The Fed’s dangerous monetary experiments will continue whoever wins the US election June 14, 2016 The Federal Open Market Committee will be gathering in earnest today, but this hotly-anticipated event now looks like a damp squib after Janet Yellen all but ruled out an immediate rate rise last week. No doubt Fed watchers will revive their usual excitement and frenzy in the coming months, but a potential 0.25 per cent rise [...]
How the Treasury’s dodgy dossiers grossly exaggerated the economic impact of Brexit June 14, 2016 With just over a week to go before Britain votes, the Remain campaign is relying heavily on analysis produced by the Treasury which claims a variety of extremely negative impacts in both the short and the long term from the UK leaving the EU. Having reviewed the two models used by the Treasury, however, it [...]
Are leading investors wrong to criticise house-builder Persimmon for its £600m executive bonus pot? June 14, 2016 Rachel Cunliffe, deputy editor of CapX, says Yes. Persimmon’s aim was simple: incentivise executives to develop land in the most profitable way. The bonus scheme it established rewarded managers if they hit ambitious targets over a 10-year period – targets they have outperformed dramatically, building more homes more efficiently. Investors should be thrilled. The share price [...]
Dwindling bank profits may be the death knell for City jollies June 14, 2016 So how about Centre Court tickets, a stay at a top hotel in Wimbledon Village, and a couple of lovely meals thrown in? All on the house, of course. Just call it relationship building between an appreciative Canada institution and its valuable client. Ordinarily it would be a no-brainer. “Of course we’d love [...]
What will central banks do next? Prepare for more unconventional monetary policy, experts warn June 14, 2016 Eight years since the global financial crisis, and central banks are still experimenting with ever-more unusual ways to fire up their economies. “We have had QE money printing, QE involving corporate bonds, very cheap loans to banks, and in the US they have been buying up troubled assets,” explains Jim Leaviss of M&G Investments. But despite [...]
Apple had plenty of “I’d definitely use that” moments at WWDC June 13, 2016 Once again the Apple faithful dutifully attended or watched its annual developer update to see what the company had in store. Apple’s momentum with developers is staggering. It claims to have over 30m developers and since the iPhone launched, the company claims to have shared nearly $50bn (£35bn) of shared revenue with app makers. It remains the [...]
The Eurozone’s winners and losers – and how to close the gap June 13, 2016 While helpful in addressing the symptom, deflation, Mario Draghi’s quantitative easing cannot be expected to solve the Eurozone’s underlying problem – a monetary union devoid of economic union. Solving this will take years. The chart below tracks the winners and losers of the euro, since its introduction. It highlights how real unit labour costs have [...]
Remain campaign can’t rely on Labour voters June 13, 2016 With just 10 days to go until Britain votes on its membership of the European Union, how much ammunition do the two sides have left? The Leave camp feel they’re on to a winner with talk of Turkey joining the EU, not least with immigration remaining top of the list of public concerns. Number 10 [...]
Brexit could spark an EU renaissance if elites recognise their many failings June 13, 2016 One of the many things I do for my political risk firm is design and play war games for my clients – strategic, empirically-based simulations of the possible geostrategic futures out there, and how businesses can use this creative tool to survive and thrive in our present world, laden as it is with political risk. Some [...]
Britain must not turn its back on its friends and allies by leaving the EU Single Market June 13, 2016 The referendum on the UK’s continued membership of the European Union is just ten days away. While this decision on whether to remain in the EU and its integrated Single Market is the sovereign choice of the British people, it is important for voters to listen to the opinions of allies and partners from around [...]