Aurelia Butler

WASHINGTON (Reuters) – The phone calls to Yvonka Hall’s health nonprofit in northeastern Ohio from families begging for help feeding their children started in March 2020, and slowed down only when an expanded child tax credit came into effect last summer.Now, Hall fears the calls will ramp up again as U.S. lawmakers quibble over renewing this program that expired after making final payments on Dec. 15, despite having been credited with helping millions of poor children.”It’s easy when you make $200,000 a year to drag your feet on someone that may be making $10,000 a year,” Hall said referring to the $174,000 annual salaries earned by members of Congress.The expanded Child Tax Credit’s monthly payments of $300 for each child under the age of 6 and $250 for children 6 to 17, lifted some 3.6 million American children out of poverty in October, according to Columbia University research.”It allowed our families to be able to live,” Hall said. The Northeast Ohio Black Health Coalition in Cleveland, where Hall is executive director, has had to start setting aside $10,000 per month to fund an ad hoc food bank since the COVID-19 pandemic began.When the expanded Child Tax Credit monthly payments kicked in, the calls to the ad hoc food bank dropped off and many families were able to move into better, more stable housing.Hopes for a one-year extension dimmed on Sunday after moderate Democratic Senator Joe Manchin https://www.reuters.com/world/us/schumer-says-senate-vote-biden-plan-despite-manchin-objections-2021-12-20 said he would not vote for President Joe Biden’s $1.75 trillion “Build Back Better https://www.reuters.com/business/cop/whats-bidens-175-trillion-build-back-better-package-2021-11-05” program, which includes the tax credit provision.In so doing, he joined Republicans who are in lock-step opposition to Biden’s plan, instead wanting a scaled-back child tax credit.’INFLATIONARY BOMB’Republicans oppose the size of the credit, as well as the aim of Democrats to attach it to the $1.75 trillion “Build Back Better https://www.reuters.com/business/cop/whats-bidens-175-trillion-build-back-better-package-2021-11-05” program.Senator Lindsey Graham (NYSE:GHM), the senior Senate Budget Committee Republican, described the Democrats’ tax credit provision as an “inflationary bomb.”Without the expanded tax credit, the program for poor families reverts to a lump-sum payment that families need to file a tax return to claim, and a reduction to $2,000 annually per child from up to $3,600 this year. The Treasury Department in June estimated that families with as many as 2.3 million children did not file returns in 2019 or 2020 because their incomes were below the threshold for filing.That presents a problem for Tiquanda Newton, a 43-year-old mother of daughters aged 21, 17, seven and four.”I walk into the store and I have to figure out who gets what and who doesn’t get what. The truth is, I don’t get. I just make sure I stay hydrated,” Newton said in a telephone interview from her home in New Haven, Connecticut.Newton has been unemployed since the birth of her 7-year-old and has guardianship of her eldest daughter, who has a life-long disability.A broken heater in her car goes unrepaired and she despairs over the rising costs of basics like food and school supplies.”These babies are growing quicker than we can even buy clothes,” she said.Despite the breakdown in negotiations, “The fight to pass Build Back Better is not over,” said House Appropriations Chair Rosa DeLauro, a leading advocate for maintaining the expanded tax credit.Already, there have been hints Democrats could move to shrink the $1.75 billion plan to win support from Manchin and Democratic Senator Krysten Sinema, who together oppose various parts of the bill.Meanwhile, Mary Beth Cochran, 52, worries she may have to quit her job in western North Carolina if the expanded tax credit vanishes and she no longer can afford the used car she bought with the extra federal funding.”I’m not asking for a handout,” she said. “This money is to help us get by so our children don’t have to struggle.” More

ANKARA (Reuters) -Turkey’s lira ended the session up over 20% on Monday after President Tayyip Erdogan introduced a series of steps that he said will ease the burden of the weakened currency on Turks, while vowing to press on with a low-rates policy that led to the lira’s slide in the first place.The lira, which was down more than 10% at 18.4 to the dollar earlier, strengthened sharply and ended up 25% on the day at 13.15 in reaction to Erdogan’s announcement, in its largest daily trading range on record. It remains down 45% so far this year.Around $1 billion was sold in markets after Erdogan unveiled the measures, the head of the Turkish Banks Association said.”I imagine the market was very short the lira and the measures announced by Erdogan to protect domestic investors’ savings from lira fluctuations provided some impetus to cover those shorts,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.Speaking after a Cabinet meeting, Erdogan said the measures would ensure citizens would not have to convert their lira into foreign currency over the lira crash, including a deposit guarantee promise.”We are presenting a new financial alternative to citizens who want to alleviate their concerns stemming from the rise in exchange rates when they evaluate their savings,” Erdogan said.”With the interest rate cuts, we will all see how inflation will start falling within months,” he said. “This country will no longer be a heaven for those adding to their money with high interest rates, it will not be an import haven.”He also called on “everyone with money, access to finance” to contribute to investments and pledged steps to aid exporters and pensioners.”Today’s move is solely based on the Turkish government’s announcement that it would protect against fluctuations in the currency,” said John Doyle, vice president of dealing and trading at FX payments firm Tempus Inc.”The most important piece is that the government says that it will make up for losses in lira deposits if the lira declines exceed interest rates promised by banks. The government did not say how exactly they would execute this plan,” Doyle said.Erdogan’s push for 500 basis points of interest rate cuts since September has set off Turkey’s worst currency crisis https://www.reuters.com/world/middle-east/yearender-turkeys-crisis-rattles-faithful-erdogans-heartland-2021-12-20 in two decades, with the lira crashing near 40% in just the five weeks to last Friday.”I think that if you continue to see rate cuts (…) you should continue to expect ample volatility going forward and that many investors will still target fresh record lows despite this historic reversal that we’ve seen,” said Edward Moya, senior market analyst for the Americas at Oanda in New York.Economists have called Erdogan’s low-rates model reckless and said inflation would soar to beyond 30% next year.Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the current economic outlook was like “a truck with no brakes,” adding Erdogan’s newly announced measures diverged significantly from the usual market practices.”Turkey is going into a complicated process, they are no longer playing the game by the rules,” Ozkardeskaya said.Turkey’s five-year credit default swaps, the cost to insure against a sovereign default, jumped 39 basis points from Friday’s close to 622 bps according to IHS Markit. ISLAMIC USURYErdogan defended his economic policy on Sunday and likened the currency volatility to attacks on the country’s economy that have roots in 2013 nationwide protests.”We’re lowering interest rates. Don’t expect anything else from me. As a Muslim, whatever (Islamic teaching) requires I will continue to do that,” he said, referring to Islamic finance in which high interest, or usury, is typically avoided. Despite widespread criticism and the rapid fallout for the economy – including Turks’ fast-eroding incomes and savings – Erdogan has forged ahead with his economic program which prioritizes exports and lending.Under pressure from the president, the central bank cut rates again last week by 100 basis points, sending real rates deeper into negative territory, a red flag for investors and savers.Inflation jumped to 21% last month and is expected to pass 30% next year.Even after today’s sharp gains, the lira has lost about half its value to the dollar this year and is by far the worst performer among emerging market economies, due largely to damaged monetary credibility, analysts say. In an attempt to slow the selling and address what it called “unhealthy” prices, the central bank has intervened five times this month, though there was no official indication of intervention on Monday. Bankers’ calculations show it has sold more than $6 billion from its already-depleted foreign reserves. “If anything, (Erdogan’s announced) measures will bring an end to the uninterrupted breaks through record-lows, but in order for the lira to trade at levels seen last year, more action is needed from the central bank,” said Ima Sammani, FX Market Analyst at Monex Europe. More

Equities and oil prices gave up further ground after the rapid spread of the Omicron coronavirus variant prompted governments across the developed world to reimpose lockdowns, spooking investors who fear the pandemic may again choke off the global economic recovery. The FTSE All-World Index fell 1.3 per cent, marking its worst one-day slide since shortly after the discovery of the new variant last month. Wall Street’s S&P 500 also dropped 1.1 per cent after a 1 per cent fall on Friday, led lower by stocks in economically sensitive sectors such as financials, raw materials and consumer goods. The tech-heavy Nasdaq Composite fell 1.2 per cent. Oil prices were also under significant selling pressure. Brent, the international benchmark, fell 2.7 per cent to $71.52 a barrel, while US benchmark West Texas Intermediate declined 3.7 per cent to $68.23.Omicron is “one of the biggest issues for markets right now” because it has “clouded the outlook moving into year-end”, said Jim Reid, strategist at Deutsche Bank.In Asia, Hong Kong’s Hang Seng traded 1.9 per cent lower and Tokyo’s Nikkei 225 shed 2.1 per cent yesterday.Thanks for reading FirstFT Asia Here’s the rest of today’s news — EmilyFive more stories in the news1. Turkish lira gyrates as Erdogan vows ‘no going back’ on rate cuts The currency whipsawed after President Recep Tayyip Erdogan rejected warnings from business about the dangers of recent interest rate cuts. The lira fell to a new record low of TL18.36 against the dollar yesterday before rallying to TL14.8 in chaotic trading late in the Turkish day.2. Federal prosecutor says Maxwell worked ‘hand-in-hand’ with Epstein Prosecutor Alison Moe called Ghislaine Maxwell a “sophisticated predator who knew exactly what she was doing”, as she urged jurors to convict the British socialite of sex trafficking. “She manipulated her victims and she groomed them for sexual abuse,” Moe said in her closing argument.3. China’s top online shopping celebrity suspended after tax fine Huang Wei, known online as “Viya”, has vanished from Alibaba’s ecommerce platform Taobao after authorities fined her for tax evasion, in a big blow to the ecommerce giant’s fight to dominate the growing market of livestream shopping.4. Peng Shuai denies she was sexually assaulted by Chinese official The tennis star at the centre of China’s biggest ever #MeToo scandal has denied claims she had been sexually assaulted by a senior Communist party official that were posted last month on her official Weibo account.5. Chile’s stock market and currency fall after election result Chile’s currency and its local stock market fell sharply yesterday after Gabriel Boric, the leader of a leftwing coalition that includes the Chilean Communist party, won the country’s presidency by more than 11 percentage points.

Gabriel Boric won the Chilean presidency by more than 11 percentage points © AFP via Getty Images

Coronavirus digestThe People’s Bank of China has cut one of the country’s most important lending rates in a sign that the government is pushing ahead with policy easing measures to counter a loss of economic momentum.Moderna’s said its Covid-19 booster shot increases antibody levels 37-fold, compared with people who received just two doses.The World Economic Forum has scrapped its plans to hold an in-person annual meeting in Davos next month amid continued uncertainty over the Omicron variant.The Novavax coronavirus vaccine has been recommended for use in the EU by a European Medicines Agency panel.The divide over worker autonomy will widen in 2022 as the trend for more flexible working gathers pace, writes Pilita Clark.The day aheadReserve Bank of Australia December minutes released The minutes from the board’s monetary policy meeting this month could shed light on the central bank’s bond buying and its timeline for rate hikes. (Reuters) Bank of Korea PPI data South Korea will release its producer price index figures for November. Meanwhile, the government expects inflation to keep heating up and outpace the Bank of Korea’s current forecasts. (FT, Bloomberg) Winter solstice in northern hemisphere Those marking the occasion include, in the UK, druids at Stonehenge and The Burning the Clocks parade in Brighton.What else we’re reading and watchingA tale of two elites in Washington and Beijing One of the few things that Republicans and Democrats agree on is that America should treat China as a serious and dangerous global rival, writes Gideon Rachman. Until recently, most Americans assumed that the US would retain a technological edge over China. That can longer be taken for granted.‘Just in time’ to ‘just in case’ Companies have encountered snags in their supply chains during the pandemic as well as shipping bottlenecks, forcing a rethink of corporate strategy that includes increasing the inventory they keep on hand to entering into longer term contracts with suppliers.It’s not only working mothers who benefit from flexible jobs Onerous working hours which allow no space for family life underlie some of the starkest blue-collar labour shortages in 2021. Working mothers have been trying to balance work and family pressures for more than a century. It should no longer just be their battle to fight, writes Sarah O’Connor. The biggest market moments of 2021 From the GameStop saga to the Archegos debacle it has felt like a long year in financial markets, writes markets editor Katie Martin, as she rounds up the standout market moments of 2021.Looking ahead George Steer and Chris Flood look ahead to the big questions for the markets in 2022.South Korea politicians raise concerns over crypto brain drain South Korean politicians are calling on public officials to stop joining crypto companies for bigger pay cheques as exchanges race to bolster compliance divisions. Rising numbers of financial regulators and police officers are leaving the public service for crypto groups.What to watch, listen to and play over the holidaysFilms, TV shows, pop and classical albums, podcasts and games, our critics round up the 2021 highlights. What have you enjoyed this year? Tell us in the comments below these stories. More