Politics

Obamacare fever impairs Republicans’ vision

4 May 2017

The party is hell-bent on pushing a new health framework to fulfill campaign pledges. Congressmen are moving so quickly that the costs and coverage fallout are unknown. Important benefits could be waived while sick people pay more. Only voters may cure this political malady.

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.

New York Times and CNN should beware news cycles

3 May 2017

What Donald Trump calls a "failing" publisher and "fake news" network revealed impressive subscriber and viewer numbers. Political fatigue is among the risks to the recent growth, however. Ad trends are scary, too. The companies can't believe too much in their own headlines.

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.

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.

Malaysia throws cheque book at 1MDB problem

27 Apr 2017

A deal with Abu Dhabi puts Malaysia on the hook for $3.5 bln of the disgraced fund's debt and leaves a dispute over a further $3.5 bln unresolved. That is a costly attempt to patch up relations between the states and avoid potential embarrassment before an election.

Theresa May channels Margaret Thatcher in reverse

25 Apr 2017

The 1980s Conservative prime minister did unpopular things in the name of market forces, and wound up a middle-England hero. By pledging to cap fuel prices, her 2017 successor is being unashamedly interventionist. It’s hard to square with May’s vision of a “truly global Britain”.

U.S. “animal spirits” are turning into zombies

24 Apr 2017

The bump in U.S. stock prices and bond yields after November's election is still there, but fading. Donald Trump's business-friendly ideas are looking less likely to get through Congress. And if yardsticks measuring protectionism are any guide, that threat has evaporated.

Trump’s first 100 days provide more art than deal

24 Apr 2017

The U.S. president is planning a flurry of events before Saturday's landmark, including another try at repealing Obamacare and the unveiling of a tax plan. Promised early policy wins have yet to materialize though. Given his record, he’d be wise not to risk a Washington shutdown.

European market reboot depends on more than Macron

24 Apr 2017

Stocks and the euro rose sharply amid relief that the French centrist made it to the second round of presidential elections. The gap between Gallic and German bond yields remains wider than six months ago, though. That reflects lingering political risks to the single currency.

Winning French presidency is easy part for Macron

23 Apr 2017

Projections show the centrist reformer will face the far-right Marine Le Pen in the election's second round. Macron is the clear favourite – a relief for investors who feared the rise of anti-EU candidates. They risk ignoring how hard he will find it to deliver economic change.

Soccer attack weirdly converges risk factors

21 Apr 2017

A bombing of Borussia Dortmund's team bus was carried out by a man using leveraged options to bet against the club’s stock, prosecutors say. A similar unsuccessful plot recently involved U.S. retailer Target. The mix of financial weapons and real ones is a disturbing new trend.

UK proves itself a so-so green energy investor

20 Apr 2017

The government has sold its Green Investment Bank to Macquarie for 2.3 bln pounds. A 5 pct annual return over five years gives taxpayers some benefit. But as with other recent public sales, the risk is private capital reaps benefits that could have stayed with the public purse.

Economic heresy is real winner in French election

20 Apr 2017

Investors are nervous the presidential contest will be a choice between far-right Marine Le Pen and hard-left rival Jean-Luc Melenchon. That’s unlikely. Still, candidates who are blasé about debt and hostile to the EU could get two-fifths of the vote. Their ideas may catch on.

Samsung’s enemies pick the wrong battle

20 Apr 2017

Politicians in Seoul want to stop Samsung restructuring using treasury stock. They argue it's a trick for the ruling Lee family to gain more control cheaply. But the resulting firms would be worth more, and be better run. Keeping the status quo would be a Pyrrhic victory.