Daily Archives: June 3, 2014

In America’s coal country – centred in Appalachia and stretches of the Mountain West – Barack Obama has come to represent federal tyranny. With this week’s announcement of new regulations intended to close eventually many or most of the nation’s 600 coal-burning power plants, those regions are sure to resent him even more.
Democrats campaigning in West Virginia and Kentucky were quickest to denounce the president’s carbon emissions plan, but this is unlikely to do many of them much good in the midterm elections later this year. The new rules increase the odds that the Republicans will win control of the Senate in November, that Congressional deadlock will get worse, and that the president’s final quarter will be marred by subpoenas and investigations. Read more

There are no signs that China’s slowdown has bottomed out. A turnround would require some combination of a pickup in investment, exports or consumption in the midst of current efforts to deleverage and this is unlikely to happen soon. More than a decade ago during the Asian financial crisis, China was able to revive growth despite a similarly severe debt problem by tapping buoyant global markets facilitated by its accession to the World Trade Organisation.

But circumstances this time are different. The recovery in the US and Europe continues to be tepid with both parties needing to generate stronger trade balances to support their recoveries. Thus any bounce in exports is likely to be modest and China will face continuing pressures to scale back its trade surpluses with negative consequences for industrial production. Read more