Category: Economics

Investor Considerations Over the U.S. Holiday


1.  FX Price Action:  The US dollar is little changed against most of the major currencies.  The notable exception is the Australian dollar.  It has been sold to new six-year lows to near $0.7500.  Recall that is the level that RBA Governor Stevens previously identified as reasonable.  This illustrates one of the problems of nominal and bilateral exchange rate targets.  The continued negative terms of trade, shock (e.g., iron ore prices have renewed their decline) and knock-on impact from poor Chinese developments make whatever fair value means more dynami

Escalating Debate over the ISDS Dogs the China-Australia FTA


The China–Australia Free Trade Agreement (FTA), signed and made public on 17 June 2015, included investor-state dispute settlement (ISDS) provisions, which allow foreign investors to claim against host states that violate substantive commitments if the treaty’s inter-state arbitration mechanism is unavailable due to political or diplomatic reasons. ISDS is especially useful when the host state’s laws and procedures do not meet commonly accepted minimum international standards.

Safe Bet: The Next Taiwanese President will be a Woman


With legislator and Deputy Speaker Hung Hsiu-chu confirmed by the Standing Committee of the Nationalist Party or Kuomintang (KMT), the presidential candidates for the two main parties contending for Taiwan’s 2016 election are both women, leading to the foregone conclusion that there will be a female president in Taiwan next year.

U.S. Home Price Gains Slow


House prices continue to rise in the United States, but at a slower pace than before.

A new study by S&P Dow Jones shows that home prices rose 4.9% year-over-year in the 20 largest cities in the country, while prices gained 4.6% year-over-year in the 10-city composite. Those figures are for April, when some analysts expected price gains to slow because of cold weather hindering demand.

Rounding Up Corrupt Chinese Officials in Australia


China has an emigration problem. Corrupt officials have decamped to all corners of the world and the Chinese Communist Party wants to haul them home. Australia should help China investigate these officials, but should try suspects in Australia rather than extradite them to China.

Is Criticism of Japan on Climate Change Well-Placed?


Japan has received some sharp criticism following the G7 meeting in June 2015 for its stance on climate change. Japanese Prime Minister Shinzo Abe announced a target of cutting greenhouse gas emissions of 26 percent below 2013 emission levels by 2030, which is equivalent to 18 percent less than 1990 emissions. If replicated globally, this would fall short of what is needed to keep the risk of catastrophic climate change to reasonable levels.

The New Development Bank Features South Africa, but What about Nigeria?


The BRICS Development Bank launched. The Asian Infrastructure Investment Bank is taking off.

Where is Nigeria?

As a slate of long-term projections suggest, Nigeria’s huge economic potential requires huge determination. When Muhammadu Buhari took over from Goodluck Jonathan, he ran on a platform of security and zero patience to corruption. Those are the preconditions for the creation of prosperity and growth.

The AIIB Leaves the Launch Pad


The launch of the Asian Infrastructure Investment Bank heralds a new era in which international multilateral institutions are no longer owned, controlled and operated by advanced economies alone.

Mortgage Market Improves, Consumer Sentiment Rises


Two major trends are boosting economic expectations in the United States, as the mortgage market continues to strengthen and consumers get more confident across the country.

The total amount of seriously delinquent mortgages on single-family homes for Freddie Mac loans fell to 1.58% in May, the lowest rate since the end of 2008. That is still far above the pre-crisis average of about 0.7%, but indicates a continued decline from the peak, when serious delinquencies rose to over 4% at the beginning of 2010.

Calmer Seas Should Prevail between Australia and Indonesia


Australia and Indonesia both have a keen interest in the law of the sea, as both possess large maritime areas of jurisdiction. However, this commonality does not mean their interests necessarily coincide. Australia has a keen interest in freedoms of navigation through the archipelagos to its north, but Indonesia, as the largest of these archipelagos, is most sensitive to the movement of foreign ships and aircraft in and around its archipelagic waters.