Föhrenbergkreis Finanzwirtschaft

Nach den kristallklaren Aussagen des Föhrenbergkreises zur Finanzwirtschaft aus dem Jahr 1999 gibt es jetzt einen neuen Arbeitskreis zum Thema.

Mit ‘WSJ’ getaggte Beiträge

IMF Warns Inequality Is a Drag on Growth

Geschrieben von hkarner - 14. März 2014

Date: 14-03-2014
Source: The Wall Street Journal

Says Rising Income Inequality Is Weighing on Global Economic Growth

Rich man poor  manWASHINGTON–The world’s top economic institution is sounding the alarm about a growing chasm between rich and poor, warning that rising income inequality is weighing on global economic growth and fueling political instability.

The International Monetary Fund’s latest salvo came Thursday in a top official’s speech and a 67-page paper detailing how the IMF’s 188 member countries can use tax policy and targeted public spending to stem a rising disparity between haves and have-nots.

IMF Managing Director Christine Lagarde has made the issue a high priority for the fund, warning—along with some of the fund’s most powerful shareholders—that inequality is threatening longer-run economic prospects. Last month, Ms. Lagarde said the income gap risked creating “an economy of exclusion, and a wasteland of discarded potential” and rending “the precious fabric that holds our society together.”

The IMF is wading deep into a problem that no less than President Barack Obama and Pope Francis have called a defining issue of our time, and the fund’s potential prescriptions are likely to be a lightning rod for debate. They include raising taxes and redistributing wealth.

“Redistribution can help support growth because it reduces inequality,” David Lipton, the fund’s No. 2 official and a former senior White House aide, said in a speech Thursday at the Peterson Institute for International Economics. “But if misconceived, this trade-off can be very costly.” Den Rest des Beitrags lesen »

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ECB’s Draghi: Strong Euro Pulling Down Euro Zone Inflation

Geschrieben von hkarner - 14. März 2014

Date: 14-03-2014
Source: The Wall Street Journal

Central Bank Concerned That Muted Price Pressures Could Undermine Europe’s Fragile Recovery

European Central Bank President Mario Draghi issued his strongest statement yet that the strong euro is pulling down inflation in the euro zone, making clear that the central bank is concerned that the appreciating euro could undermine the currency bloc’s fragile recovery.

$ € Exchange rate“The strengthening of the effective euro exchange over the past one-and-a-half years has certainly had a significant impact on our low rate of inflation and, given current levels of inflation, is therefore becoming increasingly relevant in our assessment of price stability,” Mr. Draghi said Thursday in a speech in Vienna.

Mr. Draghi’s comments pulled the euro down sharply. The common currency slumped from $1.3910 just before news of the speech was released to $1.3860 within minutes. It was trading around $1.3850 early evening in London. It also rapidly lost ground against the yen. The euro has been on a steady march upward for more a year.

The top euro zone central banker added a powerful voice to increasing concerns among policy makers across the euro zone that the strength of the euro is impacting inflation, which has been well below the central bank’s target of just under 2% for months. That could prompt the ECB to potentially implement measures designed to weaken the common currency.

Euro Falls on Draghi Remarks
As the euro rises, it cheapens the price of imports, thus putting downward pressure on the inflation index.

“The fact that he’s said this is quite a departure from where they’ve been on [euro strength] for almost forever…In the history of the ECB it’s almost unprecedented,” said Lorcan Roche Kelly, an analyst with Agenda Research in Ireland.

The exchange rate is “the single most known factor so far that could trigger ECB action, and a further appreciation would clearly make them consider further action,” Carsten Brzeski, an economist with ING Bank in Brussels, said. Den Rest des Beitrags lesen »

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Bundesbank’s Weidmann: Strong Euro Could Push Inflation Even Lower

Geschrieben von hkarner - 14. März 2014

Date: 13-03-2014
Source: The Wall Street Journal

Drop in Inflation Could Force ECB to Make More Moves to Boost Economy

FRANKFURT—A strong euro could affect the European Central Bank’s outlook for inflation, Germany’s central bank president said Thursday, an indication that the ECB may have to take measures to shore up the region’s fragile recovery should the currency appreciate further.

“The exchange rate is not a target of our monetary policy, but it is one of many variables in the data that influence the prognosis. In this way, an appreciation of the euro could change the inflation outlook,” Jens Weidmann, a member of the ECB’s Governing Council, said, at the euro-zone central bank’s annual news conference on Thursday. He added that it is something the ECB has to take into account.

Mr. Weidmann’s comments are the latest in a chorus of concern this week that the strong euro could put downward pressure on already-low inflation in the euro zone. The euro appreciated further after the ECB’s decision to leave its policy unchanged last week. In a news conference Thursday, ECB President Mario Draghi said the euro’s 9% appreciation against the U.S. dollar since mid-2012 had been “a factor that is affecting in a significant way” the inflation rate, likely responsible for lowering it by almost half a percentage point. Since then, policy makers have expressed their displeasure at the strong euro’s effect on price pressures in the monetary bloc. Den Rest des Beitrags lesen »

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Incredible Shrinking Management Fee

Geschrieben von hkarner - 9. März 2014

Date: 08-03-2014
Source: The Wall Street Journal

Professional portfolio management has long cost too much. If a new company has its way, it could be free.

This past week, WiseBanyan, an online-only investment adviser, publicly launched a service that builds and manages diversified portfolios of exchange-traded funds for nothing. There is no minimum account size; nor is there any fee to sign up, to buy the funds or to hold them (other than the underlying expenses of the funds, averaging less than 0.14% annually).

“We’re attempting to replicate what good financial advisers do for large clients in an automated, low-fee fashion for small clients,” says co-founder Herbert Moore, a former institutional trader who has run an affiliated advisory firm since 2009. It’s much too early to say whether WiseBanyan will succeed; so far, it has signed up hundreds of clients, says Mr. Moore. The company ultimately hopes to make money by charging fees for additional services.

But the new venture poses a fundamental question to every investor: If money can be managed this cheaply, am I getting my money’s worth from my financial adviser? Den Rest des Beitrags lesen »

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Beijing Signals New Worry on Growth

Geschrieben von hkarner - 6. März 2014

Date: 05-03-2014
Source: The Wall Street Journal

Economic Growth Forecast Is Unchanged From Last Year at 7.5%, but Leaders Show New Concern on Reaching Goal

BEIJING—China’s leaders kept the growth target for their giant economy unchanged but signaled that they are more concerned than ever about reaching it, giving themselves the option of letting credit flow freely to keep from falling short.

The suggestion of more lending to buoy growth—despite repeated recent efforts to rein in debt—is the latest sign of government unease that a slipping economy could trigger higher unemployment and corporate failures, aggravating already high social tensions.

For years, China kept a growth target of about 7.5% but actually grew far faster; in the last two years the economy has barely cleared that figure, and many economists have said it would have a tougher time meeting the goal this year as its economy matures and global demand for its exports comes under pressure. That is a troubling trend for the rest of the world, which has increasingly depended on China to fuel the global economy. Den Rest des Beitrags lesen »

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IMF Lagarde: Prolonged Low Inflation May Derail Euro Zone’s Recovery

Geschrieben von hkarner - 5. März 2014

Date: 04-03-2014

Source: The Wall Street Journal

Lagarde CCIMF Chief Says More Monetary Stimulus Needed

A prolonged period of low inflation in the euro zone may derail the currency area’s fragile economic recovery, and must be fought with additional monetary stimulus, International Monetary Fund chief Christine Lagarde said Monday.

Ms. Lagarde, who was speaking at a conference in Bilbao, northern Spain, said that while the European Central Bank already has taken a number of strong measures to help the euro area, “even further accommodative policies and targeted measures are needed to address low, below-target inflation and achieve lasting growth and jobs.”

Annual inflation in the euro zone was 0.8% in February, according to European statistics office Eurostat, well below the ECB’s target of just below 2%. The ECB will meet Thursday to decide on interest rates for the area.

Ms. Lagarde also said that Europe needs to complete its banking union and repair bank balance sheets, to reduce financial fragmentation within the euro area.  Den Rest des Beitrags lesen »

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Ukraine Crisis Roils Global Markets

Geschrieben von hkarner - 4. März 2014

Date: 03-03-2014

Source: The Wall Street Journal

Investors Cut Their Exposure to Stocks as Crisis Escalates

The escalating Ukraine crisis rocked global financial markets Monday, driving up oil prices significantly and sending investors rushing into perceived safe-haven assets such as the yen, while they cut their exposure to stocks. 

Early in European trading, Russian markets saw the heaviest losses after Moscow authorized an increase in the number of troops present in Ukraine’s Crimea region. The Russian ruble hit a record low against the dollar and euro, prompting the Bank of Russia to raise interest rates Monday. The benchmark Micex stock index slumped 12%.

Across the board, emerging market currencies and stock markets came under selling pressure Monday.

Poland’s main stock market fell 3.6% at the open, while its currency, the Polish zloty fell over 0.5% against the euro.

In European government bond markets, the yield on the benchmark 10-year Bund fell 0.04 percentage points to 1.58% while the yield on the corresponding U.K. gilt eased 0.06 percentage points to 2.66%. The yield on Ukraine’s 10-year dollar-denominated bond leapt more than a percentage point higher from Friday’s close to 10.53%. Bond prices and yields move in opposite directions.

“The escalation of Ukraine crisis—with reports that Russia may have invaded Crimea—represents a major shock to sentiment toward risky assets,” said Benoit Anne, head of emerging market strategy at Société Générale in London. Den Rest des Beitrags lesen »

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China Currency Set for International Role, Says ECB Board Member

Geschrieben von hkarner - 26. Februar 2014

Date: 26-02-2014

Source: The Wall Street Journal

Renminbi Could Eventually Rival U.S. Dollar, Says Yves Mersch

China’s renminbi could become a leading international currency, even rivaling the U.S. dollar, if the country opens up its markets and liberalizes its foreign-exchange rules, a European Central Bank Executive Board member said Wednesday.

Speaking at a forum dedicated to the role of the Chinese currency in Luxembourg, Yves Mersch said that the Chinese currency remains in the early stages of its internationalization, but said the process is “rapidly moving forward.”

Market participants are expecting trade settlements in renminbi to continue to rise and new offshore markets for the currency to emerge, he said. Furthermore, they expect an increasing number of institutional investors to operate in mainland China. Den Rest des Beitrags lesen »

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Diversify Europe’s Financial Grid

Geschrieben von hkarner - 24. Februar 2014

Date: 24-02-2014
Source: The Wall Street Journal

Euro-zone lenders hold assets worth more than €30 trillion, three times the output of the euro area.

European banks remain vulnerable to another financial crisis. Capital buffers are too small, creditor bail-ins too low and emergency resolution mechanisms still inadequate to insulate governments from losses that could arise from a system-wide failure. In short, we need a new formula for financial stability.

A banking crisis today would still cost European sovereigns between 2% and 10% of GDP. The final bill would depend on many factors, the size of the initial loss being only one. Others include how much is mitigated by the banks’ own capital reserves, by pre-existing government backstops and by any money that can be recouped by bailing-in bondholders.

The size of a country’s banking system is also critical. By that measure, Europe’s banks remain too big to fail. Den Rest des Beitrags lesen »

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Are Austria’s Banks in for a Rough Ride from Emerging Markets?

Geschrieben von hkarner - 24. Februar 2014

Congratulation, we have  made it again into the Wall Street Journal! (hfk)

Date: 24-02-2014
Source: The Wall Street Journal

Raiffeisen bicycleA bicycle bearing advertising logos of Raiffeisen Bank International is parked opposite Burgtheater theatre in Vienna.

A wobble in emerging markets last month sharpened concerns about banks and companies that are heavily exposed to developing economies.

Royal Bank of Scotland’s credit strategists reckon Austrian banks are worth closer attention.

Austrian lenders–including Erste Group Bank, Raiffeisen Bank International AG and UniCredit Sp subsidiary Bank Austria–could face €13.5 billion of losses from exposure to central and eastern Europe, a region which accounts for about a third of their assets, RBS says. Den Rest des Beitrags lesen »

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