Politics and Economies

Alfonso Peccatiello of TheMacroCompass.com explains that if central bankers and their economists applied a little common sense, they would realise that their decisions are based on mistakes.

All the signs are here but central bankers are either in denial or doing exactly the wrong thing.

The European Bank of Reconstruction and Development began life as a combination lender and aid agency to help bring relatively poor areas in the EU up to standards in the more well off areas. It funded bridges and drainage, hospitals and schools and it was good. It has no money other than what it raises from "donors" which is a fictitious term meaning member states which, of course, means EU taxpayers.

What is it spending money on now? Let's just say that it's not good and if you are a taxpayer in the EU, it's your money. The EBRD itself says that 35% of the money it spends comes from EU coffers. As you will see, more comes direct from member states.

In a notice issued 22 April, the Australian Consumer and Competition says "Petrol retailers should not use the current pandemic to further increase profits, which the latest ACCC petrol industry report
https://www.accc.gov.au/public... shows have risen in recent years, and should pass on the full benefit of falling oil prices to motorists." The full notice is below. In this teaser we ask this: with dramatically reducing volumes, if the price per litre falls in line with current oil prices (which are lower than those when the oil that is now current petrol stocks were bought), who's paying for the infrastructure and the staff? Prices per litre must cover those costs and that may mean a higher, not lower, price per litre simply to maintain a cashflow neutral business.

Just as every day leading up to an election, there are talking points and slogans this morning as the scale of the Conservatives' win in the UK General Election sinks in. The standard response from Labour is that they lost the election because of "Brexit." But did they?

It all sounds as if it's tailor made for cynics: a government looks at high-growth companies using what it terms "non-traditional data" (which turns out to be social media comment about and by the company and the companies's own websites) and uses it to predict what industries and what regions may thrive. And cynics would be right: social media comment tends to be polarised and out of balance and websites are, of course, the bearers of good tidings. So what's going on?

This week, some Conservative Party MPs delivered, in sufficient number, a letter to the party's managing committee, the 1922 Committee. It expressed that they had no confidence in the Prime Minister and that the party should replace her. The timing, many have said, was a mistake, that those seeking her removal, should have waited until after the Brexit vote and attack her then, if she lost. That, it is here opined, would have defeated the purpose of this week's supposed rebellion.

OK, so the headline's a bit click-baity. This is what happened: a pal and I were chatting about Deutsch Bank and he said that he wondered what investigators might find about Trump and his dealings with Russia.

No-deal Brexit would hit south-eastern European economies hardest among EBRD regions, says the European Bank for Reconstruction and Development (EBRD) in a surprising counter-point to the position espoused by the EU generally .

German company Siemens and French company Alstom are facing immense competition, especially in developing markets, from China's state-backed CRRC. The plan is to create a new Joint Venture entity owned by both companies and to transfer their respective divisions into it. So, while it is being touted as a merger, it isn't and nor is it a take-over. However, the fact that it's neither of the usual methods of combining businesses doesn't mean that competition regulators won't look at it - and opposition is coming from an unlikely quarter.

Janus was a Roman god: the one with two faces. California's Attorney General Xavier Becerra has those traits: on the one hand, he's all about consumer rights, the rights of the under-privileged including immigrants but on the other he's in favour of allowing unions to compel non-members to hand over part of their wages. The idea that oppression is oppression is oppression seems to have passed him by and it's a case called Janus v AFSCME, Council 31 and others that has compelled him to nail his colours to the mast. Government bad, socialist bullies good. His defiance of Federal law is well recognised but this is a case where all the good he's done, and there is a lot, is undermined.

If the current state of affairs in Italian politics were to be in any other country, it would be a national, even regional and, perhaps even, global crisis. But it's not. In Italy politics is so bizarre that even a Gallic shrug, a Malaysian "it's Malaysia" or a Japanese polite turning away would be over-reactions.

There are few things about Malaysia's Najib government that have caused as much anger amongst the populace as the introduction of the Goods and Services Tax ("GST") which is, in fact, a form of Value Added Tax. It was an election promise that Mahathir's coalition would repeal it and reinstate the old Sales Tax. Even during a press conference yesterday, before he was sworn in, Mahathir was asked to confirm that the promise would be kept and he did. Popular though such a policy would be, it is a horribly retrograde step that will cost the country, and businesses, dear. He should revise GST, which was not, in some detail, properly thought through, but he should not reverse its imposition.

In Kuala Lumpur, the capital of Malaysia, it was shortly after 5 a.m. on 10 May. The call for prayers from the mosques in the Pudu area of the city was unusually loud and sounded somehow lighter than usual. There were car horns blasting in the city's streets. Two hours later, all is quiet. There are the usual sounds of trains running, traffic passing and birds twittering as they hunt insects high above the ground. Monkeys chatter in the trees and today has become normal. Except it isn't.

Early on Saturday morning,in Setapek, one of Kuala Lumpur's most racially and religiously integrated suburbs, two men in dark, full face, helmets sat on a rare, high-powered, motorcycle for some twenty minutes. As Palestinian FADI Mohammad al Batsh, 35, passed by on his way from his home to lead dawn prayers in his role as imam, the man on the back of the bike shot him. Police reports say that he was shot four times with a high degree of accuracy: there were only two stray bullets found out of evidence that ten shots were fired. Two men nearby were not harmed. This was not a simple murder, the circumstances suggest.