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World economy 13th January 2014

Spanish Economic Recovery Gets Credit in Washington

NEW YORK | By Ana Fuentes | In an eagerly awaited meeting for the Spanish government, PM Mariano Rajoy made his first official visit to the White House on Monday. As expected, Barack Obama praised the progress and reforms made by the Southern European economy, although both leaders agreed unemployment rate is still posing a major challenge. Later, Mr Rajoy also met IMF’s Head Christine Lagarde. After two hard recession years, and even more painful austerity measures, Spain is looking to restore international investors’ confidence.


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World economy 13th January 2014

Bernanke has been found wanting

SAO PAULO | By Marcus Nunes | According to Alan Goolsbee, as Mr. Bernanke prepares to depart at the end of January and the Fed has initiated the exit-strategy countdown with the start of tapering, it is time to take stock of the QE Era—and time for the critics to admit they were wrong.

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World economy 10th January 2014

Is France the Euro Zone’s New Bashing Victim?

Op-ed by Ana Fuentes | We no longer hear about ‘Spailout’ nor ‘Grexit’, but there seems to be a euro zone’s new victim: France. A Newsweek magazine article called ‘The fall of France’ wondered about the Hexagone’s economic health and how it may be a burden for the EZ’s recovery. The problem is, some of the stated facts were wrong. French media are striking back.

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World economy 9th January 2014

Bernanke and the “Big Black Hole”

SAO PAULO| By Marcus Nunes|When the Fed ‘forgets’ its function of keeping overall nominal stability you may get different instabilities. If, as in the 1960s, it becomes mostly concerned with unemployment the result will be rising inflation.

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World economy 7th January 2014

Panama Canal and Sacyr-led consortium, closer to a deal

The Corner Team | The Panama Canal Authority and the  building consortium Grupo Unidos por el Canal (GUPC), led by Spanish construction company Sacyr, have both agreed to put up at at least $100 million each to keep the canal work running. The big question remains who should pay for $1.6 billion in cost overruns. GUPC has asked the canal administrator for a $400 million advance. Some Spanish analysts believe they’ll reach an intermediate agreement, in which the Panamanian Government covers half of the costs (circa $800 million), although the consortium would have to sacrifice some profit margin. The Spanish government insists they will not give money “in any case”.

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World economy 7th January 2014

After Austerity, Capital Inflows Will Ease Euro Zone’s Pain

THE CORNER TEAM | Although fiscal austerity and structural reforms implemented have inflected some euro zone countries a severe pain, they will bring them external capital inflows, Chinese rating agency Dagong Credit predicts for 2014. This combined with the potential increase in Germany’s import demand will mean that the euro zone economies will rebound a little and see pressure of sovereign debt crisis ease further.

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World economy 7th January 2014

Interest rate moves are out of sync with inflation, what next?

LONDON | By Michael Gavin at Barclays | The 2013 sell-off in interest rates in the global currency areas has been driven entirely by perceptions that economic activity is on course to continue its recovery; inflationary pressures have been conspicuous only for their absence in all major currency areas except Japan, where the (still limited) pressure is welcome. This likely explains why equity markets in the advanced economies were so resilient to the backup in US and global rates and why the brunt of the 2013 bond sell-off was borne largely by the long end of the curve.

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World economy 3rd January 2014

Investors See Spain As No-Brainer, Juicy Risk

THE CORNER TEAM | As the euro zone crisis shakes off a recession, investment opportunities are mushrooming across the South of Europe. In Spain, banking and media sector as well as infrastructure are the preferred bets. “As maximum exposure recovery in Europe’s periphery, FCC is ideal. Just don’t think about the downside,” the Financial Times’ Lex argued on Friday, after millionaires George Soros and Bill Gates have both bought stakes in the indebted construction company in less than three months.