We have another day without a single overarching theme in the newspapers. The U.S. papers, the Wall Street Journal (WSJ) and the New York Times (NYT), lead with domestic politics. The WSJ hits on union political spending and on the beginnings of the battle over the extension of the Bush tax cuts. The NYT looks at fundraising by the presidential campaigns—Romney is ahead—and the evolving political incentives on the tax-cut extensions and health care. This is a pretty interesting article, as it highlights the evolution of the incentives we discussed in an earlier post in the context of intra-party politics. The bright line for a cutoff of $250,000 in income for the tax-cut extension, as opposed to $1 million, actually appears to run through the Democratic Party to a greater extent than I would have expected. Likewise, there appears to be some evolving Republican support for parts of the health care bill. These intra-party arguments will only get more complicated, particularly on the health care side, as voters start to process what they will now be losing, either on the expiration of the tax cuts or on a repeal of the health care bill. Don’t expect simple party line votes on either—that may be what we get, but it really is not as simple as that.
The Financial Times (FT) focused on Europe and China again. Key issues include an accelerated plan to aid Spanish banks, which also makes the “What’s News” column in the WSJ and the business section of the NYT. Overall, this is probably a good thing, but it does not seem to have impressed the markets to any degree. The LIBOR fixing scandal is also highlighted in the FT; the problem continues to expand to other banks besides Barclays. and we can expect to be hearing a lot more about this going forward.
That is it for today. I am in Seattle speaking on the economy and alternative investments at the Commonwealth Live! road show. This truly is a great city, and I always enjoy the chance to visit. Have a great day!