Removal of Stimulus Packages Next Year Poses Bubble, Credit Risks Says World Bank’s Zoellick
The global economy must be wary of bubble and credit risks in 2010 as central banks around the world begin removing stimulus, warned World Bank President Robert Zoellick yesterday (Wednesday).
Speaking to the press at the Singapore Foreign Correspondents Association, Zoellick said policymakers must be vigilant in preventing asset bubbles and that the private sector is needed to stoke demand.
"And so when that stimulus money has run its course, then the question will be, will the private sector rebuild demand?" he said.
Part of the problem going forward for East Asian economies is policymakers typically follow the U.S. Federal Reserve. However, nations choosing to do this may face challenges because the recovery won’t be symmetrical.
The Three Key Economic Issues Obama Will Tackle In His First Asia Trip
When U.S. President Barack Obama this week makes his first visit to Asia as the nation's chief executive, he will have no shortage of issues to address. However, there are three key subjects that he will pay particular attention to.
- China's currency, the yuan, which Beijing keeps undervalued to boost exports.
- The large trade imbalance between China and the United States.
- And a pending free trade agreement (FTA) with South Korea.
Analysts believe President Obama will push to ratify a free trade deal with South Korea that was signed in 2007 but has failed to pass legislatures in both countries. Many also hope he will pursue other agreements like it.
U.S. Companies Finding More Consistent Growth Overseas
McDonalds Corp. (NYSE: MCD) yesterday (Monday) became the latest in a long line of U.S. companies to find growth overseas as domestic growth continues to falter. Although there are some signs show the United States is headed toward a recovery, rising unemployment is weighing on consumers, who continue to cut back on discretionary spending. The [...]
Commodities-Rich Australia Leads the West's Recovery
The Reserve Bank of Australia (RBA) last month became the first Western economy to raise its key interest rate since the financial crisis began almost two years ago. It proceeded to raise the rate for a second time in a month last week, just before it published its quarterly report on Friday, which says bottlenecks [...]
Disney Gets Nod for Shanghai Theme Park
It's been in the works for more than a decade, but The Walt Disney Co. (NYSE: DIS) finally got the approval it needed from China's government to build a theme park in Shanghai.
Disney's fourth park outside the United States will be the first on mainland China, giving the company a new avenue to market its popular properties in the restriction-laden Red Dragon. The park, to be located in the Pudong district between Shanghai's main international airport and its downtown area, will target China's growing middle class.
"Shanghai Disney would be a huge boom," Shaun Rein, managing director of China Market Research Group told Bloomberg News. "You have 80 million people within 3 hours' driving distance."
Buffett Bets on Bright U.S. Economic Future With Burlington Acquisition
Warren Buffett believes in the United States' economic future, and yesterday (Tuesday) he put his money where his mouth is.
Berkshire, which already owns 22.6% of the company, will pay $100 per share in cash and stock for the remainder of Burlington's business. The offer values Burlington stock at a 31.5% premium to its Monday close. The deal, expected to close in the first quarter of next year, includes $10 billion in Burlington debt.
Asia's Semiconductor Makers Mirroring Improvement of U.S. Counterparts
Some of Asia's biggest players in the chipmaking business have confirmed what U.S. semiconductor makers have been saying for months: Demand for semiconductors is growing and the future looks bright. South Korea's Samsung Electronics Co. Ltd. (PINK: SSNLF) saw operating profit in its semiconductor business improve by more than 84%, rising to $968.8 million (1.15 [...]
Ford Inches Closer to Volvo Sale, Profitability
By announcing China’s Geely Automobile Holdings (PINK: GELYF) as the preferred bidder for its Volvo unit, Ford Motor Co. (NYSE: F) has passed another recovery milestone. There’s much left to be sorted out in any possible deal, such as intellectual property concerns, but a completed sale of the money-losing Volvo is just one more smudge [...]