China’s Trillion-Dollar Yuan Defense Puts Growth at Risk – By Lingling Wei April 13, 2017 2:12 p.m. ET


Beijing’s aggressive approach threatens to keep other important initiatives on the back burner

For years, China seemed to defy the “trilemma,” an economic theory that a country can’t at the same time have a controlled exchange rate, free flow of capital and an independent monetary policy. Now Beijing is betting big on defending the yuan. Photo: Qilai Shen/Bloomberg News

BEIJING—President Xi Jinping gathered with his economic mandarins in December for their annual strategy meeting at a heavily guarded government hotel. In closed-door sessions, say people familiar with the confab, he made clear what their mandate was for 2017: He would tolerate no wobbliness in the economy.

The communiqué coming out of the session singled out one policy objective in particular—keep the yuan stable.

What followed has been the marked acceleration of a shift in priorities at the People’s Bank of China, the central bank, toward preventing the currency from cratering above all else.

The yuan’s value is a global hot button, and Beijing’s handling of it has played prominently in President Donald Trump’s rhetoric. In a Wall Street Journal interview Wednesday, Mr. Trump said his administration in a report due this week won’t label China a currency manipulator, something he threatened to do during his campaign. On Thursday, China’s central bank guided the yuan to its biggest one-day gain against the dollar in nearly three months, putting it at the strongest level against the dollar since Feb. 17. The yuan has gained 1% this year against the dollar.

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The Horn of Africa’s Qat-22 – By James Jeffrey March 20, 2017


FEISAL OMAR / REUTERS

How the Stimulant Both Drains and Drives the Economy

What History Has to Say About the Economy President-Elect Will Inherit – More stories by Andre Tartar December 28, 2016, 9:00 PM PST


The economy was stronger in 2016 than several previous election years

Here are six charts that illustrate the economy that Trump — who wants to focus on “jobs, jobs, jobs” — will inherit from President Barack Obama and how it compares with historical standards.1223 trump

Gross domestic product is chugging along, growing at a 1.7 percent pace in the year through the third quarter. That’s slower than what most prior administrations faced, and comes against a backdrop of weak global demand, aging demographics and tepid corporate investment. Trump has said he’s aiming to achieve 3.5 to 4 percent average annual growth, even as real GDP expansion is projected to average just 2.2 percent next year and 2.3 percent in 2018, according to economists.

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Economy Trumps Politics: Why Some Investors Are Betting on Europe – By  Jon Sindreu Dec. 1, 2016 5:30 a.m. ET


Ahead of this weekend’s Italian referendum, some fund managers say a brighter economic outlook matters more than rising populism

Investors say some European stocks and bonds have fallen too far amid a rise of antiestablishment parties on the Continent. Above, a woman in Rome walks past posters in support of the “No” vote in Italy’s upcoming referendum.ENLARGE

Investors say some European stocks and bonds have fallen too far amid a rise of antiestablishment parties on the Continent. Above, a woman in Rome walks past posters in support of the “No” vote in Italy’s upcoming referendum. Photo: tony gentile/Reuters

As politics spook European markets, some large fund managers are buying battered stocks and bonds in a bet that worries about rising populist movements are overblown.

Europe’s political calendar is staked with votes that could result in antiestablishment upsets. A referendum in Italy on Sunday could topple a reformist government. Next year, the NetherlandsFrance and Germany all face elections in which euroskeptic parties could post gains that some investors say may hurt economic growth and threaten the euro’s very existence.

Polls mostly predict the status quo will prevail. But, burned by misleading polls on the U.S. election and Brexit, many investors don’t want to take a chance. Through Wednesday, the Euro Stoxx 50 equity index is down 6.6% since the start of year, compared with a 7.6% rise in the S&P 500. Eurozone bonds have sold off in the last month.

But some money managers see an opportunity. If political fears are overstated, now is a chance to buy on the cheap, they say.

Their wager gets to the heart of an age-old debate: Just how critical are political developments to global markets?

Not very much, said Vincent Mortier, deputy chief investment officer at Amundi, Europe’s largest asset manager with €1.1 trillion in assets. Amundi holds more European assets, especially equities and real estate, than allocated by benchmarks.

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Tens of thousands of low-wage workers flood the streets demanding higher pay – Bryce Covert November 29, 2016


Fast food workers, Uber drivers, childcare providers, home health aides, airport workers, healthcare employees, and adjunct protested on Tuesday.`

The movement, which now calls itself the Fight for 15, is demanding a minimum wage of at least $15 as well as the right to unionize. And Tuesday’s day of action proved just how massive it has now become. Strikes and protests weren’t limited to New York City — they reached 340 cities. Fast food workers were joined by a variety of low-paid people, including childcare providers, home health aides, airport workers, healthcare employees, adjunct professors, and, for the first time, Uber drivers.

Uber drivers went on strike in more than two dozen cities. They were joined by striking hospital workers in Pittsburgh as well as a number of fast food employees across the country.

Many airport workers, including baggage handlers and cabin cleaners, also went on strike for the first time. A group walked off the job at Boston’s Logan International Airport, while more than 500 went on strike at Chicago O’Hare. They were backed up by protests at nearly 20 other major airports.

A number of other workers and supporters were arrested for acts of civil disobedience. In Detroit, Michigan, home care worker Renita Wilson was arrested at 5 a.m. while demanding she be paid $15 an hour, be allowed to join a union, and have access to affordable health insurance with a client she cares for, Carl Watkins, at her side.

Uber drivers, fast food employees, and airport workers were also arrested outside of McDonald’s restaurants in a number of cities, including Cambridge, Chicago, Detroit, and New York City. Organizers said tens of thousands of people joined the protests.

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Bettina Warburg: How the blockchain will radically transform the economy – Filmed June 2016 at TEDSummit


Say hello to the decentralized economy — the blockchain is about to change everything. In this lucid explainer of the complex (and confusing) technology, Bettina Warburg describes how the blockchain will eliminate the need for centralized institutions like banks or governments to facilitate trade, evolving age-old models of commerce and finance into something far more interesting: a distributed, transparent, autonomous system for exchanging value.

 

 

Fed Rate Rise Could Come ‘Relatively Soon’ as Data Point to Stronger Economy – By Kate Davidson Updated Nov. 17, 2016 9:57 p.m. ET


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Fed Chairwoman Janet Yellen tells Congress the economy is making ‘very good progress’ amid some of the best government data in decades on housing, jobless claims and inflation

Federal Reserve Chairwoman Janet Yellen, testifying before the Joint Economic Committee on Thursday, said she intends to serve her full term as chair through 2018 and that the central bank is on track to raise interest rates despite post-election uncertainties.

The U.S. dollar steamed to a level not seen since 2003 and yields on the 10-year Treasury note reached a high for the year Thursday, as Federal Reserve Chairwoman Janet Yellen confirmed investors’ view that the U.S. economy is strong enough to withstand an interest-rate rise soon.

Ms. Yellen told lawmakers in testimony Thursday that the Fed could move “relatively soon,” after the government released a grab bag of economic data all pointing to a stronger economy: an improving housing market, rising consumer prices and a more robust labor market.

“At this stage, I do think that the economy is making very good progress toward our goals, and that the judgment the [Fed policy] committee reached in November still pertains,” she told Congress’s Joint Economic Committee.

Her comments bolstered expectations that the Fed will lift its benchmark federal-funds rate at its next meeting on Dec. 13-14.

Ms. Yellen said the results of the U.S. presidential election hadn’t altered the central bank’s assessment, following its meeting earlier this month, that the case for a rate increase had grown. And Thursday’s data suggest President-elect Donald Trump is poised to take office in January at the helm of an economy that is gathering pace.

Federal Reserve Chairwoman Janet Yellen told Congress’s Joint Economic Committee that it is critical the central bank be separate from the political process. The comments come after a contentious election campaign in which the Fed’s policies were criticized by President-elect Donald Trump. Photo: AP

U.S. consumer prices rose in October from a year earlier at the fastest rate in two years, while the number of Americans filing new claims for unemployment insurance fell last week to its lowest level since 1973, the Labor Department reported Thursday. Housing starts were at their strongest pace since 2007, and permits for new construction rose in October.

Ms. Yellen warned that holding off on a rate increase for too long could force the Fed to raise rates relatively abruptly in the future to keep the economy from overheating. But she said the near-term risk of “falling behind the curve” soon is limited, and reiterated that the bank expects to raise rates gradually over the next few years.

Ms. Yellen said it isn’t clear whether Mr. Trump’s proposals for tax cuts and increased spending, if enacted by Congress, could alter that path in the future.

Since last week, investors have been pouring money into the dollar and financial shares, and pulling money out of government bonds, with many expecting Mr. Trump’s election would mean a more expansive fiscal policy, stronger inflation and ultimately higher U.S. interest rates.

The improving economic news and Ms. Yellen’s comments solidified that view, investors said. The numbers “were quite striking and suggest solid growth and inflation outlooks with very low recession fear,” said Mike Lorizio, a senior fixed-income trader at Manulife Asset Management.

The ICE Dollar Index, which measures the U.S. currency against six others, reached its highest level in more than 13 years on Thursday and is up 2.9% since the election.

Write to Kate Davidson at kate.davidson@wsj.com

African economies are growing at very different speeds – The Economist Oct 25th 2016 


New numbers from the IMF tell a tale of two Africas

HOW are sub-Saharan African economies doing? It depends on where you look, says the IMF in its latest survey of the continent, which is published today. Regional growth will slow to just 1.4% this year, the most sluggish pace for two decades. Things look grim in Nigeria, which is mired in recession. But Ivory Coast, a short flight away, is thundering along at a growth rate of 8%. Similar contrasts are found across the continent. Better to talk of two Africas, says the IMF, moving at different speeds.

The big divider is resources. As commodity prices have slumped, so too have the fortunes of big exporters. As a group, resource-rich countries will grow on average by 0.3% of GDP, says the IMF. Take oil-rich Angola, once the fastest-growing country on the continent: it will not grow at all this year, and is wrestling with inflation of 38%. Commodity-exporting countries saw the value of their exports to China almost halve in 2015. Public debt is rising sharply. Exchange rates are falling. Private consumption has collapsed.

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