Hong Kong suffers from being small and open
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Hong Kong’s dollar peg is straining under the global liquidity glut. The territory’s monetary authority bought U.S. dollars on four separate occasions in the past week to prevent the currency from rising beyond the top of its permitted trading range. But it’s hard to say if abandoning the 29-year-old fixed rate regime would have made it any easier for Hong Kong to cope with money-printing in the West.
Last U.S. debate neglects foreign policy realities
By Jeffrey Goldfarb The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The last U.S. presidential debate was an oratorical rendition of Saul Steinberg’s 1976 illustration of the myopic world view from New York. Listening to Barack Obama and Mitt Romney spar on Monday night, it would have been easy to forget Europe exists and imagine the Middle East is as big as the African continent and Asia combined. Free trade got short shrift and the global coordination of finance nary a mention. Worse, politically facile China-bashing suggests both men may miss a big opportunity.
Israel, Iran, Iraq and Afghanistan couldn’t be ignored and weren’t. Combined, they were mentioned at least 125 times during the 90-minute event, according to a transcript published by the New York Times. But Europe, whose fiscal crisis is still weighing on global economic growth, was discussed once, by the president, and only in the context of military cooperation. Germany, Italy and Spain never came up. Romney invoked Greece – as a bad word.
China’s liquidity non-problem could turn ugly
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
A thin sliver of “ultimate liquidity” is supporting a vast edifice of private-sector debt obligations in China. That structure is unstable.
Japan exporters should fear slowdown, not boycott
By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Squabbles over remote islands have sparked a Chinese backlash against Japanese brands. But China’s slowing economy is having an even bigger impact on Japan’s exports. And while China has toppled the U.S. as Japan’s biggest market, both nations face a common economic enemy in the form of plunging demand from Europe.
Review: The danger of trading machines
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It’s a quarter-century since computerized program trading led to Black Monday on the U.S. stock market. A new and more advanced generation of arcane algorithms now threatens capital markets. That is the lesson of “Dark Pools,” a new book on machine-based equity trading by the Wall Street Journal’s Scott Patterson. The book is a great read – and raises an important question: could the trading machines destroy the capital markets?
Indonesia’s Bob Marley economy’s gonna be alright
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Wayne Arnold
It sometimes seems like every little thing is conspiring against Indonesia’s economy: poor infrastructure, political corruption, regulatory caprice and bureaucratic inertia. Falling commodity prices threaten to reverse the spread of wealth to poorer parts of the archipelago. But Indonesia’s very immaturity gives it resilience to muddle through.
U.S. energy boom spurs economic vs political clash
By Christopher Swann The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
America’s energy boom is spurring a clash between the realms of politics and economics. Meaningful exports of oil have been banned for almost a century. But with output surging and crude fetching a 20 percent discount at home, producers want to ship it overseas. BP, Royal Dutch Shell and four others have applied for limited licenses to do just that. Unblocking trade could benefit everyone.
The 1920 Mineral Leasing Act allows producers to sell only tiny amounts of black gold abroad. Even shipments to Canada require a special license – BP has just secured one. At present America exports just 47,000 barrels a day, against imports of over 8 million barrels. Yet production has shot up 32 percent since 2008.
Coffey to go
By Chris Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Greg Coffey’s retirement at 41 from Moore Capital marks the end of the big personality era in hedge funds. The macro trader’s success was based on drive, personality and talent, plus the usual hedge fund ingredients – luck, leverage and high management and performance fees. His luck ran out at GLG Partners when the Lehman crisis hammered his illiquid positions. Clearly, something else has gone at Moore Capital.
China’s mild slowdown dims hope for big stimulus
By Wei Gu
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
At 7.4 percent, China’s third-quarter GDP growth rate was the lowest for three years. But it looks like the worst of the recent de-acceleration is over.
Latest attempt to find Libor victim: Main Street
By Agnes T. Crane The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
The Libor scandal is still in search of victims. Now a group of U.S. homeowners has accused 12 banks of booking illicit profit from nudging the London Interbank Offered Rate benchmark higher. Bringing Main Street into the affair could add to political pressure for tougher regulation. Even so, it’s hard to see how more than a tiny amount of harm was done.
First off, manipulation of Libor – if it happened at all – was subtle. The suit filed by four Alabama borrowers asserts that for years, six-month Libor tended to be artificially high on the first day of the month when many adjustable-rate mortgage interest payments reset. In the worst period, from August 2007 to February 2009, the discrepancy may have been 0.075 percentage point or even more, according to the lawsuit.
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Breakingviews: Rosneft's Russian rouletteOct. 24 - Oil is vital to the Russian economy and Rosneft is taking a gamble that it won't stifle competition and its own effectiveness by taking over TNK-BP's oil fields, say Breakingviews.Video
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Breakingviews: Parochial international debateOct 23 - The final presidential showdown was notable more for sins of omission than commission: Europe, the global financial system, trade and the new Chinese leadership took a backseat to bayonets and the Middle East.Video
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