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Posts Tagged ‘WSJ’

Cheaper Chinese Currency Has Global Impact

Posted by hkarner - 12. August 2015

Date: 12-08-2015
Source: The Wall Street Journal

By devaluing yuan, Beijing is turning to a controversial growth-boosting tactic whose effects reverberate far and wide

Beijing signaled with its currency devaluation that the domestic economic slowdown it has failed to reverse is no longer a problem confined within China’s borders. It is now the world’s problem, too.

Chinese officials have cut interest rates four times in the past 12 months, increased the amount of money banks can lend out and pumped funds into the stock market—measures meant to boost domestic demand in the world’s second-largest economy. By devaluing the yuan, Chinese authorities are turning to a controversial growth-boosting tactic whose effects by their nature reverberate far and wide.

A cheaper yuan could help boost Chinese exports. It also might complicate the Federal Reserve’s decision about when to start raising U.S. interest rates. It will pressure China’s direct trade rivals, such as South Korea and Japan, to follow suit and let their own currencies fall. It raises risks of market volatility in other emerging market economies. More broadly it sends a signal to investors that policy makers in China and elsewhere are straining for tools to address the problem of slow growth. Den Rest des Beitrags lesen »

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Startups such as Google-funded Granular offer software to run farms with precision, efficiency

Posted by hkarner - 11. August 2015

Date: 10-08-2015
Source: The Wall Street Journal
Subject: To Feed Billions, Farms Are About Data as Much as Dirt

Drone over farmlandA drone made by Intelligent UAS transmits data about crops. Here it flies over farmland in Maryland.

Mark Bryant is a farmer in Ohio with 12,000 acres, on which he raises corn, soybeans and soft red winter wheat. He is rarely on a tractor, because that isn’t how farms work anymore.

Instead, Mr. Bryant’s days are spent surveying dashboards full of data gathered from the 20 or so iPhones and five iPads he has supplied to his employees, on which they report on his acreage in real time, thanks to software from a Google-funded startup called Granular. Data gathered from aircraft, self-driving tractors and other forms of automated and remote sensors—for yield, moisture and soil quality—are also essential to how he does his work.

“Just imagine, up until Granular came, for us everything was done on a Microsoft Excel spreadsheet,” says Mr. Bryant.

Mr. Bryant isn’t atypical. Increasingly, this is how farming must be done for a farm to remain competitive. Den Rest des Beitrags lesen »

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Industrial Production Slumps in Eurozone’s Engine Room

Posted by hkarner - 9. August 2015

Date: 08-08-2015
Source: The Wall Street Journal

Germany feels sharpest drop with 1.4% drop in June

Industrial production slumped in France and the eurozone’s other dominant economies in June, but rose sharply in Spain.

Industrial production fell in the eurozone’s three largest economies in June, a sign that economic activity in the region failed to gain much momentum in the second quarter.

The drop was most severe in Germany, the region’s industrial powerhouse, where output, adjusted for calendar effects and seasonal swings, slumped 1.4% from May, data from the economics ministry showed Friday. Den Rest des Beitrags lesen »

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The Euro’s Failed Dream of a Wonderful Life

Posted by hkarner - 8. August 2015

Date: 07-08-2015
Source: The Wall Street Journal

The euro looks like a solution that will be costlier than the problems it was meant to address

What would Europe be like if the euro had never been born? Unlike George Bailey in the 1946 film classic “It’s a Wonderful Life,” we don’t get the chance to go back and find out.

In the movie, the kindly but suicidal George is taken by his guardian angel to see what the world would have been like without him. The small town in which he grew up and from which he never manages to escape is unrecognizable. Instead of the idyllic Bedford Falls, he finds the violent and crime-ridden Pottersville.

George found he had made a difference for the better.

The euro must have made a difference too. But the eurozone looks more like dysfunctional Pottersville than law-abiding Bedford Falls. It is still in danger of losing Greece, and while much of the rest of the bloc is starting to grow again after years of recession, it has taken rock-bottom interest rates, a weak euro and very low oil prices to help it happen. Den Rest des Beitrags lesen »

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Some Greek Lessons for Emerging Markets

Posted by hkarner - 6. August 2015

Date: 06-08-2015
Source: The Wall Street Journal By SIMON NIXON

Greek crisis has obscured the worrying slowdown in emerging markets

Now that the dust is beginning to settle, the Greek crisis can be seen as an extraordinary act of self-immolation by a government that misjudged economic reality. While Athens was turning an economy that was widely expected to grow 2.7% this year into a basket-case that is now back in recession and whose stock market slumped 16% when it reopened on Monday after a five-week closure, the recovery in the rest of the eurozone has been gathering momentum.

The Irish economy is growing at an annualized rate of more than 5%; the Spanish government is now forecasting growth of 3.3% this year. Spanish unemployment registered its biggest fall since 2007 in July; Portuguese unemployment is now at its lowest since late 2010, albeit still in the double digits.

Growth elsewhere in the eurozone may be less spectacular but the recovery is now clearly gathering pace, even in Italy and France. Den Rest des Beitrags lesen »

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The Graying of Germany’s Small Business Managers

Posted by hkarner - 1. August 2015

Date: 28-07-2015
Source: The Wall Street Journal#

Quickly aging group raises concerns about succession planning, stalled investments

FRANKFURT—At the midsize companies that form Germany’s industrial backbone, managers are literally a dying breed.

The executives who helped fuel the country’s economic boom in recent decades are aging quickly, entering the 55-and-over age group four times as fast as Germans as a whole, according to a survey by development bank KfW. That disparity is particularly striking given how swiftly the overall population is aging: Germany now has the world’s lowest birthrate, slipping below Japan, according to a study this year by the Hamburg Institute of International Economics and audit firm BDO AG.

The graying executive corps could have a significant economic impact. Germany’s more than 3.5 million small and midsize businesses, known collectively as the Mittelstand, account for about 60% of its workforce and more than half of its economic output. Den Rest des Beitrags lesen »

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For Some in Syriza, a Greek Euro Exit Is Goal

Posted by hkarner - 10. Juli 2015

Date: 09-07-2015
Source: The Wall Street Journal

Leftist coalition led by Alexis Tsipras split over best way to advance socialism in Greece

Few prime ministers have had a more disastrous first five months than Alexis Tsipras.

Greece was the second fastest-growing economy in the eurozone in the third quarter of last year, unemployment was falling and investors were snapping up government bonds and bank shares again.

Today, the country is back in recession, the banks are closed, the public finances have deteriorated and bad debts are rising.

Mr. Tsipras has until Sunday to convince eurozone leaders to provide a new bailout program or the government and banks will go bust and Greece will likely have to abandon the euro, and the terms are now certain to be even tougher than those he urged voters to reject in a referendum last weekend. Den Rest des Beitrags lesen »

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European Central Bank Holds Key to Greece’s Future

Posted by hkarner - 8. Juli 2015

Date: 08-07-2015
Source: The Wall Street Journal

The ECB could force Greek banks into instant collapse if Athens doesn’t make July 20 bond payments

Later this month, European Central Bank President Mario Draghi may have to set Greece’s exit from the eurozone into motion.

FRANKFURT—A looming bond payment by Greece to the European Central Bank is emerging as the potentially decisive event in the country’s attempt to stay in the euro and avoid a banking collapse.

On July 20, Greece must repay €3.5 billion ($3.8 billion) in bonds held by the European Central Bank. The Athens government doesn’t have the money and without a fresh infusion from its main creditors—other eurozone governments at this stage—it almost certainly won’t have it by then.

Greece’s failure to repay the ECB would lead to heavy pressure on the bank’s president, Mario Draghi, from his governing council to no longer accept Greek government-backed debt as collateral for emergency loans to the country’s banks. Short of alternative collateral, Greece’s banking system would face instant collapse if Athens, the ECB or the rest of the eurozone can’t find a workaround. Den Rest des Beitrags lesen »

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China’s Stock Plunge Is Scarier Than Greece

Posted by hkarner - 8. Juli 2015

Date: 08-07-2015

Source: The Wall Street Journal

 

There are four basic signs of a bubble, and the Chinese stock market is on the extreme end of all four.

China’s state-sponsored stock-market rally is unraveling, with potentially dangerous consequences. The first major sign that all wasn’t going according to script came on June 15. Chinese had awakened expecting big gains because it was President Xi Jinping’s birthday, but the Shanghai market fell more than 2%. One deeply indebted day trader committed suicide by jumping out a window, his net worth wiped out by the collapse of a single stock that he had borrowed heavily to purchase. The market has since fallen by another 25%—and some fear that prices could go much lower.

In most countries, no one thinks there is a link between a leader’s birthday and the market. That such a theory prevails in China reflects the widespread belief that Beijing’s authoritarian government can produce any economic outcome it wants. Now trust in China’s ability to command and control the economy is faltering. If trust collapses, the global repercussions could be more severe than those from the Greek debt crisis. Den Rest des Beitrags lesen »

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Eurozone Sets Sunday Deadline for Greece Financing Deal

Posted by hkarner - 8. Juli 2015

Date: 08-07-2015
Source: The Wall Street Journal

Athens seeks interim financing but creditors insist on measures rejected by voters

BRUSSELS—Eurozone leaders set Greece a Sunday deadline to come up with new and even-tougher economic measures if the country wants to avoid defaulting on the European Central Bank and crashing out of the currency union.

As a sweetener for such a deal, leaders raised the possibility of some short-term financing to help Athens make a July 20 payment and—most important for Greek Prime Minister Alexis Tsipras—action down the road to relieve Greece’s crushing debt burden.

Obstacles to an agreement that keeps Greece in the eurozone remain high, however.
Most notably, the policy overhauls and budget cuts demanded go beyond those that were resoundingly rejected by Greek voters in a referendum last weekend.

German Chancellor Angela Merkel said after Tuesday’s emergency summit of eurozone leaders that it is up to Greece to act. “Of course, at the very end, one will have to discuss how debt sustainability can be recreated but not by saying first ‘How do we close the gap?’ but “What can Greece do?’ ” she said.

She added that Mario Draghi, the ECB president, made clear to leaders at the summit that Sunday would be “the right moment to take decisions” for Greece to avoid a meltdown of its banking system. Den Rest des Beitrags lesen »

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