Expert Zone

Straight from the Specialists

Too many questions, no convincing answers

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(Nipun Mehta is an award-winning private banker with many years of experience across Asia. The views expressed in the column are his own and not those of Reuters)

If one were to evaluate global events of the last four years dispassionately, the subprime mess in the U.S. and the imminent debt default by Greece (and four other countries to a lesser extent) and the resultant crisis in the euro zone have virtually held the global economy to ransom.

This generation of bankers, analysts, bureaucrats, politicians or even economists, has not been witness to the kind of convolutions that governments and markets are passing through. All this has also led to credit rating agencies taking some surprising and some highly inexplicable decisions.

The outcome of this extraordinary, though not entirely unexpected, chain of events has been various out-of-the-box decisions and/or suggestions like introduction of a new tax on the rich called the ‘Buffet Tax’, an offer by Brazil to start funding the euro zone deficit (much like the tail wagging the dog), of breaking up of the EU, of easing Greece out of the EU, of issuing a new layer of ‘Euro Zone Bonds’, tranches of quantitative easing by the Federal Reserve, etc. The pendulum of risk aversion has swung so sharply that gold and more recently the dollar are the only asset classes that have performed in the last few quarters.

Asia and the euro crisis

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(Paul Donovan is a Managing Director and Global Economist at UBS. The views expressed in this column are the author’s own and do not represent those of Reuters)

The euro should not exist. More precisely, the euro should not exist in its current form, with its current membership.

Two problems, one strategy for both RBI and the Fed

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The Reserve Bank of India and the U.S. Federal Reserve were confronted with two different problems but used the same monetary strategy for solution. Neither succeeded.

Is “depressing” depression better than “economic boom”?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Every once in a while, I come across the term — depression. Well, I have heard of recession, contraction, subtraction — so what exactly is “depression”? It is very depressing to say the least. But if you still insist, these are some of the facts.

Life after the U.S. rating downgrade

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(Nipun Mehta is a veteran private banker with many years of experience across Asia. The views expressed in the column are his own and not those of Reuters)

The unthinkable (for some) happened last week when the U.S. economy was downgraded from ‘AAA’ to ‘AA+’ with a negative outlook by Standard & Poor’s, one of the three large global rating agencies.

Impact of U.S. debt downgrade

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Standard & Poor’s has cut the U.S. triple-A rating down to AA+ which if one is to go by the technical meaning, says the U.S. is no longer as reliable as it was last week when it comes to repaying its debts.

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