Leap off fiscal cliff is bad option, but not worst

September 18, 2012

If U.S. politicians can’t compromise, higher taxes and spending cuts will kick in at year-end. That could bring recession. But it would also reset the political battle lines, improving the chances of a real fix. That’s better than Washington continually deferring tough decisions.

Japan shuns fiscal cliff, won’t escape growth funk

November 14, 2012

Opposition parties have agreed to end the budget impasse in return for an election as early as next month. But if the next government takes an ultra-hawkish stance on debt and deficits, Japan’s economy could slip into a deeper hole.

Corporate America fears taxes more than recession

November 29, 2012

Hence the flurry of special dividends. If the “fiscal cliff” of tax hikes and spending cuts really risks a downturn, companies ought to hoard cash. Instead Costco and others are giving it to shareholders while tax rates are low. That’s fine, but suggests the hype is overdone.

Wall Street deal-making has lesson for Washington

December 3, 2012

U.S. budget talks have become the equivalent of an ugly merger proxy battle, with leaks and messaging trumping substance. While investment bankers are often too eager to push for a deal, they also know one important thing: negotiating in public usually only makes things harder.

The 1 pct find a way to stimulate themselves

December 5, 2012

Special dividends are coming thick and fast in the U.S. to avoid higher tax rates in 2013. Oracle’s Larry Ellison and the Waltons of Wal-Mart are among the beneficiaries. Payouts may have saved recipients $5 bln so far. Uncle Sam might have put that to work fixing infrastructure.

U.S. doesn’t need Washington for economic stimulus

December 27, 2012

President Obama’s planned one-time jolt has been stymied. But a divisive corner of the energy industry has many hallmarks of a boost to the nation’s wallets. Shale oil and gas production pumped $140 bln into 2012’s economy. It won’t cure America’s ills, but it can ease the pain.

Calamity likely to be postponed again in 2013

December 31, 2012

The financial crisis has been frustrating for doom-mongers. Sure, debts are still high and the financial system’s reconstruction is slow. But growth has been no worse than tepid and China refuses to collapse. Even if the U.S. goes over the fiscal cliff, the end is not yet nigh.

Global relief on fiscal cliff misses the point

January 2, 2013

The unnecessary fight over the U.S. budget ended with another messy and inadequate compromise. Other equally silly clashes loom. Investors may cheer, but their nail-biting was symptomatic of the world’s excessive dependence on dysfunctional American politics. That hasn’t changed.

Liberal economists aid Tea Party in cliff debate

January 3, 2013

Government spending enthusiasts don’t mind high deficits and don’t like proponents of low taxes. But with the U.S. right more anti-tax than anti-spend, the result is a common acceptance of deficits. That makes budget deals easier, but promotes unrealistic expectations.

Markets’ new-year euphoria looks overdone

January 28, 2013

The S&P 500 is up 5 pct, earnings look good, investors are shoveling record sums into equities and Treasuries are flirting with 2 pct yields. But fiscal cliff woes remain and at least one incentive to put money to work may wear off. It’s OK to feel better, just not to excess.