Dear Mr President: Dodges for the U.S. debt ceiling

October 10, 2013

Political gridlock is slowly heightening concern that the United States may not pay its creditors on time. Breakingviews imagines an economist’s suggestions to the U.S. president on how to limit the market fallout if an accord can’t be reached soon enough.

Italy’s corporate zombies haunt Letta reboot

October 9, 2013

The Italian premier has derailed Silvio Berlusconi’s attempt to take down his government. Now his grand reform promises are tested by the problems of Alitalia and Telecom Italia, both victims of past attempts to block foreign ownership. So far, not so good.

Obama’s Fed chair pick looks timed to calm market

October 9, 2013

Appointing Janet Yellen to run the central bank is a safe, boring end to a wild nomination process. But a little certainty is what global investors need from a politically chaotic US. A debt ceiling deal remains elusive, but at least there’s some predictability on Fed policy.

For China, U.S. debt ceiling is a paper tiger

October 8, 2013

The biggest holder of U.S. debt is understandably troubled by Washington’s financial straits. Yet absent an actual default, China is relatively insulated from market gyrations. The more trade partners doubt the dollar, the faster it can promote its own currency as a substitute.

UK’s Help to Buy scheme is a no-brainer for banks

October 3, 2013

Sure, the government’s mortgage guarantee scheme could backfire on banks’ reputations if overstretched borrowers lose their homes and taxpayers wind up paying the bill. But capital benefits and the need to defend market share look like compelling reasons for banks to sign up.

An Abenomics lesson on politics for Uncle Sam

October 2, 2013

While dysfunction has shut Washington, Japan pushed ahead with a 60 pct consumption tax hike and $51 bln stimulus. What's startling about the contrast is that Japan was the paralyzed one two years ago. Staring down the barrel of a demographic gun concentrates the political mind.

UK’s politicians race to the bottom on policies

September 30, 2013

The 2015 election looms. Which party can come up with the worst proposals? The competition is fierce. Labour made an excellent start with a self-destructive cap on energy prices. The government has hit back with mortgage subsidies and bashing the unemployed. The UK lacks leadership.

China Tea Leaf Index: Hanging on for reform

September 30, 2013

China's rail shipments and steel drove our alternative growth index up to 96.3 in August, the highest since January. That looks like enough to give leaders the benefit of the doubt ahead of November’s party plenum, when the tone for future economic growth will really be set.

Austerity is killing France’s attempt at reform

September 26, 2013

The French budget for 2014 is heavy on spending cuts and lighter on tax hikes. The Brussels-imposed fiscal deficit goals won’t be met until 2015. As austerity takes its toll, the reforms are stalled. François Hollande should forget about the targets and focus on the long term.

Hong Kong shouldn’t brush off Shanghai threat

September 25, 2013

Shanghai’s new free trade zone faces one big drawback in becoming a financial hub: it lacks Hong Kong’s rule of law. But Hong Kongers can’t be complacent. Shanghai may yet turn its sights on other things the city-state holds dear – like its low taxes, and luxury-hungry tourists.