Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Economist’

Polish entrepreneurs in Britain are unfazed by the prospect of Brexit

Posted by hkarner - 2. September 2016

Date: 01-09-2016
Source: The Economist
Feelings were hurt by the Leave campaign, but new opportunities beckon

TALKING behind his grocery shop’s generously stocked sausage-counter, a gloomy Daniel Przybylowski says it is time to sell up. Yet those who voted for Brexit on June 23rd in the hope of reducing the number of European migrants may be disappointed to learn that Mr Przybylowski is not going home to Poland as a consequence of the referendum. Far from it: it is the business rates that have defeated him. He hopes to recoup all his investment, at least, and is determined to start another business—in Britain.

Mr Przybylowski typifies the attitude of the 90,000 or so Polish entrepreneurs and self-employed who make up a growing share of Britain’s economy. Last year Poles overtook Indians as the largest foreign-born group in the country, at an estimated 831,000. Consequently they became a target for hostility towards EU migration during, and after, the referendum campaign. In Hammersmith, a west London suburb down the road from Mr Przybylowski’s shop, a Polish cultural centre was daubed with racist graffiti following the vote. On August 27th a Polish man was beaten to death outside a takeaway restaurant in Harlow, Essex; police are treating the murder as a “potential hate crime”. In the feverish aftermath of the referendum vote there was talk among Poles as to how many might feel forced to leave. But after two months of political inaction, the atmosphere has changed. Feelings were hurt by the Leave campaign, but Polish entrepreneurs are now weighing up new opportunities rather than dwelling on Brexit’s risks. Den Rest des Beitrags lesen »

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Grim employment prospects for young people around the world

Posted by hkarner - 28. August 2016

Date: 27-08-2016
Source: The Economist

Youth UnemploymentA NEW report from the International Labour Organisation has provided a snapshot of job prospects for young people around the world. Things have worsened this year following a period of slight improvement. Unemployment among 15-24-year-olds has risen to 13.1% in 2016 and is close to its historic peak of 2013. The rate is highest in Arab countries, at 30.6%, and lowest in East Asia, at 10.7%. The report also finds that even where jobs are available to young people, they often fail to provide secure incomes.

Youth unemployment is typically lower in poorer countries than in rich ones. This is because workers in less-developed countries have to take work just to make ends meet and, with few choices, end up in low-paid jobs with no security. Even in richer countries, the young often end up in less-secure employment than the older generation. In 2015, 25% of young workers in OECD countries were in temporary jobs and 26% were employed part-time, often on an involuntary basis. Those rates are more than twice as high as for workers aged 25 to 54. Den Rest des Beitrags lesen »

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Why markets obsess over bond yields

Posted by hkarner - 26. August 2016

Date: 25-08-2016
Source: The Economist

IN 1993 James Carville, an American political operative, quipped that should reincarnation turn out to be real, “I want to come back as the bond market. You can intimidate everyone.” Today, bond markets are more powerful than ever. Traders, politicians and financial journalists keep constant watch over bond yields as they wobble up and down. And when a missed budget forecast in Portugal sends its bond yields soaring, or unexpected murmurs from a Federal Reserve governor cause Treasury yields to tumble, the reaction from all three can be immediate and dramatic. But just what is a bond yield and why does anyone care how it moves?

A bond is a financial security which allows a government or firm to borrow money from markets. Bonds come in many different varieties. The most common sort entitle the owner to occasional interest payments and the return of the principal on a specified maturity date. The governments or firms issuing the bonds typically auction them off, and buyer appetite determines the interest rate the bond carries. Den Rest des Beitrags lesen »

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Speed-bumpy start: IEX

Posted by hkarner - 20. August 2016

Date: 19-08-2016
Source: The Economist

IEX trading volueA new American stock exchange opens today, having been approved in June by the Securities and Exchange Commission. In existing markets speed is of the essence, but IEX deliberately slows transactions by routing signals through 61km of optical fibre, adding a “speed bump” of 350 millionths of a second. That prevents high-frequency traders from extracting risk-free profits at the expense of slower investors. Mutual funds, pension funds and retail investors see IEX as a fair-market crusader; critics such as Citadel, a financial-services outfit, say that slowing trades violates the SEC’s long-held tenet that they should happen wholly unimpeded. But IEX is gathering pace: already operating as a private venue, it accounts for about 1.5% of daily trading volume in American equities. NASDAQ, another exchange, is seeking approval for a new order type that matches quotes based first on price and then on arrival time. It’s an idea whose time has come.

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The case for delaying the start of the Brexit process

Posted by hkarner - 20. August 2016

Date: 18-08-2016
Source: The Economist
Subject: The Brexit trigger: To pull or not to pull

May mountain climbingMay with a mountain to climb

THERESA MAY knew from the moment she became prime minister last month that Brexit would be her biggest test. Nobody has ever before tried to disentangle a large and sophisticated economy like Britain’s from as intricate and regulated a body as the European Union, after it has been a member for 43 years. Before the June referendum, David Cameron’s government noted that Brexit would be the start, not the end, of a process and warned that it could last up to a decade.

The administrative challenge alone is vast. Mrs May has passed much of it to pro-Brexit ministers known, inevitably, as the three Brexiteers: David Davis, Liam Fox and Boris Johnson. Just setting up a new Department for Exiting the EU under Mr Davis is taking time. The department is now 150-strong, but it will have to expand to more like 400 (including officials in Brussels). Mr Fox’s Department for International Trade needs 1,000 staff, including hundreds of trade negotiators. Relations between the two, and with Mr Johnson’s Foreign Office, can be strained. Already Mr Fox and Mr Johnson have clashed over who runs economic diplomacy. Mr Fox and Mr Davis are hardly best friends. Den Rest des Beitrags lesen »

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An Inheritance of Incompetence

Posted by hkarner - 16. August 2016

By John Mauldin, August 13, 2016mauldin 

– Dean Acheson

“Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”

– John Maynard Keynes

I don’t often agree with Keynes, but he is the most quotable of all major economists. The above sentence was one of his best. He was right about defunct economists. Of course, he was talking about all those other defunct economists who no longer kept up with his new and improved way of thinking about all things economic. Now his quip comes back to haunt his legacy and his followers.

Theories and practices often outlive their usefulness in our fast-changing world. So do institutions, including those chartered at the 1944 Bretton Woods Conference. In today’s letter we are going to look closely at the International Monetary Fund and a scathing report from its own internal auditors. For those of us who have been following the IMF for decades, the report is not all that surprising.

My real purpose here is not to point the finger at the IMF but to point out where its problems are part and parcel of a greater problem in global institutions. During the next global recession we are going to see a continuation of the same approaches to crisis solving that we’ve seen in the past, based on the theories of defunct economists mixed with personal and institutional biases. Their prescription is a witches’ brew that we will be told is good for us but that will in fact ensure that those of us least able to cope will bear the brunt of its impact. Den Rest des Beitrags lesen »

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Migration within the EU: Europe’s scapegoat

Posted by hkarner - 13. August 2016

Date: 11-08-2016
Source: The Economist

The EU’s cherished free-movement rights are less secure than they seem

THERE is not a lot to do on the outskirts of Targu Lapus, a small town in northern Romania. But Catalin Konolos, a construction worker, is rarely home, so he is making the most of a mid-afternoon game of cards before he returns to Luton, a town north of London, for another spell on the building sites. Mr Konolos and his brother, Viorel, sitting beside him, typically toil for four months at a time in Britain before taking a break at home. They work for other Romanians, and have little interest in integrating. Neither speaks English.

The brothers embody the European Union’s free-movement rights. They, and millions like them, are filling labour needs abroad and improving their wages by many multiples. Much of that income finds its way to Romania, in the form of remittances to family members or via consumption (often of the conspicuous kind, as the flash cars in nearby villages testify). Den Rest des Beitrags lesen »

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What if France voted to leave the European Union?

Posted by hkarner - 7. August 2016

Date: 04-08-2016
Source: The Economist: Charlemagne
Subject: Au revoir, l’Europe

BARELY a year into his second presidency, Nicolas Sarkozy looked out from the steps of the Élysée and admitted defeat. The referendum had been lost. The European Union flag still fluttering behind him, the president said that he regretted that France, a founding member of the EU, would now have to leave it. Pollsters were flabbergasted. Mr Sarkozy put on a brave face. “Eternal France”, he said, trying to sound like de Gaulle, had endured far worse in its long and glorious history. Its best days lay ahead. And non, the president had no intention of resigning.

His optimism was unusual. Mr Sarkozy had won another spell in the Élysée by trafficking in fear (borrowing several ideas from Donald Trump’s almost-successful campaign for the White House). In the primary for France’s centre-right Republicans, held in November 2016, Mr Sarkozy had focused relentlessly on the country’s année de cauchemars (“year of nightmares”), blaming weak leaders and bumbling Eurocrats for failing to prevent a bloody series of terrorist attacks. In this febrile atmosphere Mr Sarkozy’s rival, the genteel Alain Juppé, didn’t stand a chance. Den Rest des Beitrags lesen »

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Britain and Europe: The start of the break-up

Posted by hkarner - 5. August 2016

Date: 04-08-2016
Source: The Economist

What do other countries make of Brexit?

MUCH of the European Union is still smarting from Britain’s vote to leave the club on June 23rd, according to data released on August 4th by Ipsos Mori, a pollster. In the nine member states surveyed, 55% think an exit vote was a bad choice for Britain, while 58% think it was also bad for the EU as a whole. Outside the Union feelings are slightly more sanguine. Only 35% of those polled in seven countries with big economies think Britain made a mistake.

Brexit FeelingsOf all the countries surveyed, Russia is by far the happiest. Only 10% believe it was the wrong decision for Britain. By contrast, the Swedes are the most overwrought: 68% think it will be bad for Europe. These two extreme reactions may well be connected. Swedes fear Brexit could lead to the dissolution of the EU. This would leave them even more exposed to the whims of the Kremlin, which routinely makes aggressive gestures in their direction, such as sending submarines into Swedish waters. By contrast Russia is delighted by the prospect of a weaker Europe.

Another reason the Swedes may be anguished is trade. Britain is their fourth-biggest trading partner. As with the other countries surveyed, that factor seems to sway respondents’ feelings about Brexit. Broadly speaking, the more a country exports to Britain, the more upset are its citizens by the split (see chart).

In almost every country surveyed the better educated are more likely to think Brexit was unwise. On average 42% of people who did not finish secondary school thought it was the wrong choice, compared with 58% of those who had been to university. Moving up the income ladder also tends to lower the likelihood of backing Brexit.

Slightly more Europeans want the EU to be tough with Britain (28%) than those who want a softer approach (26%). France is harshest: 39% of its people want Britain to be clobbered. Britons, unsurprisingly, are the most eager for generous terms.

Britons diverge from continental thinking in another regard. They are more likely than those in any other EU state to believe their departure will spur others to leave. Fully 64% of them also reckon that Brexit will leave the EU economy weaker, the joint-highest estimate among all the countries asked. Breaking up a relationship is never easy, but when one side thinks it is God’s gift to political unions it becomes tougher still.

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Technology in China: China’s tech trailblazers

Posted by hkarner - 5. August 2016

Date: 04-08-2016
Source: The Economist

GOOGLE left. Facebook is blocked. Amazon is struggling to make headway. And if further proof were needed that China’s tech market is a world apart, this week seemed to provide conclusive evidence. Uber, a ride-hailing service that is the world’s most valuable startup, decided to sell its local unit to Didi Chuxing, a Chinese rival. Its China dream, like those of so many before, is dead.

For many, the lessons of this latest capitulation are clear. China is a sort of technological Galapagos island, a distinct and isolated environment in which local firms flourish. Chinese firms are protected from external competition by government regulation and the Great Firewall. And that protection means that they need not innovate but can thrive by copying business models developed in the West. In short, China is closed, its firms are cosseted and their talent is for mimicry. Den Rest des Beitrags lesen »

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