UBS | In this note we present our updated analysis of OPEC production capacity. On a headline basis the numbers are alarming – we expect the group to add close to 1Mb/d to its effective production capacity in 2016 and then a further 0.6Mb/d in 2017. Over the 2015- 20 period we expect total additions of 2.1Mb/d
We are nearly eight years on from the crisis, the effects of which have been particularly devastating for the weaker social classes. This has led to an unsustainable unemployment rate, as well as inequality, in countries like Spain. So now some people are beginning to wonder whether productive capitalism is ailing, given how difficult it is to recover pre-crisis levels.
James Alexander via Historinhas | Call me a conspiracy theorist but when three unrelated beasts of the global financial establishment all start talking about the same, previously unfashionable, thing it’s a bit of a coincidence.
In one year, China has used up $ 676 billion of its reserves, which had reached a total of $4 trillion. It could let the remimbi fall and restore monetary autonomy in order to lower rates and boost an economy which is in recession. But this only serves to worsen the volume of debt in dollars, which of course erodes the status it seeks for its currency. The only solution: EU, US help for China.
Caixin | The campaign for the U.S. presidential election in November that is well underway is creating uncertainty for Sino-U.S. relations because no key figures in the incumbent administration are running.
Eusun Cho | Leading up to the Independence Referendum in 2014, one way Scotland sought to differentiate itself from the United Kingdom was through its environmental policy. The Scottish government published a draft interim constitution that separated out the government’s duty to protect the environment in a separate clause.
Marcus Nunes | Ms. Yellen also said that she did not think the Fed, by raising rates in December, had contributed significantly to the latest round of economic problems. When Senator Dean Heller, Republican of Nevada, asked Ms. Yellen whether the Fed had caused stock prices to fall, she responded, “I don’t think it’s mainly our policy.”
In her speech yesterday to the US Congress, Fed chair Janet Yellen made it clear that rates will remain stable over the coming months, despite concerns over China and global growth. The Fed’s monetary policy has no pre-established direction and, if it needed one, it would be adusted to meet the objectives entrusted to the institution. But the problem is that the market will demand more from the Fed.
When there is no big demand for credit and, at the same time, the banks have little appetite to lend, they should focus on repairing balance sheets and not expanding them. And they can use those resources they hold with negative cost to repair their balance sheets.
Francesco Saraceno | FT Alphaville‘s Matthew Klein goes back to the issue of financial stability and monetary policy. A recent speech of Bank of Canada’s Timothy Lane is the occasion for Klein to reassess monetary policy before the crisis, when policy makers (in particular he refers to Ben Bernanke, but the Fed chair was in good company) dismissed fears of asset price bubbles, thus failing recognize, and to counter, the buildup of the crisis.