Trump’s budget plan exhibits poor risk management 16 Mar 2017 The U.S. president wants to slash money for healthcare research, job training and clean water in favor of beefing up an already well-funded defense. His $1.1 trln blueprint discounts too many dangerous economic threats. America can't afford to forgo long-term investments.
Dutch deliver conventional protest vote 16 Mar 2017 The country’s governing coalition suffered heavy losses in Wednesday’s election. But right-wing firebrand Geert Wilders picked up fewer seats than expected and finished a distant second. The setback for extremism leaves mainstream political parties more fragmented than ever.
Fed hike puts sand in economy’s consumer engine 15 Mar 2017 The U.S. central bank raised interest rates for the second time in three months. Healthy jobs growth and strong business confidence indicate an economy in good shape. Yet household debt is reaching record levels and higher borrowing costs will start to pinch people’s wallets.
Britain’s budget U-turn merits Brexit deal alarm 15 Mar 2017 Chancellor Philip Hammond has reversed last week's tax hike for self-employed workers. As EU exit negotiations begin, the UK critically needs a united government that can be firm in the face of political pressure. Ditching a defensible reform implies the opposite.
Hadas: The real trade-surplus problem is financial 15 Mar 2017 Big positive German and Korean current accounts are supposedly bad. Trump wants to rewrite the rules over America's trade deficits. Yet the traditional cases against surpluses are weak. The larger fear is that cross-border cash flows weaken the stability of the financial system.
Saudi Arabia’s flawed oil plan still the right one 15 Mar 2017 Cuts to production agreed with OPEC aren’t boosting the value of crude as hoped, or reducing global stockpiles. Shale in the U.S. is recovering too, and prices are moving sideways. The holding pattern is painful, but it’s still better than reversing course and letting oil plunge.
Icahn cronyism fits Trump’s emerging energy policy 14 Mar 2017 The activist investor is urging an overhaul of the U.S. biofuel program in his first pitch as deregulation adviser to the president. The program could use a rethink, but not from a man whose refinery stands to benefit. Yet the idea fits with Trump’s conflicts-laden energy agenda.
Hogg exit only half solves Bank of England problem 14 Mar 2017 The central bank’s deputy governor has resigned after a UK parliamentary committee criticised her for failing to disclose a conflict of interest. Better late than never. However, the BoE’s tardy response to the affair has exposed a tin ear that will require attention.
Xi has weak pitch selling status quo to Trump 14 Mar 2017 The U.S. president will reportedly host China's Xi in April, but neither has much to bring to the table. Xi wants Trump to stick with the status quo on trade, investment and climate change. In exchange China will make friendly noises about investment and reform, but little more.
Obamacare reform rests on GOP sleight of hand 13 Mar 2017 The Republican plan to replace the Affordable Care Act cuts the deficit by $337 bln over 10 years, the CBO estimates. It does so by removing 24 mln people from the program and ending Medicaid expansion. That’s a ruse anyway: taxpayers bear a lot of the cost of the uninsured sick.
White House friends not much help to gun industry 13 Mar 2017 Trump's victory vanquished the prospect of new firearms rules. In the upside-down world of ironmongery, that's bad for business. Gander Mountain just filed for bankruptcy, Cabela's merger with Bass Pro is imperiled and gun shares have been crushed. The bust will continue.
Second Scottish vote could still mean hard Brexit 13 Mar 2017 Sterling rose against the U.S. dollar as Scotland’s first minister called for another independence referendum. One theory is Prime Minister Theresa May will need to take a softer line on Brexit negotiations to persuade Scots to stay. But a hard divorce is still possible.
Bank of England deputy governor Hogg should resign 13 Mar 2017 Charlotte Hogg failed to inform the UK central bank that her brother works for Barclays. While a sin of omission, it’s serious for an institution that holds itself and others to a high standard. If she stays, it would hurt the bank’s reputation.
Dutch election exposes fragility of mainstream 13 Mar 2017 This week’s vote is a test of Europe’s anti-elite mood. But the focus on right-wing firebrand Geert Wilders ignores a fragmentation in support for traditional parties. That is an obstacle to forming a stable government in the Netherlands - and for decision-making in the EU.
Modi’s state poll victory will keep India moving 13 Mar 2017 A big win by Prime Minister Narendra Modi’s BJP after a disruptive currency overhaul shows Indians are willing to endure pain for progress. It gives a green light for more reforms that benefit the poor, like simpler subsidies. A major shift towards free markets is less likely.
White House disrupts Silicon Valley pecking order 10 Mar 2017 Trump's arrival has rearranged how tech firms stack up in Washington. Some have criticized the U.S. president's policies while others see opportunities to sway the new regime. The shift has legal battles between Oracle and Google, and Apple and Qualcomm spilling over into D.C.
Payroll bump a fair wind for Trump economic agenda 10 Mar 2017 Employers added a healthy 235,000 jobs in February. Wages and participation also improved. Combined with buoyant investor confidence, the first payroll report of the Trump era gives the president momentum to push his ambitious fiscal plans - if he can focus on essentials.
EU bank repairs are a race against time 10 Mar 2017 Regulators are rushing to streamline how lenders assess the riskiness of assets. An end-2018 deadline is ambitious since the review spans 68 institutions. Global Basel IV rules may also be delayed. Slippage is a headache for banks facing big changes to how they account for loans.
Aramco’s IPO merits social engineering discount 10 Mar 2017 The kingdom’s state oil group is about to launch the world’s biggest share offer. It has also just announced plans to invest $4.4 bln in a new industrial city, to create jobs for Saudis. The danger for potential investors is that white elephant subsidies trump a focus on returns.
China gets a timely economic spring in its step 10 Mar 2017 A batch of positive data sets a good tone for the economy in 2017, easing fears of capital flight and deflation. The respite may be brief. Even so, it provides some room for Beijing to step back from firefighting, allowing it to focus on deleveraging and its ambitious restructuring plans.