“The need to impose good governance comes to the forefront among providers of development aid. But no one knows well how to get it.” The quote from Collier’s book only has as its objective to remind us that humanity continues without overcoming the “trap” of underdevelopment, and therefore without resolving the problem of poverty in the world.
Zhang Yuzhe via Caixin | China’s membership in the European Bank for Reconstruction and Development (EBRD) will help link its firms and financial institutions to projects backed by the well-established development bank, a senior central bank official says.
UBS | Current year in Asia we expect c.8% return (in U$) driven primarily by earnings, from a 6% growth in revenues and a modest expansion of margins. We think multiples will be unchanged as a re-rating is unlikely given ongoing ‘Debtopia’ headwinds, and historically low valuations make further de-rating also less likely
Benjamin Cole via Historinhas | Probably, He Is Right. Among serious economists, the words “print more money” are not used, and of course the thought is sacrilege for many. Evidently, some prefer a decade or so of 20+% unemployment (see Spain, Greece), or the perennial loss of about 10% of GDP (the United States) to the idea of printing more money.
Interest rates have dropped 450 bp to record lows over the last 30 years. And they are at this level because the desire to invest and take a risk is lower than ever. It’s the weak demand from investment funds, not the central bank’s supply, which is the reason for the almost flat interest rate curve.
UBS | 2015 was likely to mark the fifth year of EM underperformance. The last time EM underperformed for as extended a spell as this was 1997-2001. And what a time to buy that was! Could 2016 provide a similar inflexion point? We would bet against it.
The implentation of Basel III is taking its time. The adjustment periods are very long and drawn-out; the refinement of the concept of capital will not be completed until 2022. We have also seen that the implementation of the TLAC requirements, ratified at November’s G20 meeting, will not happen quickly. Until these adjustments are completed, the banks and the markets will still feel there is no break from regulation.
UBS | We expect the primary investor focus in 2016 to remain on interest rates but some key debates should shift a long with the environment. A few of the debates we propose and analyze include: Will the realization of earnings from rates matter next year? How will investor perception of asset sensitivity evolve as rates start to rise? Will earnings from higher rates lead to less pricing discipline by trust banks? Is the M&A cycle peaking?
Jean Pisani-Ferry via Caixin | For the first time in several decades, a series of Western countries are simultaneously experiencing major political upheaval. In several of them, populist parties that challenge consensual principles and established policies, and candidates who define themselves as anti-system outsiders, are on the rise or already in power.
Medea Benjamin | It would certainly be easy to do a piece about ten horrible events from 2015—from the ongoing war in Syria and the refugee crisis, to the attacks in Beirut, Paris and San Bernardino, to the rise of Donald Trump and Islamophobia. But that wouldn’t be a very inspiring way to bid farewell to this year and usher in a new one. So let’s look at ten reasons to feel better about 2015.