Grassley, the oldest Republican senator and the longest-serving Iowa senator, has also helped shepherd conservatives into the federal judiciary, including the U.S. Supreme Court.He is seeking his eighth term in the chamber, now divided 50-50 with Democratic Vice President Kamala Harris serving as tie-breaker to give Democrats narrow control. “I’m running for re-election — a lot more to do, for Iowa. We ask and will work for your support. Will you join us?” he said in a post on Twitter (NYSE:TWTR).Republicans, who lost control of the Senate in January following a special election in Georgia, aim to retake the upper chamber and the House of Representatives next year to counter Democratic U.S. President Joe Biden, who won in 2020. Grassley’s seat is considered a “solid” Republican, according to the nonpartisan Cook Political Report. Grassley serves as the ranking Republican on the Senate Judiciary Committee, which he previously chaired when the party controlled the Senate under former Presidents Republican Donald Trump and Democrat Barack Obama and helped reshape the nation’s top court with three more solidly conservative justices. He played a central role in conservative Justice Brett Kavanaugh’s contentious U.S. Supreme Court confirmation in 2018.Earlier, in 2016 he embraced then-Senate Majority Leader Mitch McConnell’s decision not to act on Obama’s nomination of centrist Merrick Garland to fill a Supreme Court vacancy, an action with little precedent in U.S. history. That left Trump to fill the position – left vacant for more than a year – in 2017 with Neil Gorsuch.In 2020, Grassley was no longer chairman but was on the committee when the Senate confirmed Trump’s third Supreme Court appointee Amy Coney Barrett. (This story corrects to add dropped letter in headline) More
- in Economy
(Reuters) – U.S. stock indexes were set to open lower on Friday following a strong two-day rally, as worries persisted about the spillover from debt-laden China Evergrande, while Nike tumbled after cutting its sales forecast.Big banks including JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS) and Bank of America Corp (NYSE:BAC) slipped about 0.5%, while oil majors Exxon Mobil (NYSE:XOM) and Chevron Corp (NYSE:CVX) were down 0.4% and 0.3%, respectively, in premarket trading.The banking sub index and the S&P energy sector have gained nearly 2.5% and 3.8% so far this week.Wall Street’s main indexes have been roiled this month by fears of a sooner-than-expected tapering by the Federal Reserve and the crisis at Evergrande, which on Thursday missed an interest payment deadline and has entered a 30-day grace period.The benchmark S&P 500 is now on course to snap a seven-month gaining streak.On the week, however, the index is still set to post modest gains, with investors shrugging off signals from the Fed that it would reduce its monthly bond purchases as soon as November and that interest rates could rise quicker than expected.”We are taking some breather (from the two-day rally), (but) there is some uncertainty out of China that the market wants a little clarity on,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.”But the key theme is the shift back to the value reopening and cyclical trade … and we should expect to see a move back into reopening into the end of the year in the face of a rising (interest) rate environment.” The S&P 500 value index is up nearly 0.6% this week, outperforming its tech-heavy growth counterpart and on track to break a three-week losing streak.At 7:57 a.m. ET, Dow e-minis were down 136 points, or 0.39%, S&P 500 e-minis were down 21.5 points, or 0.48%, and Nasdaq 100 e-minis were down 97.25 points, or 0.64%.A downbeat annual sales forecast by Nike Inc (NYSE:NKE) dragged the sportswear maker’s shares lower by 5.2%, with the stock set to weigh on the Dow and the S&P 500 after market open.Shares of peer Under Armour (NYSE:UA) also fell 1.9%, while footwear retailer Foot Locker (NYSE:FL) dropped 3.3%.Mega-cap growth names Alphabet (NASDAQ:GOOGL) Inc, Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), Apple Inc (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) Inc slid between 0.6% and 1%.Shares of cryptocurrency-related firms Coinbase (NASDAQ:COIN) Global, MicroStrategy Inc, Riot Blockchain (NASDAQ:RIOT) and Marathon Patent Group tumbled between 3.5% and 7.3% after China’s central bank vowed to crack down on cryptocurrency trading. More
Troubles at property group China Evergrande also affected sentiment, raising concerns about spillover risks to other economies.Investors purchased a net $30.25 billion in global money market funds in the week, which marked their biggest weekly net buying since Aug. 4. (GRAPHIC: Fund flows into global equities bonds and money markets – https://fingfx.thomsonreuters.com/gfx/mkt/lbpgngzqxvq/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg) In its latest policy statement on Wednesday, the U.S. central bank signalled it is likely to begin reducing its monthly bond purchases as soon as November and that interest rate increases may also follow more quickly than expected. Global equity funds faced a marginal outflow of $5 million in the week. U.S. equity funds saw net selling of $2.85 billion, while Asian and European equities received $2.93 billion and $0.73 billion in net purchases. Real estate sector funds saw $720 million in outflows.Industrials and consumer staples sector funds also saw outflows of over $600 million, while consumer discretionary funds attracted a net $442 million. (GRAPHIC: Global fund flows into equity sectors – https://fingfx.thomsonreuters.com/gfx/mkt/lgpdwkarzvo/Global%20fund%20flows%20into%20equity%20sectors.jpg) Global bond funds saw inflows for a ninth straight week, though purchases were 24% lower than in the previous week, at $8.92 billion. Global government bond funds pulled in a net $2.2 billion, the biggest in four weeks, while inflation protected bond funds attracted $680 million. High yield funds, however, faced outflows of $154 million.The net inflows decreased as investors reiterate tapering fears from the Fed’s decision to taper bond purchases by the end of the year, said OCBC in a note. (GRAPHIC: Global bond funds’ flows in the week ended Sep 22 – https://fingfx.thomsonreuters.com/gfx/mkt/dwpkrdloovm/Global%20bond%20funds’%20flows%20in%20the%20week%20ended%20Sep%2022.jpg) Among commodity funds, investors purchased precious metals funds for a second straight week, worth a net $172 million, while they sold energy funds for a sixth successive week. An analysis of 23,900 emerging market funds showed investors sold $888 million in bond funds and $381 million in equity funds, their first weekly net sales in four weeks. (GRAPHIC: Fund flows into EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/klvykgbxavg/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg) More
“Furlough-end remains key,” BofA economist Robert Wood wrote in a report. “If it goes well, or the BOE feels pressured by spot inflation, it could hike as soon as December and a second time next May.”The U.S. bank’s main scenario now anticipates the BOE raising its key rate by 15 basis points to 0.25% in February instead of May. BofA shifted its view after the BOE said on Thursday that the case for tightening monetary policy has strengthened. The central bank also said it expects inflation to exceed 4% later this year, more than double its target. “If furlough end results in no rise in unemployment, a hike by or before February would in our view be a very high likelihood,” Wood wrote. “But we think that scenario is far from guaranteed.”The wage-support program ends on Sept. 30. The central bank expects unemployment to peak below 5%, well below its previous scenarios at the height of the pandemic crisis. More
“HGV drivers are the glue which hold our supply chains together. Without them, we are unable to move goods from farms to warehouses to shops,” said Andrew Opie, director of food & sustainability at the British Retail Consortium.”Unless new drivers are found in the next ten days, it is inevitable that we will see significant disruption in the run up to Christmas.” More
HONG KONG (Reuters) – The debt crisis engulfing China Evergrande Group has begun to dent homebuyer sentiment and force developers to cut prices, signalling deeper consequences for the world’s No.2 economy and a consolidation in the overcrowded property sector.Evergrande, which epitomises the borrow-to-build business model, is suffocating under $305 billion of debt and has stopped repaying some investors and suppliers and halted building work at many projects across the country.What has rapidly become China’s biggest corporate headache has now smashed consumer confidence in property investment, as cash-strapped Evergrande struggles to complete home developments for buyers. While contagion fears from a possible Evergrande collapse have depressed global financial markets, analysts say the property sector, which accounts for a quarter of the country’s gross domestic product, could be the worst hit. “It’s not China’s Lehman moment that we should be worried about. It’s a sharp drop in property sales,” Capital Economics chief Asia economist Mark Williams said, referring to the 2008 collapse of U.S. investment bank Lehman Brothers.On Friday, Evergrande inched closer to the potential default that investors fear, missing a payment deadline in one of the clearest indications yet that the developer, whose debt struggles have spooked markets, is in dire trouble.The developer is now repaying some suppliers, as well as retail investors in its opaque wealth management products, partly in completed real estate in an effort to ease social tensions.”It’s not the first time a developer has used real estate as payment to suppliers,” said realtor Centaline Shenzhen general manager Alan Cheng. “But it’s the first time homebuyers realize a big developer like Evergrande can collapse too – they think there must be something wrong with this market.”He said buyer sentiment had turned pessimistic, resulting in low transaction volumes and confirming a market downtrend. Adding pressure to home prices, Cheng said other developers, including Kaisa and state-backed China Resources Land, cut selling prices in the southern city of Shenzhen, after a 30% discount promotion by Evergrande in May. Kaisa said it did not have a comment on price cuts, while China Resources Land did not respond to request for comment.Growth in China’s property sales by floor area in the first eight months slowed to 15.9% from a year earlier, compared to 21.5% growth in the first seven months, as the sector was hard hit by a liquidity squeeze. Growth was 105% year-on-year in the first two months of 2021, rising from a low base in 2020 when sales were hurt by the COVID-19 pandemic.CONSOLIDATION DRIVE Nomura said the decline in new home sales accelerated in the first two weeks of September from August to 16%, and 49.5% from a year earlier for top and lower tier cities, while they eased to 15.5% for tier-2 cities.Capital Economics’ senior China economist, Julian Evans-Pritchard, said Evergrande’s crisis had had a much bigger impact on housing demand than he had anticipated, and households had turned much more cautious, triggering a drop in prices. He said that while most developers would be able to cope with weaker sales for six months, a broader shift in property sales triggered by the negative sentiment would be more worrying.To withstand the crisis, the sector was expected to see a wave of consolidation in the near-term, some analysts said. China’s property market has been extremely fragmented, with an estimated more than 50,000 developers at the peak. Given many were small and poor quality, Beijing also wants to drive consolidation, analysts said. No.3 developer China Vanke and Guangzhou-based KWG Group said in their earnings conferences last month they were eyeing M&A to acquire land from distressed peers, when prices are often cheaper than at public land auctions. Vanke said it had been in talks with Evergrande in the past few months on project cooperations, and it has acquired three projects of Sichuan Languang Development, a smaller developer that defaulted in July.Country Garden Services, the property management unit of developer Country Garden, said on Monday it had agreed to buy Wealth Best Global, an arm of Guangzhou R&F Properties Co, for 10 billion yuan ($1.55 billion).”Consolidation will definitely accelerate under the current tight credit environment,” said an executive of a developer based in eastern China, adding it was looking at a few projects now. “If a company in a liquidity crunch doesn’t sell its assets quickly when the problem first emerges, it may collapse like Evergrande,” said the executive, declining to be named as he was not authorised to speak to the media. More
IMF chief Kristalina Georgieva is under growing pressure from staff, US lawmakers and economists as she battles allegations that she pressured subordinates to favour China while in a previous role at the World Bank.Five staff members in managerial and operational positions told the Financial Times that they and their colleagues were concerned the scandal might compromise IMF work. Three US Republican lawmakers have also written to US Treasury secretary Janet Yellen asking her to investigate the matter, which they said “raises serious questions about . . . Georgieva’s ability to lead” the IMF.Georgieva used a scheduled IMF staff meeting last week to deny allegations contained in an independent report that while World Bank chief executive she manipulated its “Doing Business” report on countries’ business climates, flattering China’s ranking. “[Let] me put it very simply to you. Not true,” she told staff. “Neither in this case, nor before or after, have [I] put pressure on staff to manipulate data.” On Thursday, Georgieva followed up with a brief missive to further try and assuage staff concerns.But IMF staffers who requested anonymity told the FT that Georgieva’s denials of the report’s findings at the town hall meeting had left them and colleagues dismayed. “Not just me, other people as well, felt this was wholly inappropriate,” said one manager. “This is a highly dubious and highly concerning situation,” the person added, because nobody can be sure the IMF is not taking “directions from one or other country . . . Everybody says this stinks to high heaven.”The allegations against Georgieva, contained in a report commissioned by the World Bank and since referred to the IMF’s executive board, are the biggest threat yet to her two-year tenure at the IMF. They also jeopardise the fund’s reputation for scrupulous data, which informs a myriad of economic and financial decisions by the IMF and other lenders. Erik Nielsen, group chief economist at UniCredit and a former IMF and World Bank economist, said the allegations came just as the fund was struggling to reconcile an internal policy conflict between austerity and expansionary public spending.“In the middle of a cultural crisis, you get this news — it’s very bad, it’s throwing fuel on the fire,” he said. “But at the end of the day, you don’t cook numbers and if you do, you have no role in policymaking.”Ultimately, Georgieva’s fate as head of the IMF rests on whether its major shareholders — including the US, European countries and Japan — believe she should remain in the job. Georgieva has won praise from economists such as Joe Stiglitz for her handling of the pandemic, and her progressive views on climate change and debt. “She was changing the institution, and I think in a good way . . . other people like to keep the old fund,” Stiglitz said in an interview, after sending a letter to the IMF board in her defence. “Her services are needed now more than ever,” he wrote. Still, unease about the scandal, which one staffer said had “severely impacted” their jobs, adds to the pressure on Georgieva after last week’s release of the report prepared by law firm WilmerHale at the request of the World Bank’s board.
Three Republican lawmakers on the US House of Representatives financial services committee on Wednesday wrote to Yellen and called for the Treasury department to report to Congress within 30 days on the extent that China may now be influencing the IMF under Georgieva.“Everyone I’ve talked to is pretty shocked,” an IMF staffer said. “Everybody is unhappy.”Georgieva took another stab at addressing the concerns on Thursday. “There are many questions raised by the report that I will address as the Board goes through its review process,” she wrote in a note to staff. “So far I have refrained from commenting out of respect for the Board’s role. I hope soon to be able to present in detail my reflections and answers to all questions people may have,” she added, before giving thanks for “many messages of support from you.”The WilmerHale report was based on three dozen interviews with current and former World Bank staff and a review of 80,000 internal documents.Georgieva was World Bank chief executive at the time, before she became its acting president. She was appointed IMF managing director in 2019 and has led the organisation through the pandemic.The report accuses Georgieva of directing Simeon Djankov — a fellow Bulgarian who also worked at the World Bank and was later promoted to head its development economics department — to push up China’s rankings in the 2018 Doing Business report, which was cancelled last week amid the furore. At the time, Georgieva was working alongside bank president Jim Yong Kim to persuade China and other countries to contribute more capital to the World Bank. Djankov did not respond to requests for comment.Former World Bank staffers who were close to the situation have provided contrasting views. In a note sent to the IMF board, Shantayanan Devarajan, a former senior World Bank official, denied that Georgieva had put pressure on him to manipulate country rankings to benefit China.Devarajan, who was later replaced by Djankov, said Georgieva “asked the team and me to check, double check and triple check the data underlying China’s score” but only with an eye to ensuring the research was “accurate and credible.”“She emphasised that she wanted us to be as thorough as possible without compromising the integrity of Doing Business,” Devarajan wrote to the board, according to an excerpt seen by the FT. On Thursday, he said Georgieva was the victim of a “rush to judgment”, in the first of a series of tweets on the allegations. However, Paul Romer, who resigned as World Bank chief economist in 2018 after he went public with earlier concerns about the Doing Business rankings, has claimed Georgieva “engineered a cover, a whitewash” about their methodology. More
How well did you keep up with the news this week? Take our quiz.Investors in an Evergrande offshore bond say they have yet to receive a closely watched interest payment that was due yesterday, adding to uncertainty over an unfolding liquidity crisis at the world’s most indebted property developer.The $83.5m payment had a deadline of noon in Hong Kong or midnight in New York. But two people with direct knowledge of the matter said that no payment had been received by this morning in Hong Kong. The property group, which has not made a statement on the repayment, has a 30-day grace period before any failure to pay officially results in a default.Evergrande, which had been widely expected to default for weeks, is at the centre of an unfolding storm over the health of China’s vast property sector as the government seeks to crack down on excessive debt.Its woes shook global stock and commodity markets this week ahead of the impending payment deadline, as traders weighed the implications of a slowdown across a real estate industry that has anchored China’s economic growth for decades.Evergrande’s payment deadline passed as more signs of stress emerged across China’s property sector today. A local office of another Chinese property developer, Sunac, appealed for “policy assistance”. “We have never experienced such a radical change in the external environment,” Sunac said in a letter to the Shaoxing municipal government in the eastern Zhejiang province.Read more: Is it time to avoid investing in China? I cannot remember a time when the issue about investing in China was dominated by unpredictable politics and governance as it is now, writes author George Magnus.Gillian Tett: Look to Japan for lessons on Evergrande. The fate of a regional bank in the 1990s shows what happens when the pillar of government support is removed.Lex: An Evergrande default would be one thing, but the bigger issue is whether a two-tier China bond market is emerging.Five more stories in the news1. Trump aides subpoenaed over Capitol attack A bipartisan House of Representatives select committee investigating the January 6 attacks on the US Capitol has subpoenaed four close aides of former president Donald Trump. Steve Bannon, the former president’s one-time political adviser, and Mark Meadows, his White House chief of staff, are among those who will appear at a deposition next month.2. Goldman exec who led consumer banking launch set to depart Harit Talwar, who spearheaded Goldman Sachs’ push into consumer banking, is leaving the bank in October, 10 months after he handed over day-to-day running of the business. The departure crystallises a transition to a new phase of leadership at its consumer business.4. Chipmakers pressed for more transparency on supply chains Biden administration officials say they aim to gather more information about chip supply and demand, inventory and different customer segments as they rush to alleviate a global chip crisis. Industry representatives were summoned yesterday to a meeting at the White House to address the global shortage of semiconductors.4. Aukus pact is ‘insult to a Nato partner’, says Merkel adviser The new Indo-Pacific security pact between the US, UK and Australia is an “insult to a Nato partner” and US president Joe Biden is treating allies in the same way his predecessor Donald Trump did, according to Christoph Heusgen, Angela Merkel’s longtime foreign policy adviser. 5. US envoy to Haiti resigns Daniel Foote, the US special envoy to Haiti, has resigned in protest at what he described as the Biden administration’s “inhumane, counterproductive decision” to deport thousands of Haitian migrants. The resignation comes as the White House grapples with a surge of migrants from Haiti who have gathered in the Texas border town of Del Rio.Coronavirus digestRochelle Walensky, director of the Centers for Disease Control and Prevention, has overruled her agency’s advisory panel and recommended that people in occupations at high risk of Covid-19 exposure should receive a booster jab.Novavax has applied for emergency use authorisation of its vaccine from the World Health Organization.Companies in Vietnam have warned that a prolonged lockdown puts at risk the country’s status as a manufacturing hub.The UK has issued a last-minute quarantine waiver for ministers from “red list” countries attending the UN climate summit in Glasgow.The days aheadQuad meets The leaders of the US, Australia, India and Japan hold their first in-person meeting since the pandemic in Washington today. The recently signed Aukus military pact has raised questions about the purpose of the so-called Quad.Fed event Jay Powell, Federal Reserve chair, is scheduled to give the opening remarks at a virtual event hosted by the US central bank to hear how the economic recovery is progressing across the country.Earnings Carnival Corp is expected to post a sharp increase in third-quarter revenue as the cruise operator resumed sailings after a pandemic-induced pause. Germany’s election As German voters prepare to go to the polls on Sunday never before have they faced such a broad spectrum of possible electoral outcomes as Chancellor Angela Merkel exits the political stage. Our poll tracker has the latest, while Europe Express will bring you the results of the historic election on Monday.As readers may have noticed, yesterday we incorrectly stated that the Quad meeting was taking place that day. What else we’re readingJoe Manchin’s threat to Biden’s spending spree In both the White House and Congress, Democrats’ frustration with Joe Manchin, the senator from West Virginia, is rising. But for residents of Marion County, the small rural coal mining community from which Manchin hails, the Senate’s most conservative Democrat is a common sense bulwark against partisanship and overspending. Our reporter Obey Manayiti spoke to local voters. Collapsed Blackstone deal shows ‘everything is political’ in China After the buyout group was forced to call off a $3bn deal to buy property developer Soho China, the private equity industry is reassessing how to place its bets on the world’s second-largest economy. The episode underlined that even the highly connected can struggle to navigate the country’s political environment.‘I have a lot of questions for you’ FT Weekend Magazine brought together the reclusive Italian novelist Elena Ferrante and performance artist Marina Abramović to discuss art, writing and more, on the occasion of Abramović’s new London exhibition.
University rankings are just an educated guess There is little hope of universities treating rankings less seriously but students should not get too embroiled in their status game, argues John Gapper. The best advice, he says, is to visit some colleges, see which ones might suit you best and try to ignore the noise.Business book of the year 2021 The challenges of climate change, racial discrimination and cyber crime feature on the shortlist for this year’s Financial Times and McKinsey Business Book of the Year Award. Andrew Hill, management editor, runs through the six finalists. The winner of the award will be announced on December 1.TravelHouston will soon be the third-largest city in the US. Gary Tinterow, director of Houston’s Museum of Fine Arts, shares his favourite places to eat, drink, enjoy the arts and have fun in the port city. A winter highlight he never misses is the Houston Livestock Show and Rodeo.
The Houston Livestock Show and Rodeo: where else can you eat fried Oreos? More