World economy

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Weekend | Obama chooses an unconventional candidate for the World Bank: will it calm developing countries?

NEW YORK | It could have been Hillary Clinton, one of the most well known US political figures; it could have also been Larry Summers, one of the most respected (and yes, also hated) figures in US economy; it may have even been Jeffrey Sachs, a very prestigious economist. But Obama has chosen a low profile candidate to the lead the World Bank: Jim Yong Kim, Dartmouth College president and…


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Game on: US healthcare hullabaloo

NEW YORK | Respected subscribers, my inbox is on fire. Democrat’s Campaign managers Jim Messina and Jen O’Malley, Vice President Joe Biden… even Michelle Obama wrote me in the last two days. It is clear. Unofficial, but clear: Democrats campaign is on. And everybody agrees the main theme is going to be… The Economy. But there is going to be a whole of juicy political battles surrounding another subject, one…


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Impact of euro crisis in the US economy

By Luis Arroyo, in Madrid | A lengthy series of the risk premium spread (over capital or liquidity) between US Treasuries and BAA corporate bonds tells us several things: 1) that each time there has been recession (gray areas) this premium has picked up markedly; 2) the time it reached the highest point was in the last recession, up to 6%; 3) the 60-year average of this spread is 1.8%; 4) the current figure…


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Tax havens are alive and well

By Carlos Cruzado, in Madrid | Although the concept has many nuances and definitions, when we hear about tax havens we all know what that means: areas that offer very favourable fiscal treatment for citizens and businesses in order to attract foreign money, which usually also implies a lack of control about the nature of such funds. While it is true that the existence of tax havens is a longstanding problem,…


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Wednesday’s Spanish graph: late payments rate will approach 9.8pc by 2013

From Renta 4 analysts, a confirmation that late payments rate was 7.91pc in January, the maximum level seen by the Spanish financial sector since December 1994. And it was 8pc for the depositary entities. The increase in both cases has been the highest since February 2009, but the experts said today that they discard further acceleration. “During the next months, the situation should be stable and late payments rate is…


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Why Geithner wants the EU to increase their firewall

NEW YORK | There has been a lot of anxiety in the US with the European crisis, no doubt of that. The New York Times has published an enormous amount of editorials (not counting Krugman’s op-eds) complaining about Merkozy not increasing the firewall enough to contain contagion from Greece and saying that they were not putting any measures in place to tackle the lack of growth in the southern countries….


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Europe toughens powers to grab higher share in crime loot

The European Commission wants new rules for more effective and widespread confiscation of funds and other property acquired through crime. An enhanced legal framework will increase member states’ ability to confiscate assets that have been transferred to third parties, it will make it easier to seize criminal assets even when the suspect has fled and will ensure that authorities can temporarily freeze assets that risk disappearing if no action is…


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Rajoy’s government begins deleverage: 27 state companies to close down now

MADRID | A plan for the restructuring and rationalisation of public sector firms become official on Friday in Spain. The government describes it as the first step of many to achieve a public network of companies without duplicities. Some of the enterprises were founded with the aim of developing activities not yet covered by private initiative and that were of national interest, but their justification is nowadays unclear, official sources said. In…


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Monday’s US charts (especially) for Spain’s labour union leaders

By Luis Arroyo, in Madrid | While some Spanish labour union leaders attend press conferences dressed up in expensive Rolex watches, employment numbers increase somewhere else: in the US, as this graphics show and economist Tim Duy explains in his post. Hiring activity in the US raises 245,000 new jobs since last December. It always is inconvenient and very imperfect to compare different national labour markets and I know better. Yet,…


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Make the banks pay for their sins… with taxpayers’ cash?: US latest episode

NEW YORK | These are not the best days for being a banker. Banks lent irresponsibly, they were bailed out with public money, and then started a robo-signing foreclosures campaign. All while tightening the credit to small businesses. Now they are starting to pay their penance –some are taking even more of it than they were supposed to. Bank of America said that it will provide deeper than anticipated principal…