After the taper, the hard part; If fracking could shatter stagnation; World Cup and unpaid labour; In South Africa, abandoning kids to party on the beach

1 After the taper, the hard part (Linda Yueh on BBC) It was one of the most anticipated moves in monetary policy.  Yet the US Fed trimming its monetary stimulus - cutting its cash injections by $10bn to now inject $75bn per month - still managed to surprise. The hard part begins now. The cutback is of US Treasury purchases from $45bn to $40bn per month and mortgage-backed securities (MBS) from $40bn to $35bn. 

Once the cash injections end for the Fed, like they have in the UK, then their forward guidance maintains that rates will remain low for a long period of time until the economy recovers. The big question here is whether they will be believed by markets who determine the rate at which they will lend to the government over the longer term.

After all, there are those who anticipate the inflation will take off. If so, then they are unlikely to lend money at a low nominal interest rate since their real return is the difference between the nominal rate and inflation down the line. This will be the hard part - to convince markets to keep rates low in accordance with the central bank's base rate.

There are also implications for emerging economies. Money has left these economies since Mr Bernanke first mentioned tapering back in May. The cost of money certainly matters for these economies, some of which have become indebted to cheap foreign money. For the first time since the financial crisis, more emerging economies have been downgraded than promoted by the rating company Fitch last year, for instance.

http://www.bbc.co.uk/news/business-25440720

2 If fracking could shatter stagnation (Robert Skidelsky in The Guardian) The developed world is slowly emerging from the Great Recession, but a question lingers: how fast and how far will the recovery go? One big source of pessimism has been the idea that we are running out of investment opportunities – and have been since before the 2008 crash. But is that true?

The last big surge of innovation was the internet revolution, whose products came onstream in the 1990s. After the dotcom collapse of the early 2000s, speculation in real estate and financial assets – enabled by cheap money – kept western economies going. The post-2008 slump merely exposed the unsoundness of the preceding boom; the mediocrity of the recovery, coolly considered, merely reflects the mediocrity of previous prospects. The risk now is that a debt-fuelled asset spike merely perpetuates the boom-bust cycle.

The question today is whether a new upsurge of investment will come to our rescue. Optimists point to the shale-energy revolution in the US. The McKinsey Global Institute has identified shale energy as a “game changer” for the world economy, estimating that it could boost America's GDP by as much as 4% ($690bn) a year and add 1.7m permanent jobs to the labour market by 2020.

I am in no position to judge either the quantitative impact of shale energy on the US economy – and, via growth there, on the rest of the world – or to comment on its geopolitical consequences or net effect on carbon emissions. But it does seem to me that contemporary apostles of secular stagnation like Summers and Paul Krugman at least ought to be taking the shale-energy revolution into account.

http://www.theguardian.com/business/economics-blog/2013/dec/18/fracking-shale-gas-stagnation

3 World Cup and unpaid labour (Pete Pattisson in The Guardian) If things had gone well, Ram Kumar Mahara would be working on a Qatari building site, earning around £120 a month helping the country to erect the infrastructure that will enable it to host the football World Cup in 2022. But things didn't go well.

First there was the pay. Ram Kumar says there wasn't any. Then there were the conditions – 12-hour shifts, a shortage of food and finally, after a complaint to the manager, summary removal from the labour camp. It was so distressing that the 27-year-old Nepali lost his hair. After weeks in legal limbo at the Nepali embassy in Doha, he finally made it home. The nightmare was over, but a new one was just beginning.

"I spent six months in Qatar but did not receive a single rupee," he said from a remote village in Nepal, where he has found piecemeal work threshing cattle fodder. "I was reluctant to come back home as I didn't earn any money ... When I got home my wife was weeping and even I did not feel good. I still feel very guilty. I have not done anything since I got back," he said. "I just sit at home looking after my children. I came here for 10 days of work ... but it does not pay much."

Ram Kumar was one of the Nepali workers who spoke to the Guardian for an investigation that exposed systematic exploitation of Nepalese migrant workers in Qatar's booming construction industry, including on a site directly linked to the 2022 World Cup. The investigation found high levels of fatalities (44 in eight weeks over the summer), terrible living conditions and labour practices that in effect enslaved the migrant workers, depriving them of pay, permits and freedom to move around.

http://www.theguardian.com/world/2013/dec/19/nepal-worker-exploitation-qatar-football-world-cup

4 In South Africa, abandoning kids to party on the beach (Nivashni Nair in Johannesburg Times) Holidaying parents use the Durban police as babysitters while they party on the beach during the festive season. "It is disturbing to find that parents deliberately abandon their children on our beaches so they can enjoy themselves in the belief we will find their children and take care of them," said KwaZulu-Natal police spokesman Colonel Jay Naicker. He said it was "heartbreaking" for police officers to deal with traumatised children who are sometimes abandoned for more than a day.

In the past Naicker attributed the high number of lost children to the large crowds at the city's beaches. But in recent years the police and eThekwini Municipality have warned irresponsible parents they would be charged for abandoning their children. "If any person is found to have abandoned their child deliberately, they will be charged for child abandonment in terms of the Child Care Act," Naicker.

In 2011 more than 3,000 children were separated from their parents, compared with only 100 last year. An identification armband was introduced a few years ago and issued to all children at the beachfront during the holidays. Last year more than 129,000 armbands were issued.

http://www.timeslive.co.za/thetimes/2013/12/20/children-abandoned-for-parties-on-the-beach