbing gimmicks. Politics makes meaningful action tough. Still, a hands-off approach could backfire if voters don't feel more warmth of recovery by November.

Ron Paul’s staying power threatens to alter debate

January 11, 2012

The New Hampshire primary results keep the outspoken libertarian in the hunt for the Republican nomination. Paul’s strong showing also could inspire him to make a third-party run. His continued presence will shift the discussion on sound money, spending and U.S. isolationism.

China will fudge Iran oil sanctions

January 12, 2012

Simple disobedience of the U.S. freeze would give China cheap oil, but it can’t afford the cost of angering Uncle Sam. Total obedience would push up prices, and could spark social unrest in China. But Beijing can probably find a middle way: do just enough to placate the Americans.

Predictions 2012: Upside down and inside out

January 12, 2012

Planet finance has a propensity to turn itself upside down and inside out. It’s up to its old tricks again. A new collection of commentaries from Breakingviews sets the financial agenda for the next 12 months.