
With the global economy struggling to recover from the implosion of the US subprime real estate bubble and the toxic derivatives that fed off it, there is a growing sense among regulators that asset bubbles need, somehow, to be pricked before they reach Gargantuan proportions. In the teeth of this general clamor for “something to be done,” Adam Posen’s speech on December 1 to the MPR Monetary Policy and the Markets Conference in London sounds…

What to do? Doing business with the world’s second largest economy, which looks like it may become the world’s largest economy within the working life of today’s 20-year-olds, is a “no brainer” from a strategic point of view. Granted, China is not a Western democracy, but it is more and more embracing market economy practices, and some economists would argue that you can’t be a little bit pro free market any more than you can be a little bit pregnant…

He may be something of a pariah on Wall Street thanks to his calls for a new tax on “upper income” Americans but, in his latest critique of the Obama administration’s handling of the financial crisis, Nobel prize-winning economist Joseph Stiglitz makes a great deal of sense. Stiglitz—described as “perhaps the closest thing we have to John Maynard Keynes in both his theoretical outlook and his cogent kibitzing of policymakers” by…

While M&A activity in the US, the UK, and Europe is still way below pre-crash levels, China’s “outbound” M&A activity (acquisitions outside its borders) has ramped up strongly, according to a report by accountants Deloitte, “The emergence of China: New frontiers in outbound M&A.” This will surprise almost no one interested in global M&A, but the Deloitte report is refreshingly free of the hysteria China’s spending spree on foreign assets has generated in some quarters…

It’s official. Caring for the environment and for society can actually benefit your wealth. And according to a raft of recent surveys, the benefits of investing responsibly are increasingly being recognized by the global fund management industry, puncturing expectations that the financial crisis might put paid to such hopes. The only real negative to emerge from the recent surveys—and unfortunately it’s a big negative—is that…

There’s an interesting tussle going on in the US over whether the Federal Reserve should be given more powers—or indeed whether the Washington-based central bank should have its wings clipped. Those arguing in favor of the Fed gaining additional abilities perhaps unsurprisingly include its chairman “Helicopter” Ben Bernanke. He has recently been claiming—to the wry amusement of some economic commentators and guffaws from others…

In Part 1 we looked at what makes catastrophe bonds an interesting investment option for a wide range of investors. The focus in Part 2 is on the prospects for cat bonds post the crash of 2008/2009. The first thing to be said is that, while the cat bond market was rocked back on its heels by the recession, it did not go away. According to the likes of Swiss Re, one of the pioneers of cat bonds, although the first half of 2009 was extremely slow, it now looks likely that…

The picturesque Swiss ski resort of Davos will later this month again play host to the World Economic Forum (WEF), the annual jamboree of the global great and the good. This year the event is likely to be dominated by soul-searching about the state of the global economic recovery. Specifically, speakers will be assessing whether the neo-Keynesian medicine doled out by most governments is going to be sufficient to…

On November 20, 2001, the Doha Declaration came into existence. Following the disastrous dot.com crash and the ensuing slowdown (which looked bad at the time but wasn’t a patch on the 2008/2009 crash), the countries of the world signed up to an optimistic development agenda. This committed them to work to enhance the global multilateral trading system, as embodied in the World Trade Organization (WTO), which, ministers noted, “has contributed significantly to…

Catastrophe bonds are either complete lunacy or an astounding triumph of statistics and probability theory over common sense, depending on your point of view. Either way, they have proved to be a marvelous way for the insurance industry to tap into the deep pockets of the capital markets. How do they work? The basic idea is…
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