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World economy 19th May 2014

Yet another delay in the long-awaited global growth acceleration

LONDON | By Barclays analysts | 2014 was supposed to be different. After three years of disappointment, this was meant to be the year when the global economy had a broader, higher and more persistently solid level of growth – at least, this was the consensus narrative. In the end, the seasonally adjusted quarterly rate of global growth in Q1 was among the weakest of the recovery. US growth was near zero (probably negative after revisions) and China’s GDP growth was below already low forecasts.

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World economy 16th May 2014

The ECB will play by the book

MADRID | The Corner | Mario Draghi says the ECB is comfortable with taking action in June, and markets see it as a more or less done deal. This time the Bundesbank is not likely to say a word, as basic economic theory shows there is not much else to discuss: when money is pumped into a system, it shows up either like inflation or growth. And the Eurozone needs both.

 

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World economy 16th May 2014

The “Rat Pack” loses one member (Australia)

SAO PAULO | By Marcus Nunes | (Note to generation y: The Rat Pack was the name given to a group of actors led by Frank Sinatra Dean Martin and Sammy Davis Jr) In 2005 Edward Nelson, at the Research Department of the St Louis Fed, wrote a very interesting paper entitled “Monetary Policy Neglect and the Great Inflation in Canada, Australia and new Zealand”.

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World economy 14th May 2014

China, this is not the giant oil rig you’re looking for

By Ray Kwong | It’s not an “ultimate weapon” like the Death Star from the Star Wars movie franchise, but the giant oil rig that China has parked just 140 miles away from Hanoi is equally as ominous. Much as the Galactic Empire used the Death Star’s presence to keep the weak in line, China’s decision to position the rig in the South China Sea in an area claimed by Vietnam is a demonstration of its regional muscle and resolve to assert its territorial claims.

 

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World economy 14th May 2014

BIS head: from ignoring the Spanish bubble risks to ignore deflation

MADRID | By Luis Arroyo | You probably know Jaime Caruana. He is an inept who ignored the warning signals of the Spanish bubble although as the central bank governor he was the main responsible for it. And now that he is the Bank for International Settlements (BIS) head and Spain’s housing prices have declined by 40% on average according to property valuer Tinsa, he disregards deflation risks.

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World economy 14th May 2014

Alibaba Continues Net Video Spree by Starting Production Firm

BEIJING | By Liu Ran via Caixin | E-commerce giant Alibaba Group Holdings Ltd. has taken another step forward in the online video business by establishing a video production business. China Vision Media Group Ltd., which is 60 percent owned by Alibaba and listed in Hong Kong, registered Alibaba Pictures Group Ltd. in Hong Kong on April 3, a source who works at Alibaba said. The legal representative of the new company is Dong Ping, the chairman of China Vision.

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World economy 13th May 2014

EU rules against Google in ‘right to be forgotten’ case

MADRID | By Ana Fuentes | The EU highest court backing the right to be forgotten has taken Google by surprise. The Internet giant cannot longer refuse to erase personal information of citizens who request it. The sentence, which is setting a crucial precedent in the history of the Web, has raised an intense debate about censorship and the boundaries of tech giants. From now on, no matter how powerful online providers are, in EU soil they will need to comply with European law unless they have “legitimate” reason to do otherwise.

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World economy 7th May 2014

What Is Alibaba Worth? That Depends on Tencent

BEIJING |By Jeffrey Towson via Caixin | The valuation of China’s largest e-commerce company is tied to its market share, margins and return on capital, factors its rival can easily impact. Far the low-end of predictions have put Alibaba at US$ 80 billion to US$ 100 billion. The majority of estimates are in the US$150 billion range. And a few analysts are making headlines with predictions of US$ 250 billion and above.

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World economy 5th May 2014

Gary Becker: the importance of being born at the right time

WASHINGTON | By Pablo Pardo | The last time I interviewed Gary Becker in his office I told him: “I hope to visit you here in ten years.” It had been almost ten years—December 1996—since I had visited him in his office. He smiled and said: “Well, I hope to be around in ten years.” Unfortunately, his wish was not fulfilled. The interview was on June 7, 2006, so he had just around 7 years and 10 months left to live. Becker, however, had exactly the same appearance the first time I had met him in 1996. He was still playing tennis and swimming.