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World economy 28th May 2014

Power and energy: the Egyptian presidential election

If Sisi does not stabilize the energy and power sector, the Egyptian street’s patience will not last forever. The Egyptian presidential election takes place between May 26-28, having been extended by one day due to low voter turnout. Former Gen. Abdel Fattah el-Sisi is poised to win by a landslide against left-wing candidate Hamdeen Sabahi. Langendorf and Dargin talk about the Egyptian presidential election, the country’s energy crisis and its potential consequences.

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World economy 26th May 2014

China: The birth pains of a new economy

BEIJING | By Andy Xie via Caixin | The quality of China’s GDP growth is rising with falling property prices. The economy is diverting resources away from wasteful bubble activities to productive ones. While growth is slowing, it reflects shrinking of the bad GDP. Two-thirds of the economy is still expanding steadily. More importantly, China is experiencing a labor shortage due to a shrinking of working-age population and steady economic expansion. The economy is in a strong position to absorb the fallout of a deflating property bubble.

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World economy 23rd May 2014

Banks likely to outperform as Capex drives loan growth

LONDON | By Barclays analysts | We believe that one of the reasons why loan growth has been so anaemic thus far in the recovery is because the recovery in capital spending has been very poor. However, an improving outlook for Capex could see loan demand pick-up and be supportive of future earnings growth for the domestic banking sector.

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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.