The year in business: A review of 2015
2015 was a very bad year to be in the business of digging things out of the ground, thanks to a dramatic slowdown in growth in China. Commodity prices tumbled, Continue Reading
Oil Bankruptcies Reach Highest Quarterly Level Since Recession
Bankruptcies among oil and gas companies have reached quarterly levels last seen in the Great Recession, according to the Federal Reserve Bank of Dallas. At least nine U.S. oil and Continue Reading
US banks hit by cheap oil as Opec warns of long-term low
US banks face the prospect of tougher stress tests next year because of their exposure to oil in a sign of how the falling price of crude is transforming the Continue Reading
Tumbling oil erases decade of China-fuelled super cycle
Oil has shed two-thirds of its value since mid-2014 in a rout that essentially means gains from a decade-long commodity super-cycle have been wiped out — as if China’s unprecedented Continue Reading
U.S. third-quarter growth revised lower to 2.0 percent
The U.S. economy grew at a fairly healthy clip in the third quarter as strong consumer and business spending offset efforts by businesses to reduce an inventory glut, underscoring its Continue Reading
Gas Windfall Fails to Stoke Consumers
AAA says regular gas nationwide fell Sunday to $2 a gallon. American consumers are getting a windfall of billions of dollars a week thanks to low fuel prices. The U.S. Continue Reading
Who’s right, commodities or the Fed?
As the U.S. Federal Reserve Bank raised interest rates last week for the first time in 10 years in response to what it said was strength in the U.S. economy, Continue Reading
Junk-Bond Rout Deepens, Sending Shockwaves Through Stocks and Other Markets
U.S. junk bonds posted their steepest decline since 2011, intensifying fears that a six-year bull market in stocks and other risky assets is nearing an end. The largest high-yield exchange-traded Continue Reading
Rate rise belies frailties in US economy
Expectations are carved in stone that the US Federal Reserve will shift borrowing costs higher next week with the central bank’s policy shift seen in some quarters as justifying optimism Continue Reading
Solid U.S. employment report a green light for Dec rate hike
U.S. job growth increased solidly in November in a show of the economy’s resilience, which most likely paves the way for the Federal Reserve to raise interest rates this month Continue Reading
Yellen lays ground for interest rate rise
he US economy has “recovered substantially” from the Great Recession and is set for further growth and firmer inflation, Janet Yellen said, as she laid the ground for the first Continue Reading
Eurozone inflation unchanged at 0.1 percent, below forecasts
Inflation across the 19-country eurozone held steady in November at 0.1 percent over the year, reinforcing the case for the European Central Bank to deliver a further big stimulus for Continue Reading
Euro on shaky ground, stocks up on talk of aggressive ECB easing
The euro slipped back towards seven-month lows, bond yields fell and European shares rallied on Thursday as talk of aggressive stimulus from the European Central Bank next week gained ground. Continue Reading
U.S. GDP growth raised for third quarter
The Lower Manhattan skyline, One World Trade Center and Manhattan Bridge are seen in the background as a ferry with a U.S. flag cruises along the East River in New York September 21, 2015. The U.S. economy grew at a healthier clip in the third quarter than initially thought, but strong inventory accumulation by businesses could temper expectations of an acceleration in growth in the final three months of the year. The Commerce Department on Tuesday said the nation’s gross domestic product grew at a 2.1 percent annual pace, not the 1.5 percent rate it reported last month, as businesses reduced an inventory bloat less aggressively than previously believed. The pace of economic growth, which was also boosted by upward revisions to business spending on equipment, suggests a resilience that could help give the Federal Reserve confidence to raise interest rates next month. While consumer spending was revised down […]
Kurt Cobb: Money Cannot Manufacture Resources
Our cornucopian economic and social narrative is in a state of denial and delusions. We have volumes of science that tell us what we are doing economically and socially is not sustainable. We cannot keep expanding our economy and population. We are trying to expand our economy and we are unable. Our population growth in uncontrollable even if we wanted to. What is even more of a catch 22 with our human arrangement is it is irreversible. We cannot degrowth without catastrophic collapse. We have far too many people that must be fed. Starvation and famine lead to failed states failed state in a complex global system like ours. This leads to generalized globalized failure. Just because it has not happened yet is no reason it won’t. If Saudi Arabia collapses so will the globalized world if its oil resources are destroyed. This is the inconvenient truth of complexity. […]
Bank of England gauges impact of lower oil prices
Bank of England offers measured take on impact of lower crude oil prices, but notes inflation is below a level considered to be healthy. File Photo by Hugo Philpott/UPI LONDON, Nov. 10 (UPI) — With about 60 percent of the drop in crude oil prices linked to demand issues, the Bank of England suggested pressure may be negative for the British economy. Lower crude oil prices have translated to a de facto form of stimulus to consumers and consuming nations, but left exporters struggling to cope with weakened economies. The Canadian economy most recently said it was flirting with recession. In September, the Russian Central Bank warned of a prolonged slump in crude oil prices and said there were "persistent risks of considerable economic cooling" in Russia. The Bank of England said in a November report on inflation there were key market factors to gauge when determining the risks […]
OECD cuts world growth forecast
Sign up for quick access to a wealth of global business news, including: OECD cuts world growth forecast Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no For 4 weeks receive […]
Dollar hits near seven-month high after U.S. jobs report
An employee of a money changer holds a stack of U.S. Dollar notes before giving it to a customer in Jakarta, October 8, 2015. The dollar rose against other major currencies on Friday, maintaining gains that followed the release of data showing the U.S. economy created far more jobs than expected in October. The surprisingly robust jobs report helped the dollar solidify a case for the Federal Reserve to increase U.S. overnight borrowing costs for the first time since 2006, a move that would strengthen the greenback and attract investors. Nonfarm payrolls increased 271,000 last month, the largest rise since December and a far cry from the 142,000 and 136,000 jobs numbers seen in September and August. Market economists polled by Reuters had predicted 180,000 new jobs for October. The data sent the dollar higher across the board. The greenback hit highs of 2-1/2-months versus the yen, seven months […]
Brisk Job Gains Ease Fed’s Path
U.S. employers added jobs in October at the quickest pace this year, while boosting wages at the fastest rate since 2009, giving the Federal Reserve its clearest signal yet that the economy may be strong enough to withstand an interest-rate increase next month. Nonfarm payrolls rose a seasonally adjusted 271,000 last month, the Labor Department said Friday. Revisions showed employers added a combined 12,000 more jobs in September and August than previously estimated, bringing the year’s average to 206,000. The unemployment rate fell to 5%, a level Fed officials expected it to reach by year’s end and near the 4.9% rate they project as normal in the long run. Average hourly earnings of private-sector workers rose at a 2.5% annual pace in October. That marked the best year-over-year performance since July 2009, just as the economy was emerging from recession, and a notable rise from the 2% average pace […]
U.S. jobless claims rise; third-quarter productivity posts surprise gain
People wait in line to enter the Nassau County Mega Job Fair at Nassau Veterans Memorial Coliseum in Uniondale, New York October 7, 2014. New U.S. applications for unemployment benefits last week recorded their largest increase in eight months, but remained at levels consistent with a fairly healthy labor market. Other data on Thursday showed a surprise rise in productivity in the third quarter after a drop in self-employment led to overall hours worked falling for the first time in six years, restraining labor-related production costs. Initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 276,000 for the week ended Oct.31, the Labor Department said. It was the largest weekly increase since late February. Still, last week marked the 35th straight week that claims were below the 300,000 threshold normally associated with a strong jobs market. Claims had hovered near 42-year lows for much of October. […]
U.S. employment seen raising December rate hike chances
A job seeker holds literature while waiting to speak with a representative of the Golden Gate National Parks Conservancy at a career fair in San Francisco, California July 14, 2015. U.S. job growth likely accelerated in October after two straight months of tepid gains, with wages also picking up in a show of domestic strength that would bolster prospects for a December interest rate hike from the Federal Reserve. A Reuters survey forecast nonfarm payrolls increasing 180,000, well above the 139,000 jobs per month average for August and September. Should payroll gains meet expectations, it would add to robust automobile sales in painting an upbeat picture of the economy at the start of the fourth quarter. With speeches from several Fed officials, including Chair Janet Yellen, suggesting a low bar for a December rate increase, economists say job gains above 150,000 in October and November would be sufficient for […]
U.S. factory orders fall for second straight month
An Airbus A321 is being assembled in the final assembly line hangar at the Airbus U.S. Manufacturing Facility in Mobile, Alabama September 13, 2015. New orders for U.S. factory goods fell for a second straight month in September as the manufacturing sector continues to struggle under the weight of a strong dollar and deep spending cuts by energy companies. The Commerce Department said on Tuesday new orders for manufactured goods declined 1.0 percent after a downwardly revised 2.1 percent drop in August. Factory activity, which accounts for about 12 percent of the economy, is also being constrained by efforts by businesses to reduce an inventory overhang and tepid global demand. But the worst could be over for the sector after a report on Monday showed new orders rose in October for the first time since July. Economists polled by Reuters had forecast factory orders falling 0.9 percent in September […]
U.S. rail freight falls as industrial economy struggles
Railroad cars are seen in Pittsburgh, Pennsylvania April 8, 2011. Freight carried by major U.S. railroads fell by 7 percent in the second quarter of 2015 compared with the same period in 2014, confirming that large parts of the industrial economy are in recession. The major Class 1 railroads carried 431 billion ton-miles of freight in the three months ending June, down from 463 billion ton-miles in 2014, according to the U.S. Surface Transportation Board. Changes in freight volumes reflect broader difficulties in the industrial economy. Rail operators have been struck by a perfect storm which has hit both their traditional and new business lines. Coal shipments to power plants, the biggest commodity on the network, accounting for about one-third of total tonnage, have been hit by a combination of environmental regulations and low gas prices. Coal shipments were down by 27 million tonnes, around 15 percent, in the […]
U.S. manufacturing slows; construction spending at 7-1/2-year high
An SUV moves through the assembly line at the General Motors Assembly Plant in Arlington, Texas June 9, 2015. U.S. manufacturing activity slowed in October for a fourth straight month, but a rise in new orders offered hope for a sector buffeted by a strong dollar and relentless spending cuts by energy companies. Other data on Monday showed construction spending rose in September, indicating the economy remained on firmer ground despite some cooling in consumer spending and persistent weakness in manufacturing. The Institute for Supply Management said its national manufacturing index slipped to 50.1 this month from a reading of 50.2 in September. A reading above 50 indicates expansion in the manufacturing sector. New orders rose to 52.9 from 50.1 in September. However, the employment index fell to 47.6, the lowest reading since August 2009. It was the first time it had dropped below 50 since April. U.S. stocks […]
Inventories seen weighing on U.S. third-quarter growth
U.S. economic growth likely braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, but solid domestic demand could encourage the Continue Reading
Inside the Secretive Circle That Rules a $14 Trillion Market
Fifteen of the biggest players in the $14 trillion market for credit insurance are also the referees. Firms such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. wrote the rules, are the dominant buyers and sellers and, ultimately, help decide winners and losers. Has a country such as Argentina paid what it owes? Has a company like Caesars Entertainment Corp. kept up with its bills? When the question comes up, the 15 firms meet on a conference call to decide whether a default has triggered a payout of the bond insurance, called a credit-default swap. Investors use CDS to protect themselves from missed debt payments or profit from them. Once the 15 firms decide that a default has taken place, they effectively determine how much money will change hands. And now, seven years after the financial crisis first brought CDS to widespread attention, pressure is growing inside […]
Global Trade Is Collapsing
When the global economy is doing well, the amount of stuff that is imported and exported around the world goes up, and when the global economy is in recession, the amount of stuff that is imported and exported around the world goes down. It is just basic economics. Governments around the world have become very adept at manipulating other measures of economic activity such as GDP, but the trade numbers are more difficult to fudge. Today, China accounts for more global trade than anyone else on the entire planet, and we have just learned that Chinese exports and Chinese imports are both collapsing right now. But this is just part of a larger trend. As I discussed the other day , British banking giant HSBC has reported that total global trade is down 8.4 percent so far in 2015, and global GDP expressed in U.S. dollars is down 3.4 […]
U.S. Companies Warn of Slowing Economy
Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as some industrial firms warn of a pullback in spending. From railroads to manufacturers to energy producers, businesses say they are facing a protracted slowdown in production, sales and employment that will spill into next year. Some of them say they are already experiencing a downturn. “The industrial environment’s in a recession. I don’t care what anybody says,” Daniel Florness, chief financial officer of Fastenal Co. FAST 1.33 % , told investors and analysts earlier this month. A third of the top 100 customers for Fastenal’s nuts, bolts and other factory and construction supplies have cut their spending by more than 10% and nearly a fifth by more than 25%, Mr. Florness said. The weakness is overshadowing pockets of growth in sectors such as aerospace and technology. Industrial companies are […]
Investors lurch backwards on US rate rise expectations
Sign up for quick access to a wealth of global business news, including: Investors lurch backwards on US rate rise expectations Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no For […]
U.S. Consumer Prices Fall, Clouding Fed Rate Decision
The Federal Reserve’s policy dilemma deepened Thursday with new data showing a persistently sluggish pace of inflation, held down largely by lower gas prices. U.S. consumer prices fell in September, driven by the drop in gasoline prices. The consumer-price index, which measures what Americans pay for everyday goods and services, fell a seasonally adjusted 0.2% in September, the second straight month of overall price declines, the Labor Department said. The monthly pace of inflation has been steadily falling since May, when renewed weakness in gas prices took hold. Prices were unchanged over the past year, but gasoline prices have fallen 29.6% during that time, the department said. Besides cheaper gas, consumer prices have been held down by the strong dollar, which makes imports cheaper for Americans. Excluding the volatile food and energy categories, prices rose a relatively firm 0.2% in the month and a moderately healthy 1.9% over the […]
Strategist: We’ve Hit ‘Peak Negativity’ in the Energy Sector
Ratcheting oil prices up higher. Earlier this year, Bank of Montreal Chief Investment Strategist Brian Belski called energy stocks a value trap . He has become more constructive, upgrading the sector to market weight, from underweight. A confluence of factors influenced the strategist’s decision to "neutralize" his portfolio position for both U.S. and Canadian energy stocks. The first is that the sector has reached what he called "peak negativity," underperforming the Standard & Poor’s 500-stock index by the most since 1986, when the last supply side-driven crash in oil prices occurred. Second, a prolonged period of low oil prices is now baked into analysts’ earnings expectations, although some Canadian analysts will probably have to ratchet down their estimates even farther. "Earnings per share revisions are one of our most trusted contrarian indicators and the fact that they have hit extreme negative levels is encouraging to us for sector performance […]
UBS Sees Sovereign Assets Shrinking by $1.2 Trillion
Central bank and sovereign wealth fund assets will shrink by $1.2 trillion, or almost 7 percent, by the end of the year as China and petrostates including Russia and Saudi Arabia dip into their savings amid slower growth and lower crude revenues, according to UBS Group AG. The decline will be driven by China withdrawing its foreign exchange reserves, while oil-producing countries tap foreign assets to support government spending, Massimiliano Castelli, head of global strategy at UBS Asset Management, said in a phone interview from Zurich Tuesday. The fall in sovereign assets will likely continue into next year and also be driven by an expected drop in investment returns, he said. Assets held by central banks and sovereign wealth funds amounted to more than $18 trillion at the end of 2014, according to UBS. Sovereign wealth funds from Oslo to Riyadh and Doha to Moscow are preparing to withdraw […]
Why Are The IMF, The UN, The BIS And Citibank All Warning That An Economic Crisis Could Be Imminent?
The warnings are getting louder. Is anybody listening? For months, I have been documenting on my website how the global financial system is absolutely primed for a crisis, and now some of the most important financial institutions in the entire world are warning about the exact same thing. For example, this week I was stunned to see that the Telegraph had published an article with the following ominous headline: “ $3 trillion corporate credit crunch looms as debtors face day of reckoning, says IMF “. And actually what we are heading for would more accurately be described as a “credit freeze” or a “credit panic”, but a “credit crunch” will definitely work for now. The IMF is warning that the “dangerous over-leveraging” that we have been witnessing “threatens to unleash a wave of defaults” all across the globe… Governments and central banks risk tipping the world into a fresh […]
Four Ways the Oil Price Crash Is Hurting the Global Economy
Crude consumption. Lower oil prices were roundly celebrated as a tailwind for global growth. In theory, the movement of wealth from commodity producers, which often stow away oil revenue in sovereign wealth funds, to consumers, which spend a far larger portion of their income, is a positive for economic activity. But strategists at Credit Suisse believe that so far, the global economy has seen only the storm from lower crude, not the rainbow that follows. "The fall in the oil price was considered by many investors, and ourselves, to be a significant positive for global GDP growth," a team led by global equity strategist Andrew Garthwaite admitted. The net effect of this development, according to their calculations, has turned out to be a 0.2 percent hit to the global economy. The negative effects of lower oil—namely the large-scale cuts to capital expenditures—are having a large and immediate impact on […]
IMF warns on worst global growth since financial crisis
Sign up for quick access to a wealth of global business news, including: IMF warns on worst global growth since financial crisis Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no […]
An ailing global economy starts to weigh on US job market
WASHINGTON (AP) — A sagging global economy has finally caught up with the United States. Nervous employers pulled back on hiring in August and September as China’s economy slowed, global markets sank and foreigners bought fewer U.S. goods. Friday’s monthly jobs report from the government suggested that the U.S. economy, which has been outshining others around the world, may be weakening. Lackluster growth overseas has reduced exports of U.S. factory goods and cut into the overseas profits of large companies. Canada, the largest U.S. trading partner, is in recession. China, the second-largest economy after the United States, is growing far more slowly. And emerging economies, from Brazil to Turkey, are straining to grow at all. A result is that economists now expect the Federal Reserve to delay a long-awaited increase in interest rates, possibly until next year. Employers added just 142,000 jobs in September, and the government sharply lowered […]
IMF chief warns of ‘disappointing’ growth
Sign up for quick access to a wealth of global business news, including: IMF chief warns of ‘disappointing’ growth Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no For 4 weeks […]
The receding tide of oil price foreshadows the incoming DEFLATION TSUNAMI.
The receding tide of oil price foreshadows the incoming DEFLATION TSUNAMI. Nothing grows indefinitely in a finite system, not even debt! Almost all (90%) of ‘money’ in existence today is debt (credit) . This debt is created from thin air with every form of loan, from credit cards, through corporate debt to Treasury Notes. All this debt comes with an interest component that demands never ending growth in order to repay it. Again, the current monetary system REQUIRES that we have never ending economic growth. It is one massive pyramid scheme because, if we ever stop growing, who is paying the interest? Total U.S. debt has soared over the last 35 years: Debts are claims on future goods and services with interest and are essentially a bet that the future economy will be bigger than the present. However: The economy is the summation of all goods and services and […]
Worries Rise Over Global Trade Slump
A sharp drop in global trade growth this year is underscoring a disturbing legacy of the financial crisis: Exports and imports of goods are lagging far behind the pace during past expansions, threatening future productivity and living standards. For the third year in a row, the rate of growth in global trade is set to trail the already sluggish expansion of the world economy, according to data from the World Trade Organization and projections from leading economists. Before the recent slump, the last year trade underperformed during an economic expansion was 1983. “We have seen this burst of globalization, and now we’re at a point of consolidation, maybe retrenchment,” said WTO chief economist Robert Koopman. “It’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should.” Since rebounding sharply in 2010 after the financial crisis, trade […]
Asian shares tread water as Fed meeting looms
A man holding an umbrella walks past an electronic board displaying graphs showing recent movements of the Nikkei share average outside a brokerage in Tokyo September 8, 2015. Asian shares and the dollar inched higher on Tuesday but caution reigned after Wall Street skidded as investors awaited this week’s U.S. Federal Reserve policy decision. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, after Wall Street logged losses, with U.S. trading volume at its lowest in a month as markets awaited the Fed outcome. Japan’s Nikkei stock index .N225 rose 0.6 percent as investors awaited the outcome of the Bank of Japan’s two-day policy meeting later this session, as well as BOJ Governor Haruhiko Kuroda’s post-meeting speech. A few investors were betting that Japan’s central bank would muster additional easing measures. But the majority believe that the BOJ will simply warn of heightening global risks while […]
An Energy Firm’s Collapse Casts Ominous Sign Over Mortgage Bonds
A pair of office towers in Tulsa, Oklahoma, is giving commercial real estate investors more reason to worry that the collapse in oil prices is starting to infect their market. The biggest tenant, oil and gas producer Samson Resources Corp., vacated one of the more than a dozen floors it occupied, according to a report from the firm that services a $45 million mortgage on the buildings known as the Williams Center Towers. Samson, which is preparing to file for bankruptcy protection this month, has indicated it will abandon another floor next year, and its lease gives it the right to withdraw from more space after that, according to the report. Samson’s shrinking footprint is laying bare the risks faced in cities that boomed amid the U.S. shale revolution — and are now the most vulnerable to the commodities rout. That’s increasing concern in the market for commercial mortgage […]
China turmoil divides Fed over inflation
Sign up for quick access to a wealth of global business news, including: China turmoil divides Fed over inflation Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no For 4 weeks […]
Challenged on Left and Right, the Fed Faces a Decision on Rates
Photo Janet L. Yellen, the Federal Reserve chairwoman. Credit Stephen Crowley/The New York Times JACKSON HOLE, Wyo. — Conservative activists who want the Federal Reserve to raise interest rates distributed chocolate coins in golden wrappers at the local airport last week as Fed officials arrived for their annual policy retreat. Liberal activists in green “Whose Recovery?” T-shirts formed a receiving line at the resort hotel in the heart of Grand Teton National Park where the meeting was held, to personalize their argument that the Fed should wait. Sometime soon — possibly as early as mid-September and probably no later than the end of the year — the Fed plans to raise its benchmark interest rate one-quarter of one percentage point, a mathematically minor move that has become a very big deal. Investors, who always pay attention to the Fed, are paying particular attention now. The central bank has held […]
U.S. second-quarter GDP growth rate revised up to 3.7 percent
People are seen walking through Roosevelt Field shopping mall in Garden City, New York February 22, 2015. The U.S. homeland security chief said on Sunday he takes seriously an apparent threat by Somali-based Islamist militants against prominent shopping sites in the West… Aug 27 The U.S. economy grew faster than initially thought in the second quarter on solid domestic demand, showing fairly strong momentum that could still allow the Federal Reserve to hike interest rates this year. Gross domestic product expanded at a 3.7 percent annual pace instead of the 2.3 percent rate reported last month, the Commerce Department said on Thursday in its second GDP estimate. The GDP report, which was released in the wake of a global stock market sell-off, should offer assurance to both investors and cautious Fed officials that the United States was in good shape to weather the growing strains in the world economy. […]
Excluding a Slump in Oil Investments, the U.S. Economy Grew the Most in Nine Years
A gas flare burns at an oil well site near Sidney, Montana, U.S. Photographer: Daniel Acker The U.S. clocked its fastest rate of economic growth in nine years. Well, at least if you strip out the effects of a battered energy sector. Oil and exploration companies this year have cut back on investment in response to a plunge in crude prices that gathered steam as 2014 drew to a close. If it weren’t for such a dramatic reversal in demand for drilling rigs and wells, the economy would have posted its strongest pace of growth since the start of 2006. Gross domestic product, which includes what consumers, companies and governments spend and invest, increased at a 4.5 percent annualized rate in the second quarter when outlays for exploration, shafts and wells are excluded. Corporate investment in oil and mining structures retreated at a whopping 68 percent annualized rate from […]
Fitch sees Houston at risk from weak oil market
Fitch Ratings sees some risk for Houston finances and jobs because of the depressed crude oil market. Photo by Aaron M. Sprecher/UPI CHICAGO, Aug. 26 (UPI) — Fitch Ratings finds lower crude oil prices will impact U.S. cities differently, though Houston may be a standout in terms of financial risk. U.S. crude oil prices are down more than 50 percent from this time last year. An increase in oil production, largely from reserve areas like the Eagle Ford shale basin in Texas, has pushed markets toward the supply side. Fitch found that, since at least the early 1980s, local government finances have been linked strongly to energy prices. Using metrics like tax revenue and gross domestic product, the ratings agency found some Texas cities in particular were pressured by the weak crude oil market . For the state as a whole, tax collections for June were down 1.4 percent […]
Deflationary Collapse Ahead?
Both the stock market and oil prices have been plunging. Is this “just another cycle,” or is it something much worse? I think it is something much worse. Back in January, I wrote a post called Oil and the Economy: Where are We Headed in 2015-16? In it, I said that persistent very low prices could be a sign that we are reaching limits of a finite world . In fact, the scenario that is playing out matches up with what I expected to happen in my January post. In that post, I said Needless to say, stagnating wages together with rapidly rising costs of oil production leads to a mismatch between: The amount consumers can afford for oil The cost of oil, if oil price matches the cost of production This mismatch between rising costs of oil production and stagnating wages is what has been happening. The unaffordability […]
Signs, Long Unheeded, Now Point to Risks in U.S. Economy
Photo Awaiting the opening bell at the New York Stock Exchange. Credit Justin Lane/European Pressphoto Agency As investors scramble to make sense of the wild market swings in recent days, a number of financial experts argue that, for more than a year now, signs pointing to an equity crisis were there for all to see. The data points range from the obvious to the obscure, encompassing stock market and credit bubbles in China, the strength of the dollar relative to emerging market currencies, a commodity rout and a sudden halt to global earnings growth. While it would have been impossible to predict the precise timing of the last week’s downturn, this array of economic and financial indicators led to an inescapable conclusion, these analysts say: The United States economy would only be able to avoid for so long the deflationary forces that have taken root in China. And if […]
Risks Grow for Slow but Steady U.S. Expansion
The U.S. has been the tortoise in a global race for economic growth, plodding out a slow but steady expansion while China signals exhaustion and the rest of the world wobbles. Now, market turmoil and China’s troubles threaten to undermine the already unspectacular U.S. outlook. Few economists see a U.S. recession. In fact, some recent developments, including lower oil prices, will help U.S. consumers and businesses. But an uneven global growth outlook is pushing the value of the dollar higher, making U.S. goods more expensive overseas and harder to export. That could restrain the U.S. economy in the months ahead. Stock-market declines could further hurt U.S. consumer sentiment and spending, if the drops are sustained, and they make businesses even less willing to invest. Federal Reserve officials now need to decide if they should alter their planned course on interest rates. Officials have been signaling for months that at […]
Treasuries Roar as Disinflation Specter Haunts Global Economy
Treasuries headed for the biggest weekly gain in five months as slumping commodities prices sparked speculation a slowdown in global growth will revive deflation and delay the Federal Reserve from raising interest rates early. Benchmark U.S. government securities headed for the strongest rally since March as sliding oil prices pushed a gauge of inflation expectations toward a five-year low, enhancing the allure of fixed-income assets. The average yield on developed nation debt fell to the lowest in three months. “Risk-off sentiment has been strong over the past couple of weeks and supporting sovereign debt,” said Tomohisa Fujiki, head of interest-rate strategy for Japan at BNP Paribas SA in Tokyo. “Doubts about Chinese growth fueled concern about slackening global demand and emerging nations, which seems to have helped pave the way for a correction in Treasuries.” The U.S. 10-year note yield fell 14 basis points this week to 2.06 percent […]