White House creates its very own jobs crisis 21 Jul 2017 Press Secretary Sean Spicer quit after the hiring of financier Anthony Scaramucci. Donald Trump also fired his FBI director, undercut his Treasury secretary and regrets his attorney general pick. Just as U.S. employers wrestle with labor participation, so too does the president.
Viewsroom: Why U.S. tax reform is doomed, too 20 Jul 2017 Republicans’ failure to replace Obamacare throws into doubt Washington’s ability to keep other high-profile election promises, not least cutting corporate levies. Meanwhile, President Trump’s fuzzy agenda for reforming NAFTA could give Canada and Mexico more bargaining power.
Central banks have no choice but to keep the faith 20 Jul 2017 ECB chief Mario Draghi and Bank of Japan boss Haruhiko Kuroda have spent trillions of euros and yen without generating much inflation. Nor is it clear when a pick-up in growth will feed through into prices. Yet they are obliged to insist their policies will work eventually.
Britain gets taster of capital markets disunion 19 Jul 2017 EU lawmakers may ban securitisation of loans where the borrower’s income isn’t proven. It’s a step towards the capital markets union Britain championed before its Brexit vote, yet one that will mostly affect UK borrowers. Britain can try and change the rules – but not for long.
Hadas: No auction often beats a bad auction 19 Jul 2017 Governments and Google are fans of auction theory, which teaches how to extract the highest bids for assets like radio spectrum or online ads. But the branch of economics cannot say if the price is fair. Auctions too often confuse consumers and tarnish the image of capitalism.
BBC stars will gain from radical pay transparency 19 Jul 2017 The UK public broadcaster has named everyone who earns more than 150,000 pounds a year. The main conclusion is that valuing TV presenters is guesswork. As with chief executives of listed companies, disclosing compensation will just enable them to demand even higher wages.
Greek bonds are a bet on euro zone support 18 Jul 2017 Athens wants to issue bonds just after receiving another bailout tranche. If Greece had to finance itself at market rates it would struggle to stay solvent. But debt relief from European governments and ECB bond-buying will reduce the risk. Investors may find the wager appealing. Full view will be published shortly.
Third Senate GOP health attempt is most charmless 18 Jul 2017 Having twice failed to pass alternatives to Obamacare, Republicans may try to repeal it with no replacement. Based on a similar 2015 effort an estimated 32 mln Americans would lose insurance cover, some 10 mln more than under the nixed bills. It’s hard to see senators backing it.
German climate change policy takes Trumpian turn 18 Jul 2017 Angela Merkel has castigated the U.S. President for pulling out of the Paris accord. Yet two German states are putting mining jobs ahead of cutting carbon emissions. If they don’t reconsider, the Chancellor’s green credentials – and the global agreement – will suffer a blow.
Inflation gives Bank of England a summer reprieve 18 Jul 2017 Prices rose just 2.6 pct in June, easing the pressure on the central bank to hike rates. That gives it a bit more time to gauge the extent of any Brexit-induced slowdown. When it comes to normalising monetary policy, Britain is shuffling towards the back of the queue.
Trump fuzziness gives NAFTA mediators wiggle room 17 Jul 2017 The president wants to cut deficits with Mexico and Canada and strengthen rules for products made in North America. But his trade rep is offering few details, while cribbing other ideas from the ditched TPP. Such a vague approach may increase the chance of striking a decent deal.
Central banks oust politicians as market fixation 17 Jul 2017 Investors are worrying about interest rates rather than elections. Statistics are a more reliable guide to the economic outlook than polls to political outcomes. But the path for monetary policy remains uncertain. Expect asset prices to be jumpy and their moves more synchronised.
Wanda’s M&A punishment is too much, too late 17 Jul 2017 Chinese banks have been ordered to halt lending to entertainment and property giant Dalian Wanda, Reuters reported, in what looks like retroactive punishment for big foreign investments. Such blurry lines around what is and isn't allowed do Chinese outbound investment no good.
Citi, JPMorgan and Wells show reliance on D.C. 14 Jul 2017 Higher interest rates helped all three big U.S. lenders beat estimates. But so, to varying degrees, did one-offs, low tax rates and benign credit costs. Performance isn’t yet justifying their healthy trading multiples. That will require more Washington talk to become action.
Review: How justice lost its way on Wall Street 14 Jul 2017 The financial crisis had millions of victims but, unlike previous ones, no apparent perpetrators. Jesse Eisinger's "The Chickenshit Club" blames political timidity, lobbying and D.C.'s revolving door for the failure to prosecute top dogs. Investors may yet regret the change.
Mexico and Canada on the lookout for new friends 14 Jul 2017 Donald Trump will soon present demands for a revised trade pact. Uncle Sam's size gives it leverage, but America’s neighbors have been seeking out partners in South America and Europe. This could benefit firms like Adecoagro in Argentina and Germany’s Oetker over U.S. rivals.
Murdoch’s Sky takeover can survive lengthy review 14 Jul 2017 The media mogul won’t offer more concessions to win quick approval for his 11.7 bln pound bid for the UK broadcaster. That will probably trigger an extended probe which investors think makes a deal less likely. But authorities can suggest remedies to clear the way for a deal.
Macron’s choice: Europe or Gallic exceptionalism 13 Jul 2017 The French President and Germany’s Angela Merkel are keen to revamp the euro zone. It’s hard for Macron to be a role model as long as France’s budget deficit is too big – and harder still given the pressure to cut taxes quickly. This fiscal dilemma is the euro zone’s problem.
Aramco exemption bends London IPO rules to limit 13 Jul 2017 The UK regulator wants to change its listing regime to lure state-controlled groups like the Saudi oil giant. The watchdog has to keep markets clean while protecting London’s competitiveness. But making policy for a single company - especially one as big as Aramco - is a mistake.
Why Europe can’t beat Google on corporate taxes 13 Jul 2017 A court has ruled the search giant is not liable for French back-tax after all. Google will face other battles over how it arranges its profits. Tech companies will always have an advantage, though. Unlike competing European countries, they can put their global interest first.