Showing posts with label Economic. Show all posts
Showing posts with label Economic. Show all posts

16 February 2019

Oil Markets Appear to be Taking a Longer View on Venezuela, for Now ...


Three weeks ago (January 23), Juan Guaidó, the newly elected leader of Venezuela’s National Assembly boldly invoked Article 233 of the country’s Constitution and assumed Venezuela’s presidency on an interim basis, pending new elections. Aided by massive public demonstrations and international support from both regional and global powers—including the United States, the European Union, and a cadre of Latin American neighbors—Guaidó has been able to unify previously fragmented opposition to reigning president Nicolás Maduro and raise hopes for a transition in Venezuelan governance. Buoyed by the imposition of sanctions from the United States, including on oil and PDVSA, a state-owned oil company, and the expectation of an influx of humanitarian relief, the confrontation and simultaneous existence of two presidents has set in motion a combination of economic and geopolitical events with far-reaching consequence.

On the heels of the imposition of Iran sanctions and announced cutbacks by the Organization of Petroleum Exporting Countries (OPEC) and their non-OPEC counterparts, a combination of supply challenges in Nigeria, Libya, and Canada, and infrastructure and refiner requirements in the United States, the impending loss of heavy, sour Venezuelan crude has raised alarms of potential price spikes and fuel shortages as refiners and marketers scramble for alternative crude feedstocks.

15 February 2019

Uniqueness Of India In The 5KR Age – Analysis

By Umberto Sulpasso

India is a country with unique opportunity of economic growth in what I call the 5KR (Fifth Knowledge Revolution) of modern times. But to assert this peculiar and historically most congruent role for one of most populated countries in the world, that is a country that always had a driving vision of the role of knowledge (let’s not forget Veda means knowledge), we need to set up a new specific statistical instrument that I have called GDKP – Gross Domestic Knowledge Product. In the age of 5KR that we are living in, GDKP-INDIA is not only a most modern notion of wealth of nation, based on the most precious man-made raw material, namely, Knowledge, but also the key tool to assure a higher growth of physical wealth of nation captured by GDP.

But in order to achieve those goals through new metrics there is a peculiarity connected to such a man-made raw material that we have first to properly appreciate: Knowledge in Cyber Space. This is the most revolutionary modification of knowledge in human history ever since the invention of writing. Writing changed forever human history, 5KR will do the same in a few decades. 5KR is such a revolutionary change in knowledge, that as it happened with the invention of writing, will produce radical changes in politics, security and economy and as consequence of 5KR human life will not be the same.

U.S. Shale Oil And Natural Gas, Underestimated Its Whole Life

Jude Clemente

FILE - In this Wednesday, March 1, 2017, file photo, Exxon Mobil Corporation Chairman & CEO Darren Woods, third from left, joins the applause during opening bell ceremonies at the New York Stock Exchange. Woods succeeded Rex Tillerson, following Tillerson's nomination by President Donald Trump to be the next United States Secretary of State. Woods is a veteran of the more cautious refining side of the oil business who is likely to focus relentlessly on controlling costs. (AP Photo/Richard Drew, File)ASSOCIATED PRESS

I want to write on a recent piece in The Wall Street Journal, "Fracking’s Secret Problem—Oil Wells Aren’t Producing as Much as Forecast," that speaks of an 'illusory picture’ of prospects for the U.S. shale oil and gas industry. The article is based on the same rhetoric that we have been hearing since the industry's takeoff back in 2008: well decline rates are too fast and recoverable reserves are overstated, so a conveyor belt of drilling must be installed to simply maintain production. If not, output inevitably plummets.

The WSJ story could just as easily been written a number of years ago.

14 February 2019

The End of Economics?

BY FAREED ZAKARIA

In 1998, as the Asian financial crisis was ravaging what had been some of the fastest-growing economies in the world, the New Yorker ran an article describing the international rescue efforts. It profiled the super-diplomat of the day, a big-idea man the Economist had recently likened to Henry Kissinger. The New Yorker went further, noting that when he arrived in Japan in June, this American official was treated “as if he were General [Douglas] MacArthur.” In retrospect, such reverence seems surprising, given that the man in question, Larry Summers, was a disheveled, somewhat awkward nerd then serving as the U.S. deputy treasury secretary. His extraordinary status owed, in part, to the fact that the United States was then (and still is) the world’s sole superpower and the fact that Summers was (and still is) extremely intelligent. But the biggest reason for Summers’s welcome was the widespread perception that he possessed a special knowledge that would save Asia from collapse. Summers was an economist.

25 January 2019

The founder of the World Economic Forum shares what he sees as the biggest threat to the global economy

JACK HOUSTON,SARA SILVERSTEIN,LAUREN SHAMO

Economist Klaus Schwab is the founder and executive chairman of the World Economic Forum which will be holding it's Annual Meeting in Davos, Switzerland January 22-25, 2019.
Schwab explains the theme of this year's meeting, "Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution."

When asked if we were currently in a trend of deglobalization he said no, "we have to make a differentiation between globalization, which is a fact, and globalism."

He says the biggest threat to economic stability is the imbalances in the world.

Schwab says he believes trade imbalances are a problem. He is not an unconditional advocate for free trade, which he says is great but only if there is equality.

19 January 2019

Britain's Economic Future Depends On Brexit

by Salvatore Babones

Brexit fearmongering tends to focus on the old economy of planes, trains, and automobiles. But London's future hinges on the twenty-first century's “innovation” economy.

The British political establishment can't seem to make up its collective mind about Brexit. Meanwhile the European Union's Jean-Claude Juncker says that he will offe r "clarifications" to help British prime minister Theresa May push her Brexit deal through Parliament—but no “renegotiation.” It seems unlikely that “clarifications” will do the trick.

The British economy may be on go-slow in advance of Brexit, but with the Eurozone descending into recession for the third time since 2008, it’s hard to understand why the British are so worried about their economic future outside the European Union. Looking beyond the quarterly results calendar, the EU has big structural problems too. Not least among them: an addiction to the old-economy manufacturing industries of the twentieth century.

14 January 2019

The Geopolitics of 2069 Are More Chaotic Than You Can Imagine

Ian Bremmer

People say we’re about to enter the “Asian century.” That would be true if the world still did centuries. But it doesn’t; change driven by technological advancements now comes so rapidly and with such force that it’s challenging to know what the next year of geopolitics will look like, let alone the next 50.

That said, we are undeniably embarking on an “Asian decade” (maybe even two)—a period that largely coincides with our current G-Zero era of world politics, which is defined principally by its lack of global leadership. What that means in practice is that there is no country (or group of countries) leading global responses to global problems such as climate change or the next pandemic. So, as advanced industrial economies continue to struggle to balance democracy’s dynamism with the toll globalization has taken on large segments of their societies, China’s state-capitalist approach looks set to continue barreling on.

The Falsehoods That Drive 'Open Borders' Theory

by Philip Carl Salzman


The idea of "open borders" is to open one's heart and arms to everyone in the world, open one's country to all comers, to encourage everyone to come. "Open borders" is an increasingly popular idea in the West. Mainstream politicians of the European Union and of the largest countries of the Union have thrown open their borders and admitted all comers. So too in North America. Canada has welcomed anyone who infiltrates the partially unguarded border, as well as returning Islamic State terrorists. In the U.S., the Democrat Party increasingly opposes enforcing border protection and removing "illegal aliens" (to use the official government term), called "dreamers" by Democrats as they chant "abolish ICE" (Immigration and Customs Enforcement).

Why Open Borders?

The new enthusiasm for open borders is a result of the confluences of three lines of political thought, each one ill advised: multiculturalism, utopianism, and "social justice."

Multiculturalism

Shelter from the Storm in 2019

BARRY EICHENGREEN

BRUSSELS – What would have to happen for this to be a tranquil year economically, financially, and politically? Answer: a short list of threats to stability would have to be averted.

First, the trade war between the United States and China would have to be placed on hold. In November and December, financial markets reacted positively to each hint of a negotiated settlement and negatively to each mention of renewed hostilities – and for good reason: tariffs that disrupt trade flows and supply chains do global growth no good. And, as we know, what happens in financial markets doesn’t stay in financial markets: outcomes there powerfully affect consumer confidence and business sentiment.

Second, the US economy will have to grow by at least 2%, the consensus forecast incorporated into investor expectations. If growth comes in significantly lower – whether because the sugar high from the December 2017 tax cuts wears off, the Federal Reserve chokes off the expansion, or for some other reason – financial markets will move sharply downward, with negative implications for confidence and stability.

13 January 2019

Economic Headwinds in 2019: Navigating Priorities For ASEAN – Analysis

By Kaewkamol Pitakdumrongkit*

The New Year will likely see Southeast Asian economies face major economic headwinds namely the US-China trade tensions and the interest rate increases by the US Federal Reserve. While some observers think that the 90-day truce between Washington and Beijing could beget better relations between these two powers, they may overestimate China’s ability to make concessions to the US.

As reflected in his speech at a gathering to celebrate the 40th anniversary of China’s reform and opening up on 18 December 2018, President Xi Jinping stressed that “No one is in a position to dictate to the Chinese people what should or should not be done”. Given that such remark came against the backdrop of the truce, it connotes that Beijing may not easily bow to Washington’s demands.

Coping with Economic Headwinds

12 January 2019

Poland’s transformation is a story worth telling

By JAN CIENSKI

WARSAW — The first thing that hit you about the Poland of 1987 was the smell — a pungent mix of coal smoke leavened with coarse tobacco, a whiff of cabbage and rancid sweat overlaid with clouds of diesel exhaust. Lingering on the streets and alleys of cities, towns and villages, it was not the smell of a successful or a happy society.

The odor hit me in the southern city of Kraków in 1987, where I was taking a year off from university in Toronto to study in Poland. It was only one symptom of a decomposing country.

At Kraków’s Jagiellonian University, the first phrase the foreign students (mostly from Brazil and Argentina) who were studying Polish before beginning inexpensive medical and architecture studies would learn was Nie ma (“We don’t have it”). They heard it in shops when they tried to buy meat or wine. They heard it in kiosks when trying to buy luxuries like soap and razor blades. They heard it fired at them by surly waiters indicating a lack of almost every item on the menu, from beer to “exotic” dishes like beef cutlets and pork chops (no point in ordering on Monday, as meat was not sold on the first day of the week). At one point I remember tossing aside the menu and telling the waiter, “Just bring me whatever you have.”

10 January 2019

BITCOIN EXPOSED SILICON VALLEY'S ULTIMATE AIM: MAKING MONEY



BITCOIN TURNED 10 this month, and what a ride it’s been—initial obscurity; the kind of exponential price spike last seen by Dutch tulip peddlers; the rise of imitators based on its underlying blockchain technology; and, in the past year, a steep, steady decline in price. The old joke about the lifecycle of a Hollywood star applied to Silicon Valley: What is Bitcoin? Get me Bitcoin! Get me a Bitcoin type! What is Bitcoin?

The decade since the project’s pseudonymous creator, Satoshi Nakamoto, mined the “genesis block” of bitcoins offers more than a parable of faddishness. With its focus on wealth creation (of early adopters) and institutional destruction (of centralized banks, in particular), Bitcoin provides direct access to the character of Silicon Valley. If you think companies like Facebook and Google are about manipulating the public to make money without concern for the damage done to society, then the Bitcoin story should be your urtext.

3 January 2019

The Future of the Dollar—and Its Role in Financial Diplomacy


The dollar’s central role in world financial markets reflects both faith in American leadership and the absence of reasonable alternatives. Currency dominance has also been a linchpin in America’s efforts to shape a global order around free markets and democracy while serving as a foundation for the sustained growth of a more integrated global economy. These roles now face rising risks. Both Republicans and Democrats question the benefits of an open and integrated economic order that seems to drain good jobs and demand repeated bailouts of bad banks and corrupt foreign governments. Meanwhile, allies and rivals alike raise doubts about the durability of U.S. leadership and the wisdom of depending so heavily on one dominant power.

Christopher Smart is a nonresident fellow at the Carnegie Endowment for International Peace, where he focuses on the interaction of global financial markets and international economic policy.

31 December 2018

Immigration's Effect On Future Workforces


from the St Louis Fed

-- this post authored by Subhayu Bandyopadhyay, Research Officer and Economist, and Asha Bharadwaj, Research Associate

Many Organization for Economic Cooperation and Development (OECD) nations have aging populations, with substantial fractions of their populations exceeding 55. As more of this population retires and people live longer on average, a corresponding number of younger people will have to move into the workforce to maintain a steady share of the working population for the entire nation.

This working-age population has to produce not only for themselves, but also for others, including the elderly and children. In this context, immigration can play a role, especially if the immigrants are of prime working and/or childbearing age: 

First, the immigrants can substitute for natives who are retiring from the workforce. 

Second, working-age immigrants are likely to have children, who can contribute to the future workforce of the nation. 

29 December 2018

The Geopolitical Flash Points of 2019

BY MICHAEL P. DEMPSEY

If 2018 was a year marked by international challenges that percolated but did not boil over into full-blown crises, next year may well be the year in which that good fortune runs out. As the former deputy and then acting director of national intelligence, I am frequently asked during discussions about the global threats I am most concerned about. So, let me highlight five major geopolitical challenges that I fear may become more troublesome in the coming months, as well as a few less publicized but still worrisome “hot spots” that may also command policy maker attention in the year ahead.

Syria

While several foreign policy experts believe that the Syrian war is winding down and that the Bashar al-Assad regime has won, there is still, in my view, considerable cause to worry about the direction of this conflict in 2019. For example, the uneasy truce in the Idlib Province, which is home to many (probably numbering in the low thousands) of the most extreme al-Qaeda and Islamic State fighters left in Syria, as well as 2,000,000 civilians, seems shakier by the day.

27 December 2018

Infographic Of The Day: The Business Value Of The Blockchain


Blockchain can be an elusive concept. Its abstract nature leaves many wondering if this emerging technology is the global catalyst evangelists claim it to be.

But blockchain is more of a tool than a catalyst – not a one-size-fits-all, but a new foundation underpinning our everyday tasks. It offers industries a techno-driven facelift with its ability to increase productivity, ensure transparency, and reduce wasted time and paperwork.

Today’s graphic is inspired by a study from McKinsey. Their research combines industry-by-industry analysis, expert interviews, and more than 90 distinct use cases to make informed estimates about the projected business value of the blockchain.

Blockchain Adoption

Russia-Venezuela Economic Ties

Venezuela is looking for a little help from its friends. 

Earlier this month, Venezuelan President Nicolas Maduro visited Russian President Vladimir Putin in Moscow. According to Putin’s spokesman, the purpose of the meeting was to discuss ways that Russia could assist Venezuela financially. Venezuela has been in dire financial straits for years and has been looking for support from its allies after low oil prices and U.S. sanctions, among other things, brought its economy to the brink of collapse. Last year, Moscow offered Caracas a debt restructuring plan as Venezuela looked to be heading toward default. It’s not hard to see why Putin would want to help Maduro – as a major oil producer and target of U.S. sanctions itself, Russia, too, has been reaching out for support from friendly governments. 

26 December 2018

Overestimating the EU Economy

MOHAMED A. EL-ERIAN

If the EU were a soccer team, it would not lose games for lack of a game plan or due to inadequate capacity. The problem is that the team as a whole is not playing cohesively, and all of the top players are struggling individually, owing to messy problems at home.

ABU DHABI – The European Commission, the International Monetary Fund, and the OECD predict that, on average, the European Union’s economy will grow by 1.9% next year, a rate that is broadly consistent with the average of 2% expected for this year. But the picture this paints may prove to be overly optimistic, not only because the growth rate itself is likely to disappoint, but also because there is significant downward pressure on the EU’s growth potential beyond 2019 – pressure that, at present, European leaders seem unprepared to counter effectively.

25 December 2018

The Biggest Emerging Market Debt Problem Is in America

CARMEN M. REINHART

A decade after the subprime bubble burst, a new one seems to be taking its place in the market for corporate collateralized loan obligations. A world economy geared toward increasing the supply of financial assets has hooked market participants and policymakers alike into a global game of Whac-A-Mole.

CAMBRIDGE – A recurrent topic in the financial press for much of 2018 has been the rising risks in the emerging market (EM) asset class. Emerging economies are, of course, a very diverse group. But the yields on their sovereign bonds have climbed markedly, as capital inflows to these markets have dwindled amid a general perception of deteriorating conditions.

24 December 2018

Overestimating the EU Economy

MOHAMED A. EL-ERIAN

If the EU were a soccer team, it would not lose games for lack of a game plan or due to inadequate capacity. The problem is that the team as a whole is not playing cohesively, and all of the top players are struggling individually, owing to messy problems at home.

ABU DHABI – The European Commission, the International Monetary Fund, and the OECD predict that, on average, the European Union’s economy will grow by 1.9% next year, a rate that is broadly consistent with the average of 2% expected for this year. But the picture this paints may prove to be overly optimistic, not only because the growth rate itself is likely to disappoint, but also because there is significant downward pressure on the EU’s growth potential beyond 2019 – pressure that, at present, European leaders seem unprepared to counter effectively.