World turbulences ahead ? #IMF #Forex #Economy

10 years ago, the global economy seemed to be on the mend. Interests rates down to 1%, UK was in its 12th year of uninterrupted growth, China was a part of WTO and everyone firmly believed in self correcting markets. The monetary system crash was unforeseen and a surprise. IMF confessed that it had been guilty of groupthink and played down the signs of trouble.
2014 is not that different from 2004. The global economy is mobile again, with the cheap money available.

Some optimists believe that the period of low inflation and continual expansion has returned after the hiatus caused by the crash. Recessions are rare and countries eventually revert to a trend rate of growth. This could either be the start of another long global upswing, another case of groupthink. Maybe the IMF is yet again choosing to ignore the signs in 2014 which might lead to another turbulence. 5 of such sings are

  1. The global economy’s dependency on exceptionally low interest rates. The trough in interest rates has been lower in each subsequent cycle and they are now barely above zero.  
  2. The bond market crashed as the world’s central banks cautiously try to return monetary policy to a more normal setting with a modest and gradual increase in official interest rates. 
  3. Everyone relied on Shale Oil and Gas to be our next source of energy. However 15 major companies have written off $35bn in investment since the boom began. Getting oil and gas out of the ground is proving costlier and less profitable than expected
  4. the risk of resource conflicts within the next five to 10 years unless the international community gets serious about dealing with global warming. The catalogue of extreme weather events – from floods in the UK to droughts in Australia – is growing. 
  5. Rising inequality – a tiny elite now grabbing the lion’s share of global growth. At the bottom, and increasingly for those in the middle as well, it is a case of wage squeezes, high unemployment, debt, austerity and poverty. The 85 richest people on the planet own the same wealth as half the world’s population but seem oblivious to the risk of widespread social unrest.

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How Racist is France? #France

There has been a sudden spike recently in expressions of racism in French public life—one that has provoked a national debate and may lead to legal action this week. It began in October 2013, when a candidate for the right-wing National Front likened Christiane Taubira, the Justice Minister, who is black, to a monkey, pairing her photograph with one of a chimpanzee on a Facebook page. Although the leader of the National Front, Marine Le Pen, forced the candidate to withdraw, the attacks continued. During some of the protests against France’s new gay-marriage law (which Taubira, as Justice Minister, pushed), the crowds chanted “Taubira, t’es foutue, les Français sont dans la rue.” (“Taubira, you’re fucked, the French are in the street!”) At one rally, a twelve-year-old child symbolically presented Taubira with a banana.

 

This does not appear to be an isolated case. The National Commission for the Rights of Man (C.N.C.D.H.), which has been charged by the French parliament to monitor incidents of racism in France, noted a twenty-three-per-cent increase in incidents of racism, Islamophobia, and anti-Semitism in 2012, and a five-fold increase over the past twenty years.

The Taubira affair has set off something of a national debate on the origins and responsibility for this ugly recrudescence of racism. Until fairly recently, the debate around prejudice in France has concentrated on the difficulties of integrating France’s sizeable Muslim minority, estimated at between four and six million people, or less than ten per cent of the population.

During the campaign, the center-right singled out Taubira as a reason to fear the election of the left. Taubira, who has a long and impressive political career, became one of the most visible members of Hollande’s government.

Joan Wallach Scott, an American scholar at the Institute for Advanced Studies, at Princeton, argues in her book “The Politics of the Veil” that the Republican values of egalité and laicité were historically entangled in the racist roots of French colonialism. The idea that people of all races could become French was coupled with an implicit (and often explicit) assumption that they came from inferior cultures, and needed to submit to France’s mission civilatrice to be equal. The French, in her view, need to learn to “negotiate difference.”

Egalité makes France officially color-blind: the government is not allowed to count, let alone consider, whether individuals belong to a racial, ethnic, or religious minority. And yet, the reality is that the Algerian workers who were encouraged to come to France in the nineteen-forties and fifties were placed in temporary housing on the periphery of France’s cities, and these geographically segregated banlieues are where later immigrants have continued to live.

Numerous studies show that job applicants with such addresses or with “foreign” names are much more likely to be rejected out of hand, regardless of their professional qualifications. Many in France continue to consider as immigrants people of North African or African descent whose families have lived in the country for generations, and who are French citizens. Fifty-five per cent consider Muslims to be a “group apart,” and twenty-six per cent still consider Jews to be a “group apart,” surprising given that Jewish immigration is very old and highly assimilated.

 

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Dark markets may be more harmful than high-frequency trading #HFT

Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges.

Some former regulators and academics say so much trading is now happening away from exchanges that publicly quoted prices for stocks on exchanges may no longer properly reflect where the market is. And this problem could cost investors far more money than any shenanigans related to high frequency trading.

http://www.reuters.com/

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Nigeria becomes Africa’s biggest economy #Mint

One MINT country show us we need to follow them.

 

Nigeria has “rebased” its gross domestic product (GDP) data, which has pushed it above South Africa as the continent’s biggest economy.

Nigerian GDP now includes previously uncounted industries like telecoms, information technology, music, online sales, airlines, and film production.

GDP for 2013 totalled 80.3 trillion naira (£307.6bn: $509.9bn), the Nigerian statistics office said.

That compares with South Africa’s GDP of $370.3bn at the end of 2013.

‘Changes nothing’

However, some economists point out that Nigeria’s economic output is underperforming because at 170 million people, its population is three times larger than South Africa’s.

On a per-capita basis, South Africa’s GDP numbers are three times larger than Nigeria’s.

Continue reading the main story

“Start Quote

Economies are dynamic things; they grow, they shrink, they add new sectors and technologies and people’s behaviours change”

And Nigerian financial analyst Bismarck Rewane called the revisions “a vanity”.

He added: “The Nigerian population is not better off tomorrow because of that announcement. It doesn’t put more money in the bank, more food in their stomach. It changes nothing.”

Rebasing is carried out so that a nation’s GDP statistics give the most up-to-date picture of an economy as possible.

Most countries do it at least every three years or so, but Nigeria had not updated the components in its GDP base year since 1990.

Then, the country had one telecoms operator with around 300,000 phone lines. Now it has a whole mobile phone industry with tens of millions of subscribers.

Likewise, 24 years ago there was only one airline, and now there are many.

International aid donors are keen for more African countries to undertake this process regularly because it enables them to make better decisions when it comes to aid.

 

 

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