Puerto Rico restructuring will be no day at beach 3 May 2017 Congress gave the U.S. territory access to a form of bankruptcy. Now the board overseeing its finances, encompassing $70 bln of debt, has pressed the button. Creditors will get their day in court, and tidy plans in spreadsheets could end up as warped as in Detroit – or worse.
Kansas’ fiscal fiasco a warning for Trump tax plan 3 May 2017 The president’s tax plan echoes sweeping cuts by the Plains state in 2012. The GOP governor’s bet on trickle-down economics slashed revenue but failed to spur growth. Lawmakers now want to reverse the reductions amid a school-funding crisis. It may be a crystal ball for D.C.
Make Britain’s Brexit bill performance-related 3 May 2017 The EU may demand 100 bln euros from the UK for leaving the bloc. Some Britons want to pay nothing. Investment bankers ease impasses between companies by making part of the cost contingent on future performance. Linking the bill to UK GDP might enable both sides to claim victory.
Hadas: Basic income is basically confused 3 May 2017 As new technology threatens job security, the dream of giving all citizens a simple payment is making a comeback. But the idea is too expensive to be practical. It also ignores the biggest drawback of modern welfare states: that lives are complicated and people are not angels.
Elite animal spirits shift to comfortable smugness 3 May 2017 Dramatic U.S. tax cuts and deregulation may no longer seem certainties, but financiers and other bigwigs at the annual Milken Institute shindig in LA are sanguine. The Treasury secretary's in-jokes added to the coziness. Whether the easy feeling trickles down is another matter.
French savers are a good bulwark against Le Pen 3 May 2017 Marine Le Pen’s anti-euro rhetoric will be a liability in Sunday’s election. Some undecided voters may share the far-right leader’s distrust of the EU. But ditching the single currency would be punitive for a country with the euro zone’s third-highest savings rate.
India’s Minister for Everything poses a problem 3 May 2017 Finance Minister Arun Jaitley also oversees defence and corporate affairs. Rolling out a giant tax reform, tackling bad debt, and managing military spending is too much for one person. It reflects a talent crunch in New Delhi as much as the playbook of a strongman ruler.
U.S. air-traffic revamp is overdue for boarding 2 May 2017 The White House wants to privatize flight control and overhaul ancient systems at an estimated cost of $35 bln. Canada pioneered a self-funding, stakeholder-governed model. A similar approach could work for America if carriers, politicians and others can dump their baggage.
EU clearing spat epitomises perils of hard Brexit 2 May 2017 Brussels may try to restrict euro-denominated clearing in the UK, a report says. European regulators have long fretted over the fact that most of it occurs outside the euro area. A compromise is more than possible – but is harder to achieve if Britain leaves the single market.
Trump rains on his own dealmaking parade 1 May 2017 Lawmakers kept Uncle Sam running with a temporary budget that called the president’s bluff on everything from the border wall to the environment to Obamacare. With no sign of leverage elsewhere, turning himself into a lame duck may be Trump’s major first-100-days achievement.
Cautious consumers provide new sort of Trump bump 28 Apr 2017 The U.S. economy grew slower than expected, at just a 0.7 percent pace in the first quarter. Less spending on cars was a big factor. The year typically starts slowly, but consumers have been less confident than investors. That could put a hitch in the president's ambitious plans.
Theresa May has a way out of UK pension pickle 28 Apr 2017 The prime minister is dithering over whether to keep guaranteeing above-inflation hikes to pensioners. The triple-lock is nonsensical, inequitable and unfit for an era of Brexit and stagnant wages. May has the political capital to adopt a fairer single-lock, tied to earnings.
French vote may spring one more plot twist 28 Apr 2017 Presidential favourite Emmanuel Macron enjoys a huge poll lead over far-right Marine Le Pen. But the margin could be eroded by any missteps, his rival’s media savvy, and what the hard-left does. With a week to go, there is still time for the election to rattle financial markets.
MSCI’s China plan is clever window dressing 28 Apr 2017 The index provider has slashed the number of mainland stocks to include in benchmarks tracked by $1.6 trln in assets. This should win support after prior failed attempts. But resulting flows into China will amount to a rounding error. It's a very tiny step in the right direction.
Viewsroom: Europe’s electoral frenzy 27 Apr 2017 France is about to choose a new president. The UK has called a surprise election. Germans head to the polls soon and Italians and Greeks could be close behind. As Brexit gets in motion and President Trump settles in, Europe’s election season will bring risks and opportunities.
Archived tax plan could help White House close gap 27 Apr 2017 Donald Trump's bullet points, summarizing earlier campaign ideas, would add trillions to U.S. deficits over 10 years. Ex-Congressman Dave Camp sketched out a more balanced plan three years ago. It may offer a blueprint, albeit with smaller business-rate cuts than Trump wants.
For credit, ECB is more perilous than Le Pen 27 Apr 2017 The dwindling likelihood of far-right Marine Le Pen becoming French president has sent the cost of borrowing for risky companies to near-record lows. A correction could come once the European Central Bank withdraws support for bond markets – which is more likely if Le Pen loses.
Cox: Proximity to Trump no blessing for stocks 27 Apr 2017 Equity-market winners and losers from the president's first 100 days are surprising. "Failing" New York Times shares have surged. White House talent providers Goldman Sachs and Exxon are down. Blackstone and Fox are flat. Distance from the Oval Office may prove a virtue.
FCC puts dubious faith in U.S. broadband oligopoly 26 Apr 2017 New Chairman Ajit Pai wants to roll back rules that classify high-speed internet as a utility. He reasonably points to reduced investment following their implementation. A defanged regulator overseeing dominant providers of a crucial service, however, would be bad for customers.
Trump’s sketchy tax math will fail Congress test 26 Apr 2017 The president’s plan for big rate cuts relies on the unrealistic assumption that GDP will hit 3 pct and be enough to cover any revenue shortfall. The U.S. deficit, though, is growing at an alarming pace. Republican lawmakers are likely to demand a do-over before giving it a pass.