In Brief – N.9 – March 22, 2015

Japan economy grew at a real annualized rate of 1.5 percent in the October-December 2014 quarter, slower than earlier reported but still reaffirming an end to recession, the Abe government said. The revision puts growth for 2014 at 0 percent.

“While we continue to forecast a strong demand recovery in 2015, we believe that sequentially weaker activity, the end of winter and the end of potential restocking demand, will lead to a sequential deceleration in demand-growth as we enter the spring,” Goldman Sachs said about US crude oil likely to drop again to the late 2008 level at $40 a barrel.

“There could be problems. But, as my Prime Minister has said, we are not yet glued to our chairs. We can return to elections, call a referendum,” in case the Eurogroup rejected the 7 major reforms proposed by Greece, Finance Minister Yanis Varoufakis told Italian daily Corriere della Sera.

“Almost half the respondents believe current fiscal policy to be about right,” said John Silvia, the chief economist at Wells Fargo and president of the National Association of Business Economists (NABE) whose latest survey showed 71 percent of 293 economists expect a Fed rate hike this year.

China’s annual consumer inflation (CPI) recovered in February 2015, exceeding expectations, but producer prices continued to slide, underscoring deepening weakness in the economy. This is again bad news from China for the financial markets.

According to Loïk Le Floch-Prigent, former CEO of French energy company ELF Aquitaine (now Total), the alliance between General Electric (GE) and Alstom has resulted from very tumultuous undisclosed events – including the 14-month imprisonment of an Alstom’s executive – which threw doubt on the deal as a whole.

According to Renaissance Capital, It will be tough for initial public offerings (IPOs) to top 2014. But while 2015 may not reach last year’s record heights, it shouldn’t do too badly.

The Euro has fallen to its lowest level against the US dollar in 12 years, as low as $1.0560, before recovering a bit, 2 days after the ECB began its QE. Many traders expect there may soon be EUR-USD parity.

“It is our firm belief that questions of reparations and compensation have been legally and politically resolved, (…) we should concentrate on current issues and, hopefully what will be a good future,” said a spokesman for German Chancellor Angela Merkel about Greek demands for WWII reparations.

The IMF’s Executive Board approved a $17.5 billion loan to Ukraine that will support immediate economic stabilization in Ukraine and wide-ranging policy reforms aimed at restoring robust growth over the medium term and improving living standards.

The Chancellor of the Exchequer, George Osborne announced that the UK intends to become a prospective founding member of the Asian Infrastructure Investment Bank (AIIB). In doing so, the UK is the first major Western country to seek to join the AIIB.

Steady climb in global demand growth prompts slight upward revision of 2015 oil prices forecast, the IEA wrote in its March 2015 market report.  Annual gains are forecast at about 1.0 mb/d for the first half of 2015, in line with projected oil product demand growth.

Getting back in touch with Assad? “We are working very hard with other interested parties to see if we can reignite a diplomatic outcome,” US Secretary of State John Kerry said on CBS.

Egypt is at the center of much international attention. At a conference that drew positive reviews from business circles, IMF Managing Director Christine Lagarde saw a “moment of opportunity” for investors in Egypt’s economy.

Monetary stimulus has certainly played an important role in the global economic recovery in the past years and this role is largely expected to continue,” the March 2015 report from the OPEC read.

Asia is not wonderland. “Between 2005 and 2014, India’s arms imports increased by 140 percent,” SIPRI said. In the meantime, China’s sales were up 143 percent.

The Wall Street Journal wrote the Lunar New Year holiday caused the drop in the average price of new homes in 70 cities of China. According to Cyceon, the situation is a bit more worrisome and there is real fear that the real estate market might be correcting.

If there is a sector that will grow exponentially in the next decades, it’s cybersecurity. Premera, a US-based health insurer, has been the target of a sophisticated cyberattack last spring, only to be discovered in January 2015.

Is $40 billion-valued company Uber responsible for unfair competition or is it just Schumpeter-like “creative destruction”? The question was asked repeatedly by mainstream media recently. The Telegraph wrote about “the colossal cost of competing with Uber” while the New York Post said “Taxi Kingpin in massive debt thanks to Uber.”

US markets soared after the Fed Committee judged that an increase in the target range for the federal funds rate remains unlikely at the April FOMC meeting. Also, the Committee anticipated that it will be appropriate to raise the target range when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.

Yahoo announced a new intuitive option for users to login to their account without any need for a password. Upon sign in, an on-demand password is texted directly to a user’s mobile phone. Reinventing online identification is a top priority for technology companies as existing one has proven too easy to crack.