Archive for January, 2016

Tony Elumelu made his fortune off banking and real estate. Now he wants to spread the wealth and create jobs by investing in African startups.

via Economy : NPR http://ift.tt/1m2kabt

Advertisements

UK Only Article: 
standard article

Issue: 

The brawl begins

Fly Title: 

Free exchange

Rubric: 

Reviving Italy’s economy will require sacrifices not just from Italians, but also from Europe

Location: 

Rome

TO LOSE Greece or Portugal may be regarded as a misfortune; to lose Italy looks like carelessness. It is hard to imagine the single currency surviving a showdown with Italy, the currency club’s third-biggest economy (and the world’s eighth-biggest, just ahead of Brazil). Perhaps that explains the recent pugnacity of Matteo Renzi, Italy’s prime minister, regarding European fiscal rules. In an article published in the Guardian newspaper in mid-January, he sounded positively Greek, complaining that the European Union’s “fixation on austerity is actually destroying growth”. His finance minister, Pier Carlo Padoan, has been tangling with the European Commission over how to deal with the €350 billion ($382 billion) of bad loans clogging up the Italian banking system. Mr Renzi is demanding the Eurocrats’ …

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

Nigerian billionaire banker Tony Elumelu is promoting what he calls “Africapitalism.” To combat terrorism and social ills, he’s funding young entrepreneurs, from car mechanics to caterers.

via Economy : NPR http://ift.tt/1PjRwOQ

STERLING has had a very choppy history, marked by crises such as 1967, 1976 and 1992. And it is having another rocky period. John Warith of UBS writes thatOf the many violent recent moves in global markets, the collapse of sterling is one of the most remarkable. In trade weighted terms, the currency has dropped more than 7% in just two months, a fall of a magnitude only surpassed once since the MPC assumed responsibility for setting UK monetary policy in 1997.Part of the weakness is down to a change in tone by Mark Carney, the governor of the Bank of England, who indicated recently that British interest rates were unlikely to rise in the near future. But that can't really explain the whole move; after all, the European central Bank has hinted it will ease policy further, but the pound has still fallen against the euro.

 And though the interest rate rise in December boosted the dollar, markets have been revising down their forecasts for further US rate increases just as rapidly as they have for those in Britain. The pound has behaved more like a commodity currency (the Aussie or Canadian dollars) even though it is a large net importer of commodities.Mr Wraith's answer is simpleWe believe the explanation for the move lies in the future, not the past. A big increase in the focus on the UK's EU referendum – which may well be held by the middle of the year – and a …

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

SHARE prices have been falling persistently since the start of 2016 with markets in Europe and Japan now down more than 20% from their recent highs, the technical definition of a bear market. Bear phases are reasonably common; the S&P 500 index has suffered at least 15 of them since 1929, although it has yet to meet the definition this time round.It is never possible to be definitive about the reasons for a stockmarket fall. Investors don’t have to fill in a form explaining their reasons for selling shares. The popular explanations for the current decline involve worries about the health of the Chinese (and thus the global) economy; concerns that corporate profits may be falling; and fears that the Federal Reserve may have tightened monetary policy too soon when it raised interest rates in December. And a survey of fund managers by Bank of America Merrill Lynch indicates these explanations are roughly right; optimism about the global economy has declined, more than half think profits will fall over the next 12 months and a Chinese recession is perceived to be the biggest risk.Another way of understanding the decline is to focus on the theoretical basis for share valuations; a share represents the future cashflows the investor will receive, discounted at the appropriate rate (the higher the discount rate, the lower the current price). So falling share prices either …

via Economic Crisis http://ift.tt/1Ps8JRP

UK Only Article: 
UK article only

Issue: 

Who’s afraid of cheap oil?

Fly Title: 

The economy

Rubric: 

Recent strong growth in Britons’ pay packets proves short-lived

UNEMPLOYMENT in Britain is just 5.1%, the lowest since 2006. Economists expect that when joblessness falls, wages will rise as employers must compete more fiercely for staff. After a long slump brought on by the recession, by mid-2015 wages were growing nicely (see chart). But as unemployment has continued to decline, the economists have been left scratching their heads. In November three-monthly average growth in pay was just 1.9% year on year, far below levels in the years leading up to the 2008-09 global crisis.
The shaky world economy is partly to blame. The oil-price slump is biting: wages in the oil-and-gas industry, which are about 50% above the average, have fallen by 12% in the past year. Cheaper oil also prompted a flirtation with price deflation in the middle of 2015, making workers less inclined to demand pay rises. In the year to December 2015 the pound appreciated on a trade-weighted …

via Economic Crisis http://ift.tt/20gWjEb

UK Only Article: 
standard article

Issue: 

Who’s afraid of cheap oil?

Fly Title: 

Central banks

Rubric: 

Central banks need to do less, and politicians more

Main image: 

20160123_BKD001_1.jpg

The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse. By Mohamed El-Erian. Random House; 296 pages; $28.

THE past seven years have been an extraordinary period for central bankers. Not only have they cut interest rates to zero (and even below) in the developed world; for the first time in their history central banks have greatly expanded their balance sheets, buying government bonds and other assets. Most economists agree that vigorous action was needed in the wake of the financial crisis in 2007-08 in order to head off a repeat of the Great Depression. Nevertheless, the sheer scale and protracted nature of such monetary stimulus is now a cause for concern among some commentators; have the banks permanently distorted the economy? In December the Federal Reserve made the first, …

via Economic Crisis http://ift.tt/1ZOSp8T