Hong Kong defends its dollar peg in both directions

THE Hong Kong dollar is one of the most and least manipulated monies in the world. For over 34 years the territory’s monetary authority, the HKMA, has kept it pegged to America’s currency at...

America’s Treasury refrains from naming any currency manipulators

MOST governments are happy when foreigners want their bonds, especially when those foreigners are long-term holders, like central banks. But America is different. It worries that some foreign governments buy its debt to keep...

Indicators that signal financial-market trouble are flashing

WATCHING financial markets can be like watching a horror film. A character walks into the darkness alone. A floorboard creaks. The latest spooky sign is the spread between the three-month dollar London interbank offered...

Economists still lack a proper understanding of business cycles

THE aftermath of the 2007-08 financial crisis ought to have been a moment of triumph for economics. Lessons learned from the 1930s prevented the collapse of global finance and trade, and resulted in a...

Catching the bitcoin bug – Buttonwood

SINCE the heady days of late 2017 and January of this year, crypto-currencies have gone into retreat. Bitcoin, the best-known example, is now worth just a third of its value at its peak (see...

The next Japan is not China but Thailand

TWENTY years ago Thailand was the most torrid of emerging markets. After a spell of overheated growth and wide current-account deficits, it had exhausted its foreign-exchange reserves and lost its currency’s peg to the...

A trade war between America and China takes shape

TALK of tariffs is in danger of developing into cries of trade war. On April 3rd America published a list of some 1,300 Chinese products it proposes to hit with tariffs of 25%. Just...

America’s trade strategy has many risks and few upsides

AMERICA’S president claims to view China as a friend. But the friendship is going through a rocky patch, to say the least. America’s trade deficit with China, “the largest deficit in the history of...

India’s economy is back on track. Can it pick up speed?

IT IS easy to be awed by the Indian railway network. The 23m passengers it carries daily travel, in total, over ten times the distance to the sun and back. It is just as...

Insurers and undertakers profit as people prepay their last bill

With all the trimmings“WHEN are you thinking of dying?” asks John Cleese, a British comedian, in a recent television ad. Dressed as the Grim Reaper, he addresses the viewer as he prepares a cup...

China wants to reshape the global oil market

TRADITIONALLY, to count as an oil power a country had to be a big producer of the black stuff. China is the world’s biggest importer but still wants to break into that exclusive club....

The average American is much better off now than four decades ago

JUST how bad have the past four decades been for ordinary Americans? One much-cited figure suggests they have been pretty bad. The Census Bureau estimates that for the median household, halfway along the distribution,...

More market volatility seems likely

“FASTEN your seat belts. It’s going to be a bumpy night.” Those famous lines of Bette Davis in “All About Eve” may turn out to be the motto for the markets in 2018. After...

Europeans fret that Chinese investment is a security risk

“WE ARE not naive free traders. Europe must always defend its strategic interests,” said Jean-Claude Juncker, the president of the European Commission, last year as he introduced plans to screen foreign investment into the...

Wall Street looks overvalued – Buttonwood

FEW measures of stockmarket valuation are as controversial as the cyclically adjusted price-earnings ratio, or CAPE. American equities have looked expensive on this measure for most of the past 20 years, which is why...

What if China corners the cobalt market?

COBALT derives its name from Kobold, a mischievous German goblin who, according to legend, lurks underground. For centuries it vexed medieval miners by lookinglike a valuable ore that subsequently turned into worthless—and sometimes noxious—rubble....

America’s public markets are perking up. Can it last?

FOR years, discussions of America’s public markets have usually featured a lament for their dwindling appeal. According to Jay Ritter of the University of Florida, the number of publicly listed companies peaked in 1997...

Active fund managers hold fewer and fewer stocks

THE past decade has been tough for conventional “active” fund managers, who try to pick stocks that beat the market. They have been losing business to “passive” funds—those that try to replicate a benchmark,...

How digitisation is paying for DBS

MOST banks gush about digital technology, fearing all the while that some born-digital usurper, large or small, will do to them what Amazon has done to retailers, Uber to taxi-drivers and Airbnb to hoteliers....

Capital is on its way to America, but for bad reasons

ACCORDING to President Donald Trump, money is pouring into America from abroad. The tax reform he signed into law in December means American firms can no longer defer paying taxes on profits left sitting...

Russia’s credit rating rises; Brazil’s falls

BRAZIL and Russia, the third- and fourth-biggest emerging economies, have much in common beyond their size. Each boasts annual GDP per person of around $10,000, which depends more than either would like on natural...

Automation will drive interest rates higher, a new report concludes

REAL interest rates in the developed world have been low ever since the financial crisis of 2008-09 (see chart). The global economy might have struggled to recover had that not been the case; higher...

A banking centre seeks to reinvent itself

ON A clear day, sunset over Lake Zug is magnificent. Snow-dusted mountains cut through the orange glow above and are mirrored in the lake below. “Zug is our spiritual home,” says Jeremy Epstein, from...

Economists cannot avoid making value judgments

AMID the name-calling and bluster that mar many fights between economists are a few common tactics. Belligerents may attack the theory used to support a claim, or the data analysis used to quantify an...

Men and women in economics have different opinions

MEN may hail from Mars and women from Venus. But economists, surely, inhabit planet Earth, surveying it dispassionately. Alas, a new paper suggests that even dismal scientists divide on gender lines. Ann Mari May...

India’s state-owned banks endure a string of bad news

Spot the $1.8bnOF LATE Indian bankers have felt an unfamiliar sensation: optimism. A 1.3trn-rupees ($21bn) bail-out from the government seemed to have cleaned up the bad lending decisions of years gone by. A new...

Tax reforms prompt upheaval in the private-equity industry

IN THE political cacophony surrounding America’s new tax law, the voice of the private-equity industry has been muted. This is perhaps unsurprising. The industry has managed in large measure to retain its favourable tax...

American banks pay depositors less than online accounts

EVERYONE knows that interest rates are rising—except, perhaps, one group: American savers who have put $12trn in bank accounts. They have seen the government’s deposit guarantee, purportedly designed to protect them, become a ticket...

How to interpret America’s experiment with huge budget deficits

“DEFICITS don’t matter,” said Dick Cheney, then the vice-president, in 2004. He may have meant what he said, yet the administration he belonged to showed a decided lack of conviction when it came to...

The digital upstarts taking on Britain’s dominant few banks

CHRIS MATTHEWS joined Monzo last May. “A friend mentioned it over a curry. Everyone signed up at once. Nine or ten of us.” Mr Matthews, a structural engineer living in London, transfers money monthly...

Saboteurs and sunlit uplands: Those Brexit clichés explained

Ever since February 2016, when David Cameron, the British prime minister, called a referendum on the UKleaving the EU, the debate has been clouded by catchphrases, similes and confusing metaphors. If you...

Insider trading has been rife on Wall Street, academics conclude

The joy of knowledgeINSIDER-TRADING prosecutions have netted plenty of small fry. But many grumble that the big fish swim off unharmed. That nagging fear has some new academic backing, from three studies. One argues...

Wells Fargo suffers a rare punishment—a cap on assets

ON HER way out, Janet Yellen, who stood down as the Federal Reserve’s chair on February 2nd, paused to add yet another sanction to those already imposed on Wells Fargo for foisting unwanted insurance...

Bitcoin and its rivals offer no shelter from the storm

THE “biggest bubble in human history comes down crashing,” tweeted Nouriel Roubini, an economist, gleefully. After an exhilarating ride skywards in 2017, investors in crypto-currencies have been rudely reminded that prices can plunge earthwards,...

South-to-South investment is rising sharply

AT A meeting in Namibia last month Zimbabwe’s finance minister, Patrick Chinamasa, made a pitch to lure African investors to an economy ruined by Robert Mugabe. That he did so first in Windhoek, not...

Passive funds tracking an index lose out when its make-up changes

IS THERE hope for fund managers after all? Conventional “active” managers, who try to pick stocks that will beat the market, have been losing ground to “passive” funds, which simply own all assets in...

Why sub-zero interest rates are neither unfair nor unnatural

DENMARK’S Maritime Museum in Elsinore includes one particularly unappetising exhibit: the world’s oldest ship’s biscuit, from a voyage in 1852. Known as hardtack, such biscuits were prized for their long shelf lives, making them...

“Factor investing” gains popularity

RETAIL investors tend to dream of finding a wonder stock—a Netflix or Apple that will multiply their savings many times over. But institutional investors cannot commit too much capital to one individual company. Instead,...

A safe asset is devised for the euro zone

THESE are bright days in the euro area. Preliminary figures say that the currency zone’s GDP grew by 2.5% last year, the fastest since 2007. But many of the faultlines in the zone’s financial...

Zhou Xiaochuan, China’s central-bank chief, is about to retire

WHEN Zhou Xiaochuan took the helm of China’s central bank 15 years ago, the world was very different. China had just joined the World Trade Organisation and its economy was still smaller than Britain’s....

Cars block the road to a renegotiated NAFTA

ROBERT LIGHTHIZER, the United States Trade Representative, wants renegotiation of the North-American Free Trade Agreement (NAFTA) to speed up. When the sixth round of talks ended on January 29th with only three chapters agreed,...

Cancer is a curse, but also a growth market for investors

CANCER is a grim sort of growth market. By 2030 there will be over 22m new cases a year, up from 14m in 2012, according to the International Agency for Research on Cancer. But...

Why don't foreign investors take fright more often?

BACK in the days of the gold standard, central bankers were very concerned about the views of international investors. They believed that maintaining the value of their currencies would reassure creditors. That is why...

Morgan Stanley’s unexciting model takes the prize on Wall Street

MORGAN STANLEY emerged in 1935 out of a global financial disaster, as one of Wall Street’s leading firms. In a rare shred of consistency in America’s turbulent markets, history has repeated itself. But it...

Monetary policy suffers a shortage of central bankers

IN THEIR quest to stabilise the job market, central banks are setting a bad example. Jerome Powell, whom senators this week confirmed as the next chairman of America’s Federal Reserve, will lead an institution...

How microcredit can help poor countries after natural disasters

Small pots of liquidityBOTH, in different ways, worry about liquidity. And global warming may, indeed, be bringing meteorologists and financiers together. On January 18th, VisionFund, a microlending charity, and Global Parametrics, a venture that...

Bangladesh experiments with a new approach to poverty alleviation

BESIDES shoes and shrimp, Bangladesh exports poverty cures. Microfinance was developed there in the late 1970s before spreading. In 2002 BRAC, a charity, started giving assets such as cows (and training in how to...

The French government experiments with venture capitalism

Don’t be coy, carp about the foodAS A boy, Antoine Hubert used to catch butterflies. These days, the agro-engineer has eyes only for meal worms. In a demonstration factory near Dole in eastern France,...

Why driverless cars may mean jams tomorrow

THE most distractingly unrealistic feature of most science fiction—by some margin—is how the great soaring cities of the future never seem to struggle with traffic. Whatever dystopias lie ahead, futurists seem confident we can...

Why the oil price is so high

PERHAPS the most vexing thing for those watching the oil industry is not the whipsawing price of a barrel. It is the constant updating of theories to explain what lies behind it. In March...
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