In The News

The Credit Bubble, the Bears and the Central Bankers

Gillian Tett October 2, 2015
Emerging markets are following the pattern of developed economies with stagnant growth. Attempts to stimulate economies may lead to another credit bubble, notes Gillian Tett, adding that “the way that financial flows operate today in, say, Shanghai is almost as mysterious for investors as subprime mortgages were in California a decade ago, and just as dangerously contagious.” Between 2004 and...

Containing China’s Slowdown

Lee Jong-Wha September 23, 2015
China’s economy is slowing its fast pace of growth. This year’s rate is projected at 6.3 percent. Lee Jong-Wha, an economics professor writing for Project Syndicate, points to weak domestic activity and external demand, falling fertility rates and an aging population, competition on wages from other nations, and a struggle to make productivity gains with technology. He suggests that China has...

Interest Rate Rise: Turning Point Looms for US Debt Binge

Eric Platt September 9, 2015
The world has become accustomed to low-cost loans since late 2007 and many dread a hike in interest rates by the US Federal Reserve. Low interest rates encouraged corporate borrowing and speculation, weakening some firms. “Companies have had easy access to cash to write cheques for multibillion-dollar takeovers, to fund buybacks and dividend strategies – all welcomed by investors as share prices...

IMF Changing Tack on Greece

Astrid Prange September 4, 2015
The International Monetary Fund may have devoted too much money into efforts to rescue Greece from its debt crisis. Many of the IMF’s 188 members question the sum of loans for Greece - $25 billion from the IMF. “It seems paradoxical: The term debt relief is a taboo in Latin America, Asia and Africa, but that is exactly what Greece asked the IMF for,” writes Astrid Prange for Deutsche Welle. The...

IMF to the Aid of Ukraine: Well-Intended, But Misguided

David R. Cameron September 3, 2015
Ukraine, battling separatists and demands for autonomy in its eastern regions, confronts a debt crisis. The International Monetary Fund approved $17.5 billion over four years and also called for another debt operation. After five months of negotiations, Ukraine received another $15.3 billion, including a 20 percent “haircut” in the $18 billion of bonds held by the private creditors. More than...

Worried About China? Keep Calm as Markets Return to Earth

David Dapice September 1, 2015
A long anticipated slowdown in China’s growth prompted a downturn in stock prices and firm government interventions. The percentage of foreign investors in Chinese stocks are low, but the abrupt moves unnerved investors around the globe. Market prices fell in Europe, the United States, Japan and the many countries closely linked to China’s economy. China has long been regarded as the world’s...

Europe’s New Economic Divide

Chris Miller August 27, 2015
Europe still wrestles over how to resolve the debt crisis in Greece. The managing director of the International Monetary Fund warned this month that Greece’s debt remains unsustainable, and she urged the country’s European partners to prepare to provide significant relief. “Few voters anywhere in Europe are excited about bailing out Greece’s government,” writes Chris Miller, associate director of...