Chart of the week: bric in the news
Who’s talking about the Brics? Well, we are, of course. It’s 10 years since the acronym was coined by Jim O’Neill, and it has become common parlance in financial markets and beyond. But how fast did it catch on? And has it peaked?
Chart (2) of the week looks at how many times “Bric” has been used in published sources over the last decade.
And the currency that matters most to EM investors is…
About 300 dedicated emerging markets investors, traders and analysts gathered on the 27th floor of Citi’s offices in Manhattan this week to discuss the outlook for … the euro. Continue reading »
Poland to Brussels: don’t leave us out
Poland is not a member of the euro, but the growing woes of the common currency are causing increasing worry in Warsaw – which is concerned that any tighter eurozone that emerges from the crisis would leave Poland and other non-euro countries on the outside looking in.
That’s why Donald Tusk, Poland’s prime minister, has become increasingly active in suggesting solutions to the crisis – on Friday calling for the strengthening of the European Commission and the European Central Bank, as well as a new EU treaty that will impose budgetary discipline and more closely coordinate actions in the Union. Continue reading »
Croatia: election blues
As Croatians head to the polls on Sunday, they will do so under a cloud of gloom about what lies ahead for their country’s economy, regardless of the near-certainty of rotation of power.
The centre-right Croatian Democratic Union (HDZ), headed by the prime minister, Jadranka Kosor, appears all set to crash and burn in the parliamentary elections as voters punish it for the weak economy and spiralling corruption scandals. Continue reading »
Indian MBAs: less attractive
With economic uncertainty growing at home and abroad, more and more Indian students are passing on MBAs and instead going straight into stable jobs with big-ticket IT companies like Facebook, Google and Microsoft.
Mid-career executives, similarly, are staying away from higher studies, fearful of leaving a well-paid job to invest two years of time and money with no guarantee that a high-paying job will materialize on the other side. Continue reading »
China’s banks: a rotting core
China began serious easing last Wednesday as fears of a slowdown forced it to cut its reserve requirement ratios (RRRs) for all banks by 50 basis points. However Fitch, the ratings agency, argues that such a small cut will have no meaningful impact on credit expansion.
Even more worryingly, Fitch raises serious concerns about Chinese banks’ liquidity levels and says their ability to weather a coming storm of asset deterioration really isn’t what it should be. As such a ratings revision could be on the cards. Continue reading »
Guest post: Slovenia’s post-election challenge
By Petra Lesjak
Slovenians go to the polls on Sunday after the collapse of the centre-right Pahor coaltion government in September, leading to the first early elections since the country’s independence in 1991.
The new government will face a deteriorating economy and stagnating capital market and must confront the privatisation of government-controlled stakes in numerous major companies, along with problems in the banking sector. Continue reading »
Hungary and the IMF: not so fast
Love him or hate him – and there are plenty of Magyars in both camps – you simply can’t deny Viktor Orbán has chutzpah.
Eighteen months ago he was telling the International Monetary Fund to get lost – and let Hungary and its newly elected centre-right government get on with their own, unique brand of economic policy, designed to promote growth and well-being for the nation. Continue reading »
China brands: stand up and be counted?
Many Chinese companies trying to build a global brand have chosen to keep quiet about one thing: where they come from. The ‘Made in China’ label is just too closely associated with cheap, low-quality goods and health and safety scandals to make it an asset.
But silence is the wrong strategy, says a report by Calling Brands, a UK consultancy. Continue reading »
Social housing: a cushion for China?
With China’s property market in the doldrums, a major engine for the economy is stalling. In cities like Shanghai, buyers of apartments have staged noisy protests after learning that the developer had cut prices for new buyers. Exporters have been hard hit in October and November by a drop in orders from Europe. What could take the place of these major drivers of GDP growth?
Here’s a surprise: Housing. Continue reading »
New York headlines
* IMF to offer Budapest help but with conditions
* ECB overnight lending jumps to €8bn
* Europe prepares oil imports embargo on Iran
* Egypt’s Islamists look to share power Continue reading »
Guest post: is China still a Bric?
By Ben Simpfendorfer of Silk Road Associates
The “Brics” expression has captured investor’s attention over the past decade. But it can also mislead. China’s relative size to the other Brics is one example. Its $5.9tn economy is larger than the combined economies of Brazil, Russia, and India at $5.3tn.
So is China still a Bric? Or is it ‘the single brick’ that is propping up the rest of the global economy, including demand in Brazil and Russia? Continue reading »
Brazil: Mantega gloats as Europe burns
Guido Mantega, Brazil’s indomitable finance minister, could not help taking a dig at the expense of Christine Lagarde, the visiting International Monetary Fund managing director, on Thursday.
“It’s a great satisfaction to us that this time the IMF did not come to Brazil to bring money like in the past but to ask us to lend money to developed nations,” he told reporters with a grin. Continue reading »
Further reading: easing into it
Friday’s top picks from the beyondbrics team: Lex on China’s start to monetary easing and why Africa and oil is a tricky mix; David Miliband on the risks of sleepwalking into a war with Iran; the changing nature of Russia’s relationship with Putin; and some thoughts on the UAE’s 40th birthday. Continue reading »
Guest post: how to restructure Vietnam’s economy
By Jonathan Pincus at the Vietnam Program, Harvard Kennedy School.
Vietnamese newspapers are full of talk of economic restructuring. Price inflation in excess of 20 per cent, high nominal interest rates, a weakening currency and a swollen trade deficit have undermined faith in the government’s growth strategy, which consisted of a mix of trade liberalisation in agricultural and labor intensive industries, plus subsidies and protection for state owned companies.
But how should Vietnam actually go about effecting change? Continue reading »
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