Föhrenbergkreis Finanzwirtschaft

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Archive for 1. Juni 2019

The trade war and finance

Posted by hkarner - 1. Juni 2019

Date: 30-05-2019
Source: The Economist

Alibaba’s experience shows how relations between America and China have soured

If you want to understand how cooling relations between America and China are changing global business, a good place to look is Alibaba, an internet giant. It is China’s most admired and valuable firm, worth a cool $400bn. For the past five years it has also been a hybrid that straddles the superpowers, because its shares are listed only in America. Now it is considering a $20bn flotation in Hong Kong, according to Bloomberg. The backdrop is a rising risk of American moves against Chinese interests and the growing clout of Hong Kong’s capital markets. A listing there would be a sign that Chinese firms are taking out insurance to lower their dependence on Western finance.

The world looked very different back in 2014, when Alibaba first went public. Although based in Hangzhou and with 91% of its sales in mainland China, it chose to list its shares in New York, home to the world’s deepest capital markets, which also permitted its complex voting structure. Wall Street banks underwrote the offering. Alibaba’s boss, Jack Ma, already a star in China, was toasted in Manhattan high society as the kind of freewheeling capitalist Americans could do business with. He was not alone: 174 other Chinese firms have their main listing in America today, with a total market value of $394bn, including tech stars like Baidu and jd.com. A recent notable arrival is Luckin Coffee, a Starbucks wannabe, which floated for $4bn in May. Den Rest des Beitrags lesen »

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Britain’s constitutional time-bomb

Posted by hkarner - 1. Juni 2019

Date: 30-05-2019
Source: The Economist

Brexit is already a political crisis. Sooner or later it will become a constitutional crisis, too

Britons pride themselves on their “unwritten” constitution. America, France and Germany need rules to be set down in black and white. In the Mother of Parliaments democracy has blossomed for over 300 years without coups, revolution or civil war, Irish independence aside. Its politics are governed by an evolving set of traditions, conventions and laws under a sovereign Parliament. Thanks to its stability, Britain convinced the world that its style of government was built on solid foundations laid down over centuries of commonsense adaptation.

That view is out of date. The remorseless logic of Brexit has shoved a stick of constitutional dynamite beneath the United Kingdom—and, given the difficulty of constitutional reform in a country at loggerheads, there is little that can be done to defuse it. The chances are high that Britons will soon discover that the constitution they counted on to be adaptable and robust can in fact amplify chaos, division and the threat to the union. Den Rest des Beitrags lesen »

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When picking leaders, the EU should put skill before box-ticking

Posted by hkarner - 1. Juni 2019

Date: 30-05-2019
Source: The Economist

Surely Europe can find a better president than Manfred Weber?

Seen from afar, Europe is shrinking and ineffective. In Germany Angela Merkel’s chancellorship is winding down. Domestic woes bedevil the French president, Emmanuel Macron. Britain is leaving the eu, which is divided between east and west, north and south, liberals and authoritarians. The big centre-right and centre-left blocks are struggling, as politics fragments across the continent. If America or China wants to speak to Europe, it is less clear than ever whom they should call.

The European Parliament elections have brought yet more fragmentation, with the two main groups losing seats and their joint majority in the eu’s legislature. Liberals, Greens and right-wing populists gained. The union today resembles a patchwork of ideological and regional tendencies. That makes the task of parcelling out its big jobs extra-fiddly. There are four vacancies: the presidencies of the European Commission (the eu’s executive), the European Council (its senate-like body of national leaders) and the European Central Bank (ecb) as well as the “high representative” for the eu’s foreign and security policy. A convention of 2014 says the commission job should go to the “lead candidate” of the largest group in the parliament. Under an older precedent, those appointed to the top positions are meant to include representatives of all corners of the continent and of the big political families. Different permutations are lined up until, like a Rubik’s cube, everything slots into place. Den Rest des Beitrags lesen »

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How central banks should prepare for the next recession

Posted by hkarner - 1. Juni 2019

Date: 30-05-2019
Source: The Economist

They must change their targets and find new tools—while avoiding a populist takeover

It has been a decade since America’s latest recession, and it has taken that long for the Federal Reserve to ask itself whether it is ready for the next one. On June 4th officials and scholars will gather in Chicago to debate how monetary policy should work in a world of low interest rates. The benchmark rate is 2.25-2.5%, which gives the Fed little room to cut before hitting zero—and less than half as much as it has needed in past downturns. As if to remind policymakers that rock-bottom rates are here to stay, the ten-year Treasury yield fell below 2.3% this week. Other central banks, many of which preside over still lower rates and weaker economies, are looking to the Fed for inspiration. Den Rest des Beitrags lesen »

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Jeremy Corbyn is increasingly isolated in his own party

Posted by hkarner - 1. Juni 2019

Date: 30-05-2019
Source: The Economist: Bagehot

The leader of the Labour Party is in his weakest position yet

H.l. mencken is said to have defined a politician as “an animal that can sit on the fence and yet keep both ears on the ground”. By that definition Jeremy Corbyn is failing in his vocation. The European elections bulldozed Mr Corbyn’s fence by giving the Labour Party just 14% of the vote in the country as a whole and 9% in its former stronghold of Scotland. They unleashed a furious debate that was ostensibly about the party’s stance on Europe in particular but also about Mr Corbyn’s leadership in general.

Senior figures such as Tom Watson, the deputy leader, and Emily Thornberry, the shadow foreign secretary, were quick to blame Labour’s dismal performance on its refusal to offer wholehearted support for holding a second referendum and staying in the European Union. Others, particularly from the party’s working-class wing, were equally quick to push back. Gloria De Piero, mp for Ashfield, urged her colleagues not to let a single issue—Brexit—“wreck” the party. Len McCluskey, head of the Unite trade union, accused supporters of a second referendum of trying to launch a coup against the leader. Mr Corbyn did his best to rebuild his fence and climb back on it. He promised that “we are ready to support a public vote on any deal”. But he stopped short of offering Remainers what they want: unconditional backing for a second referendum whether or not there is an eu deal on the table, and a firm commitment to turning Labour into a Remain party. Den Rest des Beitrags lesen »

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