The Great Debate UK

from The Great Debate:

A chink of light for the euro zone

James Saft Great Debate -- James Saft is a Reuters columnist. The opinions expressed are his own --

Even without a huge fiscal boost or a hell-for-leather central bank, Europe could have a recovery, albeit a tepid one, on the cards by the end of the year.

Recent forward looking economic data is still grim, but hides within it the seeds of a rebound, as the absolutely brutal fall in manufacturing over the past six months burns itself out.

The euro zone's economic situation is still dire and it still faces outsized risks; its banking system must deleverage and has the potential for disastrous losses while it remains unclear who in the world exactly is going to be buying enough goods to stoke a sustained recovery.

But nothing goes in the same direction forever, and absent a health or banking disaster it is reasonable to expect positive surprises from demand as the year wears on.

from The Great Debate:

Drugs, elephants and American prisons

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

Are the 305 million people living in the United States the most evil in the world? Is this the reason why the U.S., with 5 percent of the world's population, has 25 percent of the world's prisoners and an incarceration rate five times as high as the rest of the world?

Or is it a matter of a criminal justice system that has gone dramatically wrong, swamping the prison system with drug offenders?

from The Great Debate:

Uncertain Fed support sinks bonds

John Kemp Great Debate-- John Kemp is a Reuters columnist. The views expressed are his own --

The bond market's adverse reaction after the Fed announced no new asset purchase facilities or bond buyback programs highlights the fundamental difference between interest rates and quantitative easing (QE).

Rate cuts provide ongoing support for an indefinite period until the Federal Open Market Committee chooses to reverse them. In contrast, QE programs provide a one-off, time-limited boost that has to be continually reapplied to have the same effect.

from The Great Debate:

Buttress bank tangible common equity

James Saft Great Debate -- James Saft is a Reuters columnist. The opinions expressed are his own --

Whatever the results of the stress test are, increasing levels of tangible common equity (TCE) should be at the heart of the response. That implies painful and dilutive capital raisings to come, and not just for the banks being tested.

U.S. regulators will next week release information about the stress tests they are holding on 19 large banks. Expectations are that a substantial number will be forced to raise new capital and that some will be guided to converting existing preferred securities into plain old equity.

from The Great Debate:

Specter shift will not change reform prospects

John Kemp Great Debate-- John Kemp is a Reuters columnist. The views expressed are his own --

Senator Arlen Specter's decision to cross the aisle and join the Democratic Party hastens the extinction of moderate Republicans in the north-east and symbolizes their deep problems.

But it does not change the legislative landscape.

On the most contentious parts of the president's program -- cap-and-trade emissions program, healthcare and Social Security -- the key divisions are among Democrats rather than between the parties. Specter's defection numerically swells the party's ranks but in practice brings the administration no closer to the magic 60 votes it needs to push through ambitious reform proposals.

from The Great Debate:

A vaccine needed for bad statistics

ericauchard1- Eric Auchard is a Reuters columnist. The views expressed are his own --

If you look no further than the latest headlines, you might think a worldwide flu pandemic was already underway with a very real threat to millions of lives.

While there are many unanswered questions early on in the outbreak of flu from Mexico, it is crucial to remember that the number of deaths and reported infections remain small -- even if its spread across the globe has proved worryingly rapid.

Not what the economy’s doctor ordered

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James Saft Great Debate – James Saft is a Reuters columnist. The opinions expressed are his own –

Besides being a human tragedy, a deadly pandemic is, quite literally, the last thing a global economy suffering a huge drop off in trade and activity needs.

from The Great Debate:

Active funds, more high-paid value destroyers

James Saft Great Debate -- James Saft is a Reuters columnist. The opinions expressed are his own --

While they have avoided the opprobrium heaped on bankers during the bear market, traditional active fund managers have quietly been proving that they too are often highly paid destroyers of value.

Active managers have few bushes left to hide behind, and the release of a new report from Standard & Poor's uproots one of the few left: that somehow they provide protection during down markets, being able to go into cash and defensive stocks.

from The Great Debate:

Fiat’s over-ambitious expansion strategy

paul-taylor
-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

Could Italy's cash-strapped Fiat, Europe's sixth auto maker, build a workable alliance with Chrysler and Opel to become be a profitable global player? Or would it be a marriage of losers, doomed to fail?

Fiat CEO Sergio Marchionne has made clear that his interest in Opel, the European arm of ailing General Motors, is more than just a well-timed tactic to get better terms in the alliance he is negotiating with troubled U.S. number three Chrysler. Chrysler faces likely bankruptcy if a deal is not clinched by April 30.

from The Great Debate:

Failure is the only success in stress test

James Saft Great Debate -- James Saft is a Reuters columnist. The opinions expressed are his own --

The stress test of banks now underway in the U.S. is one exam in which failure will be the only true measure of success, at least in terms of speeding a recovery.

The U.S. will release some information about the methodology of the stress test of 19 major banks on Friday according to reports, with results slated for release in some form on May 4.

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