Written by Econintersect
Early Bird Headlines 23 July 2017
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
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Global
- Accounting for debt service: the painful legacy of credit booms (Bank for International Settlements) When taking on new debt, borrowers commit to a pre-specified path of future debt service. This implies a predictable lag between credit booms and peaks in debt service which, in a panel of household debt in 17 countries, is four years on average. The lag is driven by two key features of the data: (i) new borrowing is strongly auto-correlated and (ii) debt contracts are long term. The delayed increase in debt service following an impulse to new borrowing largely explains why credit booms are associated with lower future output growth and higher probability of crisis. This provides a systematic transmission channel whereby credit expansions can have long-lasting adverse real effects.
U.S.
- GOP wrestles with soaring deductibles in healthcare bill (The Hill) Senate Republicans have run into another problem in passing their ObamaCare replacement bill: it could increase deductibles by thousands of dollars, potentially alienating moderates who are already skeptical of the bill. An analysis released Thursday by the nonpartisan Congressional Budget Office concluded that a single policyholder purchasing a standard benchmark plan under the GOP bill could face a deductible of $13,000 in 2026.
Under current law, an individual making $56,800 would have a deductible of $5,000, while someone making $26,500 would have an $800 deductible.
Higher deductibles is the tradeoff that Republicans made when they decided that lowering premiums would be a top priority for their legislation; plans with lower premiums generally have higher deductibles.
- Meet Trump’s new communications director (The Hill) President Trump’s decision on Friday to install Wall Street financier Anthony Scaramucci as the new White House communications director sparked a sudden shakeup of the president’s senior staff, driving out press secretary Sean Spicer and elevating his deputy to take his place. Spicer’s resignation was reportedly prompted by Scaramucci’s appointment, which he reportedly told Trump was a mistake. Here are five things to know about the new White House communications director:
- He got his start on Wall Street
- He didn’t start as a Trump supporter
- He has been eyed for multiple jobs in the Trump White House
- He wants to “de-escalate” the White House’s tensions with the press
- He’s a prolific tweeter
- Scaramucci Purges Twitter Messages to Avoid Being a ‘Distraction’ (Bloomberg) Anthony Scaramucci has purged his Twitter account of previous criticisms of President Donald Trump, saying he didn’t want to be a “distraction” for the White House in his new role as communications director.
Among the missives that disappeared into the digital ether on Saturday were a post referring to Trump’s campaign as a “spectacle,” another in 2012 imploring Democrat Hillary Clinton to run for president, and a tweet calling Trump ally Newt Gingrich, the former House speaker, an “odd guy.”
- Jeb Bush calls out Republicans silent on Trump’s Russia probe (The Hill) Former Gov. Jeb Bush (R-Fla.) on Saturday called out Republicans for not speaking out about the investigation into possible collusion between the Trump campaign and Russia. Speaking at the OZY Fest in New York City on Saturday, the Florida Republican and former opponent to President Trump gave the crowd a series of rules for politics, what he called “Jeb’s rules.” The first rule wasn’t caught on camera, but Bush’s second “rule” spoke directly to the Russia investigation swirling around the Trump administration. Bush said:
“If your opponent does things that you, your head explodes on, if Barack Obama did something as it’s related to Russia, you say ‘this is outrageous,’ all this stuff, then when your guy does the same thing, have the same passion to be critical.”
EU
- When Will the ECB Pull Its Trillions From the Markets? (Bloomberg) After three years of asset purchases, negative interest rates and cheap loans, the European Central Bank is finally confident that it has beaten the risk of deflation in the euro area. Now it’s time to start thinking about how to unwind those extraordinary measures. It won’t be simple. The ECB’s mandate is to keep inflation just below 2%, but to judge its progress it looks at a range of key economic and market indicators.
The ECB on Thursday left interest rates unchanged and deferred the delicate decision of how and when to venture the next step toward policy normalization until later this year. Click through the timeline to see how key indicators have weighed on the central bank. [Go to article for interactive graphic.]
UK
Parallels now with lost decade of U.K. political instability
Investors mulling whether Theresa May will last past October
Russia
- Russian Envoy Kislyak, at Heart of US Probes, Ends Tenure in Washington (NewsMax) Russia’s ambassador to Washington Sergei Kislyak, a key figure in ongoing U.S. investigations into Moscow’s meddling in the 2016 presidential election, ended his tenure on Saturday.
The Russian embassy in Washington said on its Twitter feed that Minister-Counseler and Deputy Chief of Mission Denis V. Gonchar would serve as Charge d’Affaires until Kislyak’s successor arrived.
Kislyak, who held the post since 2008, is expected to be replaced by Russian Deputy Foreign Minister Anatoly Antonov.
India
- Philip Morris takes aim at young people in India, and health officials are fuming (Reuters) The tobacco giant is pushing Marlboros in colorful ads at kiosks and handing out free smokes at parties frequented by young adults – tactics that break India’s anti-smoking laws, government officials say. Internal documents uncovered by Reuters illuminate the strategy.
- EC failed to curb ‘invisible money’ in polls, says Jaitley (The Hindu) Union Minister for Finance, Defence and Corporate Affairs Arun Jaitley on Saturday blamed the Election Commission for failing to check the use of ‘invisible money’ in elections, before hinting that the EC and political parties have a problem with the government’s proposal of funding through electoral bonds.
“For 70 years, India’s democracy has completely been funded by invisible money – elected representatives, governments, political parties, Parliaments. And I must say that the Election Commission completely failed in checking it.”
