October, 2018

• 15 October

  The ‘Amazon effect’ can drive prices up

  

  In recent years, the so-called “Amazon effect” has been used to explain low inflation in developed economies: Prices are supposedly lower – and more transparent – online, forcing offline retailers to reduce prices. The effect, however, can go both ways – the influence of e-commerce makes prices fluctuate more often, reacting immediately to shocks like energy price and exchange rate ...

  Read More »
• 15 October

  IL&FS: The Indian hydra that must be slayed

  For its roads, power stations and other useful assets to live, a bankrupt Indian infrastructure lender must die. Infrastructure Leasing & Financial Services Ltd. (IL&FS) was seized by the government this month after unexpected defaults on its $12.5 billion of debt spread panic through money and equity markets. A new six-member board chaired by banker Uday Kotak will have to sort ...

  Read More »
• 15 October

  Global economic leaders point to mounting risks

  The finance ministers and central bankers from almost 190 countries who gathered in Bali for the annual meetings of the International Monetary Fund and World Bank (IMF) drove, I suspect, the final nail into the coffin of the notion of a synchronized pickup in global growth. In a tone that contrasted with the optimism of their spring meetings in April, ...

  Read More »
• 15 October

  What if Ireland scuppers Theresa May’s Brexit?

  

  Few talked about Northern Ireland during the Brexit referendum. Yet it could now dash Prime Minister Theresa May’s hopes of a deal with the European Union (EU) and threaten 20 years of peace and prosperity in Ireland. A coalition of hardliners within May’s Conservatives and a small party from Northern Ireland that has provided her parliamentary majority since last year’s ...

  Read More »
• 15 October

  Short sellers are missing Tencent’s $250bn party

  

  If there’s an upside to a downturn it’s that short sellers get to make a buck. By borrowing shares, investors can sell what they don’t own. If the price falls, they buy the stock back at a cheaper level and return it to the lender (with interest), pocketing the difference. Assuming the shares fall enough and borrowing costs aren’t too ...

  Read More »
• 15 October

  We have an epidemic of loneliness. How can we fix it?

  

  If Sen. Ben Sasse is right — he has not recently been wrong about anything important — the nation’s most-discussed political problem is entangled with the least-understood public health problem. The political problem is furious partisanship. The public health problem is loneliness. Sasse’s new book argues that Americans are richer, more informed and ‘connected’ than ever — and unhappier, more ...

  Read More »
• 15 October

  Stocks, greenback decline as global tensions escalate

  

  Bloomberg US stocks fell along with the dollar as political tensions added to a growing list of investor concerns. Gold rose and Treasuries edged higher. The S&P 500 Index deepened its decline following its biggest weekly retreat since March as President Donald Trump threatened to impose another round of tariffs on China. European and Asian shares dropped after a weekend ...

  Read More »
• 15 October

  Rising telecoms, energy shares help European stocks reverse losses

  

  Bloomberg European equities reversed an early retreat and turned flat as US stock index futures pared losses ahead of the stock market open in New York. The Stoxx Europe 600 Index briefly turned positive on the day after losing as much as 0.7% in the morning. Telecoms outperformed, with Deutsche Telekom AG up 2.3 percent and BT Group Plc up ...

  Read More »
• 15 October

  Kuroda says first sign of exit will be seen in bond yields

  

  Bloomberg Look to bond yields and not asset purchases for the first sign that the Bank of Japan is finally ready to start exiting its years-long monetary stimulus, Governor Haruhiko Kuroda said in an interview. Kuroda’s statement offered the clearest glimpse yet of what an exit will look like one day, though he stressed that policy settings will remain at ...

  Read More »
• 15 October

  Phillips curve is ‘waking from its coma’: ECB’s Rehn

  

  Bloomberg The revival of a long-established relationship between unemployment and inflation is proceeding — ever so slowly, according to European Cent-ral Bank Governing Council member Olli Rehn. “We see some signs that the Phillips curve is waking from its coma,” said Rehn, referring to the theory first described by William Phillips in the 1950s. “It’s maybe alive but not kicking ...

  Read More »