Anyhow, in a recent piece, Dr. Krugman links to a paper by Robert Gordon that discusses the future of US growth and the potential for this permanent stagnancy. In it he discusses the stages of growth in the USA:
“The analysis in my paper links periods of slow and rapid growth to the timing of the three industrial revolutions:
IR #1 (steam, railroads) from 1750 to 1830;
IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and
IR #3 (computers, the web, mobile phones) from 1960 to present.”
Wednesday 26 December 2012
PRAGMATIC CAPITALISM – What Could Trigger a 4th Industrial Revolution?
There’s been a lot of chatter in recent years about the “new normal” and the “end of growth” where the world just enters this stage of permanent stagnancy. It all sounds plausible and has become increasingly popular as the temporary balance sheet recession creates the impression that today’s environment is going to last forever. I don’t believe that’s true. And while I like to focus on downside risks, I think it’s also prudent to consider the upside risks.
Sabic warns of threat to gas supplies - FT.com
Domestic supply constraints are threatening the expansion of the fast-growing $100bn Gulf petrochemicals industry, Saudi Basic Industries Corp has warned.
As rapid population growth and industrialisation send Gulf energy needs soaring, the world’s largest petrochemical maker by market capitalisation is increasingly having to compete for its raw materials such as gas with domestic public electricity and water companies, says Mohamed al-Mady, Sabic chief executive.
Utility companies burn fuel to heat water to generate electricity, or to desalinate water.
As rapid population growth and industrialisation send Gulf energy needs soaring, the world’s largest petrochemical maker by market capitalisation is increasingly having to compete for its raw materials such as gas with domestic public electricity and water companies, says Mohamed al-Mady, Sabic chief executive.
Utility companies burn fuel to heat water to generate electricity, or to desalinate water.
Middle East listings fuel equities hopes - FT.com
Middle Eastern companies have in 2012 raised more than double the amount via stock market listings than last year, creating some optimism that the long-term slump in equity market activity could turn round next year.
Initial public offerings recorded $2bn in 2012 compared with $843.9m in 2011, according to data released this week by professional services firm Ernst & Young. In the fourth quarter, three initial public offerings worth $339.8m took place, compared with $226.1m in the same period last year.
“Drawing comparisons over the past two years we have noticed a steady climb in the amount of funds being raised by IPOs possibly hinting that markets are inching towards better results,” says Phil Gandier, regional head of transaction advisory at Ernst & Young.
Initial public offerings recorded $2bn in 2012 compared with $843.9m in 2011, according to data released this week by professional services firm Ernst & Young. In the fourth quarter, three initial public offerings worth $339.8m took place, compared with $226.1m in the same period last year.
“Drawing comparisons over the past two years we have noticed a steady climb in the amount of funds being raised by IPOs possibly hinting that markets are inching towards better results,” says Phil Gandier, regional head of transaction advisory at Ernst & Young.
ArabSaga: Iraq-Iran tandem filling GCC’s shoes in Jordan
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| Iraq's Maliki with Jordan's King Adullah II in Amman |
The GCC proposed in 2011 to invite Jordan (and Morocco) into the regional club. No further development has taken place since and there are no signs any progress has been made or whether the initiative has any traction left at all.
More recently, when protests erupted in Amman against a cut in fuel subsidies, the six GCC partners indicated they would come to Jordan’s rescue with financial assistance. The regional club is seemingly still studying ways to reduce the kingdom’s budget deficit.
MIDEAST STOCKS-Egypt slips to 9-day low; Gulf mkts mixed | Reuters
Egypt's bourse slipped to a nine-day low on Wednesday, extending losses as political tensions encouraged investors to book gains from the rally of the past two weeks. Gulf markets were mixed.
Cairo's benchmark index slipped 0.3 percent to 5,301 points, down for a third session from last week's one-month high. Mid-caps weighed, with Orascom Telecom losing 1.1 percent and Citadel Capital falling 1.4 percent.
There was fresh evidence of how the controversy over Egypt's new constitution is hurting economic policy, as the Al-Mal newspaper quoted Planning Minister Ashraf al-Araby as saying the government would not implement a series of planned tax increases for at least two weeks, until it completed a dialogue with different parts of society.
Cairo's benchmark index slipped 0.3 percent to 5,301 points, down for a third session from last week's one-month high. Mid-caps weighed, with Orascom Telecom losing 1.1 percent and Citadel Capital falling 1.4 percent.
There was fresh evidence of how the controversy over Egypt's new constitution is hurting economic policy, as the Al-Mal newspaper quoted Planning Minister Ashraf al-Araby as saying the government would not implement a series of planned tax increases for at least two weeks, until it completed a dialogue with different parts of society.
MENA stock markets close - December 26, 2012
| Exchange | Status | Index | Change | ||||
 | TASI (Saudi Stock Market) | 6866.71 | 0.03% | ||||
 | DFM (Dubai Financial Market) | 1603.71 | 0.60% | ||||
| ADX (Abudhabi Securities Exchange) | 2618.68 | -0.38% | ||||
 | KSE (Kuwait Stock Exchange) | 5950.38 | 0.48% | ||||
 | BSE (Bahrain Stock Exchange) | 1051.71 | 1.20% | ||||
 | MSM (Muscat Securities Market) | 5668.05 | -0.14% | ||||
 | QE (Qatar Exchange) | 8327.38 | -0.64% | ||||
 | LSE (Beirut Stock Exchange) | 1160.64 | 0.26% | ||||
 | EGX 30 (Egypt Exchange) | 5300.6 | -0.34% | ||||
 | ASE (Amman Stock Exchange) | 1943.88 | 0.59% | ||||
 | TUNINDEX (Tunisia Stock Exchange) | 4559.34 | -0.59% | ||||
 | CB (Casablanca Stock Exchange) | 9386.38 | -1.25% | ||||
 | PSE (Palestine Securities Exchange) | 476.94 | 0.21% | ||||
STOCKS NEWS MIDEAST-Small-caps lift Dubai; Qatar drops to 5-mth low - Yahoo! News Maktoob
Small-caps help lift Dubai's market as retail investors bet on stronger fourth-quarter earnings, while Qatar's
drops to its lowest closing level in near-five months. Dubai's Deyaar Properties jumps 5.6 percent and
Shuaa Capital surges 15 percent, the maximum daily gain.
"Retail investors are getting in, speculating on Q4 results... generally the market is quiet - most people are away," says Yousry Kassem, assistant vice-president of sales trading at EFG Hermes.
The emirate's index rises 0.6 percent to finish at 1,604 points, up for five sessions in last six. In neighboring Abu Dhabi, the benchmark sheds 0.4 percent to 2,619 points, down for a second session since Monday's two-week high.
drops to its lowest closing level in near-five months. Dubai's Deyaar Properties jumps 5.6 percent and
Shuaa Capital surges 15 percent, the maximum daily gain.
"Retail investors are getting in, speculating on Q4 results... generally the market is quiet - most people are away," says Yousry Kassem, assistant vice-president of sales trading at EFG Hermes.
The emirate's index rises 0.6 percent to finish at 1,604 points, up for five sessions in last six. In neighboring Abu Dhabi, the benchmark sheds 0.4 percent to 2,619 points, down for a second session since Monday's two-week high.
UAE bad loan provisions drop for first time since crisis | Reuters
Outstanding provisions for bad loans set aside by banks in the United Arab Emirates fell in October for the first time since the global financial crisis began building in 2008, central bank data showed on Wednesday.
The small drop does not indicate an end to the corporate debt problems that have weighed on UAE banks' earnings over the past several years. But it does suggest the banks are over the worst of those problems, helped by solid economic growth and a fledgling recovery of Dubai's real estate market.
Provisions set aside for specific non-performing loans edged down to 65.3 billion dirhams ($17.8 billion) at the end of October from 65.4 billion dirhams in September, the data showed.
The small drop does not indicate an end to the corporate debt problems that have weighed on UAE banks' earnings over the past several years. But it does suggest the banks are over the worst of those problems, helped by solid economic growth and a fledgling recovery of Dubai's real estate market.
Provisions set aside for specific non-performing loans edged down to 65.3 billion dirhams ($17.8 billion) at the end of October from 65.4 billion dirhams in September, the data showed.
Rising trend to continue in UAE real estate prices - Khaleej Times
The prices of Dubai’s top-end proprties will continue to rise for at least 18-24 months, United Arab Bank’s (UAB) chief executive officer Paul Trowbridge said.
“Assuming the premium properties continue to recover, it is inevitable that at some point in time the medium-end will benefit. The lower-end is only likely to recover once we have seen an established increase in the medium end,” he told Khaleej Times during an interview.
“We are likely to see price appreciation at the top-end continue for at least the next 18 to 24 months. Further appreciation beyond this period will depend on how much the market has increased,” Trowbridge said.
“Assuming the premium properties continue to recover, it is inevitable that at some point in time the medium-end will benefit. The lower-end is only likely to recover once we have seen an established increase in the medium end,” he told Khaleej Times during an interview.
“We are likely to see price appreciation at the top-end continue for at least the next 18 to 24 months. Further appreciation beyond this period will depend on how much the market has increased,” Trowbridge said.
Tecom remains committed to SmartCity Kochi project | GulfNews.com
The SmartCity Kochi project is still on track, according to top officials. Abdul Latif Al Mulla, CEO of Tecom Investments, has rejected recent media reports indicating the project has moved from Tecom to Dubai Holding.
The reports surfaced following the announcement that Al Mulla had joined the Dubai Holding Corporate Office as Chief Business Development Officer. Al Mulla said on Tuesday that the SmartCity Kochi project in Kerala will continue to remain a direct part of the Tecom portfolio under his supervision and not Dubai Holding, as he will continue to retain his position at Tecom.
“The published reports are not true and the Kochi project will remain part of the Tecom portfolio,” he told Gulf News.
The reports surfaced following the announcement that Al Mulla had joined the Dubai Holding Corporate Office as Chief Business Development Officer. Al Mulla said on Tuesday that the SmartCity Kochi project in Kerala will continue to remain a direct part of the Tecom portfolio under his supervision and not Dubai Holding, as he will continue to retain his position at Tecom.
“The published reports are not true and the Kochi project will remain part of the Tecom portfolio,” he told Gulf News.
Egypt limits travellers leaving country to $10,000 in cash | GulfNews.com
Egypt has banned travellers from carrying more than $10,000 in foreign currency cash in or out of the country, as officials worry over pressure on its pound currency and a rush by Egyptians to withdraw their savings from banks.
Political turmoil over the past month has raised fears among ordinary citizens that the government — which has pushed back talks to seal IMF funding till January — may not be able to get its fragile finances under control.
The central bank has spent more than $20 billion of its foreign reserves to support the pound since the popular uprising that toppled Hosni Mubarak in early 2011. It now has only $15 billion, which is equal to only about three months of imports cover.
Political turmoil over the past month has raised fears among ordinary citizens that the government — which has pushed back talks to seal IMF funding till January — may not be able to get its fragile finances under control.
The central bank has spent more than $20 billion of its foreign reserves to support the pound since the popular uprising that toppled Hosni Mubarak in early 2011. It now has only $15 billion, which is equal to only about three months of imports cover.
Industry’s growth to be fuelled by the five national airlines | GulfNews.com
The eventful year 2012 will be remembered in the history of the UAE’s aviation industry for a number of developments — the first being Etihad Airway’s acquisition of stakes in a number of airlines.
The nine-year-old has become profitable — for the first time in history — while most global carriers have been struggling. The airline currently has a fleet of 67 aircraft, flying to 86 destinations, serving more than 10 million passengers this year with more than 10,000 employees.
The UAE flag carrier picked up a 40 per cent stake in Air Seychelles, within a few months after acquiring a 29 per cent equity in Airberlin for just $105 million in December 2011 — followed by a 10 per cent stake in Virgin Australia and a 3 per cent stake in Aer Lingus later in 2012.
The nine-year-old has become profitable — for the first time in history — while most global carriers have been struggling. The airline currently has a fleet of 67 aircraft, flying to 86 destinations, serving more than 10 million passengers this year with more than 10,000 employees.
The UAE flag carrier picked up a 40 per cent stake in Air Seychelles, within a few months after acquiring a 29 per cent equity in Airberlin for just $105 million in December 2011 — followed by a 10 per cent stake in Virgin Australia and a 3 per cent stake in Aer Lingus later in 2012.
Azerbaijan To Buy 50% Stake In Nabucco Eurasia Review
Nabucco stakeholder Bulgarian Energy Holding (BEH) said on Thursday (20 December) that talks were advanced and that he hoped a deal could be sealed on 10 January at a Nabucco shareholders meeting in Sofia.
“We are holding talks almost every day. We expect Shah Deniz to acquire 50% of the shares in the Nabucco consortium,” Mikhail Andonov, head of BEH, told reporters.
Economic Survey Reveals Iran’s Slowdown Eurasia Review
The 40-percent drop is accompanied by a 36-percent increase in job losses in the same period.
The report adds that the prices of produced goods have risen by 87.9 percent, while the cost of primary materials has jumped by 112.1 percent.
Higher Saudi Growth Spurs Sabic Credit Risk Drop: Arab Credit - Bloomberg
Saudi Basic Industries Corp. (SABIC)’s credit risk is poised for the biggest monthly drop in almost a year as the world’s biggest petrochemicals maker by market value benefits from higher Saudi economic growth expectations.
Five-year credit default swaps for the state-owned company known as Sabic have decreased 10 basis points this month, the most since February, to 102 yesterday, according to data provider CMA. That compares with 116 for Dow Chemical Co., the world’s third-biggest publicly traded chemicals maker.
Saudi Arabia’s economy expanded 5.6 percent this year, the second-fastest pace in almost a decade, according to the median estimate of 16 economists compiled by Bloomberg this month. That’s up from an earlier forecast of 5.1 percent as the world’s top oil exporter pursues more than $500 billion of investments in areas including industry and petrochemicals. The kingdom’s credit risk almost halved this year to 69, the lowest in the Middle East and below similar-rated Japan.
Five-year credit default swaps for the state-owned company known as Sabic have decreased 10 basis points this month, the most since February, to 102 yesterday, according to data provider CMA. That compares with 116 for Dow Chemical Co., the world’s third-biggest publicly traded chemicals maker.
Saudi Arabia’s economy expanded 5.6 percent this year, the second-fastest pace in almost a decade, according to the median estimate of 16 economists compiled by Bloomberg this month. That’s up from an earlier forecast of 5.1 percent as the world’s top oil exporter pursues more than $500 billion of investments in areas including industry and petrochemicals. The kingdom’s credit risk almost halved this year to 69, the lowest in the Middle East and below similar-rated Japan.
Steps towards union for GCC - The National
The GCC wrapped-up its two-day summit in Manama yesterday with a statement that restated the bloc's commitment to monetary union.
The Sakhir Declaration read out by the GCC secretary general Abullatif Rashid Al Zayani said the GCC nations were "highly appreciative" of steps taken to implement the timetable for achieving the common Arabian Gulf market, "especially in the areas of movement and residence for GCC nationals, the practice of trades and professions, movement of capital, tax measures ... employment in government and private sectors, and social insurance and retirement".
The GCC's collective GDP last year was around US$1.37 trillion (Dh5.03tn).
The Sakhir Declaration read out by the GCC secretary general Abullatif Rashid Al Zayani said the GCC nations were "highly appreciative" of steps taken to implement the timetable for achieving the common Arabian Gulf market, "especially in the areas of movement and residence for GCC nationals, the practice of trades and professions, movement of capital, tax measures ... employment in government and private sectors, and social insurance and retirement".
The GCC's collective GDP last year was around US$1.37 trillion (Dh5.03tn).
EFG-Hermes to shut Abu Dhabi operations - The National
EFG-Hermes will shut its brokerage at the Abu Dhabi Securities Exchange by the end of the month in an effort to reduce costs, it said yesterday.
The Egyptian investment bank will instead cater to its institutional clients from its headquarters in Dubai amid dwindling demand in the UAE for buying and selling shares among the public.
"We submitted our intention, but we are still working on the operational issues with the stock market and our clients - informing them that we are no longer operating out of Abu Dhabi," said Mohamed Ebeid, the co-head of brokerage at EFG-Hermes in Cairo.
The Egyptian investment bank will instead cater to its institutional clients from its headquarters in Dubai amid dwindling demand in the UAE for buying and selling shares among the public.
"We submitted our intention, but we are still working on the operational issues with the stock market and our clients - informing them that we are no longer operating out of Abu Dhabi," said Mohamed Ebeid, the co-head of brokerage at EFG-Hermes in Cairo.