Monthly Archives: October 2008

Doha can wait

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Gordon Brown does a nice job of grabbing the headlines with Peter Mandelson’s return to the Cabinet as Business Secretary.  It’s hard to divine what this means for the European Commission.  Catherine Ashton will take his place as Trade Commissioner and there’s nothing in her background that indicates that she’s as ready as Mandy was to push the WTO negotiations to the point of irritating the EU’s agriculture-intensive states.  In any event, trade has slipped down the list of headlines with the global financial crisis and Mandy has a well-timed opinion piece in the Guardian that clearly crosses into Charlie McCreevy’s banking regulation turf, so it was likely drafted with one eye already on the next job.   In fact, the kind of protectionism that used to draw concern on trade issues has, at least in an intra-EU context, shifted to finance with banking guarantees and bailouts.  As much as anything, Mandelson probably saw better of waiting around another year to push through a trade deal that no one cares about right now.  But can he keep out of trouble in the new job?

Russia’s Crisis Spreads Right Across The Domestic Credit Market

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Well the action in Russia this week has moved on slightly, and the damage has started to spread from pressure on the domestic stock market (accompanied by capital flight) to the real economy – via a very rapid tightening in credit conditions for Russian domestic users. We are also seeing a rapid slowdown in Russian manufacturing industry as internal demand slows while the inflation-driven decline in cost competitiveness continues to make imported products (where available) an attractive alternative to the home produced variant.

Emerging-market bonds have been generally falling this week as the U.S. Senate’s approval of a $700 billion bank rescue package did little to revive demand for riskier debt, and Russia has, unsurprisingly, been among the worst affected. The extra yield investors demand to own developing-nation bonds rather than U.S. Treasuries rose 8 basis points yestreday to 4.14 percentage points after widening 12 basis points on Wednesday, according to the JPMorgan Chase EMBI+ index. At the same time the MSCI Emerging Markets Index of stocks fell 0.3 percent to 783.79, its lowest point in four days. While such data readouts do not of course exclusively define the outlook for the Russian economy, they do give us a good indication of the context within which economic activity occurs, and they also give us a very clear measure of the current level of global risk sentiment whose influence, as we will see below, lies right at the heart of the immediate shock that is hitting Russian households and businesses. Continue reading →

A Moment of Blatant Self-Regard

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Five years, one month and one day ago, A Fistful of Euros went live with its first posts.

Thanks to David, for getting the ball rolling and keeping it rolling; thanks to Tobias for keeping the back end running and the front end looking good; thanks to all of the writers; thanks to the commenters, for keeping us on our toes; thanks to the advertisers for keeping this little venture self-financing; thanks to the politicians and other public types for giving us such rich material to work with; and thanks to the readers, hope that you keep coming back for more.