Germany has to decide what to do with Spain -- and soon.
I've got some shocking news for you. Things are going badly in Europe.
The big story is Spain's borrowing costs. On Thursday yields on 10-year Spanish bonds touched the dreaded 7 percent level -- which they have continued to flirt with on Friday. What's so important about 7 percent? Two things. First, banks have to post more margin -- i.e., cash -- if yields cross that threshold when they use bonds as collateral. A downward spiral awaits. Banks might sell the bonds off because they aren't as useful -- leading to higher yields and worse margin requirements. And so on, and so on. But it doesn't even really matter. Borrowing costs of 7 percent are already ruinous for Spain. As Brad Plumer pointed out, inflation is so low in Spain that its economy would have to grow at a 4-5 percent clip to not fall into a debt trap with yields that high. But Spain isn't growing at 4 or 5 percent. Spain is in a recession.
So yes, it's fair to call the week-old bailout of Spain's banks afailout. The putative bailout has 1) Added to Spain's public debt, 2) Made that debt riskier, and 3) Likely made it harder for Spain to pay back its debt. The euro zone can hardly take any more such successes.
But the financial apocalypse isn't here yet. Just close. Spain relies on a lot of shorter duration debt to fund itself too. The borrowing costs on those bonds are still semi-manageable -- for 2-year bonds, if not 5-year bonds. Still, Spain is far too close to insolvency for comfort. Unless the European Central Bank (ECB) pushes down yields, Spain will need another bailout. And soon.
That brings us to the most interesting euro development of the past week. German bonds started to sell off -- before rallying recently. This was ... odd. German bonds never sell off when things look bad in euroland. The opposite. There's usually a flight to safety to them. If there's one euro zone country that won't go bankrupt, it's Germany. But things are getting so bad in Spain that Germany might have to cross the financial Rubicon it's so far been unwilling to countenance: joint debt.
Spain is too big to save. But that's almost irrelevant. The bailout status quo is toxic. It hasn't solved anything for Greece, Portugal or Ireland. It won't for Spain either. Southern Europe needs to reduce its debt and reduce the interest it pays. Bailouts do the latter, but not the former. But mutual debt -- so-called "eurobonds" -- would work. There's a problem. Germany doesn't want to give southern Europe a credit card with no limit. Germany wants there to be a very specific limit. That's where the so-called "sinking fund" comes in. The idea here is that each country would dump all of its debt in excess of 60 percent of GDP into a single fund. Each country would have to pay its own portion back over 20 years, but Europe would issue debt jointly.
This isn't a fiscal union. It's not an open-ended bailout of Spain by Germany. It's a one-time bailout of Spain by Germany. It's not perfect, but it could work. And it would cost Germany a good chunk of change. That's why Germany's borrowing costs surged at the beginning of the week. Of course, Angela Merkel gave her best Herman Cain impersonation later -- Nein, nein, nein! -- which is when German borrowing costs receded.
Germany will have to make up its mind soon. Markets don't have much patience for its Hamlet act. Time to decide whether the euro will be or not be.
According to Arthur, just a few months later, all 60 members of a committee selected by the American Dialect Society voted to google 2002’s most useful new word. Merriam-Webster and the Oxford English Dictionary would soon note the coinage. By 2006, Google’s lawyers—fearful of seeing the company’s name brand watered down to the trademark mushiness of kleenex—wrote a post for the company blog outlining when and when not to google should be used.
From the “400-pound” hacker to Alicia Machado, the candidate’s denigration of fat people has a long tradition—but may be a liability.
One of the odder moments of Monday’s presidential debate came when Donald Trump speculated that the DNC had been hacked not by Russia but by “someone sitting on their bed that weighs 400 pounds.” He was trying to suggest the crime had committed by someone unaffiliated with a government—but why bring up fatness?
Weight seems to be one of Trump’s preoccupations. The debate and its fallout highlighted how he publicly ridiculed the Miss Universe winner Alicia Machado as “Miss Piggy” and an “eating machine,” and how he called Rosie O’Donnell a “fat pig” with “a fat, ugly face” (“I think everyone would agree that she deserves it and nobody feels sorry for her,” he said onstage Monday). He also recently poked fun at his ally Chris Christie’s weight-loss struggles and called out a protestor as “seriously overweight.” And when he was host of The Apprentice, he insisted on keeping a “funny fat guy” on the show, according to one of its producers.
The biggest threat to the Republican nominee is not his poor performance in the debate, but his reaction to it: blaming microphones, insisting he won, and doubling down on gaffes.
Debates seldom make a great deal of difference to the outcome of the election. Mitt Romney’s dominating performance in the first debate four years ago? Didn’t stop Obama’s reelection. Gerald Ford’s “no domination of Eastern Europe” gaffe in 1976? He rose after it.
Sure, it’s better to win than to lose, but the historical record is a good reminder of why Hillary Clinton’s strong performance in Monday’s debate could have a limited effect on the election’s outcome. If it does have a lasting impact, however, it will likely be due not to what happened on stage at Hofstra University, but due to Donald Trump’s hectic, frenetic crisis-communications strategy.
This is a pattern amply seen before in the election: Trump gets caught in a tight spot, and rather de-escalate, he tends to take out the bellows and fan the flames as much as he can. Time and again, he has managed to overtake a news cycle (and often overshadow bad news about Clinton) thanks to bad crisis management. It’s what he did in his tiff with Khizr and Ghazala Khan, and so far it’s his post-debate strategy, too.
In North Carolina, the Democratic candidate basked in her debate victory. As for her supporters, they’re feeling better, but they’re not ready to exhale.
RALEIGH, N.C.— "Did anybody see that debate last night? Ooooh yes," Hillary Clinton said, her first words after striding confidently out on stage at Wake Technical Community College Tuesday afternoon.
As a capacity crowd cheered, she added, "One down, two to go."
Celebration and relief added to the thick humidity of late summerat Clinton’s event inNorth Carolina. Post-debate analysis is in that awkward in-between state, after the pundits have rendered their verdicts and before high-quality polling has measured the nation’s response. But the Democratic nominee seemed sure that she was the victor.
It was Clinton’s first event after the first presidential debate Monday evening in Hempstead, New York. One sign of her confidence coming out of that encounter: As I approached the rally, a man asked for a hand loading a heavy box into his car. He was the teleprompter man, he said, but when he arrived in Raleigh, he’d been told that Clinton had decided to do without the prompter. He was turning around and heading back to Washington, D.C.
In a unique, home-spun experiment, researchers found that centripetal force could help people pass kidney stones—before they become a serious health-care cost.
East Lansing, Michigan, becomes a ghost town during spring break. Families head south, often to the theme parks in Orlando. A week later, the Midwesterners return sunburned and bereft of disposable income, and, urological surgeon David Wartinger noticed, some also come home with fewer kidney stones.
Wartinger is a professor emeritus at Michigan State, where he has dealt for decades with the scourge of kidney stones, which affect around one in 10 people at some point in life. Most are small, and they pass through us without issue. But many linger in our kidneys and grow, sending hundreds of thousands of people to emergency rooms and costing around $3.8 billion every year in treatment and extraction. The pain of passing a larger stone is often compared to child birth.
For decades, the candidate has willfully inflicted pain and humiliation.
Donald J. Trump has a cruel streak. He willfully causes pain and distress to others. And he repeats this public behavior so frequently that it’s fair to call it a character trait. Any single example would be off-putting but forgivable. Being shown many examples across many years should make any decent person recoil in disgust.
Judge for yourself if these examples qualify.
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In national politics, harsh attacks are to be expected. I certainly don’t fault Trump for calling Hillary Clinton dishonest, or wrongheaded, or possessed of bad judgment, even if it’s a jarring departure from the glowing compliments that he used to pay her.
But even in a realm where the harshest critiques are part of the civic process, Trump crossed a line this week when he declared his intention to invite Gennifer Flowers to today’s presidential debate. What kind of man invites a husband’s former mistress to an event to taunt his wife? Trump managed to launch an attack that couldn’t be less relevant to his opponent’s qualifications or more personally cruel. His campaign and his running-mate later said that it was all a big joke. No matter. Whether in earnest or in jest, Trump showed his tendency to humiliate others.
The films touted for consideration this year include prestige projects like Martin Scorsese’s Silence and festival hits like Barry Jenkins’s Moonlight.
With the main film festivals of the fall (Telluride, Venice, and Toronto) now concluded, and Martin Scorsese finally confirming that his much-anticipated drama Silence will come out at the end of the year, the next three months will bring a calendar loaded with prestige releases. Among them are films that better reflect the wide range of faces and voices in America (and around the world), which have recently been severely under-represented on Oscar night. Audiences and critics will be paying especially close attention to the works and actors the Academy chooses to recognize, after the awards were condemned this year for nominating only white performers two years in a row.
The question, as always, is which films will be able to stand out once studios begin their awards campaigns in earnest. A lot can happen in a few months; after all, the season has already seen its earliest anointed front-runner practically disappear from the race. The former Best Picture favorite was the big story out of Sundance: The Birth of a Nation(October 7), a searing depiction of Nat Turner’s 1831 slave rebellion in Virginia written and directed by Nate Parker. The film won the festival’s Grand Jury Prize just as the conversation over the largely white Oscar nominations was at its loudest. The movie was acquired by Fox Searchlight for a record $17.5 million, with the studio promising a huge publicity campaign in the fall to help push it for awards contention.
Congress voted overwhelmingly to disregard the president’s rejection of legislation allowing 9/11 victims to sue a foreign government in U.S. court.
Updated on September 28 at 4:27 p.m.
For the first time in President Obama’s two terms in the White House, Congress has enacted legislation without his signature.
The House and Senate on Wednesday voted by a wide margin to override Obama’s veto of a bill that would allow victims of the September 11, 2001 attacks to sue a foreign government—namely, Saudi Arabia—in U.S. court, even if it had not been designated a state sponsor of terrorism. The president, in rejecting the measure, had warned that undercutting the principle of “sovereign immunity” could lead to retaliation against U.S. interests abroad, including countries that would try to bring legal action against American soldiers and diplomats overseas.
Programs that should be crafted around people’s needs are instead designed to deal with a problem that doesn’t exist.
At a campaign rally in 1976, Ronald Reagan introduced the welfare queen into the public conversation about poverty: “She used 80 names, 30 addresses, 15 telephone numbers to collect food stamps, Social Security, veterans’ benefits for four nonexistent deceased veteran husbands, as well as welfare. Her tax-free cash income alone has been running $150,000 a year.”
The perception of who benefits from a policy is of material consequence to how it is designed. For the past 40 years, U.S. welfare policy has been designed around Reagan’s mythical welfare queen—with very real consequences for actual families in need of support.
Though it was Reagan who gave her the most salient identity, the welfare queen emerged from a long and deeply racialized history of suspicion of and resentment toward families receiving welfare in the United States. Today, 20 years after welfare reform was enacted, this narrative continues to inform policy design by dictating who is “deserving” of support and under what conditions. Ending the reign of the welfare queen over public policy means recognizing this lineage, identifying how these stereotypes continue to manifest, and reorienting policy design around families as they are—not who they are perceived to be.