|Bid||43.12 x 1200|
|Ask||43.13 x 1000|
|Day's Range||42.94 - 43.83|
|52 Week Range||26.19 - 45.86|
|Beta (3Y Monthly)||0.19|
|PE Ratio (TTM)||14.28|
|Earnings Date||Oct 24, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||42.12|
Mark Zuckerberg met with lawmakers on Capitol Hill and President Trump Thursday to talk about data privacy and security issues sure to come up at next weeks big tech anti trust hearings. Phil Quade, who is Fortinet Chief Information Security Officer and Author of the book 'The Digital Big Bang', has insight on those issues as he joins On the Move to discuss.
(Bloomberg) -- Apple Inc.’s latest iPhone models hit the stores on Friday, in a test of whether better cameras and longer battery life will be enough to lure buyers ahead of a much bigger redesign next year. The new line of hardware, including three new phones and an updated Apple Watch and iPads, was introduced on Sept. 10 and customers were able to place preorders last week to either be delivered or picked up in stores today. Long lines snaked around Apple’s flagship on Fifth Avenue in Manhattan as people waited to get in to the gleaming glass cube and descend to the underground space, which as been under renovation for two years and emerged Friday bigger and brighter. Apple Chief Executive Officer Tim Cook was on site for the opening and stood out on the store’s plaza across from Central Park taking selfies with fans.Sam Sheffer had already picked up his green iPhone 11 Pro in Manhattan’s SoHo store Friday morning, waiting in line for less than five minutes. But he went uptown to see the new store and potentially get a glimpse of Cook.“For me, a die-hard enthusiast, I wouldn’t be able to live knowing there was an iPhone I didn’t have,” Sheffer said.Apple shares were little changed Friday at $220.42, valuing the company at just under $1 trillion.Apple’s latest iPhone faced some hurdles heading in to its annual revamp. Sales of the iconic smartphone have declined in the past three quarters, as prices crept above $1,000 and people hung on to their current models longer. A lack of revolutionary features on this year’s model could keep some fans holding out until 2020, when significantly faster 5G networks and a revamped design will open up new possibilities with the phone. At the same time, a trade war between the U.S. and China is also starting to take a toll.But some early reports from analysts pointed to encouraging signs for Apple. Rosenblatt Securities Inc. said it’s seeing “some new model production increases for September and October for the new iPhone models.” Jun Zhang, an analyst at Rosenblatt, wrote that the firm now sees volume increasing by 3 million to 5 million units more than earlier expectations, to 68 million to 70 million units.Apple set the base model price at $699 for the iPhone 11, down from the iPhone XR’s $749 price last year and below some analysts’ expectations. That might help attract some first-time buyers to its expanding entertainment and services ecosystem.It may come as a disappointment to those waiting on line on Fifth Avenue, but if they haven’t preordered their phone, they could face a two-to-three week wait, according to Zhang. That’s a longer wait time than the one-to-two weeks for last year’s iPhone XR, but, “there is a lot of inventory at other retailers,” Zhang said.Longbow Research analyst Shawn Harrison said Apple could be seeing a “potential higher floor in iPhone demand,” and that “initial iPhone search trends are positively surprising.”Lines outside Apple stores around the world were typically shorter or non-existent this year, but tourists and customers thronged the Fifth Avenue location. Daniel Akinsulire found himself stuck deep in line on 58th Street, waiting to pick up phones for his family. “I didn’t know it would be this packed,” he said. “I might be late for work.”To contact the reporters on this story: Molly Schuetz in New York at email@example.com;Kiley Roache in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Robin AjelloFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Twitter Inc. said Friday it has removed a network of 273 accounts originating in the United Arab Emirates and Egypt, that were targeting Qatar as well as other countries including Iran. In a blog on its site, Twitter said the accounts were interconnected in their goals and tactics, and that they spread messaging that supported the Saudi government. "We also found evidence that these accounts were created and managed by DotDev, a private technology company operating in the UAE and Egypt," said the blog. "We have permanently suspended DotDev, and all accounts associated with them, from our service." Separately, the micro-blogging site said it had suspended a group of 4,248 accounts operating from the UAE, that were mainly targeting Qatar and Yemen. The accounts used false personae and tweeted about issues impacting the region, including the civil war in Yemen and the Houthi Movement. The company also found a group of six accounts linked to Saudi Arabia's state-run media that were focused on messaging that would benefit the Saudi government. In Spain, the company has removed 265 accounts that were deemed to be falsely boosting public sentiment. Earlier this summer, the company removed a network of 1,019 accounts in Ecuador tied to the PAIS political party. Twitter shares were up 1.4% in early trade Friday and have gained 51.5% in 2019, while the S&P 500 has gained 20%.
Rodrigo Duterte has ordered Philippine government agencies and state-owned companies to suspend talks on all loan and grant agreements with the countries that voted for a UN human rights investigation ...
(Bloomberg) -- India’s government escalated efforts to repair economic growth with a surprise $20 billion tax cut, taking the rate for companies to one of the lowest in Asia.Domestic companies will pay 22% tax on their income from April 1, 2019, versus 30% previously, Finance Minister Nirmala Sitharaman said Friday. The effective rate, including all additional levies, will be 25.2% and applicable on companies that aren’t availing any incentives or exemptions.India’s key S&P BSE Sensex rose 5.3% in Mumbai, the biggest gain in a decade, and the rupee rallied after the announcement. Sovereign bonds slumped as fiscal concerns came sharply back to the fore.New companies formed from Oct. 1 will attract 15% tax and an effective rate of 17.01%, Sitharaman said. That brings it to the same level as in Singapore.India joins Indonesia in cutting tax on corporates as Asian economies compete with each other to attract companies looking for alternate manufacturing locations to escape disruptions from the U.S.-China trade war. The 1.45 trillion-rupee ($20.5 billion) revenue loss from the move will test Sitharaman’s goal of narrowing the fiscal gap to 3.3% of gross domestic product this year despite a more than $24 billion windfall from the Reserve Bank of India.“We are conscious of the impact all this will have on our fiscal deficit,” she said, without elaborating.What Bloomberg’s Economists Say“The tax cuts are likely to boost private investment and have the potential to attract much more foreign direct investment. Any fiscal slippage is likely to be limited in the near term, as stronger tax buoyancy will boost growth.”\-- Abhishek Gupta, India economistFor the full report, click here, and for more research, hereThe government had estimated tax revenue of 16.5 trillion rupees in the year to March, and may now possibly revive plans for the nation’s maiden foreign currency sovereign bond sale.The government’s growth support measures, announced in fits and starts over the last one month, supplement the RBI’s generous dose of monetary stimulus. Governor Shaktikanta Das, who called the tax cut a “bold move,” has led the rate-setting Monetary Policy Committee to deliver 110 basis points of easing this year, while signaling his readiness to do more amid stable inflation.“We are in a state of coordinated policy response both by the government and the RBI,” said Madhavi Arora, an economist with Edelweiss Securities Pvt. in Mumbai. “Despite possible fiscal slippage, the RBI would likely deliver further cuts and continue to focus on policy transmission of earlier cuts.”The Monetary Policy Committee is due to announce its next decision Oct. 4.Big BangSeveral bankers and automakers said the move will help companies increase investment in the economy, where growth slowed to 5% in the quarter to June -- the weakest pace since May 2013.The step will promote growth and investment, Sitharaman said, speaking from the western Indian city of Panaji.The yield on the benchmark 10-year bond climbed 15 basis points to 6.79%, erasing a previous dip accrued after the central bank chief said there was scope for more easing.Higher yields could make it tougher to rein in borrowing costs. Policy makers need to ensure that companies can borrow at competitive rates and must improve demand for the goods firms produce, said R. Shankar Raman, chief financial officer at Larsen & Toubro Ltd., India’s biggest engineering conglomerate.“All of these need to fall in place for the investment rationale to be valid for providers of capital,” Raman said in a text message. “In all, a good beginning, albeit a year late.”“The unexpected fiscal stimulus is positive for sentiment,” said Priyanka Kishore, head of India and south east Asia economics at Oxford Economics, Singapore. “Investors will watch closely on how the potential damage to the budget deficit is managed.”(Adds details on Indonesia’s tax cuts in the fifth paragraph.)\--With assistance from Debjit Chakraborty, Ameya Karve, Subhadip Sircar, Anirban Nag, Anurag Kotoky, Matt Turner, Dhwani Pandya and Subramaniam Sharma.To contact the reporters on this story: Shruti Srivastava in New Delhi at firstname.lastname@example.org;Vrishti Beniwal in New Delhi at email@example.comTo contact the editors responsible for this story: Nasreen Seria at firstname.lastname@example.org, Karthikeyan Sundaram, Jeanette RodriguesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- There are a number of possible explanations for why the president of the United States is so reluctant to let the public see his tax returns and accounting records.Because he’s a quiet, humble man, maybe he doesn’t want anyone to know just how massively successful and wealthy he really is. Or perhaps he’s been giving away so much money to the needy that the scope of his philanthropy might draw uncomfortable and unwanted attention.I suspect the real reason lies elsewhere. President Donald Trump is comfortably wealthy, but certainly nowhere close to having the $10 billion he has claimed since the earliest days of his presidential bid. While not containing enough information about the full scope of Trump’s debts and assets to be definitive about his wealth, the tax returns would still show how robust his businesses are and, possibly, the provenance of some of his funding. They’d also be a report card of sorts on any financial sleight of hand or potential tax fraud lurking among the skeletons in Trump’s closet.All of those latter items are likely to be things that Trump wants kept under wraps. So, on Thursday, the president’s lawyers sued his accounting firm, Mazars USA, and Manhattan District Attorney Cyrus R. Vance in federal court in Manhattan, seeking to block Vance’s request for eight years of Trump tax returns from Mazars. Vance is looking into the possibility that Trump’s company took improper tax deductions and falsified business records to mask payments it made through Trump’s former personal lawyer, Michael Cohen, to silence two of the president’s alleged lovers. Trump’s lawyers present an interesting argument in the court filing. “Though no court has had to squarely consider the question, the U.S. Department of Justice and ‘[a]lmost all legal commenters agree’ that the President cannot be ‘subject to the criminal process’ while in office,’” the suit observes. “This principle stems from Article II, the Supremacy Clause, and the overall structure of the Constitution.”That’s quite an assertion. And Trump’s lawyers, in arguing that a sitting president exists above the law, don’t cite legal precedent — the thing lawyers usually do to build a strong and persuasive argument rooted in the law itself. Instead, Trump’s team offers a sweeping interpretation of executive power and immunity and cites a Justice Department memo and a gaggle of “legal commenters” to support their Hail Mary pass.Anticipating some of the criticism coming their way, Trump’s lawyers say that “the notion that this prohibition ‘places the President ‘above the law is “wholly unjustified.” They go on: “It is simply error to characterize an official as ‘above the law’ because a particular remedy is not available against him.”Trump’s lawyers also note that hardball politics are at work and that the Founding Fathers braced for that a long time ago.“The framers of our Constitution understood that state and local prosecutors would be tempted to criminally investigate the president to advance their own careers and to advance their political agendas,” the suit says. “And they likewise understood that having to defend against these actions would distract the president from his constitutional duties.”Here’s the rub, though, when it comes to these distracting investigations that prove so irksome to the White House: The framers couldn’t have anticipated a president as financially conflicted as Trump. The framers also couldn’t have foreseen that he would be targeted by state and federal probes with such frequency — which offers at least one measure of how extensive and pervasive corruption has been in the Trump era.The Trumpistas aren’t limiting themselves to the courtroom to assert executive power. They’re doing it within the federal government too.In an episode that first got exposure in the Washington Post on Wednesday and Thursday, the inspector general for the U.S intelligence community is examining claims by a White House whistleblower who was charged with monitoring a phone call between Trump and a foreign leader. The call in question involves Ukraine and a “promise” that Trump made that alarmed the whistleblower and caused him to make others aware. Less than a month before the complaint was filed, Trump spoke with Ukrainian President Volodymyr Zelenskiy. The inspector general is also examining whether Rudolph Giuliani, Trump’s on-again, off-again adviser, worked with Trump to try to convince Ukraine to help the president in the 2020 U.S. election. As it happens, Giuliani (who confirmed this in a CNN interview) has been chatting up a Ukrainian official in an effort to dig up dirt on Joe Biden.Democrats in Congress have been trying to get relevant paperwork from the intelligence community to determine what happened around all of this. But the White House and the Justice Department have cited the latitude the president enjoys on foreign policy and national security matters and haven’t been forthcoming.Adam Schiff, the Democrat who oversees the House Intelligence Committee, has told the intelligence community he will take legal action if the whistleblower’s complaint isn’t shared with him, signaling yet another possible clash between the executive and legislative branches.For his part, the president, feeling the authority vested in him by the office he holds, took to Twitter on Thursday to let people know he doesn’t understand all the fuss.“Another Fake News story out there — It never ends! Virtually anytime I speak on the phone to a foreign leader, I understand that there may be many people listening from various U.S. agencies, not to mention those from the other country itself. No problem!,” he tweeted. “Knowing all of this, is anybody dumb enough to believe that I would say something inappropriate with a foreign leader while on such a potentially ‘heavily populated’ call. I would only do what is right anyway, and only do good for the USA!” he added.To contact the author of this story: Timothy L. O'Brien at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Timothy L. O’Brien is the executive editor of Bloomberg Opinion. He has been an editor and writer for the New York Times, the Wall Street Journal, HuffPost and Talk magazine. His books include “TrumpNation: The Art of Being The Donald.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
BRUSSELS/SAN FRANCISCO, Sept 20 (Reuters) - Twitter suspended the account of former Saudi royal court adviser Saud al-Qahtani on Friday, nearly a year after he was sacked over his suspected role in the murder of Washington Post journalist Jamal Khashoggi.
Speaking after negotiations on Friday, EU officials criticised British proposals to shelve some discussions over the Irish border until after the UK’s departure. now entailed “a regulatory and customs border on the island of Ireland”, complicating efforts to keep trade flowing after Brexit. Despite a difficult week for Boris Johnson, the UK prime minister has been talking up the chances of securing a deal with Brussels after submitting informal discussion papers — known as “non-papers” — outlining plans to replace the contentious Irish backstop — the insurance policy to avoid a hard border in Ireland after Brexit.
President Donald Trump has imposed new sanctions on Iran’s central bank in response to an attack on Saudi Arabian oil facilities that Washington has blamed on Tehran. Speaking in the Oval Office on Friday, Mr Trump said the sanctions would go “right to the top”.
Facebook and Twitter have suspended hundreds of accounts they said were connected to Spain’s People’s party, marking one of the few occasions that social media groups have linked disinformation campaigns to a major political party in western Europe. Twitter said in a blog post on Friday that it had taken down 265 accounts linked to the centre-right party that it identified as “falsely boosting public sentiment online in Spain” through spamming and retweeting.
This week wealth manager Charles Stanley sponsored a supplement published with some of the papers. There was some stuff about the social and environmental impacts of investing, as well as the usual warnings about how important it is to get good financial advice and how if you want a “happy and fulfilled retirement” you’d be wise to get on the phone to Charles Stanley ASAP. Ask a wealth manager this and you’ll usually be told there isn’t one single number that can definitely be given to any one investor — it depends on all sorts of things, from the size of the portfolio to the type of service required.
(Bloomberg) -- Donald Trump wanted to meet Iranian President Hassan Rouhani badly enough to break with his national security adviser, entertain a French initiative that would undercut U.S. oil sanctions on Tehran and defy the wishes of a stalwart ally, Israel.But in the span of ten days that saw John Bolton’s ouster and a brazen drone and cruise missile assault on key Saudi oil facilities, talk of a historic meeting between the two presidents during the United Nations General Assembly in New York next week has withered. Now Iran’s foreign minister is warning there’s a risk of “all-out war.”Saturday’s strike on one of the world’s largest oil installations hit the nerve center of Saudi Arabia’s energy industry, sending a jolt through the global economy and delivering an embarrassing blow to a country that’s at the center of Trump’s Mideast strategy.While Iran was quick to deny involvement, the U.S. and Saudi Arabia blamed the Islamic Republic, without saying whether the attacks were launched from Iranian territory. Trump said on Wednesday that he wanted tougher sanctions on Iran while signaling wariness about getting the U.S. enmeshed in another Middle East conflict.“It’s very easy to attack,” Trump told reporters during a trip to Los Angeles. “How did going in Iraq work out?,” he added of a conflict that he’s long criticized. Yet later in the day he talked tough, saying, “Just one phone call, we could go in -- that might happen.”Landing in Saudi Arabia on Wednesday on a hastily arranged two-day visit, Secretary of State Michael Pompeo signaled his immediate focus was on working with allies, saying the goal of his trip was to “build out a coalition to develop a plan to deter” Iran.Even after the attacks on Saudi Arabia, Trump, who relishes one-on-one meetings with adversaries such as North Korean Leader Kim Jong Un, has predicted Iranian leaders will sit down with him when the time is right. “I don’t think they’re ready yet,” he told reporters on Tuesday. “But they’ll be ready.”At least for now, though, “it’s much harder for the U.S. to be seen meeting with Iran in the aftermath of this action,” Richard Haass, a veteran U.S. diplomat and president of the Council on Foreign Relations, said in an interview. “The U.S. is now weighing its response to the attack, and the question is how do you hit back in a way that doesn’t push diplomacy further away.”If Iran was in fact behind the latest attacks, they signal that the country remains capable of inflicting pain on its regional rivals and the global economy even after U.S. sanctions cut off much of the oil revenue that sustains its economy. Some officials in Tehran believe regime change is America’s ultimate goal and are demanding that sanctions are eased before any talks with Trump.“Dialogue between Iran and the U.S. at the UN is impossible unless the U.S. policies change by that time,” said Diako Hosseini, director of the World Studies Programme at the Tehran-based Centre for Strategic Studies, which advises Rouhani. That echoes the position of Supreme Leader Ayatollah Ali Khamenei, who said on Monday that without “repentance” Trump can forget about talks.On Thursday, Iranian Foreign Minister Mohammad Javad Zarif warned that any U.S. or Saudi strike on his country in response to the attacks on the kingdom’s critical oil facilities would lead to “all-out war.” Later on Twitter, he wrote, “Iran does NOT want war, but we will NOT hesitate to defend ourselves.”Pompeo initially suggested he wouldn’t issue travel visas to Rouhani and Zarif to attend the UN gathering, saying they are “connected to a foreign terrorist organization.” But issuing the documents is a pro forma requirement of the U.S. agreement for hosting the global body and by Thursday, Iranian and U.S. officials said visas had been granted. Bolton’s DismissalNothing did as much to fuel the possibility of a Trump-Rouhani meeting on the sidelines of the UN as Bolton’s dismissal last week. The former national security adviser had a long history of advocating preemptive strikes on Iran and scored an early victory when he joined the Trump administration last year, persuading the president to withdraw from the 2015 nuclear deal brokered by President Barack Obama.With Bolton gone, a meeting with Iran’s leaders would have been another precedent-shattering achievement for a president who has touted his ability to forge personal relationships with authoritarian leaders from Kim to Russian President Vladimir Putin. A meeting during the annual UN gathering of world leaders also would have been relatively easy to organize because Trump and Rouhani were expected to be in New York, staying just a few blocks apart.With Trump having a penchant for dismissing the advice of his top aides, the bigger hurdle to such talks always seemed to be the Iranians and the political calculus they would face: a meeting that didn’t result in eased sanctions would be seen as a humiliating “photo op” that would undermine the regime.Mindful of the potential pitfalls, Iranians have long favored quiet talks or discussions through intermediaries instead. Iranian leaders have in recent weeks pressed European nations that are still in the 2015 nuclear deal to help broker a breakthrough that would allow it to get its crude back on the market.Losing Face“If Iran came to the table tomorrow, without caveats, it would lose face,” said Ariane Tabatabai, adjunct senior research scholar at Columbia University’s School of International and Public Affairs.European sponsors of the nuclear deal had grown optimistic that Trump might reverse course and help salvage the accord, albeit with tougher restrictions on Iran. French President Emmanuel Macron floated a $15 billion financial package that would ease the pressure of U.S. sanctions and Trump at one point suggested he might go for the idea.Instead, the attacks in Saudi Arabia have sparked a discussion of how the U.S. and its allies should retaliate, casting a pall over the fitful efforts at diplomacy.European officials are now choosing their words carefully -- trying to keep their efforts to salvage the accord separate from any coordinated response to the strike on Saudi Arabia. U.K. Ambassador to the UN Karen Pierce said her country was still assessing where the attacks came from, but acknowledged that the bombing complicates diplomatic efforts.Pierce predicted lower expectations for an impromptu meeting even if Rouhani and Zarif come to New York, saying “I’m not expecting them to be walking down the same corridor at the same time” as Trump. Still, she added, “Meetings can happen at a very short notice in the margins of UNGA.”Trump left the thinnest of cracks open this week to talks, appearing to contradict his secretary of state by saying Rouhani should be allowed to come to UN.“I would let them come,” he said. “I’ve always felt the United Nations is very important.”(Updates with Iranian officials getting their visas to travel to New York in 12th paragraph.)\--With assistance from Glen Carey.To contact the reporter on this story: David Wainer in New York at email@example.comTo contact the editors responsible for this story: Bill Faries at firstname.lastname@example.org, Larry LiebertFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Iran’s foreign minister warned that any U.S. or Saudi strike on his country in response to the attacks on the kingdom’s critical oil facilities would lead to “all-out war.”In an interview with CNN, Javad Zarif reiterated that Iran wasn’t involved in the weekend attacks and hoped to avoid a conflict. He said Yemen’s Iran-backed Houthi rebels, who have been fighting a Saudi-led coalition for four years and claimed responsibility, had the capability to carry out such a sophisticated operation.“I cannot have any confidence that they did it because we just heard their statement,” Zarif said. “I know that we didn’t do it. I know that the Houthis made a statement that they did it.”Saudi and U.S. officials have said that the drones and missiles used were made by Iran, had never before been deployed by Iranian proxy groups, and came from a northerly direction, ruling out Yemen as a launch site. But they stopped short of saying the strikes were launched directly from or by the Islamic Republic, claims that could have propelled a drift toward war. The attacks caused an unprecedented surge in oil prices.Asked what the consequence of a U.S. or Saudi military strike on Iran would be, Zarif said: “All-out war,” CNN reported.“I make a very serious statement about defending our country,” he said. “I am making a very serious statement that we don’t want to engage in a military confrontation.”The attacks have damped speculation that President Donald Trump and his Iranian counterpart, Hassan Rouhani, could meet at the United Nations General Assembly in New York next week. The U.S. reimposed sanctions on Iran after exiting the 2015 nuclear deal, kicking off a year of increasingly fraught relations. Nevertheless, Iranian officials signaled they had their visas to travel to New York.The disputed weekend attacks sent tensions in the Gulf soaring to new heights.U.S. Secretary of State Mike Pompeo held talks in the United Arab Emirates on Thursday after visiting the Saudi Arabian city of Jeddah, as the allies plot their next move.Talking to reporters, Pompeo said he’d gathered “important information about how it is we should think about proceeding,” adding that Trump still wants a peaceful resolution to the issue.Pentagon officials were more direct, saying they would defer to Saudi authorities.“We’re going to allow the Saudis to make the declarations of where the attacks came from,” Defense Department spokesman Jonathan Rath Hoffman told reporters Thursday. He added that ‘all indications” are that Iran is “in some way responsible.”Trump, who as a candidate campaigned to end America’s foreign wars, initially declared the U.S. “locked and loaded” for a response, and on Thursday said it was possible there wouldn’t be a “peaceful solution.”But he’s also announced a tightening of sanctions on Iran, adding to the sense that he’s working to avoid another military conflict in the Middle East.(Updates with Pentagon comments starting in 11th paragraph)\--With assistance from Tony Capaccio and Glen Carey.To contact the reporter on this story: Shaji Mathew in Dubai at email@example.comTo contact the editors responsible for this story: Lin Noueihed at firstname.lastname@example.org, Bill Faries, Larry LiebertFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Follow @Brexit, sign up to our Brexit Bulletin, and tell us your Brexit story. Boris Johnson is not ruling out a further suspension of Parliament if the Supreme Court doesn’t block it when it announces its decision next week. But the prime minister’s team also said it will comply with what the judges decide, potentially restricting his options as he prepares for another showdown with lawmakers over Brexit.Key Developments:Third and final day of Supreme Court hearings into the suspension of Parliament has finishedA ruling is expected early next weekGovernment said it must know the court’s decision before declaring what it will do if it losesFormer premier John Major told the court it would be “naive” to believe Johnson on his reasons for suspending ParliamentBritain has given EU negotiators some ideas in writing on how to reach a deal, but this does not yet constitute a formal blueprintBercow Warns Johnson Over Breaking Law (5:50 p.m.)Speaker of the House John Bercow said crashing out of the European Union without a deal isn’t an option if Parliament doesn’t agree, because the law says it cannot happen. At an event in Zurich honoring Winston Churchill, he said legislation passed this month “is not an aspiration… it is the law of the land.’’The speaker sees only three scenarios for the U.K. -- leaving with a deal, leaving without a deal with the approval of Parliament, or seeking an extension. But he’s not making any predictions. “Anyone who predicts with great conviction or even a modest assurance the denouement of this long running saga is either an extraordinarily clever person or a reckless fool.’’Johnson: ‘We Are Making Some Progress’ (4:15 p.m.)Speaking to reporters during a visit to Wiltshire, southwest England, Prime Minister Boris Johnson said the government is “making progress” in talks with the European Union.“I don’t want to exaggerate the progress that we are making, but we are making progress,” Johnson said, according to the Press Association. “We need to find a way whereby the U.K. can come out of the EU and really be able to do things differently, not remain under the control of the EU in terms of laws and trade policy, this is the problem with the current agreement.”The prime minister said it’s still “vital” that the U.K. prepares in case it leaves the bloc without a deal.Varadkar to Meet Johnson in New York (4:10 p.m.)Irish Prime Minister Leo Varadkar said he’d be meeting Boris Johnson next week in New York “to try and get a deal,” in comments to staff at an event in Carlow, southeast Ireland broadcast by RTE. Both leaders are attending the United Nations General Assembly. German Chancellor Angela Merkel has also said she plans to hold talks with Johnson there.Varadkar said the gap between the European Union and U.K. remains “wide,” though the “mood music is good” after his meeting with Democratic Unionist Party leader Arlene Foster on Wednesday, the Press Association reported.“If I were to assess the situation, I would say there is a real willingness to find a deal,” Varadkar said.Court Openly Struggles With Role (4 p.m.)After two days debating whether Boris Johnson’s suspension of Parliament was lawful, the Supreme Court openly struggled with what they could do about it.Several of the justices peppered David Pannick, a lawyer opposed to the so-called prorogation, with questions that tested the limits of their power, and the constitution. The final 15 minutes of the three-day hearing provided some of the clearest insights into the court’s thinking.Court President Brenda Hale said the lawyers in the case should “make no assumptions” about the ruling. “This court will produce an answer as soon as it humanly can.”Court Will Aim to Rule Early Next Week (3:15 p.m.)The Supreme Court will aim to announce its ruling on Boris Johnson’s suspension of Parliament “early next week,” President Brenda Hale said at the close of three days of hearings.“None of this is easy,” she said. “We will have to decide what the answer is and we will have to decide one way or the other what the consequences are.”Pannick Asks For Parliament to be Recalled (2:55 p.m.)David Pannick, the attorney for Gina Miller, asked the court to “encourage” the prime minister to recall Parliament next week if the judges find against him.“We would expect in the light of a declaration in our favor that the prime minister will ensure that Parliament resumes as soon as possible next week,” Pannick said. “Let Parliament sort out the problem.”He asked the court to give its decision as quickly as possible and provide its reasons later. “This court will produce this answer as soon as it humanly can,” Court President Brenda Hale replied.U.K. and Irish Finance Ministers Meet (2:30 p.m.)U.K. Chancellor Sajid Javid and his Irish counterpart Paschal Donohoe will “exchange perspectives” on Brexit at a meeting in Dublin today.In a joint statement, Donohoe said their third meeting in eight weeks would help both sides understand each others views on the U.K.’s split from the EU.For his part, Javid reiterated that the U.K. will leave the EU on Oct. 31 while noting that Ireland “is an essential partner” for the U.K.Government Lays Out Options If It Loses (1 p.m.)In its submission to the court, the government laid out its potential options in the event judges find its decision to suspend Parliament unlawful. The scenarios depend on the wording of the ruling, it said.Scenario 1: The court could rule against the government, but its reasoning might still allow it to keep Parliament suspendedScenario 2: The court could require Johnson to advise the Queen to recall Parliament earlier than planned -- it’s currently scheduled to resume on Oct. 14. A Queen’s speech laying out the government’s agenda would still take place before any other businessScenario 3: A ruling quashing the suspension could mean Parliament was never actually prorogued and remains in session -- an argument the Scottish claimants have made. But it’s this outcome that could provoke the most controversial response from the government; Johnson’s lawyer didn’t rule out a second suspension it it happensMajor’s Lawyers Highlight Risks (12:45 p.m.)Lawyers for former Prime Minister John Major said a ruling in favor of Boris Johnson’s government would be the thin end of the wedge.It risks creating a scenario where the prime minister could suspend Parliament whenever he wanted -- including when faced with a no-confidence vote in the legislature, the lawyers said, or if politicians tried to pass a law which limited the government’s power to suspend.Barnier to Meet ‘MPs For A Deal’ Group (12:30 p.m.)EU chief negotiator Michel Barnier will meet Labour MPs Stephen Kinnock and Caroline Flint in Brussels on Thursday, after he asked to discuss their cross-party campaign to get a Brexit deal through Parliament.“Despite the political rhetoric, much of the withdrawal agreement is not contentious, it was the lack of clarity over the future relationship which was the sticking point,” Kinnock said in a statement. Theresa May’s deal with the EU “provides a solid and realistic basis on which to build in order to reach a compromise that can pass in the Commons and avert a catastrophic no-deal crash-out.”The politicians, who lead the “MPs for a Deal” group in Parliament, say they want the U.K. to leave with a divorce agreement and are trying to help broker one that can pass through the House of Commons.BOE Warns of ‘Entrenched Uncertainty’ on Brexit (12:20 p.m.)The Bank of England kept interest rates unchanged, warning that “political events could lead to a further period of entrenched uncertainty” as the impasse over Brexit continues.U.K. Sends EU Written ‘Ideas’ (12:10 p.m.)The U.K. and EU confirmed Thursday that the British government has now submitted some ideas in written form about how it sees changes to the Brexit deal, which has been one of the bloc’s key requests.However, it’s clear that the texts, which a spokesman described as “non-papers” -- EU jargon for an informal discussion document -- aren’t the U.K.’s full proposals, which will come at a later of date.“We have now shared in written form a series of confidential technical non-papers which reflect the ideas the U.K. has been putting forward,” the spokesman said. “We will table formal written solutions when we are ready, not according to an artificial deadline, and when the EU is clear that it will engage constructively on them as a replacement for the backstop.”The “artificial deadline” appears to refer to the idea put forward by Finland, that the U.K. should submit written proposals by the end of September.Government Doesn’t Rule Out Another Suspension (12 p.m.)The government told the Supreme Court that it would still consider suspending Parliament a second time -- even if it loses the current case.“Depending on the court’s reasoning it would still either be open or not open to the prime minister to consider a further prorogation,” according to the document, which was tweeted by opposition lawyer Jolyon Maugham.This is a question that has been repeatedly put to government lawyers over the last two days. The government also said that it can’t reveal its position until the court has given a full ruling.Lawyer Told Off for Politicizing Case (11:50 a.m.)Ahead of former Prime Minister John Major’s intervention, the judges have been hearing from lawyers from around the U.K.Ronan Lavery, representing Raymond McCord, whose son was killed in political violence that dogged Northern Ireland for decades, was told off by the judges for what they called an attempt to politicize the hearing -- something the judges have been at pains to avoid.“Don’t abuse our politeness and don’t abuse Lady Hale’s patience,” Judge Nicholas Wilson said to Lavery. Wilson said he was “worried” that people watching the case online may mistakenly think the case was about Brexit.Confusion Over Government’s Court Plan (11 a.m.)There’s significant confusion over whether the government will actually publish what it plans to do if it loses the Supreme Court case on Boris Johnson’s decision to suspend Parliament.While staff in the Supreme Court said the document would be published by the attorney general, his office said that wasn’t the case. And government lawyers told reporters the document would be published “at some point this morning” by the Supreme Court itself. Meanwhile, all parties to the case have seen the document filed to the court.Anti-Brexit Lib Dems Leapfrog Labour in Poll (10:45 a.m.)The Liberal Democrats leapfrogged the main opposition Labour Party in a poll of voting intention published late Wednesday.The party, which held its conference this week, has agreed to revoke Article 50 -- blocking Brexit -- if it wins the next election. While that may account for some of the rise, a higher media profile as a result of television coverage of the conferences often gives parties a boost in the polls.The YouGov survey for the Times newspaper saw Boris Johnson’s Conservatives unchanged on 32% of the vote, the Liberal Democrats on 23% -- up four points on the week before -- and Labour down two points on 21%.Coveney: ‘Growing Frustration’ in EU at U.K. (10:30 a.m.)Irish Foreign Minister Simon Coveney told reporters in Dublin there’s “growing frustration” within the European Union over the U.K.’s failure to bring forward concrete proposals to replace the contentious backstop, and that a “significant gap” remains between the two sides.British ideas to replace the backstop, the fallback measure to keep the Irish border free of checks after Brexit, lack credibility so far, Coveney said.Coveney also commented on his meeting with the Northern Irish Democratic Unionist Party, calling the discussions with leader Arlene Foster “positive” but stressing there was no breakthrough. Foster said late Wednesday (see Earlier) the DUP’s 10 lawmakers in the House of Commons are prepared to be “flexible” in finding a solution to the impasse over the Irish border.‘Naive’ to Believe Johnson: Ex-PM Major Tells Court (10 a.m.)The third and final day of Supreme Court hearings into Boris Johnson’s decision to suspend Parliament gets under way shortly, with Thursday’s highlight expected to be -- in political terms -- the extraordinary spectacle of a former prime minister arguing that the incumbent can’t be trusted.Lawyers for former Conservative Prime Minister John Major will say the court shouldn’t believe Johnson’s public comments on his reasons for proroguing Parliament, even going so far as to say the court would be “naive” to do so. Johnson, who leads the same party, has long argued that he suspended Parliament to kick off a new domestic agenda, while his legal opponents say he did it to stymie the legislature ahead of Brexit.In documents prepared for trial, Major’s lawyer, Edward Garnier, focused on the lack of a government witness statement to support its position -- something the judges have also questioned.“The court is under no obligation to approach this case on the artificially naive basis that the handful of disclosed documents, the contents of which nobody has been prepared to verify with a statement of truth, should nevertheless be assumed to be entirely accurate and complete,” he wrote.Barclay: Both Sides Must Be Flexible (9 a.m.)In a speech to business leaders in Spain, Brexit Secretary Steve Barclay said the U.K. wants to secure a divorce deal with the European Union, but warned that both sides must accept a degree of risk to achieve one. The backstop must be dropped from any agreement, he said, urging the European Commission to be “creative and flexible.”“A rigid approach now at this point is no way to progress a deal and the responsibility sits with both sides to find a solution,” Barclay said, adding that he will meet the EU’s chief negotiator Michel Barnier for talks on Friday.Securing a Brexit deal is also “the best way” for the U.K. government to navigate the Brexit impasse in the British Parliament, Barclay said. Boris Johnson’s administration will always abide by the law, he said, referring to legislation passed in Parliament requiring the government to seek a Brexit extension if it can’t get a deal next month. But he also warned that the law “does not close the door” to a no-deal divorce.“The U.K. wants a deal. But time is short -- there are just 42 days before we leave. But it is sufficient for a deal,” Barclay said. “But any deal must acknowledge and reflect the political reality in the United Kingdom. Simply that means that the backstop has to go.”Barclay also said the U.K. will abide by the decision of the Supreme Court, which concludes three days of hearings in London on Thursday over whether Johnson’s decision to suspend Parliament for five weeks was lawful.Foster Says DUP Ready to Help Break Impasse (Earlier)Arlene Foster, leader of Northern Ireland’s Democratic Unionist Party, said its 10 lawmakers in the House of Commons are prepared to be “flexible” in finding a solution to the impasse over the Irish border.“We are prepared to be flexible and look at Northern Ireland specific solutions achieved with the support and consent of the representatives of the people of Northern Ireland,” Foster said in a speech in Dublin on Wednesday evening.But she told reporters it would be “madness” to erect barriers between Northern Ireland and Great Britain to achieve a deal, and said the DUP is continuing to talk with the British government about the best way forward.Earlier:On Brexit, the Political Will to Avert No-Deal Is Ebbing FastJudges Hem Boris Johnson in Further in Supreme Court CaseGrim Tidings from Both Sides of the Talks: Brexit BulletinBrexit to Stay BOE’s Hand as Officials Wait for Clarity: Chart\--With assistance from Dara Doyle, Thomas Penny, Franz Wild, Christopher Elser, Anthony Aarons, Charles Penty, Kitty Donaldson, David Goodman, Jill Ward, Peter Flanagan and Ian Wishart.To contact the reporters on this story: Jeremy Hodges in London at email@example.com;Jonathan Browning in London at firstname.lastname@example.org;Fergal O'Brien in Zurich at email@example.comTo contact the editors responsible for this story: Tim Ross at firstname.lastname@example.org, Stuart Biggs, Thomas PennyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Twitter is losing its vice president in charge of global public policy, Colin Crowell. In a series of tweets on Thursday, Crowell praised friends and colleagues at Twitter and didn't provide details on whether he has another job lined up. "I'm looking forward to winding down at Twitter over the next few months and then kicking back, relaxing a bit, and enjoying time with my family," he wrote.
(Bloomberg Opinion) -- Economics 101 is the name many colleges and universities use for their introductory undergraduate economics course. It’s also shorthand for the ideas at the heart of classical economics as they have been taught for generations. Some economists think it needs an overhaul. Michael R. Strain and Noah Smith, both professional economists and Bloomberg Opinion columnists, debated its strengths and weaknesses.Michael R. Strain: Economics 101 matters. The standard introductory class for college students, and its textbooks, shapes the way millions of people think about markets, the economy and society. Indeed, they serve as the only formal exposure to economics for most people in a variety of professions.Econ 101 kicked open a door in my mind that has never closed. In my view, it is filled with intellectual treasures that have great predictive power, are supported by data and are often right. I use that formulation because you recently wrote on Twitter that none of those things are true. I disagree with you. The theories of opportunity cost, incentive responses and thinking at the margin are just three examples of deep insights into human and social behavior that freshmen are taught in introductory economics.You have long been critical of Econ 101. Why?Noah Smith: We have to distinguish between actual introductory econ courses and the ideas that the public casually refers to as Econ 101.When people say “Econ 101,” what they often mean is the theory of supply and demand. When it comes to labor markets — the biggest and most important market in the economy — that simple theory has failed dramatically. An increasing amount of data shows that companies have a lot of power to set wages lower than a competitive market would dictate. That has important implications for policy, since it means that minimum-wage laws will cause much less unemployment than the supply-and-demand theory would predict. This is only one example of many.Does this mean Econ 101 failed? Only in the colloquial sense. A good introductory economics course will teach the theory of monopsony power as well as supply and demand — and in fact, most do.MRS: I’m happy to focus our discussion on the 101 model of the labor market. I find it astounding that you argue it has “failed dramatically.” The model argues that companies demand labor services in order to make profit, and that workers supply their labor services in order to earn income. Wages adjust to balance supply and demand, and wages correspond to the value firms receive from workers.Rather than a dramatic failure, this simple model has an incredible ability to explain very complex phenomena. Take income inequality. The model predicts that as the demand for higher-educated workers increases — due, for example, to advances in technology that make those workers more valuable to firms — their wages will increase. The wage gap between higher- and lower-educated workers — inequality — will therefore increase. But if the supply of workers with more education also increases, then inequality growth will slow.In a 2014 paper, economist David Autor wrote: “This supply-demand explanation for the rise of U.S. inequality may appear almost too simple to be credible.” Then he explained, “But a host of rigorous studies … confirm the remarkable explanatory power of this simple supply-demand framework for explaining trends in the college-versus-high-school earnings gap over the course of nine decades of U.S. history.”The model doesn’t explain everything. But if it did, it wouldn’t be a model — it would be reality.NS: David Autor is a brilliant economist, but I’m not sure what he’s saying supports your case. First of all, Autor’s measure of “demand” in that 2014 paper is simply a time trend — in other words, he assumes that demand for college-educated workers is rising, instead of actually measuring it. Thus, the fact that his so-called model fits the upward trend in the college wage premium is hardly a surprise! But it doesn’t tell us much.Second, we’re talking about two different models here. The simple theory of labor supply and demand that I described above involves only one type of worker, not two. In this theory, raising the minimum wage will throw a bunch of low-skilled workers out of their jobs. But all of our best evidence shows that this just doesn’t happen very much, if at all. Minimum wages tend to have only a small effect on employment — and, in fact, they occasionally even increase it. That’s a big failure for the supply-and-demand theory, and a win for monopsony power theory — which any good Econ 101 course should also teach.As for Econ 101’s other insights, they provide a framework for thinking about the world. But mental frameworks can often lead us astray unless we remain grounded by hard data. Thus, I think Econ 101 classes should include empirical analysis.MRS: Some — not “all” — of our best evidence suggests that minimum-wage increases do not reduce employment. The nonpartisan Congressional Budget Office is a critical referee in policy debates. They released a report this summer arguing that a $15-per-hour federal minimum wage would cost over 1 million jobs. According to the CBO, a $12 minimum wage would cost several hundred thousand jobs, as well.In a 2018 paper with economist Jeffrey Clemens, I found that recently enacted and relatively large minimum-wage hikes reduce employment. But I also found some evidence that smaller increases might be associated with employment gains. It may be that during an economic expansion, firms can absorb small increases in the minimum wage through other channels, including raising prices. So the higher minimum pulls more workers into employment than it pushes out.Does this invalidate the supply-demand model? Just the opposite. The basics of supply and demand are critical to making sense of the empirical finding.But since you keep pushing “monopsony” as the superior model for college freshmen, let me turn the tables on you. The 101-level monopsony model predicts that raising the minimum wage will typically increase the number of jobs. Is that what you think we should expect? The basic monopsony model also predicts that employment will fall in the face of large minimum-wage hikes. How do you reconcile that prediction with your enthusiasm for it replacing supply-and-demand?NS: The Congressional Budget Office study that you cite gathered a large number of studies, many of them old and outdated, and many of which did not use reliable methodologies. A 2018 paper by Kevin Rinz and John Voorheis of the Census Bureau, using the best available data and the most modern statistical methods, finds no detectable effect of minimum wage hikes in general.As for your own paper with Clemens, it seems to back up my argument. In that paper you suggest that small increases in the minimum wage may actually raise employment. That implies there’s more than supply and demand going on, and we need to understand power in order to understand the labor market.The fact that employers have significant power over their workers has plenty of consequences for how we regulate labor markets, not just in terms of minimum wage, but regarding unions, antitrust law and many other policies. Supply and demand just doesn’t cut the mustard here.And that means we should stop referring to supply and demand as “Econ 101.” Good Econ 101 classes already include alternative theories that often work better. Our rhetoric needs to catch up with the textbooks.To contact the authors of this story: Michael R. Strain at email@example.comNoah Smith at firstname.lastname@example.orgTo contact the editor responsible for this story: Jonathan Landman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and resident scholar at the American Enterprise Institute. He is the editor of “The U.S. Labor Market: Questions and Challenges for Public Policy.”Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Norway’s central bank just broke further away from the pack, delivering its fourth interest-rate increase in a year in an effort to cool an economy stoked by oil investments.Norges Bank raised its benchmark rate by a quarter of a percentage point to 1.50% on Thursday, the highest level in almost five years. Four of the six biggest Nordic banks had expected the move, but most other forecasters didn’t.The decision is a “cautious” step toward a more “normal” policy rate, Governor Oystein Olsen said in an interview on Bloomberg Television with Francine Lacqua and Tom Keene.Dubbed by local economists as one of the “last hawks,” Norges Bank has stood out for its commitment to tightening as both the European Central Bank and the Federal Reserve deliver more stimulus. Fed Chairman Jerome Powell on Wednesday pointed to the fallout of a global trade war as something that should give monetary policy makers pause.But Norway’s economy has so far withstood those pressures. The country of 5.3 million people with vast oil reserves and a $1 trillion wealth fund built from its fossil-fuel riches, is in many respects “lucky,” Olsen said.Norway has benefited this year from a surge in investments in its oil industry, and the government has spent the past four years pumping record sums of petroleum cash into the economy. That’s allowed Olsen to avoid the more drastic policy measures such as negative rates that his colleagues have resorted to.But Olsen also made clear that Norges Bank’s hike on Thursday could mark the end of its current tightening cycle, acknowledging that risks abroad make it harder to Norway to go it alone.“Other central banks have been and still are in a much more difficult situation,” he said. “I think all central banks, even those which have gone into these unconventional monetary policy, realize that if it prevails and goes on and on, there are some negative effects of rates being negative, also regarding unconventional measures.”The krone initially rose as much as 0.5% against the euro but then pared those gains. The recent weakness in the currency played a large part in giving Norway the leeway it needed to raise rates.“The significantly weaker currency level of the krone than we foresaw in June is obviously a factor affecting the decision and the future outlook of the policy path,” Olsen said.Though some market participants expected this move, “it’s nonetheless remarkable that a central bank is going completely against the flow and raising rates, while central bankers across the world are in the process of cutting,” said Frederik Engholm, chief strategist at Nykredit in Copenhagen.Olsen presented Norway’s rate decision on a day full of central bank announcements. Moments earlier, the Swiss National Bank had kept its main rate at a record low of minus 0.75%, following a cut by the Fed late on Wednesday.Martin Enlund, chief analyst at Nordea in Stockholm, drew attention to the history of adjustments to the rate path made by Norges Bank.The Norwegian government, which is backed by the world’s largest sovereign-wealth fund, has provided the kind of stimulus that most other European nations can only dream of. Norway will spend the equivalent of almost 8% of GDP this year to plug a budget shortfall. Against that backdrop, unemployment is anticipated to stay below 4% and inflation is seen holding above the 2% target.Read More About Norges Bank’s Reasoning:“The policy rate forecast indicates a slightly smaller rate rise than in the June Report. Weaker growth prospects and lower interest rates abroad have contributed to the downward revision. Slightly lower inflation and a somewhat less tight domestic labor market compared with the June projections have also pulled down the rate path. A weaker-than-projected krone has in isolation pulled up the policy rate path. With a policy rate in line with the forecast, inflation is projected to remain close to the inflation target in the years ahead, at the same time as unemployment remains low. The policy rate path will be adjusted in response to a change in economic prospects or the balance of risks.”Olsen has stuck with a strategy he calls “leaning against the wind” to fight financial imbalances, while benefiting from the persistently weak krone.\--With assistance from Nick Rigillo, Harumi Ichikura and Angela Feliciano.To contact the reporter on this story: Sveinung Sleire in Oslo at firstname.lastname@example.orgTo contact the editors responsible for this story: Jonas Bergman at email@example.com, Tasneem Hanfi BröggerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Mike Pompeo, US secretary of state, accused Iran of committing an “act of war” by attacking Saudi Arabian oil facilities, as the Trump administration prepared to impose more sanctions on Tehran in response to the strikes that took out half of the kingdom’s crude oil production. The accusation, which came as Mr Pompeo visited Saudi Arabia, marked the toughest language by a US official since Washington first claimed that the Iranian regime had conducted the weekend attacks. Mr Trump on Wednesday said he had ordered Treasury to impose “substantially” tougher sanctions on Iran, which is already reeling from a more than year-long US “maximum pressure” campaign.
(Bloomberg Opinion) -- It’s debatable whether the Federal Reserve has sense, vision or “guts.” But one thing is certain: The U.S. central bank has become a weakling. The People’s Bank of China, on the other hand, is loaded with technocrats on steroids. The Fed’s prestige took a hit this week. Its most powerful regional reserve bank somehow botched a critical market rescue operation – its first overnight repurchase agreement operation in a decade. Monitoring supply and demand in this key funding market should be routine; yet, embarrassingly, the Fed’s main rate shot above its targeted range, just when central-bank officials were convening for their monetary-policy meeting. The New York Fed will follow up its $75 billion emergency-liquidity injection with another equally sized chunk on Thursday.By contrast, open-market operations have become commonplace for China’s central bank, which actively manages liquidity to its liking. That’s less a signal of the PBOC’s draconian grip on the market and more indicative of its increasingly sophisticated efforts to ensure things run smoothly. Since a funding crunch in January 2016, the PBOC has given itself the flexibility to conduct such operations on a daily basis, up from twice a week. There are 49 primary dealers, mostly banks, that carry out the central bank’s bidding. These procedures help the PBOC manage foreseeable yuan shortages in the money market. For example, on Jan. 16, the central bank injected a net 560 billion yuan ($79 billion), the highest on record, into the interbank system via reverse repos to meet consumers’ demand for yuan ahead of the Lunar New Year, when cash gifts are common.The PBOC also isn’t shy about experimenting. Of course, there are the traditional tools: repurchase agreements and reverse repos, which, respectively, drain and inject short-term liquidity into the banks. Yet clever policymakers keep inventing new toys. Last December, the PBOC launched targeted medium-term lending facilities to encourage banks to lend to small businesses. In January, officials introduced central bank bill swaps to help lenders replenish capital by issuing perpetual bonds. The PBOC also uses open-market operations to manage the yield curve, which in China remains relatively steep compared with other global markets. Since the central bank has been cutting reserve ratios its commercial banks are required to hold – to encourage more lending to businesses – it has simultaneously been retiring medium-term lending facilities, effectively dialing up one knob and dialing down another. This ensures that rates in certain parts of the curve don’t drop too low.Wall Street analysts have been calling for the PBOC to cut its benchmark one-year lending rate since early 2019. So far, the central bank has resisted. That’s all for good reason, as I’ve written. The PBOC has realized that a good chunk of blanket easing goes into the real-estate market, which makes China’s housing unaffordable to the middle class and risks stoking social unrest. One can scoff at more obscure open-market operations, saying they’re insufficient to avert an economic recession. But here’s the thing: If a central bank is getting a good read on the economy by engaging consistently with traders, it can send liquidity to pockets of the economy most in need. Rate cuts then become a last resort. That’s a problem the Fed can only dream of having. To contact the author of this story: Shuli Ren at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Emmanuel Macron and his dinner host Giuseppe Conte made a warm display of unity in Rome, pledging to work together to boost flagging economic growth across Europe and share handling of migrant flows to turn the page on recent clashes between their two countries.The French leader, after initial talks at Conte’s official residence in the 16th-century Palazzo Chigi, described the France-Italy friendship as indestructible and underscored “our will to work together for the European project.”“Sometimes we disagree, we can quarrel, we can sometimes fail to understand each other, but we always find each other again,” Macron told reporters Wednesday, flanking Conte before a working dinner at the latter’s apartment.Macron, who is gradually replacing Germany’s Angela Merkel as Europe’s leading player, is seeking warmer ties with Conte who now heads a more centrist, pro-European coalition. Conte’s populist deputies in the previous administration had picked on France before European parliamentary elections, prompting Macron in February to briefly recall his ambassador to Rome.The newfound comity even extended into the potentially fraught terrain of the menu: The leaders’ meal twinned their nations’ cuisine, with dishes including salad with codfish and foie gras, marinated amberjack with olive paste typical of Provence and pesto, and croissant-flavored ice-cream.‘Historic Ties’Macron underscored his push for economic and fiscal stimulus in the European Union, paying tribute to the “courage and clear-sightedness” of the latest moves by Mario Draghi, president of the European Central Bank.“Monetary policy since 2012 has done the maximum it could do to preserve the EU situation, avoid deflation and avoid the worst,” Macron said. “It is now for the EU heads of state and governments to take their responsibility in their own budgets and at the EU level decisions for a real policy of stimulus and interior demand.”The French leader warned EU countries that coordinated stimulus action is needed as the continent is in “stagnation.”Read more: ECB Policy Makers Push Back Against Attacks on Draghi’s StimulusConte, who is seeking more flexibility and more room for investments for the 2020 budget while at the same time avoiding tensions with the European Commission, said he and his guest awaited efforts from “all Europe” to relaunch investments and “improve European economic governance which is indispensable for stability and growth.”“The historic ties of France and Italy are at the foundation of the European project, and we have a common responsibility to relaunch Europe with more growth, more jobs,” Conte said.‘Deeply Believe’The Italian leader is also seeking French support to cope with migrant flows from across the Mediterranean. The Italian premier is under constant pressure from Matteo Salvini of the rightist League, who had ordered ports closed to migrant ships when he served as Conte’s deputy in the previous coalition with the anti-establishment Five Star Movement.Conte won an early victory with Macron’s backing for the automatic redistribution to EU states of migrants landing in Italy, although whether this should apply to both asylum-seekers and economic migrants is still under discussion. Italy wants possible fines for members who refuse.Macron, who has made limiting illegal immigration a priority to shore up his electoral base, said he wants to change an agreement that says asylum-seekers must make their request in the first EU country of arrival. “I deeply believe the response to the subject of immigration is not in looking inward or in nationalist provocations, but in building effective European solutions,” Macron said.The two leaders agreed to hold a bilateral summit, including cabinet ministers, in Italy early next year.To contact the reporters on this story: John Follain in Rome at firstname.lastname@example.org;Helene Fouquet in Paris at email@example.comTo contact the editors responsible for this story: Ben Sills at firstname.lastname@example.org, ;Flavia Krause-Jackson at email@example.com, Alessandro Speciale, Robert JamesonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The frontrunner in the Israeli elections, Benny Gantz, has rejected a request from Prime Minister Benjamin Netanyahu to consider joining a coalition that would return the four-time premier to office. The rebuff to Mr Netanyahu on Thursday from the leader of the seven-month-old Blue and White party has deepened a political crisis that threatens to force Israel into a third election this year.