The markets will not bring politicians to their senses - The Economist - Canadanewsmedia
Connect with us

Politics

The markets will not bring politicians to their senses – The Economist

Published

on


JAMES CARVILLE is surely to blame. As political adviser to Bill Clinton, he joked that he would like to be reincarnated as the bond market, because “you can intimidate everyone”. The idea is that pressure from the markets tends to curb reckless economic policy. Carvillists think that the prospect of a hard Brexit will prompt panic-selling of bonds, shares and the pound, a rout that would bring politicians to their senses. This seems a forlorn hope. It is far more likely that the markets will be cowed by politics than the other way around.

If the House of Commons on December 11th votes down the Brexit deal agreed with the EU, the pound will probably fall. The price of gilts, as British government bonds are known, would rally as investors seek a safe haven. The share prices of firms most heavily exposed to the domestic economy would fare badly. But a cheaper pound might push the overall index of leading shares up, because many of the largest firms get much of their profits outside Britain. A weaker pound would make it cheaper to buy a stream of global earnings.

Yet it seems likely that prices would move only modestly. Really big moves would require investors to believe on December 12th that a no-deal Brexit was now a certainty. Why should they think so? Many things could happen before March 29th to mitigate, forestall or postpone such an outcome. Few hedge funds would be willing to short sterling—borrow pounds so as to sell them in the hope of buying them back more cheaply later. If the political winds suddenly changed, the pound might surge, leaving them out of pocket.

Say, for the sake of argument, that investors came to the conclusion that a no-deal Brexit was now more likely. Sterling might then conceivably fall by 10% or so. But what would put a floor under it is that the pound has already fallen a long way since the Brexit referendum in June 2016. Before the vote was in, sterling was trading at $1.48. It now buys $1.27. There is already a fair bit of Brexit bad news priced into sterling. The same goes for British stocks.

Carvillists draw a parallel between the parliamentary vote on the Brexit deal and passage through Congress in 2008 of the Troubled Asset Relief Programme, or TARP, a bail-out for America’s banks. The TARP was at first voted down. The stockmarket promptly fell sharply. Then, four days later, Congress voted in favour of it. It is not a perfect parallel. When the TARP vote was taken, many feared that banks would fail and the financial system would break down within days. In Britain, by contrast, Brexit is still months away. And in the otherwise gloomy picture of a no-deal Brexit recently drawn by the Bank of England, it was made clear that banks would still function, even in the worst-case scenario.

Investors know that most of the electorate, and the bulk of MPs, do not favour a no-deal Brexit. So they are unlikely to panic prematurely. If, as March 29th approaches, there is still no deal in place, investors will grow nervous. Things are likely to be messy. But the markets are more likely to be the bullied than the bullies.

Let’s block ads! (Why?)



Source link

Continue Reading

Politics

Politics Briefing: Huawei executive back in Vancouver court – The Globe and Mail

Published

on

By


Good morning,

The chief financial officer of Chinese telecom giant Huawei remains in Canadian custody today. Meng Wanzhou will be back in court today arguing that she should be allowed to leave jail during her extradition hearings. Ms. Meng said two of her four children go to school in Vancouver, she owns two properties in the city and she used to be a permanent resident of Canada, though she gave that up. In court filings, she also said she is dealing with health problems this year. (Vancouver police are also looking into an attempted break-in at one of her houses.)

Ms. Meng was arrested last week to be extradited to the United States, where she is wanted for having allegedly violated trade sanctions with Iran. The arrest caused an immediate chill in relations between Canada and China. British Columbia’s government even cancelled an official trade trip to China, although Canadian companies say they’re going to go ahead with the trip anyway.

Story continues below advertisement

But while the arrest catalyzed problems in the diplomatic relationship, there were already some tensions brewing there because of Huawei. The Globe and Mail reported this morning that Canada’s spy agency had convened a meeting with the country’s top research universities in October to tell them to be wary of their work with Huawei. The Globe detailed earlier this year how the telecom giant was getting the intellectual property of work done in Canada’s taxpayer-funded labs.

This is the daily Politics Briefing newsletter, written by Chris Hannay in Ottawa. It is exclusively available only to our digital subscribers. Have any feedback? Let us know what you think.

TODAY’S HEADLINES

In Ottawa, it’s the last week of sitting for the House of Commons before the winter break. Expect a mad rush to get some bills passed into law before MPs head to their home ridings for the holidays. It will also be the final week of sitting in Centre Block for at least a decade. MPs move into West Block in the new year, into a brand-new chamber whose construction we’ve chronicled. Finance Minister Bill Morneau has guests today, too: his provincial and territorial counterparts. A topic of discussion will be, as always, equalization, and the fact that Quebec – a province with a balanced budget – will get a larger infusion from the federal coffers this year, whereas the hard-hit energy-producing provinces of Alberta, Saskatchewan and Newfoundland and Labrador won’t get anything.

In London, Prime Minister Theresa May is set to postpone a key vote on her Brexit plan, as it was looking like she was almost certainly going to lose the Tuesday vote in the House of Commons. Ms. May spent the weekend talking to the European Union to see if she could wring out more concessions for Britain’s planned exit from the group. But getting changes to the hundreds of pages of legal documents will not be easy.

And in Washington, U.S. President Donald Trump needs to hire a new chief of staff. Mr. Trump announced on Saturday that John Kelly, a former general, would step down from his post on Jan. 2, after months of tension between the two people. Mr. Trump had expected to want to pick Nick Ayers, the vice-president’s chief of staff, to fill the newly vacant post, but Mr. Ayers has been clear he does not want it. Mr. Trump is said to have a few candidates from within the administration whom he might ask to take on the job. Not that the role will be a lot of fun: Democrats are already champing at the bit to try to impeach the President, or see him go to jail.

Globe and Mail editorial board on Huawei and the political relationship: “Canada’s courts must independently consider the U.S. extradition request; there is no way to honour the Chinese demand that Ottawa somehow end a court proceeding and free an accused. That would be illegal and impossible under Canadian law. We are a rule-of-law country. As part of the extradition treaty with the United States, this process will take place beyond the control of politicians. If American prosecutors have made a credible case, extradition will happen.”

Story continues below advertisement

Story continues below advertisement

Campbell Clark (The Globe and Mail) on Friday’s first ministers meeting: “It looked for a while like a lot of premiers were going to band together to take on Prime Minister Justin Trudeau. But it was no united front. They disagreed among themselves more than with the feds.”

Lori Turnbull (The Globe and Mail) on the premiers and the next election: “Mr. Trudeau might be headed toward a similar federal-provincial conflict, despite his very different approach to intergovernmental negotiations. For example, his plan for a national carbon price has been met with sustained resistance from several premiers who are looking to the courts to rule that the measure is unconstitutional.”

John Ibbitson (The Globe and Mail) on the urban/rural split in the next election: “Political divides are natural and expected in all developed democracies, until they become toxic. Downtown voters – who are more likely to be well educated, affluent, progressive and comfortable with all kinds of diversity – too often look on their country cousins as uneducated, intolerant and unenlightened. Rural voters see the way downtowners seek to reshape the country into something they barely recognize. When tensions become too extreme, a populist backlash seeks to Make America Great Again, fuels the Brexit vote, creates political paralysis in Sweden, causes riots in France.”

Got a news tip that you’d like us to look into? E-mail us at tips@globeandmail.com. Need to share documents securely? Reach out via SecureDrop

Let’s block ads! (Why?)



Source link

Continue Reading

Politics

Amid chief of staff search, Trump increasingly anxious over political future – CNN

Published

on

By


Trump has become increasingly concerned in recent weeks about what his administration is facing come January, when newly empowered Democrats are expected to unleash the full force of their oversight powers on the Trump administration.
Those include compelling Cabinet secretaries to testify, requesting the President’s tax returns and scrutinizing some of his most controversial policy decisions. Trump often complained that Kelly, a retired four-star Marine general, was not politically shrewd enough for the task.
Ayers not taking job as White House chief of staff
The details of the President’s discussions, which have not been reported on previously, reveal how close Ayers was to becoming chief of staff. He and Trump huddled several times over the last week in the residence of the White House, where they were afforded more privacy than in the staff-filled West Wing, but they ultimately could not agree to terms and Ayers declined the job. He will leave the vice president’s office at the end of the month to run the super PAC set up to assist the President’s re-election campaign.
Trump has privately told confidants he wants his new chief of staff to shift the goals of the West Wing away from legislation and toward politics, sources said. He did not outline specific things he wanted Ayers to change in the West Wing, but was generally relying on the politically savvy young aide to make changes on his own that could bolster the White House ahead of what is expected to be a tumultuous year.
Trump has remarked on several occasions that his West Wing needs aides who are more politically adept. That problem is only exacerbated by the departures of two White House aides in recent days: the political director Bill Stepien and Justin Clark, the director of the office of public liaison. Both are leaving the administration to work on Trump’s re-election campaign. And multiple White House officials have complained privately that Shahira Knight, the legislative affairs director, is more focused on the policy than navigating the political realities of Washington, including managing relationships with lawmakers.
Trump is now embarking on a hasty search for a new chief of staff with no obvious choice in mind.
He predicted Ayers would budge on his demand to be chief of staff on an interim basis, with a set departure date of this spring, and was not prepared with a second option. Kelly, who attended a holiday party at the White House Sunday night and reported to work Monday, is expected to leave at the end of the month.

Let’s block ads! (Why?)



Source link

Continue Reading

Politics

LEGER: Hate crimes are on the rise as bigotry creeps into politics – TheChronicleHerald.ca

Published

on

By


Bears might be prowling the stock indexes, but shares in hate are enjoying a bull market like we haven’t seen in generations. Western democracies, once justly proud of their openness and tolerance, are seeing the intolerant minority growing bolder and more violent.

In Canada, federal statistics captured almost 2,100 hate crimes reported to police in 2017, up from 1,409 in 2016. Some of that might arise from better reporting, but that’s an increase of almost 50 per cent. The majority of the nastiness happened in Ontario and Quebec with Jews, Muslims and Afro-Canadians the most frequent targets.

Hate crimes have increased four years in a row, according to Statistics Canada. That makes it a trend, not a coincidence, even with most of the offences classified as mischief, vandalism and public incitement of hatred against identifiable groups. But direct violent attacks were also up, a worrisome indicator of future problems and suggestive of a worsening outlook for public safety.

Most reported hate crimes fell short of direct violence against individuals with one important exception. Crimes based on sexual identity, 10 per cent of the total number of such offences in Canada, were much more likely to be violent.

Short of direct violence, spray-painting a family home or a place of worship with hateful graffiti might be considered less serious because no one gets physically injured. But there’s no denying the terror effect it has on the people it’s aimed at, especially on children.

In the U.S., law enforcement agencies report hate crimes were up 17 per cent in 2017. The same groups were targeted there as in Canada, which should come as no surprise. Canadians and Americans are both exposed to the toxic messaging from racist and hate groups that makes its way into our daily lives mainly via websites and social media.

Hate crimes are up in Britain as well, in keeping with a trend across much of Europe, according to annual statistics compiled by the European Union. Reported hate crimes in England and Wales were up by almost 30 per cent in 2016-17, the fastest increase since authorities started tracking such statistics in 2011.

As in Canada and the U.S., most such acts were aimed at racial and religious minorities. Attacks based on sexual identity (gay-bashing as it used to be called) were also frequent, although police said most attacks still go unreported.

In France, the total number of reported hate crimes has been trending downward since it peaked in 2015. But French hate crimes tend to be more violent, according to the EU. Except for France and Germany, incidents of hate and violence against minorities are increasing across Europe, with especially steep increases in Greece and Italy.

So what’s different on the hate front in 2018 compared with earlier years? I’d suggest that hate crimes are up because people are being told that hate is great again. Thinly veiled racist talk has crept into political speech and many people believe it’s now OK to be intolerant, because white European culture is under attack.

Most non-violent racists indulge their prejudices primarily through hateful speech shared with like-minded bigots. It is the violent minority among them that takes it further, shooting up black churches in the U.S. and attacking minority members in mall parking lots or schoolyards.

They’re being told it’s acceptable. In the U.K. and across most of Europe, extreme right-wing parties are embracing anti-Semitism and anti-Muslim rhetoric as part of their public appeal. They are saying, rarely explicitly but with clear implications, that it is OK to hate.

The current U.S. president refuses to condemn hate speech or hate groups. Only Donald Trump’s most ardent supporters still claim that what he says doesn’t affect how people behave.

It does matter what political leaders say about the hateful currents running through society. It’s up to citizens to reject such talk, and such politicians, online and at the ballot box.

Let’s block ads! (Why?)



Source link

Continue Reading
News3 mins ago

Court hearing on Chinatown’s request to close Edmonton safe injection sites – Global News

Science13 mins ago

Voyager 2 has finally entered interstellar space, more than 40 years after its launch – MIT Technology Review

Politics18 mins ago

Politics Briefing: Huawei executive back in Vancouver court – The Globe and Mail

Real Estate25 mins ago

Reimagining real estate – Ottawa Business Journal

Arts33 mins ago

Funding unveiled for new $13-million arts centre in downtown Halifax – TheChronicleHerald.ca

Sports58 mins ago

MMQB: 'Miami Miracle' could be knockout punch for Pats' Super Bowl hopes – TSN

News1 hour ago

'Stolen' SUV returned to owner with full tank of gas – CBC News

Economy1 hour ago

Europe could 'infect us': Richard Fisher on risks to the economy – CNBC

Real Estate1 hour ago

Six Legal Tips For Purchasing Commercial Real Estate – Forbes

Science2 hours ago

NASA's Voyager 2 becomes 2nd craft in interstellar space – Prince George Citizen

Sports2 hours ago

Monday FTB: Let’s just all agree that the last three days didn’t happen – Pension Plan Puppets

Business2 hours ago

China has banned sales of Apple iPhones 6 through X in Qualcomm patent dispute – Financial Post

Sports2 hours ago

Are The Edmonton Oilers Firing On All Cylinders After Flames Win? – Oil On Whyte

Technology2 hours ago

'Monster Hunter World: Icebourne' expansion arrives fall 2019 – Engadget

Sports2 hours ago

'I think he’s played great': Milan Lucic can't score but he's making his presence felt anyway – Edmonton Sun

Trending

Copyright © 2018 Canada News Media

%d bloggers like this: