The Ticker >> Quick commentary on economics, politics & the world from Bloomberg View
Europe's Rescue Plan Underwhelms Credit Markets: The Ticker
Europe's latest plan to end its sovereign-debt crisis has generated a lot less euphoria in credit markets than in stocks. That's not a good sign for European leaders who are hoping they've crafted a final solution.
The Euro Stoxx index of 50 blue-chip companies rose more than 5 percent after the announcement of the deal. As Bloomberg View has noted, the plan seeks to restore confidence in three ways: Boost the capacity of the euro area's rescue fund to about 1 trillion euros, require private creditors to write down Greece's debt by 50 percent and push banks to raise the capital needed to absorb sovereign-debt losses.
Parking Votes in the Republican Primary: The Ticker
Rick Perry has had an interesting week. He started off openly flirting with "birther" conspiracy theorists. Then he introduced a new flat tax plan and called his chief rival for the Republican presidential nomination, Mitt Romney, a "fat cat" -- a curious nomenclature coming from any Republican, let alone one selling a plan to reduce taxes on the wealthy.
As David Frum points out in his column at theweek.com, none of this was intended to impress the sort of people who read tax plans looking for coherence (or even defensible arithmetic), or who regard claims that Obama is an illegal alien as the gaseous emissions of the fever swamp.
Europe Shouldn't Bank on China's Deep Pockets: The Ticker
Few events say more about the dismal state of the global economy than Europe looking to developing China for a bailout.
French President Nicolas Sarkozy certainly wouldn't characterize his phone call today to Chinese counterpart Hu Jintao as such. Yet no amount of spin can hide the fact that Europe needs cash to avoid financial Armageddon and China has it. Expect Sarkozy and his euro-area peers to hit up China early and often in the months ahead.
Republicans on Twitter Say #WeCantWait Either: The Ticker
Note to President Obama -- when launching a new slogan, try not to pick one your opponents can co-opt so easily.
On Monday, the White House kicked off a new effort to get Congress to pass the American Jobs Act using the mantra “we can’t wait,” communications director Dan Pfeiffer wrote on the White House blog. Republicans have taken over the Twitter hashtag #WeCantWait to turn the rallying cry against the president.
Mortgage Stimulus Is No Slam Dunk: The Ticker
President Barack Obama's new mortgage-refinancing plan might help some struggling homeowners, but don’t expect it to have much effect on the economy.
The plan, announced Monday, would modify the government's Home Affordable Refinance Program to make refinancing at current low interest rates easier for borrowers who owe more than their houses are worth. In a speech, President Obama said it could save homeowners thousands of dollars a year in mortgage payments.
Marco Rubio's Family Fiction: The Ticker
Of all the gotchas that can trip a rising politician, none is more devilish than a family expose. A pol can navigate many things -- just look at Mitt Romney's ideological tacking over the years -- but families are forever.
Last week's stories in the Washington Post and St. Petersburg Times about Florida Senator Marco Rubio were not disqualifying; Rubio might yet end up on the Republican ticket next year. But they exposed a falsehood that was integral to Rubio's political biography, revealing that his parents had arrived in Florida in 1956 rather than -- as Rubio had repeatedly maintained -- after Castro gained power in 1959.
Is 'I Drink Alone' This Recession's Theme Song?: The Ticker
There are many reasons that Beam Inc., the maker of Jim Beam bourbon, finds itself ripe for a takeover bid, as reported exclusively by Bloomberg News's Devin Banerjee and Duane D. Stanford today.
Among them: Beam is a stand-alone survivor of the Oct. 4 breakup of its former owner, Fortune Brands; bourbon is outpacing vodka right now; sales of Jim Beam increased by 8 percent in the last year, as opposed to a 4 percent average among whiskeys; and, unlike rival Jack Daniel's, Beam isn't family-controlled.
With Troop Exit, a Civilian Phase for the U.S. in Iraq: The Ticker
President Obama confirmed on Oct. 21 that the remaining 39,000 U.S. troops will leave Iraq at the year's end. The war may be ending, but the size of the U.S. embassy in Iraq will double, from approximately 8,000 to 16,000 people.
This is uncharted territory for the State Department; it has never managed a mission this size before. The Obama administration is requesting $3.2 billion to cover the transition from civilian to military control, in addition to a core operational budget of $496 million. The embassy in Baghdad is a sprawling fortress, the largest the U.S. has ever built. Three provincial posts in Basrah, Erbil and Kirkuk will extend the U.S.'s diplomatic reach into northern and southern Iraq.
Inflation Is Moderating, Except in the Data: The Ticker
Anyone monitoring signals intelligence on the subject of additional monetary stimulus had to notice a sharp increase in the chatter last week.
On Thursday, Federal Reserve Governor Daniel Tarullo, a lawyer by training, said the Fed should reconsider additional purchases of mortgage-backed securities to boost aggregate demand. The following day, Fed Vice Chair Janet Yellen seconded the idea in light of the "significant downside risks to the outlook" and said central bankers were prepared "to employ our tools as appropriate."
Romney is Guilty of Realism: The Ticker
Kimberley A. Strassel's Wall Street Journal column today provides a window on Republican orthodoxy, including the party's teeth-grinding resistance to Mitt Romney's candidacy, circa 2011. That orthodoxy continues to evolve in truly remarkable fashion. Strassel's thesis is that Mitt Romney, who was born into wealth and made many millions as a successful private equity manager, suffers from "Guilty Republican Syndrome." Incapacitated by guilt over his wealth and success, Romney is "waving a white flag" in the class war, Strassel writes, instead of demonstrating "a principled understanding of capital and job creation."
Strassel ominously counts the number of times Romney cites the "middle" class in a debate answer and disapprovingly points to Romney's contention that the "rich" are "doing just fine." (Like "middle," the word "rich" apparently requires quotation marks, lest Strassel inadvertently endorses the notion that middle class and rich are more than mental constructs. Strassel also puts "1%" in quote marks as if its existence is debatable. Jonathan Chait has written extensively on the hermeneutics of quotation marks at the Wall Street Journal.)