Tag Archive: Politics

If American Federalism Were Like Swiss Federalism, There Would Be 1,300 States

In a recent interview with Mises Weekends, Claudio Grass examined some of the advantages of the Swiss political system, and how highly decentralized politics can bring with it great economic prosperity, more political stability, and a greater respect for property rights. Since the Swiss political system of federalism is itself partially inspired by 19th-century American federalism, the average American can usually imagine in broad terms what the...

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Three Developments in Europe You may have Missed

The focus in Europe has been Catalonia's push for independence and the attempt by Madrid to prevent it. Tomorrow's ECB meeting, where more details about next year's asset purchases, is also awaited. There are three developments that we suspect have been overshadowed but are still instructive. First, the ECB reported that its balance sheet shrank last week. With the ECB set to take another baby step toward the exit, many are seeing convergence,...

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Swiss tax spy ‘acted out of patriotism’

A Swiss man accused of spying on the German state of North Rhine-Westphalia’s (NRW) tax authority has confessed and named names. In a Frankfurt court on Thursday, the 54-year-old man, identified only as Daniel M., explained via his defence team that he had not acted with criminal intent. Rather his motivation was “patriotism, a desire for adventure, a pursuit of profit, and outrage”.

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Political Economics

Who President Trump ultimately picks as the next Federal Reserve Chairman doesn’t really matter. Unless he goes really far afield to someone totally unexpected, whoever that person will be will be largely more of the same. It won’t be a categorical change, a different philosophical direction that is badly needed. Still, politically, it does matter to some significant degree. It’s just that the political division isn’t the usual R vs. D, left vs....

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Bi-Weekly Economic Review: Yawn

When I wrote the update two weeks ago I said that we might be nearing the point of maximum optimism. Apparently, there is another gear for optimism in this market as stocks have just continued to slowly but surely reach for the sky.

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Suspected Swiss tax spy trial underway in Germany

The trial in Frankfurt of a Swiss private investigator accused of spying on the tax authorities in the German state of North Rhine-Westphalia is underway, but already temporarily suspended. The 54-year-old allegedly acted on behalf of the Swiss intelligence service trying to uncover a series of thefts of CDs with data on suspected tax dodgers who held money in Swiss banks, according to German prosecutors.

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NAFTA Worries Take Toll, Yellen’s Best Guess Supports Greenback

Risk that NAFTA collapses weighs on CAD and MXN. Yen is slightly firmer despite US yields edging higher and weekend polls suggesting LDP could nearly secure a 2/3 majority of its own. The sterling is consolidating after sharp moves at the end of last week.

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Political Focus Shifting in Europe

There was a huge sigh of relief among investors when it became clear that the populist-nationalist wave that ostensibly led to Brexit and Trump's election was not going to sweep through Europe. The euro gapped higher on April 24, and it has not looked back. We have suggested that with the outcome of the German election, European politics shift from tailwind to headwind.

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FX Weekly Preview: Forces of Movement

Over the past few weeks, the markets have come to accept the likelihood of a December Fed hike. US interest rates have adjusted. The pricing of December Fed funds futures contract is consistent with around an 80% chance of a hike. The two-year yield is trading at the upper end of what is expected to be the Fed funds target range at the end of the year, after slipping below the current range a month ago. The Dollar Index formed a bottoming pattern.

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Bi-Weekly Economic Review: As Good As It Gets

The incoming economic data hasn’t changed its tone all that much in the last several years. The US economy is growing but more slowly than it once did and we hope it does again. It is frustrating for economic bulls and bears, never fully satisfying either. Probably more important is the frustration of the average American, a dissatisfaction with the status quo that permeates the national debate. The housing bubble papered over the annoying lack of...

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Swiss expats buck the pension reform trend

Unlike their compatriots in Switzerland, Swiss voters who live abroad came out massively in favour of a wide-ranging overhaul of Switzerland’s old-age pension scheme.  Eleven of Switzerland’s 26 cantons count the votes of Swiss expats separately. An analysis of Sunday’s results shows that in nine of these cantons more than 70% of Swiss abroad backed the “Old Age Security 2020” package, which aimed to guarantee the future financing of...

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FX Weekly Preview: Forces of Movement in FX: The Week Ahead

The dollar has been declining since the start of the year, but the causes have changed. The drag from US politics may be exaggerated, while European and Japanese politics are worrisome. The economic data may continue to be a drag on US yields, especially if core CPI slips again.

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Bi-Weekly Economic Review: Don’t Underestimate Gridlock

The economic reports released since the last update were slightly more upbeat than the previous period. The economic surprises have largely been on the positive side but there were some major disappointments as well. The economy has been doing this for several years now, one part of the economy waxing while another wanes and the overall trajectory not much changed. Indeed, the broad Chicago Fed National Activity index probably says it all, coming...

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FX Weekly Preview: Three Drivers in the Week Ahead

EMU preliminary August CPI headline rise may not translate into core. US jobs growth is fine; earnings growth is key. Trump's coalition is fraying, and the weekend pardon will not help mend fences.

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Questions

Why are profit margins persistently high? With decent earnings this quarter, corporate profits as a % of GDP will approach (maybe exceed) 10% again. That is abnormally high compared to the period 1960 to 2000. Margins actually started to rise in the mid-80s but really accelerated after 2000 and outside of the 2008 crisis have remained high. Why?

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Swiss companies pull out of Venezuela

Swiss firms have been cutting hundreds of jobs in long-established branch offices in Venezuela, as the oil-producing country experiences an economic and political crisis. “The disaster – economic, social, political and humanitarian – which is engulfing Venezuela with the government of [president] Nicolas Maduro is forcing Swiss companies to resize their presence or to gradually leave the country,” wrote French-language newspaper Le Temps, which...

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Government compromises on medical tariffs

The Swiss cabinet has approved an amended billing system for medical treatments aimed at creating more transparency and limiting a further increase in healthcare costs.The decision is expected to lead to annual savings of CHF470 million ($483 million) and a drop of about 1.5 percentage points in insurance fees for patients, according to Interior Minister Alain Berset.

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“Under Any Analysis, It’s Insanity”: What War With North Korea Could Look Like

Now that the possibility of a war between the US and North Korea seems just one harshly worded tweet away, and the window of opportunity for a diplomatic solution, as well as for the US stopping Kim Jong-Un from obtaining a nuclear-armed ICBM closing fast, analysts have started to analyze President Trump’s military options, what a war between the US and North Korea would look like, and what the global economic consequences would be.

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UN group demands reversal of Swiss minaret ban

Switzerland should take steps to ensure that people's initiatives do not contravene international law, the United Nations Human Rights Committee says. It notably called for the repeal of a Swiss vote banning the construction of minarets.

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Italy demands data on billions in suspect Swiss accounts

Italian financial crime investigators have asked the Swiss authorities for help in tracking down the beneficial owners of €6.7 billion (CHF7.4 billion) held in Switzerland. The information came to light during an investigation by the Milan authorities into the activities of Credit Suisse.

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