Category Archives: Politics

Bursting China’s Property Bubble

China’s growth has been "unbalanced, uncoordinated, and unsustainable," its outgoing premier Wen Jiabao admits. And popular resentment is rising. So recent actions by China’s new leadership beg the question whether it will try to satisfy the rising expectations of its huge population, and prevent the growing polarisation of wealth from leading to open revolt, by swapping breakneck growth for greater social equity.
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Romney Turns on the Too-Big-To-Fail Banks

Back in April, I suggested that calling for a break-up of the too-big-to-fail banks could be a winner for either presidential candidate, now that campaigning for a break-up of the big banks has gone mainstream. It's intriguing therefore, that Romney turned on the TBTF banks in the first presidential debate.
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Lets hope grain prices are set to collapse, as US crop data suggests

Anyone who bought into the recent grain bubble and sent the price of corn soaring past its 2011 high - on the back of the worst drought in the US in more than 50 years - must be a little consternated. The US crop doesn’t look its going to collapse as was expected.
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Spaniards and Italians Will Never Accept Greece’s Fate

The markets have been transfixed by the ECB’s plan for unlimited purchases of bonds - or outright monetary transactions, as they are to be called. But the ECB’s implicit deal with Germany, to link any bond purchases to the European rescue funds’ strict fiscal conditions, has tied its hands. Saving the euro now depends on proud nations like Spain and Italy being willing to kowtow to their new masters in Berlin. Judging by the mood of the Spanish people, it’s more likely that Spain will call Germany’s bluff and threaten to leave the euro forthwith, unless it is given unconditional support.
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Germany’s Homemade Energy Crisis Threatens its Industrial Base

Unable to make up for the shortfall in electricity as it phases out nuclear power and boosts its dependency on wind and solar power, Germany now faces an energy crisis of its own making. It will only be a matter of time before the nuclear phase and its ‘energy revolution’ are abandoned, because jobs are now clearly threatened.
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Discreetly, the Financial World Prepares for Grexit, as Global Recession Looms

There’s an air of unreality in the financial markets right now. Discreetly, behind the scenes, various market actors are preparing for a collapse in the euro, even though no-one wants to publicly admit that the Germans are about to pull the plug on Greece, and probably the whole shebang. Similarly, investors are putting off reckoning with the day of reckoning by purposefully ignoring the signs of an impending global recession – in the belief that central banks will bail them out.
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Is Spain’s Check in the Mail?

It’s a big mystery where Spain will get the money for its so-called bailout, given how urgently its banks need a life supporting transfusion. The European Financial Stability Facility or the European Stability Mechanism are mooted, but no-one yet knows which Spain will have to rely on. My suspicion is that the check is “in the mail.”
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Is a Global Aviation Trade War About to Break Out?

The EU’s emissions trading scheme could trigger a full scale global aviation trade war within weeks. A total of 30 countries which signed the Moscow Joint Declaration in February – including Russia, India, and the US - have threatened to retaliate. But China has upped the stakes by warning that it is prepared to impound European aircraft, if the EU punishes Chinese airlines for non-compliance, according to Reuters.
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Christine Lagarde’s Leona Helmsley Moment

Displaying a shocking lack of empathy for ordinary suffering Greeks, Christine Lagarde, the managing director of the IMF, says she “thinks more of the little kids from a school in a little village in Niger, because they need even more help than the people of Athens,” in an interview in the Guardian. Ordinary Greeks can [...]
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Germany’s Best Option is to Leave the Euro, Says JPMorgan

As the cost of a euro-zone break-up continues to rise exponentially, JPMorgan has concluded that Germany’s best option is to leave the euro. With German taxpayers outraged by the dangerous rise in credit risk resulting from a plethora of backdoor bail-out schemes, carrying on regardless now looks politically suicidal for Chancellor Merkel in the wake her party’s worst state election result in Nordrhein Westfallen since the second world war.
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