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’EMs to IMF on capital controls: nice try
So much for learning to play nice.
According the Wall Street Journal on Monday morning, the tentative consensus on capital controls found last week has already unraveled (or was never there to begin with):
A G20 “victory”, part 2
Crossing the Reuters tape a little while ago, it seems members of the G20 have learned to play nice(r) since their last meeting in November:
G20 CONSENSUS REACHED ON CAPITAL CONTROLS AND EXPANSION OF IMF CURRENCY BASKET FOR SPECIAL DRAWING RIGHTS
But more on this in a minute.
More on uncertainty and capital controls
In a previous post about the efficacy of capital controls, we interpreted a passage from Reinhart & Rogoff’s epic This Time is Different by saying “there remains an awful lot we simply don’t know about the consequences of capital flows,
IMF: QE2 is not overheating the EMs
From the IMF’s latest World Economic Outlook (emphasis ours):
At the same time, monetary accommodation needs to continue in the advanced economies. As long as inflation expectations remain anchored and unemployment stays high,
Uncertainty and capital controls
Worries about capital flows and the potential side effects of poorly designed capital controls (trade wars, market inefficiencies and distortions) are all the rage these days.
But some economists are sceptical (here’s one) as to whether capital controls even work,
An unbalanced take on imbalances
Unbalanced, and thus blisteringly honest.
Fred Goodwin, “Mr Macro” strategist at Nomura, unplugged:
Is there any justice?
When a child misbehaves, parents send them to their room and take away Facebook privileges.
Capital controls: the low-intensity currency war
The latest moves by South Korea and China — not to mention India, Malaysia, Thailand and a swag of other countries — to impose capital or price controls show that the hype over ‘currency wars’ is mutating into a low-intensity battle being waged by countries through a series of unilateral,
Why QT, not QE, is the risk
A plan for a plan is not a plan, says HSBC on Friday.
And this is the reason why QT is the risk now, not QE.
Quick explainer: QT is what HSBC’s senior FX strategist Daniel Hui et al are calling quantitative tightening — a.k.a.
When capital controls are the only QE antidote
Are capital controls the most unwelcome comeback since the one-piece jumpsuit?
HSBC’s top analysts and economists look into the issue on Tuesday and slightly beg to differ. Not only have they been more common throughout the recent past than most would care to remember,
Posen to surplus countries: easy money won’t inflate asset bubbles
Still fresh after his performance as the lone dissenting dove on the UK’s Monetary Policy Committee, Adam Posen has now used the expertise for which he is perhaps best known — Japan’s lost decade(s) — to argue in a speech that easy monetary policy doesn’t lead to asset bubbles.
Capital controls: new front in the ‘currency wars’
South Korea is showing its uncanny knack for timing with its planned new steps to curb capital inflows, just ahead of its star role as host of the upcoming G20 meetings — which are likely to be dominated by discussions of “currency wars”.
Seoul unleashes its ‘magic won-booster’
South Korea on Monday deployed what it could call its ‘magic won-booster’, following its weekend announcement of measures to curb forward currency trading and control currency volatility.
The steps,
Fear me, for I am a liquidity-giving economy
In addition to weighing surcharges for too-big-too-fail banks, the latest edition of the IMF’s Global Financial Stability Report, has an interesting chapter on the 2007-2009 global liquidity expansion.
Asia is getting a little hot (money) under the collar
The warmth is spreading all over Asia-Pacific at the moment — and Taiwan’s central bank moved on Thursday to cool things down round its neck of the woods. The China Post has the details on some rather frisky fund flows:
Stop the Carnival, I want to get off
When everyone in the world has got the hots for you, things can get a little overheated. So spare a little sympathy for Brazil’s markets right now, as foreign investors fall over themselves to slobber over the girl from Ipanema.
The erstwhile openess of emerging markets, chart du jour
Courtesy of Moody’s, a reminder of the financial crisis’ impact on emerging economies:
Related link:
Blowing emerging bubbles – FT Alphaville
The real Brazilian real
Just how overvalued is Brazil’s real — the currency at the centre of the country’s new capital controls?
By 31.3 per cent, according to Standard Chartered’s Mike Moran and Douglas Smith, who have just cut their short-term recommendation on the South American currency to `underweight’.
Brazil nuts? The country’s new capital control
Late on Wednesday Brazil — land of impressive football and interest rates — announced a further development in its controversial capital controls.
From the Wall Street Journal:
BRASILIA—Brazil’s government will apply a tax on Brazilian stocks traded as American depositary receipts,
The return of capital controls, Indonesia edition
What’s this?
Another country touting the possibility of capital controls in a bid to protect itself from an appreciating currency?
From Reuters:
SINGAPORE, Nov 18 (Reuters) – The Indonesian rupiah slipped on Wednesday after the central bank threatened to restrict foreign ownership of short-term debt,