Financial Times (May 30)
“US benchmark borrowing costs plunged to levels last seen in 1946 and those for Germany and the UK hit all-time lows as investors took fright at what they see as a disjointed policy response to the debt crisis in Spain and Italy.” Ten year yields fell to 1.62% on U.S. Treasuries and to 1.64% on UK gilts, the lowest since the start of recordkeeping in 1703. Meanwhile, yields on two-year German bunds hit zero, another first.
Washington Post (May 28)
“The unfortunate result should not lessen the significance of what occurred last week: the freest and fairest vote for president in Egyptian history…. An elected Egyptian president, even a bad one, could lead his country, and the region, into a new era — one in which democracy is on the rise”
Wall Street Journal (May 28)
“It used to be said that when America sneezes, the world catches a cold.” Now, it’s China. “As the reality of slowing growth in China sets in—and with little help on the way from a still-sluggish America and a Europe in euro crisis—economies from South Korea down to New Zealand and Japan over to Thailand are starting to feel the effects. China’s flu is set to become the main preoccupation for policy doctors across the continent.”
Tags: China, Europe, Global economy, Japan, New Zealand, South Korea, Thailand, U.S.
Economist (May 26)
“Despite a recent slowdown, the world’s second-biggest economy is more resilient than its critics think.” China is not dependent on foreign borrowing, enjoys a high saving rate (51% of GDP), has highly liquid banks, and very low central government debt (25% of GDP). “China plainly has enough fiscal space to recapitalise any bank threatened with insolvency. That space also gives the government room to stimulate growth again, should exports to Europe fall off a cliff.”
New York Times (May 24)
“With Greece in meltdown, raising fears of cascading bank insolvencies and deepening recession, Europe’s leaders failed again this week to agree on the ambitious initiatives needed to quell the crisis.” If they don’t quickly wise up and promote growth, “the consequences could be disastrous — for their countries and the rest of the world.”
Financial Times (May 23)
Bonds are in. Stocks are out. “Institutional investors, from pension funds to mutual funds sold directly to the public, have slashed holdings in the past decade. Stocks have not been so far out of favour for half a century.” The penchant for bonds could reverse. Or “the end of a six-decade passion for equities could lead to a less flexible, more conservative model of corporate financing.”
Washington Post (May 23)
“Mr. Zuckerberg will want to notice that his company’s stock will be finding its way into the portfolios of real investors.” Then he will be able to “appreciate that one of the best reasons for a public listing is the one seldom mentioned: The continual feedback from savvy investors about management’s strategies and execution.”
“Mr. Zuckerberg will want to notice that his company’s stock will be finding its way into the portfolios of real investors.” Then he will be able to “appreciate that one of the best reasons for a public listing is the one seldom mentioned: The continual feedback from savvy investors about management’s strategies and execution.”
Financial Times (May 22)
“The German elite were the ones who understood what creating the euro implied. They realised that a currency union could not work without a political union. But the French elite wanted, instead, to end their humiliating dependence on the monetary policy set by Germany’s Bundesbank. Now, two decades later, Germany’s partners, including France, have learnt a painful lesson. Far from being liberated from German control, they are now far more firmly under it. In a big crisis, creditors rule.”
Tags: Bundesbank, Creditors, Currency union, France, Germany, Political union
Euromoney (May 21)
As the European currency crisis continues to unfold, the spotlight shifts. “Spain’s economic political future hangs in the balance, as fears over Greece’s exit from the eurozone leave the credibility of its financial stabilization plans in tatters without urgent redress from eurozone policymakers.” And if Spain falls to contagion, there’s no telling where the downward spiral will end, though Italy would probably be the next to fall.
LA Times (May 21)
“The world’s war on polio” has been ambitious and has almost succeeded. Less than 100 people were paralyzed by polio, which is now found only in Afghanistan, Nigeria and Pakistan. “But there is a looming danger.” In countries where polio is long forgotten, immunity is weak. Unless we wipe polio away from these final three countries, “a renewed outbreak could cripple as many as 1 million people within the decade, many of them children,” according to U.N. epidemiologists.
