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23 июня, 00:29

The Senate’s health–care bill: Deep cuts to Medicaid remain the centerpiece of the Republicans’ proposals

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Main image:  WHEN the House of Representatives passed the American Health Care Act in early May, it was widely thought that the Senate would rewrite it. The House’s bill, among its many reforms, would unwind Obamacare’s expansion of Medicaid, health insurance for the poor. That expansion has given health insurance to 12m Americans. Surely moderate Senate Republicans could not tolerate a reversal? Yet the Senate bill, the Better Care Reconciliation Act (BCRA), revealed on June 22nd after a secretive drafting process (see leader), merely delays the start of the Medicaid cuts by an additional two years, to 2021. In fact, the cuts to the programme would end up being deeper than under the House plan.By contrast, Senate Republicans have significantly altered the House’s approach to the individual market, which serves those who buy health insurance for themselves. The House had proposed a subsidy for buyers in this market that varied only with age.  By contrast, the BCRA’s subsidies would be linked to income, just like under Obamacare. The poorest buyers would pay no more than 2% of their income for insurance. As a result, those who lost Medicaid coverage would probably still be able to buy insurance.That insurance, though, could be skimpy indeed. Obamacare provides enough of a subsidy to buy a ...

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22 июня, 17:47

Slick moves: Why the falling oil price isn’t hurting markets

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Main image:  INVESTORS could easily get confused about the impact of oil-price rises on the economy and markets. The story seemed to be clear: high prices bad, low prices good. The two great oil shocks in the 1970s were unambiguously bad for Western economies—ushering in stagflation and transferring spending power to the oil-producing countries. In turn, low oil prices in the late 1990s coincided with the dotcom boom.But when oil fell in the second half of 2015, that was seen as a bearish sign for the global economy and markets. Now oil is falling again, with both Brent crude and West Texas intermediate dropping more than 20%. But the decline has barely made a dent in the upward march of the S&P 500 index.The key to the differing market reaction is why the oil price is falling. Back in 2015, the fear was falling demand. Investors worried in particular that the Chinese economy was slowing. If that assumption had been right, demand for much more than oil would have suffered. The equity markets did not rebound property until the spring of 2016.This time round, the issue seems to be excess supply. OPEC, a cartel of oil-producing countries, has been attempting to cut production. But its output increased in May, thanks extra activity in Libya, Nigeria and Iraq. Meanwhile, the attempts of the Saudis to ...

22 июня, 16:43

A king-to-be’s ransom: The prospects for the world’s biggest IPO

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Print section Print Rubric:  The world’s biggest oil company cannot be seen in isolation from the kingdom that it bankrolls Print Headline:  A king-to-be’s ransom Print Fly Title:  Saudi Aramco’s IPO UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  A king-to-be’s ransom Main image:  20170624_WBP001_0.jpg THE proposed sale of 5% of Saudi Aramco is not just likely to be the biggest initial public offering (IPO) of all time. “It’s like Gibraltar selling the rock,” as one expert on Saudi Arabia’s oil policy puts it. The world’s biggest oil company keeps the House of Saud in power, bankrolled 60% of the national budget last year, and is a paragon of efficiency in an economy otherwise mired in bureaucracy. The elevation on June 21st of Muhammad bin Salman, the 31-year-old architect of the IPO, to ...

22 июня, 16:43

Free exchange: The Federal Reserve risks truncating a recovery with room to run

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Print section Print Rubric:  Janet Yellen’s productivity scepticism could prove self-fulfilling Print Headline:  Diminished expectations Print Fly Title:  Free exchange UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  Free exchange WHEN it comes to inflation, the Federal Reserve sometimes resembles a child freshly emerged from an age-inappropriate horror film. To its members, runaway price increases seem to lurk in every oddly shaped shadow. On June 14th America’s central bank raised its benchmark interest rate for the third time in six months, even as inflation lingered below its 2% target, as it has for most of the past five years. Some critics reckon the Fed’s 2% inflation target is too constraining. Indeed, in recent comments on a letter from prominent economists calling for a higher target, Janet Yellen, the chairman, signalled openness to the idea. But the ...

22 июня, 16:43

When the gloves come off: British business prepares for a bare-knuckle fight with the government

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Print section Print Rubric:  Business squares up for a bare-knuckle fight against too hard a Brexit Print Headline:  When the gloves come off Print Fly Title:  The government and business UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  When the gloves come off Main image:  20170624_BRD001_0.jpg IT HAS been a dispiriting year for many British businesspeople. Most voted to remain in the EU in last year’s referendum. They accepted defeat, but then looked on in horror as Theresa May, the new prime minister, veered towards an extreme form of hard Brexit, promising to leave the single market and customs union and to impose harsh migration restrictions. This has been accompanied by a ceaseless flow of vitriol from politicians on all sides, triggered in part by the controversial bankruptcy of BHS, a ...

22 июня, 16:43

Buttonwood: Fund managers rarely outperform the market for long

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Print section Print Rubric:  Why fund managers do not perform consistently Print Headline:  The past is a foreign country Print Fly Title:  Buttonwood UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  Buttonwood THE big investment shift of recent years is from active to passive. Clients have been buying index funds, which passively track a benchmark like the S&P 500 index, and shunning fund managers who actively try to pick the best shares. One reason for the shift is that passive managers charge lower fees than active funds. Many clients would be happy to pay more if that translated into better performance. However, it is very difficult for investors to select fund managers who can reliably beat their peers. Performance does not persist, as the latest data from S&P Dow Jones Indices show clearly. Suppose you had picked one of the best-performing 25% of ...

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22 июня, 16:43

Sunlight needed: Rushing health care in America would be reckless and undemocratic

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Print section Print Rubric:  Rushing through sweeping health-care reform without scrutiny would be reckless and undemocratic Print Headline:  Sunlight needed Print Fly Title:  American health care UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  Sunlight needed Main image:  20170624_ldp501.jpg MITCH McCONNELL, the leader of the Republican majority in the Senate, once complained that President Barack Obama’s health-care bill was thrown together in a back room and then dropped on the Senate floor “with a stopwatch running”. Now he has made the tactic his own. Mr McConnell hopes to call a vote on a health-care bill that will have barely left the printer’s. A week before a vote that could remake a sixth of the economy, even many Republican senators claim not to know what the bill contains. Why ...

22 июня, 16:43

Financial assets, made in China: China enters the big leagues of global markets

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Print section Print Rubric:  Index inclusions will force investors to buy Chinese stocks and bonds Print Headline:  Financial assets, made in China Print Fly Title:  Global markets UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  Financial assets, made in China Location:  SHANGHAI Main image:  20170624_FND001_0.jpg FROM shoes to shirts and phones to fridges, made-in-China goods have blanketed the globe over the past three decades, entering every country and just about every home. But one kind of Chinese good few abroad dare touch: its financial assets. Outsiders own less than 2% of its shares and bonds, far below the levels of foreign ownership seen in other markets. Capital barriers and financial risks have put investors off. ...

22 июня, 16:43

Minisocialist: A trendy Asian lifestyle chain opens in North Korea

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Print section Print Rubric:  A hip, cheap home-goods upstart from China sets up shop in North Korea Print Headline:  Minisocialist Print Fly Title:  Retailing in Pyongyang UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  Minisocialist Location:  SEOUL Main image:  Shop till you pop Shop till you pop WHEN Miniso said in January that its stores would “bring the happiness of stress-free shopping to the Koreans”, you would be forgiven for thinking they were referring to emporium-loving Seoulites. In fact, the home-goods store, co-founded by a Chinese entrepreneur and a Japanese designer, was announcing that it would be taking its capitalist trinkets into (ostensibly socialist) North Korea. In a joint-venture deal with one of the ...

22 июня, 16:43

The art of the deal: The promise and pitfalls of privatising public assets

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Print section Print Rubric:  The promise and pitfalls of privatising public assets Print Headline:  The art of the deal Print Fly Title:  Privatisation UK Only Article:  standard article Issue:  India’s prime minister is not as much of a reformer as he seems Fly Title:  The art of the deal Location:  WASHINGTON, DC Main image:  20170624_USP002_0.jpg DONALD TRUMP ran for office promising to spur the private sector to rebuild America’s roads, bridges and airports. But it seems that Republicans want to start their modernisation in the sky. On June 21st House Republicans unveiled a bill that would privatise air-traffic control, a policy the president announced earlier this month. If the administration is to be believed, this is just one of many privatisations that could increase efficiency and ...

22 июня, 12:28

Indicators: Retail sales, producer prices, wages and exchange rates

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Print section Print Headline:  Retail sales, producer prices, wages and exchange rates Print Fly Title:  Indicators UK Only Article:  standard article Fly Title:  Indicators Article body images:  20170624_INT600.png Published:  20170622 Source:  Online extra Enabled

22 июня, 07:28

The Economist explains: How the euro zone deals with failing banks

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Main image:  ALMOST a decade after the global financial crisis, aftershocks rumble on. This month Banco Popular, Spain’s sixth-biggest bank by assets, was bought for a symbolic €1 ($1.10) by Santander, the largest, in a takeover organised by European authorities. The “resolution” of Popular was the first of a failing euro-area bank under new procedures that came into effect in 2015. How did the system fare?Popular had been suffering since the collapse of Spain’s national property bubble in 2008. Like other European countries, Spain was slow at first to deal with the crisis. It borrowed €41bn from European funds in 2012 to bail out its banking system—pouring a good portion of that into Bankia, a big savings bank. But its banking system is now much the healthier for a consolidation co-ordinated by the state, in which several local lenders were rolled into stronger institutions. A total of 55 banks has been reduced to a dozen or so, and more mergers may follow. Faster economic growth—just now, the fastest of any large economy in the euro zone—helps the banks too. Yet problems remained, notably at poor Popular. It did not share in the bail-out, instead raising equity from shareholders three times between 2012 and 2016. That strategy failed.When the end came Popular was hoping to find a buyer. But ...