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Posts Tagged ‘WSJ’

The Next Innovation in Shipping: Wind Power

Posted by hkarner - 16. März 2017

Date: 15-03-2017
Source: The Wall Street Journal

Maersk launches trial run of tanker using rotating cylinders that can function as high-tech sails

A ferry operated by Dutch shipping firm Bore with two rotor sails similar to the ones Maersk will test.

More than a century after shifting away from wind power, the shipping industry is looking at ways to harness ocean breezes once again—this time to reduce reliance on fuel.

The latest effort by Denmark’s Maersk Tankers uses rotating cylinders nearly 100 feet tall that can function as high-tech sails. The company, a unit of AP Moeller Maersk A/S, said Tuesday it will begin testing on one of its tankers and could add the technology to as many as four dozen ships.

Industry executives said previous efforts to harness the wind didn’t catch on with shipping operators as either the cost of such technologies was too high or tests didn’t yield the expected fuel savings. However, the lightweight and relatively cheap rotating sails show more promise, they said.

The cylinders are made with lightweight composite materials by Finland-based Norsepower Oy Ltd., and cost €1 million to €2 million ($1.1 million to $2.1 million) to fit to a ship, depending on its size. The design takes advantage of the so-called Magnus effect, in which a spinning object drags air faster around one side, creating a difference in pressure that moves it in the direction of the lower-pressure side.

The sails are already in use on a ferry operated by Dutch shipping firm Bore Ltd. and are expected to be installed on a Viking Line cruise ship. Maersk’s trial run of the technology is a joint venture with Norsepower, Royal Dutch Shell and the U.K.’s Energy Technologies Institute, an industry group focused on alternative-fuel use. Den Rest des Beitrags lesen »

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Brexit Comes With Price Shock at Checkout

Posted by hkarner - 16. März 2017

Date: 15-03-2017
Source: The Wall Street Journal

Weak pound boosts cost of imported goods, prompting retailers to raise prices

LONDON—The U.K. is expected to kick off talks this month over how it will exit the European Union, a process that could take two years. But for many British shoppers, Brexit already means one thing: higher prices.

The sharp drop in the pound following Britain’s June vote to leave the EU has boosted the cost of imported goods as well as British-made products containing foreign ingredients or parts. Some companies have resisted passing on those higher costs to consumers, or have been protected by currency hedges. But in the more than nine months since the vote, many others have been raising prices. Den Rest des Beitrags lesen »

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Smaller German Firms Rethink Foreign Investments

Posted by hkarner - 15. März 2017

Date: 14-03-2017
Source: The Wall Street Journal

‘Mittelstand’ companies see challenges with political and economic instability in core markets

Bottling-equipment maker Krones is rethinking its overseas plans because of rising uncertainty.

Krones AG, a German packaging and bottling-machine manufacturer, planned to invest up to €20 million ($21.1 million) abroad over the next two years, with a strong focus on China, the U.S. and sub-Saharan Africa.

However, the increased amount of global uncertainty has led Krones to reconsider.

“Firms like us always struggle with making decisions for overseas investments,” said Klaus Gerlach, head of international operations at Krones. “In times like these, this is even more so the case,” he said.

A mixture of political and economic instability in core international markets present a challenge for Germany’s “Mittelstand” firms, or small and medium-size companies. Britain’s Brexit vote, tighter capital controls in China and expected changes to U.S. trade policy are forcing executives of these companies to revise their plans. Some are simply putting investment decisions on hold until further notice. Den Rest des Beitrags lesen »

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European East-West Divide Widens Ahead of Brexit

Posted by hkarner - 12. März 2017

Date: 11-03-2017
Source: The Wall Street Journal

EU leaders are debating how to proceed with deeper political and economic integration

BRUSSELS—The divide between the European Union’s more affluent western nations and its less well-off members to the east deepened on Friday, as their leaders wrangled over the future of the bloc after the U.K. exits.

The last day of the summit of EU leaders in Brussels was intended primarily to focus on preparations for celebrations later this month marking the 60th anniversary of the bloc’s founding Treaty of Rome.

Instead, it became embroiled in debate over whether the world’s biggest trading bloc should continue on its path of deep political and economic integration across the Continent or moderate its ambitions. Den Rest des Beitrags lesen »

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Let’s Be Real: Bitcoin is a Useless Investment

Posted by hkarner - 12. März 2017

Date: 11-03-2017
Source: The Wall Street Journal

The Winklevoss twins are an unlikely source of philosophical musings about the nature of money. But the rejection by U.S. regulators of their plan for an exchange-traded product holding bitcoin is a good time to ask why bitcoin might have any value, and if it does whether it makes sense to hoard it.

Bitcoin as an investment suffers from a basic logic problem formulated at the time of Shakespeare: Gresham’s Law. Only someone who thinks Bitcoin has value would ever hold it. But if a person holds both bitcoin and a government-controlled currency – say dollars – then she would surely choose to spend the dollars. As Sir Thomas Gresham formulated it, “bad money drives out good.” The good currency is hoarded, and the bad money spent.

Exactly this has happened with bitcoin. While the value of transactions has been rising, and the digital currency’s now accepted by a handful of large retailers, the vast bulk of bitcoins are hoarded. Why spend the more valuable money? Den Rest des Beitrags lesen »

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New Balkan Instability Rattles EU

Posted by hkarner - 10. März 2017

Date: 10-03-2017
Source: The Wall Street Journal

Growing concerns push region to top of bloc’s summit agenda

Fears are growing in Europe that political stability is unraveling in the western Balkans after years of quiet progress.

Even a year ago, the Balkans, the spark for so many past European conflicts, seemed headed toward a longstanding European Union dream: reformist governments deepening regional cooperation and heading toward membership in the bloc.

Now, with stepped-up Russian interference and the prospect of U.S. disengagement under the Trump administration, the Balkans are again setting off alarms.

A political crisis in Macedonia that some fear could revive ethnic conflict, renewed flare-ups between Serbia and Kosovo, and allegations of a Kremlin-sponsored coup attempt in Montenegro have European officials worrying about what European Council President Donald Tusk on Wednesday called a “destabilization of the region, both from within and from outside forces.” Den Rest des Beitrags lesen »

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U.K.’s Brexit Walkout Threat Leaves EU Unmoved

Posted by hkarner - 10. März 2017

Date: 09-03-2017
Source: The Wall Street Journal By SIMON NIXON

EU insists it won’t discuss trade until divorce is done, putting Theresa May at risk of having to carry out her vow to walk away

Prime Minister Theresa May

With the U.K. most likely just days away from formally triggering the Brexit process, Downing Street is rattled. Its anxiety has little to do with the continuing parliamentary debates over the bill to allow the government to invoke Article 50 of the Lisbon Treaty: Despite two defeats in the House of Lords, senior officials are confident that Article 50 will be triggered as planned by the end of this month. Instead, what is really unnerving Prime Minister Theresa May’s government is the very real possibility that the Brexit negotiations will collapse before they have properly begun, leaving the U.K. to crash out of the EU in 2019 with no deal.

If the European Union continues to insist that it won’t discuss a new trade relationship until the U.K. agrees to an expensive divorce deal, Mrs. May really will walk away, British officials say. The U.K. government is adamant that both deals—divorce and trade—must be negotiated in parallel.

Downing Street has grounds for being rattled, because there is little sign the EU has any intention of giving way. True, the U.K. has some allies. Some senior figures in the German finance ministry, for example, believe the EU should, after a suitable delay, start discussing future trade ties with the U.K. But in the German Chancellery, which calls the shots and appears to have prepared for Brexit almost as intensively as the British government, officials are sticking to the EU script. There is frustration at what some in Berlin see as “deliberate misconceptions” being promoted by the U.K. government, including playing down the complexity of the divorce negotiations. Den Rest des Beitrags lesen »

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As Eurozone Economy Strengthens, Divisions Within ECB Re-Emerge

Posted by hkarner - 9. März 2017

Date: 08-03-2017
Source: The Wall Street Journal

Mixed messages reflect the difficulties of crafting a single monetary policy for 19 nations

FRANKFURT—Europe’s economy is accelerating, sparking optimism during a year of contentious politics but also rekindling a war of words between the eurozone’s top monetary officials.

In one camp is European Central Bank President Mario Draghi, who wants to avoid dramatic moves with fraught elections looming in the Netherlands, France and Germany. In the other is German Bundesbank President Jens Weidmann, an ardent critic of the ECB’s easy-money policies, who is concerned the dosage of stimulus is too strong for a healing economy.

The two sides closed ranks last year when the bloc flirted with deflation and the ECB came under attack from senior German politicians. But divisions are re-emerging as the bloc’s €10 trillion economy strengthens.

In a rare turn, the eurozone is currently the fastest-growing major advanced economy, according to financial-data firm IHS Markit, and its inflation rate has rebounded to 2%, slightly above the ECB’s target rate. Den Rest des Beitrags lesen »

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Central Banks Ratchet Up Reserves

Posted by hkarner - 9. März 2017

Date: 08-03-2017
Source: The Wall Street Journal

‘External reserves are a form of insurance for sovereigns against crisis and defaults,’ says an analyst

In emerging economies, reserve levels have stabilized after two years of big declines.

Central banks around the world are increasing foreign-currency reserves, highlighting the fragile underpinnings of the global economic recovery despite a bullish mood in financial markets.

In emerging economies, reserve levels have stabilized after two years of big declines. Two-thirds of the 30 biggest emerging markets increased reserves last year, according to Fitch Ratings. Foreign-currency holdings in Israel, Vietnam and the Czech Republic recently reached new records, their central banks have reported.

China’s foreign reserves rose by $6.9 billion in February compared with the previous month, rebounding for the first time in eight months and pushing the reserve total back above the $3 trillion mark. Den Rest des Beitrags lesen »

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Everything the Market Thinks About Inflation Might Be Wrong

Posted by hkarner - 8. März 2017

Date: 07-03-2017
Source: The Wall Street Journal

How much money a central bank prints may be less important to inflation than commodity prices

No number is more important for investors right now than inflation. The belief that it will continue to rise underpins the recent rally in financial stocks and the slump in government bonds. It is key to commodities, currencies and more.

Yet investors are in a quandary: Theories used to forecast it just don’t seem to work.

“I don’t think we know what inflation is. It takes so many different forms,” said David Lafferty, chief strategist at Natixis Global Asset Management, which manages about $900 billion. Inflation is this year’s “wild card,” Mr. Lafferty said.

For decades, the assumption has been that central banks have the ultimate handle on inflation. When inflation goes up, they raise interest rates to quell it; when it goes down, they lower the rates.

Investors care a lot, because bond yields broadly track interest rates. They need to predict inflation levels as well as how central banks would react. Den Rest des Beitrags lesen »

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