As the European Union mulls another year of economic stagnation and the United States a year of lacklustre and uncertain economic recovery, will emerging markets take the lead in global economic recovery?Read more
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Over the past decade, very few countries can claim to have matched the economic success of those of the BRICs. Ever since the term ‘BRIC’ was born in 2001, the bloc has grown rapidly – now accounting for almost a quarter of the world’s total economic output. Nevertheless, as the eurozone crisis has shown, the bloc is not immune to a weakening global economy; and the outlook for the BRICs is now uncertain. Have the BRIC nations lost their momentum?
Student debt is growing at an alarming rate. At the end of 2011, total student loan debt crossed the $1 trillion mark, a level that is higher than the sum of all credit card debt in the United States. Already, this category of debt has been likened to the subprime crisis, raising worries that a potential delinquency crisis could find its way into the wider economy.Read more
Many of us are familiar with the basic services that banks provide. In simple, straightforward cases, banks keep our money and pay an interest on it, while providing the convenience of cash withdrawals along their network of ATMs. But are consumers benefitting from their banks, or are they really ripped off by hidden bank charges?Read more
Since China opened up its doors to the world a few decades ago, we’ve witnessed what has been a remarkable Chinese growth spurt. Today, China has the second largest economy in the world, the largest bank by market capitalization, and also the largest population of 1.34 billion in the world. As its economy continues to run full steam ahead, it is unsurprising that China is grappling to contain a massive influx of foreigners, both skilled and unskilled, who want a slice of its growing economic pie.Read more
Back in 1992, Standard and Poor’s downgraded Canada’s triple A credit rating to AA+ amid concerns over its fiscal health. But in just six years, the budget was balanced and Canada won its prized AAA rating back within a decade. How did they do it, and what can the United States, Italy, Greece, Portugal, Spain, Hungary and many other indebted nations learn from Canada?Read more
The year 2011 has been a roller coaster ride of sorts.It began with the Tunisians toppling their authoritarian regime, which we soon realized was a catalyst for what many have labelled the “Arab Spring.” What we then saw was unprecedented – the power of collective action inspiring a suppressed generation across the Arab nations. Egypt disposed of their dictator Hosni Mubarak. Libya experienced a hostile armed struggle for months, before Muammar el-Qaddafi was eventually captured by rebels.
At last month's UN General Assembly, Bhutan's Prime Minister denounced what he called a “monster of a consumerist market economy” that “enslaves humanity and thrives on the insatiable nature of our greed,” urging instead for an alternative form of economic governance that shies away from the indulgent emphasis on GDP. EconomyWatch spoke to Bhutan’s Chief Planning Officer, Mr. Karma Galay, and found out exactly what the nation sees as a viable and sustainable form of alternative development.Read more
Despite being contrarian to Islamic beliefs, opium production is one of the biggest industries for the war-torn country. Afghanistan alone is responsible for supplying more than 90 percent of the world’s opium, the raw material for manufacturing heroin to drug addicts all across the globe. Myanmar, trails in second place.Read more
Earlier this month, the former CEO of Yahoo! was unceremoniously removed by the company board, via a telephone call. Many have questioned and wondered if it had anything to do with the fact that Carol Bartz is a woman; if the termination could have been better handled if Bartz were a male.Read more
Goldman Sachs recently released a report, State of the Markets – Long and Short Risk Strategies, that is currently making its way around the Internet. Originally intended as a private report for its institutional clients, Goldman makes suggestions on how to profit from a downturn. More importantly, is the euro really bound for a crash?Read more
Companies like Google and Apple are holding on to nearly US$2 trillion on their balance sheets. Yet, financial institutions need to address the need to balance liquidity requirements and the pursuit of revenue growth. So why are companies holding on to such large amounts of cash?Read more
Evidently, the medium is the message. The act of self-immolation by 26 year-old Mohamed Bouazizi in Tunisia was the catalyst that brought about what is today known and referred to as the Arab Spring. Despots and autocratic rules who had held on to power for decades have been unceremoniously ousted after mass demonstrations and violent protests. Over in India, one man by the man of Anna Hazare is starting a non-violent process of change.Read more
Some say that the best expression of excess capacity and overdevelopment in China is its real estate market. With nominal interest rates going at a pittance, stringent capital controls and volatility in China’s equity markets, there seems to be no real alternative outlets for the nation of savers (China saved 50% of its GDP in 2010) and it is therefore no huge wonder that investors have turned to real estate as investment options.Read more
Last week, credit ratings agency Standard and Poor’s (S&P) downgraded U.S. debt from a stellar AAA rating by a notch to AA+. The move sent financial markets in panic mode as investors grappled and tried to comprehend the severity and extent of the United States’ ability to finance its bills. China, who holds a massive amount of U.S. Treasuries, wasted no time in letting known their impatience and displeasure, criticizing Washington's “addiction to debts” and inability to “live within its means”.Read more
With all the debate in the United States over raising its debt ceiling, politicians and lawmakers are once again fighting over national spending. Democrats are sore that the US$2.4 trillion in savings will not include any mandated tax increases, while the Republicans are worried about the US$350 billion cut in the defense budget. Why is the United States perpetually policing the world at the expense of the American people and global markets?Read more
Last week, Chinese officials uncovered five fake Apple stores in the southwestern city of Kunming, and suspended two of the faux outfits. When in China, equity markets are not spared from allegations of false accounting practices and fraud either. Sino-Forest Corporation was the latest company from China to characterize what is fast becoming a truism: for Chinese companies listed abroad short selling through reverse takeovers can prove to be immensely profitable. The key question then is can, or should investors believe the numbers from Chinese companies?Read more
A study by American Express and Harrison Group shows that global spending on luxury goods is set to increase by nearly 8 per cent to US$359 billion in 2011. Rich shoppers are driving an increase in consumer spending and according to Moody’s Analytics, 5 per cent of the richest households account for 37 per cent of consumer spending. For nearly two years, households clamped down through the economic slump, exercising utmost restraint and discernment in their purchases. However, that is all changing in 2011. Find out how the rich are spending today.Read more
Last week, Beijing released its June inflation and national trade account figures, with data suggesting that the government’s current measures to cool down its economy may be inadequate. In a bid to cool surging inflation, the Chinese central bank raised key interest rates for a third time this year. Benchmark rates for one-year loans were raised by 25 basis points to 6.56 per cent. So, is China necessary showing signs of an economic slowdown?Read more
Wall Street hit its biggest four-day rally last week amid optimism that Greece will avoid default. The Dow Jones Industrial average was up 153 points, S&P’s 500 Index went up 13 points – even our Consumer Confidence Index registered optimistic activity in the US after a long period of pessimism. But is the US celebrating too soon?