China must wean itself off debt addiction if it is to avoid financial calamity, warns IMF chief
China is edging towards "financial calamity" and must wean itself off its debt addiction and reform if it is to avoid a crisis, the International Monetary Fund has warned. Markus Rodlauer, deputy director of the IMF's Asia-Pacific department, said the world's second largest economy was approaching a tipping point where its rapidly growing financial sector and […]
Draghi says ECB not to blame for problems Deutsche Bank is facing
European Central Bank President Mario Draghi said on Wednesday the bank's low interest rate policies were not responsible for the problems that Deutsche Bank is facing. Michael Kemmer, the head of Germany's BdB banking association, earlier on Wednesday told Deutschlandfunk radio that the ECB's low interest rate policy was partly responsible for the current problems that Deutsche […]
Theresa May kicks off Brexit
Theresa May had to say something about Brexit at her first Conservative Party conference as party leader and prime minister. She could not just repeat her tedious mantra that “Brexit means Brexit”. So on October 2nd she came up with an uncharacteristically splashy pledge: a “Great Repeal Bill”, promised for the next Queen’s Speech, to […]
The Fed finally accepts ‘slow growth forever’
I have been talking about slow global economic growth since I've been writing for MarketWatch — nearly five years now. In May 2015, when I expanded my thoughts a bit and wrote "Global Growth Will Never Be the Same,” there was a lack of belief in what I was saying. Earlier this year when I […]
Are We in a Baby Boomer Retirement Crisis?
Baby boomers, born between 1946 and 1964, are heading into retirement in droves (about 10,000 a day, in fact). Along with the aging of this iconic cohort come lots of data about their poor preparation for their golden years. Insufficient preparedness and lack of financial resources for decades without steady employment paint a gloomy picture […]
Grocery Prices Are Plunging
Wal-Mart effect combines with deflation to eat away at margins Two-for-one sirloins? How about a nice deal on a wagyu steak? Call it the Great Grocery-Store Giveaway of 2016. In Austin, Texas, Randalls slashed prices for boneless beef ribs by 40 percent, to $3.99 a pound. Not to be outdone, the H-E-B grocer down the […]
Middle class incomes had their fastest growth on record last year
Middle-class Americans and the poor enjoyed their best year of economic improvement in decades in 2015, the Census Bureau reported Tuesday, a spike that broke a years-long streak of disappointment for American workers but did not fully repair the damage inflicted by the Great Recession. Real median household income was $56,500 in 2015, the bureau reported, […]
The Fed Used Jackson Hole to Plan Negative Rates
Jackson Hole revealed things that did not make it into reports by the mainstream media. Turns out, the academic and philosophical underpinnings were being laid down for a radical expansion of the Federal Reserve’s toolbox. The unthinkable policy that I’ve been warning about since last May—yes, we’re talking negative rates—was not only discussed at Jackson […]
Somewhere Out at Sea, Your New TV and Bags Wait in a Hanjin Ship
Company filed for court protection in South Korea last week A number of Hanjin ships have been stranded since the filing ​Hanjin Shipping Co. gained approval Sept. 1 for its court receivership filing after creditors refused to continue supporting the company, leaving about half its fleet and their contents in limbo. The stranded vessels, at ports […]
Negative rates will stay for another five years, JPMorgan warns
Equity valuations between Japanese and European banks will converge with quantitative easing (QE) programs and negative interest rate policies set to continue for the long term, according to a team at JPMorgan. "QE reduces lending rates to negative and we are going to expect negative lending rates until 2021," Kian Abouhossein, head of European banks […]
When 2% is not enough
The rich world’s central banks need a new target Like other areas of public policy, central banking is prone to fads and fashions. From limits on money-supply growth to pegging exchange rates, orthodoxies wax and wane. Yet the practice of inflation-targeting has proved remarkably long-lived. For almost three decades, central bankers have agreed that their […]
Workers All Over America Are Getting a Raise
It's more than just a few states. Wage growth is picking up across America — and even non-oil states are getting in on the action. The median U.S. worker benefited from a 3.4 percent year-on-year increase in wages in July, only marginally lower than the bumper 3.6 percent the previous month, which was the fastest pace of wage growth since […]
Why No One Trusts China’s Markets
When China's top securities regulator said recently that it plans to delist Dandong Xintai Electric Co. for falsifying initial public offering documents, it didn't grab many headlines. But it suggested some far-reaching changes may be afoot. Xintai is the first company to be expelled from Shenzhen's ChiNext board for such an offense, and one of only a […]
Millennials Are Freaking Over Retirement—and Not Doing Much About It
Young workers today probably can't even think about retiring for 40 or 50 years. Longer lives and the prospect of weaker investment returns mean millennials will probably have to save more money, over a longer period of time, than their parents and grandparents. And the earlier they start saving, the easier it will be to accumulate a […]
Brexit Bulletin: What the Rest of the EU Wants
EU members give their Brexit demands, while consumers show resilience What are the 27 other EU countries hoping to get out of Brexit talks? Bloomberg reporters put that question to governments across the continent and came away with a web of priorities and red lines that can't be crossed. Several countries including Germany, Portugal and the Czech […]