The Great Debate UK

from The Great Debate:

How not to avoid the next panic

Photo

jamessaft1.jpg(James Saft is a Reuters columnist. The opinions expressed are his own)

A proposal to give banks, hedge funds and private equity firms "affordable" credit default swap-based insurance against market panics will be very effective: it will effectively encourage even more risk taking and turn the next crisis into one about government credit.

Global central bankers assembled at the Jackson Hole conference last week heard the proposal, by two Massachusetts Institute of Technology economists Ricardo Caballero and Pablo Kurlat. Their idea is that most of the damage in panics is due to a combination of investors overestimating the damage during a market seizure and policy-makers being too slow to pull the trigger on bailouts.

The solution, therefore, is to send the banks into the next panic ready armed with a Fed-backed get out of jail free card which the authorities can activate at a moment's notice.

This is akin to looking at a bunch of toddlers riding motorcycles and deciding that what will really improve the situation is putting them all in crash helmets.

from The Great Debate:

HP has to look beyond cost cuts soon

Photo

EricAuchard.jpg-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

The stock price seems to be the only thing growing at Hewlett-Packard, the world's largest computer company. HP shares have risen 75 percent this year, despite few signs of a revival in technology spending.

The company, best known as a supplier of computer printers, has suffered a 19 percent drop in sales of hardware and ink supplies. In good times, this produced the bulk of HP's profits, but it's the financial engineering under Mark Hurd, the company's chairman and chief executive, that seems to be the main driver now.

from The Great Debate:

Human bargaining chips in deals with Iran

Photo

Bernd Debusmann (Bernd Debusmann is a Reuters columnist. The opinions expressed are his own)

Seven summers ago, in a crowded conference room of a Washington hotel, an Iranian exile leader gave the first detailed public account of Iran's until-then secret nuclear projects at the cities of Natanz and Arak. It greatly turned up the volume of a seemingly endless international controversy over Iran's nuclear intentions.

The disclosures, on August 14, 2002, did little to earn the group that made them, the National Council of Resistance of Iran (NCRI), merit points from the U.S. government. A year later, the Washington office of the NCRI, the political offshoot of Iran's Mujahideen-e-Khalq (MEK) resistance movement, was shut. The State Department placed the group on its list of terrorist organizations. (The MEK, also known as the People's Mujahideen Organization of Iran, had been given that designation in 1997).

from The Great Debate:

Japan: The mother of all miserable recoveries

Photo

jamessaft1(James Saft is a Reuters columnist. The opinions expressed are his own)

Investors met the news that Japan's economy has emerged from a bone-breaking recession calmly and rationally: they sold shares quickly and in large amounts and made bets that consumer prices are going to be falling for years to come.

That's because Japan's recovery, coming as it does after a global bubble in the production of what I call, for lack of a more technical term, "stuff," is really not sustainable.

from The Great Debate:

China’s banks, running hard to stand still

Photo

wei-gu.jpg-- Wei Gu is a Reuters columnist. The opinions expressed are her own --

Chinese banks are like enthusiastic runners on an accelerating treadmill. The weakening economy means poor lending decisions are threatening to catch up with them, but the banks are sprinting ahead by expanding their loan books ever faster. They cannot keep this up for ever.

For now things still look fine. China Banking Regulatory Commission (CBRC) this week claimed that Chinese banks were managing credit risk sagely, pointing to record low non-performing loan ratios. Given the massive increase in the number of loans outstanding -- up 24 percent since the start of the year -- it's not surprising that the proportion of them that are non-performing at large commercial banks, which accounts for 60 percent of the lending, has declined from 2.4 percent to 1.8 percent in the past six months.

from The Great Debate:

Are women paid less than men?

Photo

Diana-FurchtgottRoth.jpg -- Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. The views expressed are her own. –-

One of the concerns of working women is the “pay gap” – the alleged payment to women of 78 cents for every dollar earned by a man.  But there are more behind these numbers than first meets the eye, because women work different hours, major in different subjects, and choose different careers.

from The Great Debate:

China and the world economy

Photo

gerard-lyons Dr. Gerard Lyons is chief economist and group head of global research, Standard Chartered Bank. The views expressed are his own.

The world is witnessing a shift in the balance of power, from the West to the East. This shift will take place over decades, and the winners will be:
- Those economies that have financial clout, such as China
- Those economies that have natural resources, whether it be energy, commodities or water, and will include countries, some in the Middle East, some across Africa, Brazil, Australia, Canada and others in temperate climates across, for instance, northern Europe
- And the third set of winners will be countries that have the ability to adapt and change. Even though we are cautious about growth prospects in the U.S. and UK in the coming years, both of these have the ability to adapt and change.

from The Great Debate:

Driven to drink by marijuana laws?

Photo

(Bernd DebusmannBernd Debusmann is a Reuters columnist. The opinions expressed are his own)

Tough marijuana laws are driving millions of Americans to a more dangerous mood-altering substance, alcohol. The unintended consequence: violence and thousands of unnecessary deaths. It's time, therefore, for a serious public debate of the case for marijuana versus alcohol.

That's the message groups advocating the legalization of marijuana are beginning to press, against a background of shifting attitudes which have already prompted 13 states to relax draconian laws dating back to the 1930s, when the government ended alcohol prohibition and began a determined but futile effort to stamp out marijuana.

from The Great Debate:

Where the healthcare debate seems bizarre

Photo

healthcare-globalpost

global_post_logoMichael Goldfarb serves as a GlobalPost correspondent in the United Kingdom, where this article first appeared.

In America, the health care debate is about to come to a boil. President Barack Obama has put pressure on both houses of Congress to pass versions of his flagship domestic legislative program prior to their August recess.

from The Great Debate:

The Ugly American and other stereotypes

Photo

Bernd Debusmann- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own -

What happened to the Ugly American, the one with the loud shirt and the loud voice, expecting the natives to speak English? Has he been shouldered aside by the Arrogant French?

That's the conclusion one could draw from a survey this month of 4,500 hotel owners around the world who rated the French the world's worst tourists, bad at foreign languages, arrogant and tight-fisted. Spaniards, deemed noisy and messy, came second in a field of 27. Americans ranked 9th on the list of the top 10 best.

  •