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U.S. Justice official accuses Barr of ‘scorn for apolitical prosecutors’ By Reuters

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© Reuters. U.S. Attorney General William Barr meets with members of the St. Louis Police Department

By Sarah N. Lynch

WASHINGTON (Reuters) – A recently retired federal prosecutor in California on Thursday became the third career Justice Department official to claim in a recent newspaper letter or op-ed that Attorney General William Barr has politicized the department.

Phillip Halpern, a 36-year department veteran who prosecuted Republican former Representatives Duncan Hunter and Randy Cunningham in California, criticized Barr in the print edition of San Diego Union-Tribune on Thursday and said he had resigned.

“Confirming his scorn for honest apolitical prosecutors, Barr refers to some as ‘headhunters’ who pursue ‘ill-conceived charges against prominent political figures,'” Halpern wrote in the piece, which first appeared in the online edition late on Wednesday.

A Justice Department spokeswoman did not respond to a request for comment.

Halpern is the latest career prosecutor to air his grievances against Barr, who has faced accusations he has undermined the independence of the Justice Department in an effort to help President Donald Trump win re-election in November.

James Herbert, a prosecutor in Boston, wrote a letter to the Boston Globe on Sept. 24, saying that Barr “has done the president’s bidding at every turn,” while Seattle-based federal prosecutor Michael Dion chimed in with a letter on Oct. 6 to the Seattle Times: “Barr … is turning the Justice Department into a shield to protect the president and his henchmen.”

Herbert and Dion, who are still employed with the department, declined to comment beyond their letters.

Halpern in an interview with Reuters called himself a “reluctant spokesperson.”

“If we remain silent in the face of authoritarian action, we risk our democracy turning into an authoritarian regime,” he said.

Barr has faced criticism for intervening in prosecutions against several of Trump’s political allies, including by recommending a lighter sentence for Roger Stone and seeking to dismiss a false-statement charge against former Trump adviser Michael Flynn.

He has also repeated Trump’s claims, without evidence, that there could be widespread mail-in voting fraud in November, and he has supported the Trump administration’s aggressive use of federal agents to quell violence in cities like Portland following the death of George Floyd.

His handling of the Stone case prompted all four career prosecutors handling the case to withdraw in protest.

The spate of letters “underscores the degree to which this attorney general, more than any other in our recent times … has politicized and overtly politicized the department’s work,” said Kristy Parker, a former federal prosecutor who is now with Protect Democracy.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Economy

Watch Now: Here’s What’s Moving Markets

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© Reuters.

Investing.com – Our markets analyst Jesse Cohen gives us his top five things to know on Wall Street on Wednesday, October 21, including:

1. Stock Fluctuate Between Gains And Losses

2. Investors Eye U.S. Talks

3. (NASDAQ:) Earnings

4. (NYSE:), (NYSE:) Also Report Results

5. Slumps On Earnings Miss

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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central bank governor By Reuters

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© Reuters.

BEIJING (Reuters) – China will strike a balance between stabilising economic growth and preventing risks, even as debt was allowed to temporarily rise this year to support the coronavirus-hit economy, central bank governor Yi Gang said on Wednesday.

Yi told a financial forum in Beijing that he expected China’s macro leverage ratio to stabilise next year as the economy expands, after the debt gauge rose in 2020.

Bank lending in the first nine months totalled 16.26 trillion yuan ($2.44 trillion) as policymakers looked to reboot economic activity, beating a previous peak of 13.63 trillion yuan in the same period last year.

“Monetary policy needs to guard the ‘gates’ of money supply, and properly smooth out fluctuations in the macro leverage ratio, and keep it on a reasonable track in the long run,” Yi said.

Ruan Jianhong, head of the statistics department at the People’s Bank of China (PBOC), said in July that the country’s macro leverage ratio jumped 14.5 percentage points in the first quarter and climbed further in the second quarter.

The central bank has not given further details.

The Institute for International Finance (IIF) said in July that China’s debt-to-GDP ratio was on track to hit 335%, from nearly 318% in the first quarter.

At the same forum, Vice Premier Liu He earlier said the economy will very likely grow this year, adding that prudent monetary policy should be kept appropriate and flexible, and liquidity reasonably ample.

On Monday, China reported gross domestic product grew 0.7% in January to September from a year earlier, versus a contraction of 1.6% in the first half following the outbreak of the novel coronavirus.

On Sunday, Yi said full-year GDP will likely grow by about 2%.

That would make China the only major economy expected to report growth in 2020, though it would be the country’s weakest annual expansion since 1976.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Column: Savings stash squares brutal second-wave rescue costs

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© Reuters. FILE PHOTO: The Federal Reserve in Washington

By Mike Dolan

LONDON (Reuters) – The public’s financial caution around lockdowns continues to give governments and central banks both the reason and room for open-ended support of their economies through another looming wave of this year’s devastating pandemic.

With a second surge of the COVID-19 virus in full swing in Europe at least and no effective vaccine on the table yet, questions about how governments can afford the blinding costs of economic support through the Northern winter are resurfacing.

The unprecedented numbers being clocked up worldwide are daunting. Estimating a global tally for this year’s fiscal rescues so far, the International Monetary Fund last week pinned it at $11.7 trillion, or almost 12% of world output.

And that was before the latest resurgence of the virus and renewed clampdowns on mass gatherings, socialising and travel.

The IMF reckons developed economy governments are likely to have exploded annual budget gaps by about 11% of gross domestic product (GDP) by the end of the year, lifting debt-to-GDP ratios by almost a fifth to 125%.

This year’s deficit in the United States is set to jump more than 12 percentage points to almost 19% and the euro zone budget shortfall is due to balloon 9 points to more than 10% – or almost a trillion euros ($1.2 trillion).

The commensurate surge in central bank bond buying is clearly the main reason financial markets haven’t run scared and benchmark 10-year borrowing rates remain near record lows of less than 1% stateside and below zero in much of the euro zone.

And on that, the IMF estimates the European Central Bank (ECB) has bought as much as 71% of all euro government debt sold since February while the U.S. Federal Reserve has snapped up 57% of all Treasury debt issued since then.

The question for the public at large, however, is how long can governments keep this up and what’s the payback?

Part of the answer lies in a circular flow involving the mass build-up of precautionary household savings during pandemic lockdowns and beyond, and whether, or how quickly, they get run down and spent.

Unlike the money supply implosion that accompanied the banking crash and credit crunch 12 years ago, the opposite happened this year as governments pre-empted their own shutdowns with a flood of income support, lending and credit guarantees while firms rushed to borrow and build cash buffers.

Yet without households running down those savings fully, its unlikely the money supply surge from government and central bank largesse will spur any significant inflation – in itself the only significant reason central banks would rethink underwriting the government bond boom and keeping debt costs affordable.

“If more fiscal stimulus is needed, the ECB will buy it,” said UniCredit chief economist Erik Nielsen. “So long as this debt is parked on the central bank’s balance sheet, it’ll be de facto cost-free for governments and taxpayers.”

Money printing is only inflationary if people and companies spend it, Nielsen wrote, and there’s really no realistic prospect of the private savings glut becoming inflationary even if spent in a very short period.

“It’s an output gap story. The huge expansion in private savings in recent months illustrates this, so the fiscal expansion is basically no more than an exercise in propping up demand as the private sector retrenches.”

SAVING THE WORLD

U.S. household savings quintupled from January to more than $6.3 trillion in April, with the savings rate as a share of income quadrupling to a record of more than 33% as most people continued getting paid, or received additional benefits, but had little to spend it on during lockdowns.

The savings rate has more than halved since to 14% – or $2.4 trillion – in August. But it remains more than twice as high as in January.

While Europe only publishes savings data on a quarterly basis, it paints a similar picture. Eurostat shows the euro zone savings rate more than doubled to a record of almost 25% by the middle of the year.

That’s why TS Lombard economist Shweta Singh describes the money growth surge back to World War Two peaks in the United States as a “false positive” and no precursor to inflation.

What’s more, if the virus dissipates, consumer spending re-emerges and those precautionary savings are run down quickly, it will most likely be an environment where deficits and debt sales shrink too and central bank balance sheets flatten out.

Myriad questions and longer-term conundrums persist.

Can debts rise endlessly if inflation never emerges? What happens to sovereign credit ratings in that scenario? What happens if, or when, inflation does re-emerge?

Investors at Columbia Threadneedle, for example, think caution is still warranted over the “political will” in the euro zone to manage the rising debt stock of countries such as Italy and Spain which have debt-to-GDP ratios above 100% but no domestic central bank.

Pan-European borrowing helps, they say, but it may have political limits too.

Yet on the issue of “exit policies” and inflation in a recovery, UniCredit’s Nielsen is adamant: “If I were a central banker, I would be much happier navigating those future challenges than those that they have been facing these past few years.”

(The author is editor-at-large for finance and markets at Reuters News. Any views expressed here are his own)

(by Mike Dolan, Twitter: @reutersMikeD; Editing by David Clarke)





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