Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘WSJ’

European Companies Happily Take ECB’s Cheap Cash, but Don’t Spend It

Posted by hkarner - 23. November 2016

Date: 22-11-2016
Source: The Wall Street Journal

The very reason the ECB started buying corporate bonds—a weak economy—is crimping the program’s success

The European Central Bank began buying billions of euros worth of corporate bonds earlier this year in a high-profile experiment aimed at spurring private investment. So far, the spending hasn’t materialized.

Since June, the ECB has bought €44.3 billion (around $46.9 billion) in corporate debt. Borrowing costs have tumbled, and debt issuance is up.

But the very reason the ECB started buying the bonds—a weak economy—is crimping the program’s success. The ECB buys bonds to stimulate tame growth with corporate spending. However, companies aren’t spending, executives say and data suggest, because they see few opportunities amid feeble growth and because credit was already cheap.

“We just don’t see much evidence that the behavior of corporates has changed as a result of the” corporate bond-buying program, said Hans Lorenzen, head of European credit strategy at Citigroup Inc. “On the whole, corporates in Europe remain very cautious.”

Corporate savings in the eurozone hit their highest level in at least 22 years in the year to June 2016, according to J.P. Morgan Chase. Corporate savings reflect the difference between cash flows and spending. Den Rest des Beitrags lesen »

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New EU Rules Would Force Big Foreign Banks to Hold More Capital in the Bloc

Posted by hkarner - 23. November 2016

Date: 22-11-2016

Source: The Wall Street Journal

Proposals would affect banks identified by regulators as institutions of significance to global financial system

BRUSSELS—The European Union will propose new rules this week requiring big foreign banks to hold extra capital and liquidity inside the bloc, a step mirroring U.S. regulations aimed at strengthening oversight of overseas banks, EU officials said.

The proposed rules, part of a raft of financial legislation being proposed Wednesday by the European Commission, the bloc’s executive arm, are meant to simplify procedures when a bank is wound down and to make sure that EU governments aren’t left holding the financial bag when big foreign banks fail. Den Rest des Beitrags lesen »

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Italy’s Looming Referendum Risk Splits Southern Europe’s Bond Markets

Posted by hkarner - 23. November 2016

Date: 22-11-2016
Source: The Wall Street Journal

Italian 10-year yields are now nearly half a percentage point above their Spanish cousins, the highest in five years

In the latest bond market selloff, a new trend is becoming ever more clear — a divergence between southern Europe’s two biggest economies, Italy and Spain.

Italian 10-year government bond yields are currently at their highest since early 2012, around half a percentage point above their Spanish counterparts with two weeks to go until the country’s constitutional referendum. In the selloff since the U.S. election, Spanish yields also ticked up, but at a slower pace than Italy’s.

The country goes to the polls Dec. 4 to approve or reject reforms to the country’s upper house of parliament. A “yes” vote would weaken the country’s senate, reducing its control over some policy areas and meaning it can no longer oust governments. Den Rest des Beitrags lesen »

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The EU’s New Bomb Is Ticking in the Netherlands

Posted by hkarner - 22. November 2016

Date: 21-11-2016
Source: The Wall Street Journal By SIMON NIXON

A referendum law has given Dutch euroskeptics a powerful tool to block deeper European integration, and then some.

wilders-ccGeert Wilders, leader of the right-wing Party for Freedom. A new generation of Dutch euroskeptics have come up behind him and pose perhaps an even greater challenge to the EU.

THE HAGUE—If the European dream is to die, it may be the Netherlands that delivers the fatal blow. The Dutch general election in March is shaping up to be a defining moment for the European project.

The risk to the European Union doesn’t come from Geert Wilders, the leader of anti-EU, anti-immigration Party for Freedom. He is well ahead in the polls and looks destined to benefit from many of the social and economic factors that paved the way for the Brexit and Trump revolts.

But the vagaries of the Dutch political system make it highly unlikely that Mr. Wilders will find his way into government. As things stand, he is predicted to win just 29 out of the 150 seats in the new parliament, and mainstream parties seem certain to shun him as a coalition partner. In an increasingly fragmented Dutch political landscape, most observers agree that the likely outcome of the election is a coalition of four or five center-right and center-left parties. Den Rest des Beitrags lesen »

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After Trump and Brexit, All Eyes Are on Italy’s Constitutional Referendum

Posted by hkarner - 18. November 2016

Date: 17-11-2016
Source: The Wall Street Journal By SIMON NIXON

The Dec. 4 ballot is the next opportunity for voters in a major economy to give the establishment a good kicking, Simon Nixon writes

After Brexit and Donald Trump, will Italy be next? Prime Minister Matteo Renzi’s Dec. 4 referendum on his proposed constitutional overhauls—designed to strengthen the power of the government by making it easier to pass laws—is the next opportunity for voters in a major economy to give the establishment another kicking.

Polls currently show the “No” vote narrowly ahead, albeit with up to a quarter of voters still to make up their minds. European policy makers have been privately warning for months that they see Italy as the biggest risk to the financial stability of the eurozone. The market is also starting to sniff trouble ahead: the spread between the yields on German and Italian government bonds has widened to more than 1.6 percentage points, the widest it has been since the European Central Bank started buying bonds in March 2015.

The worst-case scenario goes something like this: A defeat for Mr. Renzi would lead to a period of political instability. Mr. Renzi could follow through on a pledge to resign or be forced into a new coalition until elections are held in 2018.

Either way, markets would interpret his defeat as proof that Rome is incapable of reform, raising doubts about Italy’s ability ever to deliver the kind of growth needed to put its debt burden of 135% of gross domestic product on a sustainable footing. Den Rest des Beitrags lesen »

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Why a Coming Gap in the Supply of Oil Is Unlikely

Posted by hkarner - 17. November 2016

Date: 16-11-2016
Source: The Wall Street Journal

Fracking CCWSJ Energy Expert Amy Myers Jaffe writes about concern over a  projected gap in oil supply sometime between 2018 and 2020.

Amy Myers Jaffe (@AmyJaffeenergy) is executive director of energy and sustainability at the University of California, Davis, Graduate School of Management. She was formerly the director of the Energy Forum at the James A. Baker III Institute for Public Policy at Rice University.

The oil industry and analysts alike have made a hullabaloo about how capital investment in new oil and gas fields has fallen sharply since oil prices collapsed in 2014. The latest theory about it, reminiscent of scarcity mongering during the run up in oil prices in the 2000s, is that the spending decline is so large it will create a dangerous gap in oil supply sometime between 2018 and 2020. The so-called supply hole thesis was bandied about widely at a recent gathering of senior oil and gas executives in London where the Saudi oil minister credited concerns about the gap to the kingdom’s willingness to cut its own oil supply now “to signal” other producers to pour more money into exploration and spending budgets now to ensure sufficient oil will be available in the 2020s.  In Houston, belief in the 2018 supply hole is so strong, it is driving cash-starved shale-oil and gas firms to struggle to hang on and not offer their assets into the distressed debt market in the hopes that oil prices will turn back up before they have to close their doors. Den Rest des Beitrags lesen »

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Is Nuclear Power Vital to Hitting CO2 Emissions Targets?

Posted by hkarner - 16. November 2016

Date: 16-11-2016
Source: The Wall Street Journal

Nuclear Power plant ccSupporters say nuclear plants are the best way to transition to a low-carbon future. Others argue the plants are too risky to keep in operation.

New nuclear power plants are rare due to market conditions and rules favoring renewable sources of electricity.

Nuclear power is fizzling.

In recent years, many countries have largely stopped building new nuclear plants and are looking elsewhere for power. In the wake of the Fukushima disaster in 2011, Japan shut down all its nuclear reactors, though a few have restarted since last year. Germany also moved to phase out nuclear power by 2022. (China is a notable exception, with 20 reactors under construction.)

Market conditions heavily favor cheaper fuels such as natural gas over nuclear. And the regulatory climate favors other sources of energy. In the U.S., the Obama administration introduced rules requiring power plants to cut CO2 emissions 32% from 2005 levels by 2030, though President-elect Donald Trump says he will drop that rule. While nuclear plants don’t generate CO2, companies can tap federal tax credits for investing in renewables. What’s more, power companies can sell renewable electricity at higher prices because utilities need wind and solar supply to comply with state rules. Den Rest des Beitrags lesen »

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In Europe, Trumpism Leads Down a Different Economic Path

Posted by hkarner - 15. November 2016

Date: 14-11-2016
Source: The Wall Street Journal by Simon Nixon

Electoral success for populist parties is likely to heap further pressure on the European Central Bank—perhaps more than it can bear, Simon Nixon writes

Le PenMarine Le Pen, is leading in the polls ahead of next year’s French elections.

Europe’s antiestablishment politicians have barely been able to contain their excitement at Donald Trump’s election victory. From France’s Marine Le Pen to Hungary’s Viktor Orban to the U.K.’s Nigel Farage, they have greeted the U.S. president-elect’s triumph as a validation of their own longstanding opposition to immigration and free trade. With a series of political tests looming in Europe over the next year—starting with next month’s Austrian presidential election and Italian constitutional referendum and followed by elections in the Netherlands, France and Germany in 2017—European populist parties now sense an opportunity to ride to electoral success on Mr. Trump’s coat tails.

But there is a crucial difference between the U.S. and European situations. The market senses that Mr. Trump’s win is likely to pave the way for a change in U.S. economic strategy. Last week stocks rose and bonds fell as investors bet that his pledges of lower corporate taxes, fewer regulations and more large-scale infrastructure spending would boost company profits and inflation, easing some of the pressure on the Fed, which may be able to raise rates sooner and faster than previously expected. Den Rest des Beitrags lesen »

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Donald Trump’s Election Leaves Angela Merkel as the Liberal West’s Last Defender

Posted by hkarner - 14. November 2016

Date: 13-11-2016
Source: The Wall Street Journal

Merkel cc2Angela Merkel. The German chancellor has been in power for 11 years.
BERLIN — And then there was one.

Germany’s chancellor, Angela Merkel, has emerged as the last powerful defender of Europe and the trans-Atlantic alliance after the election of Donald J. Trump. But after 11 years in power, she is tired, her associates say, and under siege seemingly from all directions.

She is under pressure from the same forces that elevated Mr. Trump in America, fueled Britain’s vote to exit the European Union and are now propelling the populist Marine Le Pen in France. At home, the hard-right Alternative for Germany party has scored a string of victories in state elections.

Ms. Merkel needs to fend off a resurgent Russia that is promoting its brand of illiberal democracy by backing right-wing parties throughout the Continent and fanning the flames of populism. But with Mr. Trump openly admiring Russia’s president, Vladimir V. Putin, even maintaining economic sanctions imposed on Moscow over conflicts in Crimea and Ukraine will be a challenge. Den Rest des Beitrags lesen »

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Donald Trump’s Transition Team: We Will ‘Dismantle’ Dodd-Frank

Posted by hkarner - 11. November 2016

 This would definitely be the greatest disaster to the finance industry, opening the doors for speculation again. This will be the acid test on whether Trump is just a fool or criminally threatening mankind. (hfk)

Date: 11-11-2016

Source: The Wall Street Journal

 

GOP eager to make litany of changes that until recently stood little chance of avoiding President Barack Obama’s veto

WASHINGTON—President-elect Donald Trump’s transition team promised to dismantle the 2010 Dodd-Frank law, declaring that the coming administration will seek to remake the way the U.S. oversees the financial sector.

Tuesday’s Republican sweep, and Mr. Trump’s commitment to focus on the issue, has the GOP salivating over a wish list of Dodd-Frank changes that until recently stood little chance of avoiding President Barack Obama’s veto pen. The lineup includes everything from regulatory exemptions for community banks and regional banks to a new regime for insurers and asset managers to curbs on the federal government’s influence over consumer-finance products such as mortgages and payday loans.

The brief note on Mr. Trump’s new website was the first time since Tuesday’s election that the president-elect addressed financial regulatory policy. It was consistent with Mr. Trump’s campaign-trail rhetoric, blaming the Obama administration’s signature response to the financial crisis for a tepid economy and promising to “replace it with new policies to encourage economic growth and job creation,” but providing few details. Den Rest des Beitrags lesen »

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