June, 2018

• 26 June

  If this isn’t a trade war, then what actually is it?

  

  The escalating trade war between the United States and China poses crucial, though unanswerable, questions: Is this the beginning of the end of the post-World War II international trading system or will the present arrangements survive, as they have for 70 years? Almost certainly, historians will judge favourably the postwar expansion of trade (it has never been completely “free” but ...

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• 26 June

  Everyone should hate Google Glass

  

  I hate Google Glass, and I think I’ve hit upon a way to get everyone to understand the dystopic future this eyewear augurs: Give it to flight attendants. The summer of 2014 was a turning point for me. I had always considered myself a genuinely nice person who would never consider violence against a stranger. But then, at a conference ...

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• 26 June

  Italy is facing a crunch moment in bond market

  Italy’s auction of five and 10-year government bonds on Thursday will be the most important test of investor appetite since the country’s political crisis subsided. Buyers are understandably skittish. Appetite for the 10-year securities the government sold at the end of May was poor, something I remarked on at the time. Since then, yields on Italy’s two-year bonds have climbed ...

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• 26 June

  Emerging markets have many tools, few are good

  The rising US dollar and higher interest rates are pummeling emerging markets. Foreign investors who rode the big rally in these markets in 2016 and 2017 see little reason to stick around and are leaving en masse. This shift will probably persist since dollar-denominated obligations make up some 75 percent of the trillions of dollars in developing-economy debt. True, cheaper ...

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• 26 June

  Chinese government can’t fix its housing bubble

  

  Real estate is the driver of the Chinese economy. By some estimates, it accounts (directly and indirectly) for as much as 30 percent of gross domestic product. Keeping housing prices buoyant and development robust is thus an overriding imperative for China — one that is distorting policymaking and worsening its other economic imbalances. Despite reforms in recent years, there’s little ...

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• 26 June

  India’s life-saving plan for IDBI makes no sense

  

  Rescuing a dying bank with taxpayers’ money is often the only way to prevent a costlier contagion. But nursing a deposit-taking institution by tapping life-insurance premiums of policyholders? That’s like allowing a localized infection to spread all over, hoping the natural immunity of an otherwise healthy body will help beat back the germs. India’s plan to sell a majority stake ...

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• 26 June

  EU has failed to make US tech change behaviour

  

  A pattern is emerging in the war between the European Union’s antitrust authorities and US tech companies. The changes that Google and Apple made after adverse rulings and large fines appear to be little but window-dressing, and left intact the problems the penalties were intended to solve. In June 2017, the European Commission fined Google 2.4 billion euros for giving ...

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• 26 June

  Goldman, Citi hunker down as trade war hits emerging markets

  

  Bloomberg Some of the world’s largest money managers soured on emerging markets as compounding trade threats deepened the worst monthly rout for developing currencies since the US election. Goldman Sachs Group Inc. said it’s reducing an overweight position in developing-nation currencies, preferring a more “defensive” stance as China and Europe warned the escalating trade war could trigger a global recession. ...

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• 26 June

  Wells Fargo fined for ‘flipping’ investments

  

  Bloomberg Wells Fargo & Co. will pay $5.1 million to settle a US regulator’s claims that employees abused clients by persuading them to sell certain investments before maturity, generating large fees for the lender. Brokers with Wells Fargo Advisors, from January 2009 to June 2013, encouraged retail customers to sell market-linked investments meant to be held to maturity so they ...

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• 26 June

  Irish banks to face more capital demand

  

  Bloomberg Irish banks are set to be forced to hold more capital to cope with a future economic downturn, according to a person familiar with the matter. The country’s central bank is leaning towards increasing the so-called counter cyclical capital buffer from zero percent in coming months, according to the person, who asked not to be identified as the information ...

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