Category Archives: Global economy

For South Africa's new president the only way is up | Larry Elliott

Jacob Zuma scandals dragged down the economy. Now Cyril Ramaphosa has the chance to unleash a regional superpower

Timing matters a lot in determining political success. Gordon Brown could hardly have become prime minister at a worse time because in the summer of 2007 the UK economy had been growing for 15 years, the financial crisis was just around the corner and the only way was down.

For Cyril Ramaphosa, by contrast, the only way is up. The new South African president has taken over an economy that should be a regional superpower but has been seriously underperforming in recent years. The growth rate has been on a downward trend since the initial bounce back from the “great recession” and is close to zero. Unemployment is above 25% and the poverty rate is higher than in other large emerging market economies.

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Source: gad

Making millions from chaos: the fund cashing in on the stock market collapse

Texas hedge fund Artemis plucks millions from investments designed to benefit from turmoil and volatility

Stock markets gyrated wildly this week, and a lot of people lost a lot of money. But Chris Cole, a 38-year-old hedge fund manager from Texas, wasn’t one of them. He made millions from his fund’s bet on a financial apocalypse.

From his office overlooking the Colorado river in Austin, Texas, Cole runs Artemis Capital, a hedge fund that, since 2012, has been betting on a repeat of the 1987 Black Monday stock market crash.

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Source: gad

Bitcoin biggest bubble in history, says economist who predicted 2008 crash

Nouriel Roubini calls cryptocurrency the ‘mother of all bubbles’ as it falls below $8,000

The economist credited with predicting the 2008 global financial crisis said a 12% fall in the value of bitcoin on Friday was the latest proof that the cryptocurrency was the biggest bubble in history and destined for a crash.

Nouriel Roubini, professor of economics at New York University, said bitcoin was “the mother of all bubbles” favoured by “charlatans and swindlers” as it fell below $8,000 (£5,600), marking a 30% drop since the beginning of the week as investors became increasingly twitchy about a clampdown on cryptocurrencies by regulators.

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Source: gadt

WTO head rejects talk of global trade war as US hints at more tariffs

Roberto Azevêdo says countries see risks of going it alone despite Trump’s action against China

The head of the World Trade Organization has played down talk of a global trade war after the US said it was planning to take fresh action against Chinese imports.

Speaking to the Guardian in Davos, Roberto Azevêdo said countries were becoming more aware of the risks of a go-it-alone approach that would harm their poorest citizens the most.

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Source: gad

Inequality gap widens as 42 people hold same wealth as 3.7bn poorest

Oxfam calls for action on gap as wealthiest people gather at World Economic Forum in Davos

The development charity Oxfam has called for action to tackle the growing gap between rich and poor as it launched a new report showing that 42 people hold as much wealth as the 3.7 billion who make up the poorest half of the world’s population.

In a report published on Monday to coincide with the gathering of some of the world’s richest people at the World Economic Forum in Davos, Oxfam said billionaires had been created at a record rate of one every two days over the past 12 months, at a time when the bottom 50% of the world’s population had seen no increase in wealth. It added that 82% of the global wealth generated in 2017 went to the most wealthy 1%.

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Source: gad

Democracies will fail if they don’t deal with the fallout of globalisation | Editorial

Democracies will fall under the spell of populists like Donald Trump if they fail to deal with the fallout of globalisation

The rich, as F Scott Fitzgerald noted, “are different from you and me”. Their wealth, he wrote, makes them “cynical where we are trustful” and their affluence makes them think they are “better than we are”. These words ring truest among the billionaires and corporate executives flocking to the Swiss ski resort of Davos this week. The highs recorded by stockmarkets, the tremendous monopoly power of tech titans and spikes in commodity prices reassure the rich cosmocratic class that they have weathered the storm of the financial crisis. The moguls can talk safely about inequality and poverty. But they will do little about it because they do not think their best interests are aligned with citizens. This is a mistake of historic proportions.

Since 2015, Oxfam calculates, the richest 1% have owned more wealth than the rest of the planet. The very wealthy think they no longer share a common fate with the poor. Whatever the warm words at Davos, no company bosses will put their hands up to the fact they play one country against another in order to avoid taxes; no firm will be honest about their attempts to stymie trade unions or about how they lobby against government regulation on labour, environment or privacy that tilts the balance of power away from them and towards the public. The largest western corporations and banks now roam the globe freely. As memories of the financial crisis recede, they are going back to the myth that they are no longer dependent on national publics or governments. Lobbyists for the corporate world claim that markets are on autopilot, that government is a nuisance best avoided.

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Source: gad

Climate change, AI and harassment – the hottest topics at this year’s Davos

The World Economic Forum focuses on the ‘fractured world’ this year: but the biggest star at the gala will be Donald Trump

Donald Trump will loom large at the World Economic Forum (WEF) in Davos this week, as the self-styled anti-globalist joins the annual gathering of billionaires, business executives and politicians.

The meeting at the luxury ski resort in the Swiss Alps at the start of each year is set to be dominated by the US president, who is due to give a special address to the conference on Friday.

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Source: gad

Are we heading for another developing world debt crisis? | Larry Elliott

Western bank loans for projects in Africa were to be paid off via rising commodity prices. At least that was the theory …

Global interest rates are rising. Poor countries are finding it tough to pay back money borrowed from banks in anticipation of a commodity windfall that never materialised. Stir in some dirty dealing that has seen funds stolen and what do you have? That’s right: the makings of another debt crisis.

Poor country debt was supposed to have been sorted back in 2005, the year the Guardian changed from a broadsheet to its Berliner format. Now, 13 years later, we are changing format again and debt is back albeit in a different form. Last time, the focus was on public debt, money that poor-country governments owed to the International Monetary Fund, the World Bank and individual rich nations – and which was mostly forgiven as a result of the Gleneagles G8 agreement in 2005. These days, the issue is private-sector debt and while as yet only a handful of countries – mostly in sub-Saharan Africa – are in serious trouble, the warning signs are there. The IMF and the World Bank both know it.

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Source: gad

Trump row could kill off swift post-Brexit trade deal, says former UK envoy

Quick transatlantic trade deal should be put ‘out of our minds’ says former ambassador, as poll shows 72% of British public think president is a risk to international stability

Donald Trump’s deteriorating relationship with Britain is likely to kill off any lingering cabinet hopes of a swift post-Brexit trade deal with the United States, a former British ambassador to Washington has warned.

Sir Nigel Sheinwald said that a series of controversial interventions by the US president in British issues meant that the remote prospect of a quick transatlantic deal, heralded by pro-Brexit cabinet members, should now be “put out of our minds” for good.

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Source: gad

A record-breaking year – the global economy in 10 charts

A stock market boom, a bitcoin bubble, trade indices at recent highs, a low fear factor, even eurozone GDP is rising. But 2017 hasn’t been all good
• The most-read business stories of 2017

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Source: gad