UBS | China growth concerns and oil price weakness have undermined market sentiment and heightened risk a version in recent weeks. Given EM banks’ credit exposure to commodities/energy sector, estimated at less than 5%, there are also growing concerns over bank sector fundamentals.
The collapse of the global stockmarkets, with European bourses falling 10 percent or more over the past month, is a cry for help to the central banks to ‘do something’, namely provide more stimulus to the economy. One of these voices is Ray Dalio, founder of the world’s biggest hedge fund Bridgewater, who said that the Federal Reserve needs to start printing money again to boost markets.
Guntram B. Wolff via Caixin | One of the clear trends of 2015 was the rise of parties that radically challenge the consensus of traditional parties and their representatives. This trend is perhaps most visible in France and the United States but is also strong elsewhere. It will likely be a major force shaping European and global policies. A reflection on its causes is imperative to define the right policies for 2016. We should also ask what could it mean for China.
James Alexander via Historinhas | Where are the John Maynard Keynes’ and Milton Friedman’s when you need them? The Fed, led by Janet Yellen and Stanley Fischer, has made a huge mistake in tightening monetary policy. The other members of the FOMC are largely irrelevant noise, with the possible exception of the NY Fed’s Dudley, though all carry blame.
Which countries are poised to become the next high-growth developing markets?Until recently, when people talked about “emerging markets,” they were referring to the BRIC economies: Brazil, Russia, India and China. Undeniably, these countries have changed the face of global business over the past 20 years. Yet lately, the BRICs have been crumbling a bit, sparking many reports about their lackluster performance.
Key economic data disclosed Tuesday by Beijing seems tailored to the official mantra that matters are firmly under control. So GDP supposedly showing a 6.9% increase in 2015 only marginally trims the 7% forecast given in January last year. Quite an amazing result which is in open contradiction to the rather stern measures introduced to stave off a slowdown.
The Popular Bank of China is trying hard to protect its currency from the current sell-off. Ever since it broke away from the dollar peg switching to a trading basket reference, the currency’s depreciation has gained momentum as its off-shore value continues to deteriorate. With the aim of bridging that gap, the PBoC raised the rates in the off-shore market beyond 60% last week. On Monday it imposed a 17.5% mandatory set aside for off-shore money holdings.
Brazil industrial production have been evolving according to the world average. For the past six years, however, it “dismounted from the world horse”.
BBVA Research | Transforming shadow banking into resilient and market – based financing is one of the four core elements of the global financial regulatory reform undertaken by the G20 in 2008 at its first meeting in Washington . But prog ress towards achieving this goal is uneven and there is still work to be done. The implementation of the agreed measures is in an incipient phase. The most significant advances have been in improving transparency and aligning incentives in securitisation.
James Alexander via Historinhas | We often hear from both the right and the left that the relative lack of growth in the US is mostly due to supply issues, in particular changing demographics. Those baby-boomers retiring have created a new stagnation. The US Bureau for Labor Statistics (BLS) has consistently encouraged this view. There’s really nothing that can be done about it.