FT Monday 2nd June 2014

  1. Beijing hits out over US and Japan alliance

 

The Chinese representative at the annual Shangri-La security conference in Singapore has rebuked the US and Japanese for comments made about the future peace of East Asia. Both Japanese PM Shinzo Abe and US Defence Secretary Chuck Hegel have criticised the Chinese publically for using coercive means to assert itself in the South China Sea. China is embroiled in maritime disputes with several countries in the region, including Japan, Vietnam and the Philippines to which the US and Japan have both offered moral support in order to mount pressure on China.   

 

  1. Fifa faces call to run World Cup vote again

 

The scandal over the decision to award the 2022 World Cup to Qatar has been reignited by revelations of corruption by a FIFA whistleblower. Former FIFA presidential candidate Mohammed bin Hamman is accused of channeling $5million of payments in order to secure victory for his home nation Qatar. The money allegedly went to African officials who forwarded it on to the 4 delegates from the continent of the 22-man voting committee.  Bin Hamman has since been banned for corruption over his campaign for the FIFA presidency, but the Qatar 2022 team claimed that he had no involvement in the bid. 

 

  1. Death of US dollar is greatly exaggerated

 

The collapse of the US dollar that has been touted for years now is unlikely to happen. The role of the dollar as the world’s reserve currency means that despite much of the world’s financial problems emanating from the US, it has been able to remain the most important currency. According to Cornell economics professor, Eswar Prasad, this is because the US dollar is one of the few safe places for investors to put their money in times of crisis. For example the dollar should really have weakened of the 2008 financial crisis and the Lehman Brothers collapse, but it actually strengthened, as in that period of uncertainly large investors gravitated towards it. Prasad claims that this is almost a trap that is likely to continue for a long time. The US dollar is the safest option only because there is nothing better, and therefore will continue as the world’s reserve currency.

 

  1. UK Professional services see boom in recruitment

 

The market for accountancy, finance, and professional services graduates could be set to increase dramatically. Both KPMG and PwC have stated that they intend to hire 30% more graduates this year than last. With greater confidence in the economy, accountancy firms are looking to position themselves to be able to take on the expected greater amount of advisory and corporate finance work over the next few years. The hiring increase is not reflected in the banking sector, which has seen a decrease, particularly among the big investment banks. Barclays recently states that it would be cutting 18,000 jobs worldwide. 

 

  1. S & P 500 closes at another record high

 

The S&P 500 index in the NYSE closed last week on a record high on 4 out of 5 days. The indication from the index seems to suggest that confidence on Wall Street about the future of the US is sky-high. Some observers believe that the signals that were missed about the status of the US economy in 2008 are being similarly ignored again. Accordingly it could be the case that investors are mistaking “a decline in market volatility with a decline in overall risk”. For now though, the rise in the value of the US index will be of great pleasure to many. 


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