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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.
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In Europe 11th November 2014

Catalan Independence drive defying reality

MADRID | By Sean Duffy | This weekend´s controversial “non-binding consultation” has caused quite the stir in international media over the past number of days. Reports asserted that 80 % of Catalans had voted in favour of Catalonia becoming an independent state. Yet that figure ignores almost 60% of the electorate who chose not to take part in Sunday´s vote. Those numbers point to a rather more nuanced narrative than the one currently being posited by the Catalan independence movement and many reporters.

No Picture

Markets 11th November 2014

Bond purchase: A signal of coming collapse

VIENNA | By Keith Weiner via Truman | I proposed seven drivers of financial implosion in my dissertation. My recent writing has focused on two of them. One is the falling rate of interest on the 10-year government bond. As interest falls, the burden of debt rises. Since the falling rate incentivized more and more people to borrow, the number of indebted people, businesses, corporations, and of course governments is large. When the rate gets to zero, the burden of debt becomes theoretically infinite.

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World economy 8th November 2014

Economic surprises explain (nearly) everything

By UBS Global Macro Team | Our proprietary surprise indices for growth and inflation are still enjoying very tight correlations with the prices of a wide range of global financial assets. The gyrations of our global and regional growth indices for instance closely track equity markets, both developed and emerging. Global growth surprises (excluding the US) closely track – and often lead – the US dollar and oil prices. Eurozone growth surprises closely track – and often lead – the euro. And global inflation surprises closely track the price of gold.

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World economy 8th November 2014

China fighting the elements

The Communist Party slows down Beijing to ensure a pollution-free capital during the APEC Summit (Nov 9-11).  Information about the world’s second economy is often distorted due to a lack of understanding of China and the nuances within.  With the attention of the international community and foreign media on the country, the APEC Summit constitutes a golden opportunity for the country.

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World economy 7th November 2014

In-depth: Republican US Congress? Big budget showdown unlikely

WASHINGTON | BNP Paribas analysts | Republicans won control of US Congress this week. Latest projections suggest the GOP has taken over the Senate. Given that the Republicans are very likely to retain a working majority in the House, we can expect the party to control both houses of Congress at least until the end of 2016. A severe budget showdown is unlikely.

 

No Picture

Spanish economy 7th November 2014

Reliability of Spanish banks is certified

MADRID | By Ofelia Marín-Lozano | The Spanish banking system got positive grades in the stress tests for two main reasons: the discrepancy between the accounts published by the end of 2013 and its (minimum) revision by the ECB’s inspectors. According to the asset quality revision (AQR), carried out before the stress tests, the capital ratio  of the Spanish banks was only reduced by 20 bases points after the ECB’s revision. This is a minimum adjustment, slightly below the French or German banking system, but well below the Italian, Belgian or Dutch banking. It is certainly well below the big discrepancies detected in Greek and Portuguese banks. 

 

No Picture

World economy 7th November 2014

Progress in fiscal reform is key to transforming China

BEIJING | Via Caixin | Changes to China’s tax and fiscal framework have become the vanguard for the “deep and comprehensive” reforms the country has pledged in an effort to overhaul its economy and society. On June 30, the Communist Party’s top leaders endorsed a slate of tax and fiscal reform measures to be put in place by 2016, so a modern tax system could be up and running by 2020. In August, the National People’s Congress Standing Committee adopted the revised Budget Law.

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In Europe 6th November 2014

ECB endorses balance sheet target

MADRID | The Corner |  As expected, the ECB’s Governing Council left the policy rates and the ABSPP, CBPP3 and TLTRO programmes unchanged and expressed its endorsement for increasing the central bank’s balance sheet to its size at March 2012, that is, around €3Tr. Draghi explicitly pointed out that they would evaluate further measures in case that the current purchase programmes are not enough to expand the balance sheet or if the EZ inflation outlook worsens. With policy rates at the zero bound, pressure is mounting on the central bank to act.