Archive for December, 2014

UK Only Article: 
standard article

Issue: 

Workers on tap

Fly Title: 

Spanish politics

Rubric: 

A year of electoral turbulence lies ahead

Location: 

MADRID

SPAIN is facing a year of bruising, confrontational politics, with several elections that could result in dramatic changes in the way the country is governed. Not least, the constitution, which has underpinned democracy ever since 1978, may not survive in its present form. The prime minister, Mariano Rajoy, and his centre-right Popular Party (PP) may soon find themselves fighting on two fronts at once: trying to save Spain from disintegration if snap elections based around independence are held in Catalonia; and fighting to stop the PP being kicked into third place nationally when other regions and municipalities vote in May.
Nor do Mr Rajoy’s troubles end there. A general election looms in December 2015 which could result in either the Socialists or an upstart leftist party, Podemos, ousting Mr Rajoy and dismantling economic reforms brought in to …

via Economic Crisis http://www.economist.com/news/europe/21637423-year-electoral-turbulence-lies-ahead-restless-and-resentful?fsrc=rss

UK Only Article: 
standard article

Fly Title: 

From the archives

Rubric: 

Too much oil flooded the world in the early-1930s, contributing to deflation

Byline: 

C.R.

Main image: 

20141220_fnp504.jpg

During the Great Depression of the 1930s, massive oil discoveries in Texas, alongside falling global demand for energy, sent oil prices tumbling downwards. As we reported in 1931, that not only caused investors in oil firms to suffer huge losses, but also contributed to deflation around the world. Today, lower levels of inflation and bruised shareholders are once again the likely consequences of the fall in global oil prices seen since summer 2014.
The stock exchange: The oil outlook

Apr 25th 1931
The oil industry this year gas suffered what can only be described as a piece of bad luck. Its efforts last year to bring production into balance with consumption have been rendered abortive by the chance discovery of a prolific shallow oilfield in East Central Texas. Wells have been brought in twenty-two …

via Economic Crisis http://www.economist.com/news/business-and-finance/21637484-too-much-oil-flooded-world-early-1930s-contributing-deflation-oil-gluts-great?fsrc=rss

UK Only Article: 
standard article

Issue: 

Workers on tap

Fly Title: 

Japan’s economy

Rubric: 

Shinzo Abe unleashes a (small) stimulus package

Main image: 

20150103_FNP002_0.jpg

IF YOUR first shots miss the target, keep firing. That seems to be the lesson in Japan, where the cabinet of Shinzo Abe, the prime minister, approved an emergency stimulus package worth ¥3.5 trillion ($29.1 billion) on December 27th to pep up the recession-hit economy. Yet what stood out was the diminished heft of the package. Nearly two years ago the first of three “arrows”, as the various parts of Mr Abe’s programme have been dubbed, was a fiscal boost of ¥10.3 trillion, followed by another spending package worth ¥5.5 trillion in April 2014. The other facets of “Abenomics” will now have to be exploited.
The government hopes that its meagre package will boost Japan’s real GDP by as much as 0.7% in 2015-16. Although more modest, the stimulus is more finely targeted this time, notes Robert Feldman of Morgan Stanley, an …

via Economic Crisis http://www.economist.com/news/finance-and-economics/21637410-shinzo-abe-unleashes-small-stimulus-package-pump-priming?fsrc=rss

OLIVIER BLANCHARD, chief economist at the IMF, on tumbling oil prices, the continued US economic recovery and which countries look vulnerable in 2015
Comment Expiry Date: 

Tue, 2015-01-13

via Economic Crisis http://www.economist.com/blogs/freeexchange/2014/12/money-talks-december-29th-2014?fsrc=rss

UK Only Article: 
standard article

Issue: 

Past and future tense

Fly Title: 

Buttonwood

Rubric: 

A new book from a prescient economist

Main image: 

20141220_FND001_0.jpg

WHAT is the Japanese word for Schadenfreude? For much of the late 1990s and early 2000s, Western economists and politicians were happy to lecture the Japanese government about the mistakes it made in the aftermath of its asset bubble. But six years after the collapse of Lehman Brothers, the investment bank whose demise triggered the financial crisis, many Western economies are still struggling to generate decent growth. Their central banks are being forced to keep interest rates close to zero. Yields on government bonds in Europe, as in Japan, have sunk to record lows. Some economists are talking of a new era of “secular stagnation”.
A new book* from Richard Koo of the Nomura Research Institute argues that the West has made glaring errors too. “We are experiencing not only an economic crisis but also a crisis in economics,” he …

via Economic Crisis http://ift.tt/1Ac4NAF

UK Only Article: 
standard article

Issue: 

Past and future tense

Fly Title: 

World economy

Rubric: 

The world economy in 2015 will carry troubling echoes of the late 1990s

Main image: 

20141220_LDD001_0.jpg

A FINANCIAL crash in Russia; falling oil prices and a strong dollar; a new gold rush in Silicon Valley and a resurgent American economy; weakness in Germany and Japan; tumbling currencies in emerging markets from Brazil to Indonesia; an embattled Democrat in the White House. Is that a forecast of the world in 2015 or a portrait of the late 1990s?
Recent economic history has been so dominated by the credit crunch of 2008-09 that it is easy to forget what happened in the decades before. But looking back 15 years or so is instructive—in terms of both what to do and what to avoid.

Then, as now, the United States was in the vanguard of a disruptive digital revolution. The advent of the internet spawned a burst of innovation and euphoria about America’s prospects. By 1999 GDP was rising by more than …

via Economic Crisis http://ift.tt/1szE4b6

UK Only Article: 
standard article

Fly Title: 

Russia’s rouble crisis

Rubric: 

A deep recession is now a certainty for Russia in 2015. Things could get much worse

Byline: 

R.D.

Location: 

MOSCOW

Main image: 

20141220_fnp503.jpg

IN THE world of central banking slow, steady and predictable decisions are the aim. So when bankers meet in the dead of night and raise interest rates by a massive 6.5 percentage points it suggests something is going very wrong. It is: the Russian currency crisis many feared is now a reality (see chart) and the mood in Moscow is close to panic. Russians are right to worry: they are heading for a lethal combination of deep recession and runaway inflation.
Many of Russia’s woes start abroad. The country is highly dependent on its oil-and-gas firms. Hydrocarbons contribute over half the federal budget and two-thirds of exports. The state owns big stakes in many energy firms, as well as indirect links via the …

via Economic Crisis http://ift.tt/1zo4R0d