Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘WSJ’

Markets’ Panic Incongruent With Economic Reality—For Now

Posted by hkarner - 21. Januar 2016

Date: 21-01-2016
Source: The Wall Street Journal

Stock selloff could presage recession (unlikely), trigger a recession (unlikely) or indicate a lack of faith in policy makers (plausible)

Financial markets are in a panic over a sharp economic downturn that has yet to make an appearance—and may never.

Many of the world’s biggest stock markets, including the U.K.’s and Japan’s, are now in bear-market territory, that is off 20% or more from their peak. With its 1.6% slump yesterday, the Dow Jones Industrial Average is down 9.5% on the year.

Yet if there’s no sign of similar stress in the broader economy, why pay attention to the financial indexes that, as the old joke goes, have predicted 9 out of the past 5 recessions? There are three possible reasons the market selloff could be cause for concern. Den Rest des Beitrags lesen »

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European Experiment Comes to a Reckoning

Posted by hkarner - 21. Januar 2016

Date: 20-01-2016
Source: The Wall Street Journal By SIMON NIXON

Stagnating growth and multiple crises show member countries’ self-interest trumps the cohesion of the union

A year ago, when the world’s elite last met in Davos, Europe itself appeared to have survived a series of threats to its cohesion.

The launch of the European Central Bank’s quantitative-easing program looked set to underpin a modest recovery. Banks had bulked up on capital. A newly installed European Commission promised steps to deepen the single market, boost investment and reduce red tape.

Today, the survival of the European project looks increasingly precarious.

Two crises—Greece’s brinkmanship that almost culminated in the country’s ejection from the eurozone and the turmoil surrounding the surge of migrants—have exposed deep flaws in the governance of some member states, not least that of Greece. Den Rest des Beitrags lesen »

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How Iran Could Quickly Send Oil Prices Even Lower

Posted by hkarner - 20. Januar 2016

Date: 20-01-2016
Source: The Wall Street Journal

The impact of Iran’s return to the global oil market isn’t just about production

Iran has around 30 million to 50 million barrels of oil and condensate to unleash on the world market immediately, according to analyst estimates.

Iran torpedoed oil prices over the weekend. The question is whether the market can turn around in time to avoid serious damage.

Already hovering below the psychologically significant $30-a-barrel level after Friday’s selloff, the all-clear from the International Atomic Energy Agency on Saturday opened the door for Iran to flood the market with even more crude.

Oil prices responded by falling 3.3% Tuesday to a new 12-year low of $28.46 in New York, while global benchmark Brent hovered near $28.80.

The selloff might seem like an overreaction. After all, Iran’s full-re-entry into the world energy market upon the lifting of sanctions has been expected since last summer. Furthermore, oil production can’t simply be switched on and off, particularly after years of underinvestment. Den Rest des Beitrags lesen »

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Welcome to the Crisis Economy, Where Tumult Re

Posted by hkarner - 19. Januar 2016

Date: 19-01-2016
Source: The Wall Street Journal

Be it geopolitical tension, terror threats or faltering markets, there always seems to be something testing growth

Myriad sources of anxiety are roiling global financial markets and political capitals: a weakening Chinese economy; collapsing oil prices; escalating tension in the Middle East that has spawned a refugee crisis in Europe; the possibility of financial dislocation as U.S. monetary policy tightens.

As politicians, bankers and business leaders gather in Davos this week for the annual gathering of the World Economic Forum, they face not a single upheaval—the eurozone crisis of 2010, say, or Russia’s 2014 intervention in Ukraine—but numerous political and economic hotspots, many of which have the potential to undermine already-anemic growth.

The earthquake that began with the 2008 financial crisis in the U.S. and that later rumbled through Europe has finally shaken China, in turn crippling countries and companies from Africa to South America that prospered feeding Chinese demand. As a result, the early weeks of 2016 have been marked by paroxysms in financial, energy and commodity markets.

“What the three crises have in common is the end of the global credit expansion,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York. Den Rest des Beitrags lesen »

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Is Bitcoin Breaking Up?

Posted by hkarner - 19. Januar 2016

Date: 18-01-2016
Source: The Wall Street Journal

Rift widening over how to deal with the size limits within the virtual currency’s ledger of transactions

Bitcoin CCA prominent bitcoin developer has labeled the currency a failed experiment, widening the rift over an arcane but critical technical issue that has divided the community for nearly a year.

“The fundamentals are broken, and whatever happens to the price in the short term, the long-term trend should probably be downwards,” developer Mike Hearn wrote on the blogging platform Medium. “I will no longer be taking part in bitcoin development and have sold all my coins.”

The fight stems from growing congestion on the bitcoin network caused by size limits within the currency’s ledger of transactions. If the limits aren’t raised, the result could be debilitating bottlenecks. But fixing it requires altering a system that has been profitable for those that use heavy computer power to record transactions.

Mr. Hearn has been a vocal proponent for expanding the size limits. The problem is bitcoin is open-source software, so any change has to be approved a majority of the community, and it hasn’t been able to agree.

This isn’t the first time somebody has written bitcoin’s obituary. What is different is this obit was being written by a prominent insider, and it hit a raw nerve in the community. The price of bitcoin, which had been stable for months, dropped sharply, down 20% last week to $358. The price regained some ground over the weekend, and many are still defending the currency in the wake of Mr. Hearn’s comments. Den Rest des Beitrags lesen »

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Italy Versus Germany: Europe’s Latest Fault Line

Posted by hkarner - 19. Januar 2016

Date: 18-01-2016
Source: The Wall Street Journal By SIMON NIXON

Rome’s discontent reflects the view that rules of the EU game are rigged in Berlin’s favor

Renzi ccItalian Prime Minister Matteo Renzi .

Europe is currently riddled with tensions: over Greece; the migration crisis; how to stabilize the eurozone; whether the U.K. will remain a member; whether the new Polish government’s changes to its judiciary and state media are a breach of European standards. To this long list must be added a new one: Italy’s growing rift with the European Commission and Germany over the future direction of the European Union.

In recent weeks, these tensions have boiled over into a public war of words. Rome finds itself increasingly at odds with Brussels and Berlin over a range of issues. They include the eurozone’s fiscal rules and its own fiscal targets, EU gas pipeline policy, Italian state aid for the steel industry and its banks, and how best to strengthen the eurozone.

In matters concerning Europe’s migration crisis, Prime Minister Matteo Renzi’s government and Brussels have clashed over funding for refugee camps in Turkey and Italy’s failure to fingerprint refugees. Mr. Renzi blames German-led austerity for the rise of populist politics across the EU and accuse the commission of being biased toward Berlin. Commission President Jean-Claude Juncker in turn last week criticized Mr. Renzi for attacking Brussels at “every street corner.” Den Rest des Beitrags lesen »

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Europe’s New Medieval Map

Posted by hkarner - 17. Januar 2016

Date: 16-01-2016
Source: The Wall Street Journal By ROBERT D. KAPLAN

As the European Union unravels, the continent is reverting to divisions that go back centuries, writes Robert D. Kaplan

Look at any map of Europe from the Middle Ages or the early modern era, before the Industrial Revolution, and you will be overwhelmed by its dizzying incoherence—all of those empires, kingdoms, confederations, minor states, “upper” this and “lower” that. It is a picture of a radically fractured world. Today’s Europe is, in effect, returning to such a map.
The decades of peace and prosperity, from the 1950s to 2009, when the European Union’s debt crisis began, made the political and economic contours of the continent look simple. There were two coherent blocs for the duration of the Cold War, and they were succeeded by the post-Cold War dream of a united Europe with its single currency. Today, as the European Union suffers one blow after another from within and without, history is reversing course—toward a debilitating complexity, as if the past half-century were just an interregnum before a return to fear and conflict. Den Rest des Beitrags lesen »

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The Secret of Immigrant Genius

Posted by hkarner - 17. Januar 2016

Date: 16-01-2016
Source: The Wall Street Journal

Having your world turned upside down sparks creative thinking

Scan the roster of history’s intellectual and artistic giants, and you quickly notice something remarkable: Many were immigrants or refugees, from Victor Hugo, W.H. Auden and Vladimir Nabokov to Nikolas Tesla, Marie Curie and Sigmund Freud. At the top of this pantheon sits the genius’s genius: Einstein. His “miracle year” of 1905, when he published no fewer than four groundbreaking scientific papers, occurred after he had emigrated from Germany to Switzerland.

Lost in today’s immigration debate is this unavoidable fact: An awful lot of brilliant minds blossomed in alien soil. That is especially true of the U.S., a nation defined by the creative zeal of the newcomer. Today, foreign-born residents account for only 13% of the U.S. population but hold nearly a third of all patents and a quarter of all Nobel Prizes awarded to Americans. Den Rest des Beitrags lesen »

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$10 Oil? Sure, Why Not

Posted by hkarner - 13. Januar 2016

Date: 13-01-2016
Source: The Wall Street Journal

Investment banks have been falling over themselves the past week to call for ever-lower oil prices.

Banks have been throwing out increasingly low numbers as “worst-case scenario” oil prices, though their base-case forecasts typically call for the market to rise from current prices later this year.

Goldman Sachs shocked traders in September with a call for oil to fall as low as $20 a barrel, but that level now seems closer than ever, with WTI dipping below $30 today.

Morgan Stanley joined Goldman on Monday in the $20 club. Unlike Goldman, which based its forecast on growing inventories, Morgan Stanley said that oil could fall to $20 under pressure from a strengthening dollar. Den Rest des Beitrags lesen »

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A British Exit From the EU Would Have Global Consequences

Posted by hkarner - 11. Januar 2016

Date: 11-01-2016
Source: The Wall Street Journal  By SIMON NIXON

There are powerful reasons to believe Britons will ultimately vote to stay in the EU, but the alternative can’t be dismissed as a minor risk.

A British referendum on whether to remain a member of the European Union is the single biggest “known unknown” hanging over the European economy. The vote now seems almost certain to take place this year. Prime Minister David Cameron hopes to achieve a deal at a summit in February on the changes to the relationship that he thinks are necessary to persuade Britons to back continued membership. EU officials say the parameters of the deal are already hammered out. That should pave the way for a referendum either just before or immediately after the summer.

As things stand, bookmakers put the odds on Britons voting to leave the EU at 36%. That is roughly the same probability implicitly assumed by institutional investors, according to a survey by Absolute Strategy Research. There may be powerful reasons to believe that Britons will ultimately vote to remain, particularly when urged to do so by Mr. Cameron. But the possibility of a “Brexit” can hardly be dismissed as a minor risk. Investors should prepare themselves for the consequences. Den Rest des Beitrags lesen »

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