Last week the US Department of Justice (DoJ) announced that it was taking action to seek ‘the forfeiture and recovery of more than US$1 billion in assets’ related to 1Malaysia Development Berhad (1MDB). This action will likely start the process that will eventually lead to the removal of Najib Razak, Malaysia’s sixth prime minister.
China is unusual in that it is a developing country that has emerged as a major investor. China itself is an important destination for foreign direct investment (FDI), and opening to the outside world has been an important part of its reform program since 1978. However, China’s policy is to steer FDI to particular sectors.
After weeks of torrential rain across central and southern China, the mainland has suffered from a series of devastating floods. As the total price tag has soared, the impact will be felt in economic growth.
By mid-July, almost 240 people had lost their lives and nearly 100 were missing, as China’s floods had been compounded by Typhoon Nepartak and a violent tornado. Torrential rains affected 33 million people in 28 provinces, submerging huge areas of cropland.
This Great Graphic was tweeted by Alan Kruger (@Alan_Kruger). Drawing on official data and the Atlanta Fed’s GDPNow tracker for Q2 GDP (2.4%), it shows the current business cycle in the context of a four earlier cycles.
Until now, the recovery from the Great Financial Crisis was the weakest from the post-WWII last four contractions. However, as Kruger points out assuming that the Atlanta Fed’s GDP tracker is accurate, this dour assessment will no longer hold. It will surpass the recovery from the end of the tech bubble at the start of the century.
After some months of uncertainty, a representative from Thailand’s Democrats Party last week declared in a televised seminar that the party would not support the proposed draft constitution in the 7 August referendum. This follows an earlier declaration from the pro-Thaksin Puea Thai party that it also opposed the draft.
Following the 10 July upper house elections the Abe government now has the two-thirds majority in both houses of the Diet necessary to pass constitutional amendments. So what are the likely consequences?
Four years ago, Japan’s ruling Liberal Democratic Party (LDP) published a set of proposals for changing the nation’s postwar constitution. Like its earlier draft changes of 2005, they failed to muster enough support to be turned into legislation, let alone come to a vote.
June suffered from an excess of exits. However, none of them lived up to forecasts of dire consequences, at least for India. For now, Indian markets have shrugged off both Brexit and Rexit — the exit of Governor Raghuram Rajan from the Reserve Bank of India (RBI). In addition, the forward-looking nature of markets implies they do not foresee problems due to these exits.
EM ended the week on a soft note, as the dollar reasserted broad-based strength against most currencies. The FOMC meeting this week could see the Fed push back against the market’s dovish take on policy, in which case EM would be likely to remain under pressure.
The New York Times reported that the US is preparing to seize $1 bln in assets tied to 1MDB, S&P downgraded Turkey a notch to BB with a negative outlook, citing political uncertainty, Turkish President Erdogan declared a three-month state of emergency, The Nigerian Naira weakened above 300 per dollar for the first time, and Brazil’s central bank signaled a longer wait until it cuts rates
Increasing numbers of young Italians are following in the footsteps of previous generations in migrating to Australia, but up to 40% report feeling exploited at work, and found it difficult to have their skills recognised, new research has found.
Any suggestion that there is a new exodus of Italians to Australia is probably overblown. In broad terms, the Italian share of the Australian Temporary visa program between 2004 and 2015 was a very small 1.5% of the national total.
