This could be the week when the World’s two most celebrated General Theories were proved correct. Both spell out the dangers of black holes. But whereas the risk of Earth disappearing into a cosmic black hole may be hypothetical, the liquidity black hole in global credit markets is here-and-now. Watch-out, we are being sucked in. […]
Could the collapse of confidence in central banking, which has been so in the news the last few weeks (and years), reinforce the maneuvering of governments toward doing away with cash — or vice versa? That’s the question that nags at me after reading the column by the American editor of the Financial Times, Gillian […]
It is a measure of the fear of investors right now that the best investment strategy is “take to the hills”. What you should be putting into your portfolio is cash, gold and guns. In a deflationary environment, such as has taken grip in recent weeks due to the tumbling oil price, slowdown in China […]
What are markets worried about? Investors are concerned about declining world growth, deflation, interest rates turning negative, the consequent impact on banks’ profitability and whether markets can remain liquid if banks pull back. Can central banks just cut interest rates? Nobody is sure what central banks can do in this environment, which is part of […]
The Bank of Japan (BoJ) joins the European Central Bank and central banks of Sweden, Denmark and Switzerland to impose negative rates on excess commercial bank reserves. The BoJ’s announcement is in direct response to disappointing economic performance, worries about low inflation and weak bank lending. The negative 10 basis point interest rate will augment […]
The Bank of England has proposed new regulations that compel banks to impose financial penalties on the ex-employees of their competitors if they are found culpable for negligence or wrongdoing. Banks often attract talent from their rivals by buying out their unpaid bonuses, creating what the regulators see as a loophole. The proposals, however, are completely unenforceable. […]
Oil prices have fallen by 70 percent in the past 15 months. The price of aluminum, copper, zinc and other important commodities are also falling precipitously. While this recent collapse might be temporary and reverse once the global economy gets its mojo back, it is noteworthy that, on average, commodities today are cheaper than what […]
Throughout history records exist of situations in which economic policies have been influenced or decided by firmly held beliefs which have little or nothing to do with proper economic treatises or textbooks. Dubbed ‘pre-economics’ by David Henderson, in his blog for the IEA, these ideas have had a pervasive influence on events and policies which […]
Is the global economy on the brink of recovery or the brink of disaster? If merger and acquisition activity is any measure – and most corporate economists think it is – then things are going great guns. When economies slow down or crash, companies stop investing for the future and M&A activity comes to a […]
The prospect that the Federal Reserve will radically expand margin requirements — and not just on banks — invites reflection on the goose and the gander. The Fed’s scheme to expand margin requirements has been mooted for some time, but the news broke this week in the Wall Street Journal. It reports that the banks and […]
Thrawn is a terrific Scottish word. It means perverse or stubborn, only more so. If someone annoys you, suggesting you do something, you do the precise opposite even if you don’t want to do it. That’s thrawn. The word springs to mind in relation to Donald Trump and his difficult dealings with Scotland, his mother’s homeland. […]
The crash of the Chinese stock market on the first day of trading in 2016 is a stark reminder of the urgent need for reform in China’s financial system in particular and its economy in general. Initial reaction from commentators pointed to some incidental circumstances — China’s disappointing manufacturing data, reported earlier Monday, and the […]
Today marks five years since the death of Albert Joseph Reginald (‘Reg’) Ward, former Chief Executive of the London Docklands Development Corporation, an unconventional public sector outsider and a crucial creative force behind the regeneration of London’s Docklands. Reg Ward’s role in Docklands’ transformation was pivotal, and yet was never formally recognised, with the Chief […]
As the Chinese are finding, they take some getting used to, these market thingummy jigs. The Beijing authorities were still struggling this week, after regulatory circuit breakers closed trading on Monday following a 7% decline in the Shanghai Composite Index and on Tuesday, government financial institutions were “stabilising prices” buying up shares. It is easy […]
Research and development is the foundation of all innovation and a key driver of economic growth. With 4.21% of GDP spent on R&D, based on figures from the Organisation for the Economic Cooperation and Development (OECD), Israel ranks first in the world, according to the World Economic Forum, in comparison to the US at 11th, and the […]
This month, China’s President Xi Jinping arrived in Johannesburg for the Forum on China-Africa Cooperation (FOCAC) Summit. Upon arrival, he announced his government would be giving a US$60 billion development package to Africa. This is just the latest stage in a wider expansion into Africa by the Chinese government. For example, in the last decade, FOCAC […]
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