We’ve already said that to understand the dangers of the current sell-off in emerging markets, you need keep an eye on the corporate bond market. Companies in emerging markets haved binged on borrowing in recent years, as super-low interest rates in large developed economies drove investors abroad in search of investments that offered a higher payoff.
Here’s an interesting effort by the OECD, which is trying to quantify how well-protected trade secrets are across a number of large, significant economies.
There’s an old saying on Wall Street: If you’ve got big hopes, bet on oats.
The numbers: The search giant reported net income for the fourth quarter of $3.38 billion, up 17% from the prior year. Sales, excluding the costs of payments to partner sites for traffic, amounted to $13.55 billion, up about 19.5% from the same period last year.
Global investors have suddenly remembered that emerging markets have a rich, recent history of florid financial crises.
Careful, the cronut is now the Cronut®.
Central banks in emerging markets are performing a high-stakes balancing act.
This post has been updated.
Labor markets around the world are deeply in the red.
Crises have costs.
Think the US housing market is dangerously overheated? Think again.
It’s been a while since we’ve seen a good, old-fashioned retreat from risk. But that’s what we seem to be getting, thanks to a sharp emerging-market currency sell-off.
The abrupt departure of Mohamed El-Erian as CEO of bond-fund megalith Pimco this week sparked much head-scratching amongst the financial press. Bill Gross, Pimco’s founder and managing director, told the Wall Street Journal that he didn’t want El-Erian to leave (paywall), but the Financial Times reports that a “frequently fractious” relationship (paywall) between Gross and El-Erian was part of the reason he departed.
It’s just a fact. Many Germans can’t be bothered to buy a house.
British unemployment tumbled sharply in the three months that ended in November.
Really London, it’s getting to be a bit much.
And then there was Bill.
This article has been corrected.
The numbers: Not great. The big international bank didn’t fare well in mortgages or bond trading. Still, fourth-quarter profit rose 125% to $2.69 billion. (If you strip out assorted accounting items, net income was up a less impressive 21%.) Revenues fell 5% to $9.47 billion at Citi’s important global consumer banking unit, including an 8% tumble in North America, thanks to a decline in mortgage refinancing. (The decline in mortgages also hit peer banks Wells Fargo and JPMorgan Chase.)
The world’s sole superpower requires the same level of paid maternity benefits as fellow economic powerhouses Swaziland, Lesotho and Papua New Guinea. That is to say, zilch.
What a nice way to end the year. US retail sales showed better-than-expected momentum in December, rising 0.2% over November. (It might not sound like much but it was better than the consensus expectation for a 0.1% rise.) Moreover, the so-called core measure of retail sales—which strips out volatile components such as food, gasoline and auto sales—rose 0.7%, the best number since July 2012. Momentum like this should not be ignored in an economy dominated by domestic consumption.
The numbers: Not so hot. Wells Fargo’s residential mortgage originations (i.e., mortgages on new homes and refinancing of existing ones) tumbled 60% compared to the fourth quarter of 2012. But even so, the bank’s net income rose 19% to $2.37 billion.
That’s according to a recent update to data on official development assistance offered by the nations in the Organization for Economic Cooperation and Development.
US stocks are about as high as they’re going to get—barring an unexpected corporate profit barrage, according to Goldman Sachs. The US investment bank’s stock analysts write:
