Democrats will lose US House in 2010 23 Dec 2009 The president's party usually suffers in midterm congressional elections. To that timetested dynamic now add voter angst about high unemployment, big deficits and controversial legislation. The result: Democrats lose their Senate supermajority and hand the House back to the GOP.
U.S. healthcare bill won’t fix big inefficiencies 21 Dec 2009 The Senate version, now probably in nearfinal form, will bring health coverage to more people and usefully calls for things like insurance exchanges. However, it worsens the crosssubsidies built into the US healthcare system and risks adding yet more cost.
Bernanke Senate scrape weakens Fed independence 18 Dec 2009 The chairman's close escape from a Senate panel sets him up for a record number of final no votes on his renomination. What's clear is Bernanke will be a 2010 campaign issue. That could make the Fed even more susceptible to political pressure when it comes to time to tighten.
Cap-and-dividend a smarter carbon plan for US 17 Dec 2009 The climate policy of choice in Copenhagen is capandtrade but not on Capitol Hill, where legislation is stalled. A new bipartisan bill promotes a more politically palatable option that Democrats and greens could embrace to break the logjam.
Bernanke risks being person of the year again 16 Dec 2009 The Fed boss made the front of Time for his influence and possibly heading off a depression. But he is in no hurry to lift interest rates despite the recovering U.S. economy and signs of inflation. Through inaction, Bernanke is risking a second, less positive, turn on the cover.
BoE’s inflationary bias should raise concern 15 Dec 2009 UK inflation has come in above estimates again. Despite the deepest recession in half a century, consumer prices have barely fallen. The Bank of England may be pleased to have avoided deflation. But its persistent inflationary bias, evident for five years, is storing up trouble.
Greek banker bashing won’t solve budget blues 15 Dec 2009 Slapping a 90 pct tax on bankers' bonuses may be popular. So is the government's reaffirmation that lowpaid public sector workers will get wage increases. But this is not the plan best calculated to restore investor confidence and the country's battered credit rating.
IMF should call Ukraine’s bluff 15 Dec 2009 The government is dramatizing its plight to persuade the IMF to lend again. But Ukraine's problems are as much political as financial. The IMF shouldn't disburse more money until Ukraine comes up with a coherent plan. That won't happen until after January's presidential election.
Protectionism won’t help China’s champions 14 Dec 2009 Steel tariffs and buy China technology policies aren't just revenge against the U.S. China once traded market access for foreign knowhow and capital. Now promoting domestic champions looks a bigger priority. It could backfire, as China is not yet ready to strike out on its own.
US financial reform still faces steep climb 14 Dec 2009 The bill that came out of the House on Friday with a slim majority is far more ambitious than what the Senate could pass on a tight vote. Those, like President Obama, who might like to see fat cat bankers suffer more will be disappointed by the diluted final result.
Copenhagen creates tension instead of harmony 11 Dec 2009 The global threat of climate change was supposed to shock nations into a common effort. The opposite seems to be happening. China wants rich nations to fund a cleanup. Other poor countries want China to help. And U.S. threats to tax carbonheavy imports could spark trade war.
What’s the cost of bank bailouts? 11 Dec 2009 In the UK, official estimates go from 8 billion to 846 billion pounds. It all depends on how official support is measured. It's hard to put a number on financial rescue programmes which simultaneously protect, benefit and endanger taxpayers. They are both expensive and priceless.
Warrant auctions imply Goldman misjudged market 11 Dec 2009 The vaunted Wall Street firm paid the U.S. Treasury s $1.1 bln asking price for its TARP warrants in July. Recent auctions of JPMorgan and Capital One warrants suggest the market price was much lower. Goldman had reasons not to balk, but still looks to have overpaid.
Spain should take head out of the sand 11 Dec 2009 A rating agency's warning about a possible downgrade has fallen on deaf ears. It seems the Spanish government isn't prepared to take tough action to control its ballooning deficit. It isn't too late to act. Here is a fivepoint plan.
Spreading the burden could ease City bonus hit 10 Dec 2009 One of the mysteries of the UK's 50 percent bonus tax is why it is raising so little. Estimated proceeds of 550 million pounds suggest top bankers may suffer a 30 percent hit. But by spreading the burden across the global workforce, banks may limit the impact.
UK shows how to destroy world-class industry 10 Dec 2009 Pensions were once a national specialty for the UK. Two rule changes within a single tax year add up to a massive blow. Such shortterm fiddling destroys confidence in longterm savings. The Chancellor's latest moves betray the government's intellectual bankruptcy on the subject.
UK bonus tax: One-off or two-off? 10 Dec 2009 The UK government has made a mistake in suggesting its bankers' bonus tax might be extended. One way of mitigating the damage would be to make clear that any repeat would cover total compensation, not just bonuses. Otherwise, banks will just jack up base salaries even more.
Bonus tax shows France and UK moving closer 10 Dec 2009 France will levy the same oneoff bonus tax as the UK. A jointly penned newspaper column by Nicolas Sarkozy and Gordon Brown shows narrowing differences on financial regulation. If the banking industry doesn't change its mores, more pain may be on the way.
Britain’s bonus tax may snare unintended victims 10 Dec 2009 Britain's draft law of the supertax on bankers' bonuses has been drawn very wide. This will deter clever bankers from exploiting loopholes. But asset managers, hedge funds and even foreign bank chiefs could also be hit. The Treasury should act fast to clear up the confusion.
Taiwan can’t hold off Chinese investors forever 9 Dec 2009 The island's premier says he won't let mainlanders take control of its banks in the near future. Such opposition to Chinese investment is becoming hard to sustain. Taiwan's recovery depends on China acting as export buyer of last resort. It may have to become more welcoming.