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World economy 10th April 2012

Even UK unions might welcome London councils’ joint pension fund

LONDON | A proposed London Pensions Mutual would attempt to square the circle of austere consolidation and need for growth. The mega-pension fund could have assets in excess of £30 billion. It could also allocate up to 7.5% or £2.25 billion of its portfolio towards local infrastructure projects, taking advantage of changes announced by the coalition government in Downing Street to facilitate private investors’ and pension funds’ participation in UK infrastructure…

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World economy 10th April 2012

Barclays: Federal Reserve too hopeful on US productivity

MADRID | Analysts at Barclays said Tuesday in a report that they are less than convinced that the productive capacity of the US economy, the famous output gap, is as large as the Federal Reserve believes. And the consequences of this realisation spell further trouble for any global economic recovery. According to Barclays experts in Madrid, once investors acknowledge that China’s GDP is slowing and that the stimulus measures may…

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World economy 10th April 2012

UK commercial real estate as depressed as the economy

LONDON | The retail property market in the UK continues to struggle, as demand for retail premises stuttered again in the first three months of 2012. This lack of interest in the sector combined with growing availability resulted in a further drop in rental expectations, the latest RICS UK Commercial Market Survey showed on Tuesday. Interest from potential tenants of retail space continued to fall in the first quarter of the…

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World economy 10th April 2012

A conflict with Iran is in no one interest

By Carlos Días Guell, in Madrid | In the Middle East, drums of war have for months now been sounding and this has triggered potential risks that could push oil prices higher than ever seen before. The worst scenario, though the least likely, would be one in which the tensions between Iran and the West rise to such an extent that the Strait of Hormuz is closed and oil supplies cut. The last…

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World economy 4th April 2012

What do GDP rates matter without happiness?

MADRID | A calm breeze in the midst of so much economic shock and just-about-fine Spanish bond auctions, whose effects will probably still ripple beyond Easter with the usual euro contagion talk. Let us pause for a moment and read a list of the happiest and satisfied peoples in the world. It is a huge report, a pile of 158 pages full of charts, notes in fine print and details on…

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World economy 4th April 2012

Wenzhou, China’s liberal experiment

BEIJING | The rise and fall of the entrepreneurial community in the Chinese city of Wenzhou, Zhejiang province, is an example of the consequences attached to moves such lowering the GDP growth under the 8% without coupling this measure with an strategy that ensures a sustained level of growth. Known by its entrepreneurial society, the city’s businessmen panicked when they couldn’t repay the money they borrowed in the first hand to…

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World economy 2nd April 2012

Euro zone unemployment 2.5% higher than in the US

LONDON | Jobless rates gave Monday a nasty reminder of an ongoing credit crisis whose effects seem to have depressed further the economies in the developed countries. The euro area (EA17) seasonally-adjusted unemployment rate was 10.8% in February 2012, compared with 10.7% a month earlier. It was 10.0% in February 2011. The EU27 unemployment rate was 10.2% in February 2012, compared with 10.1% in January. It was 9.5% in February 2011. The statistical…

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World economy 31st March 2012

Weekend read | It’s the democracy, stupid!: capitalism and equality

Gustavo Matías, in Madrid | State or capital markets, regulations or freedom, financials or the real economy,  equality or inequality, inclusiveness or mobility: these are some of the dichotomies that explain the present and future of capitalism. The debate has been lately reopened mainly in British soil, by the media big guns such as the Financial Times. However, major imbalances affect nowadays the whole of Europe or the emerging countries, where not enough…

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World economy 27th March 2012

Obamacare in Court: is it unconstitutional to imitate Europe?

NEW YORK | You are going to hear it more than often. It is called individual mandate: citizens required to purchase health insurance, or face a penalty. It is the Gordian knot of Obamacare, the new US Health law. And it is also the essence of both the Netherlands health system (it has been since 2006) and the Swiss (since 1994).  In that regard, the US is trying to imitate…

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World economy 27th March 2012

US corporate profits are Keynesian

By Luis Arroyo, in Madrid | In 2011, corporate profits in the US have been exceptionally high. According to the accounts of S&P 500 companies, or according to the national accountancy, business margins have risen more than ever before. However, the consensus on Wall Street says that they will continue to rise, so the PER rate (price per earnings) is still low: therefore, the stocks will go up like a shot. In…