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China’s investment around the world has reached new highs every year this decade. This year it will likely smash the 2015 total, topped by a record $45 billion acquisition. Yet the outlook may be for a shortfall - many Chinese firms, including those owned by the state, face new financial limits. Governments and businesses dealing with them must adjust or risk getting burned.
Start at the top, because the money flows down. For 35 years, China’s foreign exchange pile climbed with its economy, peaking in mid-2014 at almost $4 trillion held by the government plus another $800 billion at…

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Maybe the middle class isn’t quite so stressed any more.
We in the media are rightly criticized for a pessimistic bias. We cover the unfortunate, the grim and the tragic. News is what people don’t know and, as often as not, is sad or shocking. Our prism on the world distorts reality, because reality is often predictable and reassuring while we aim to be surprising and upsetting.
A case in point: the Federal Reserve’s recently released “Report on the Economic Well-Being of U.S. Households in 2015.” Although full of upbeat news, it received scant media attention. Perhaps it seemed too dull.
The…

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Life in prison is meant to be difficult. But it doesn’t always get better once you’re out. Re-entering offenders often have a tough time finding employment, even when they are motivated and able to work. But “ban the box” - a popular policy aimed at helping ex-offenders find jobs - doesn’t help many ex-offenders, and actually decreases employment for black and Hispanic men who don’t have criminal records. This is a classic case of unintended consequences. We should repeal “ban the box” and focus on better alternatives.How did we get here? Helping ex-offenders find jobs is a top policy…

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Despite Congressional leadership’s ardent denial that the latest version of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) will not pump taxpayer dollars into debt-ridden Puerto Rico, we are creeping towards precisely such a bailout.
Updated last week, PROMESA seeks to redirect the indebted island territory “from a path of destitution towards a path of prosperity.” Republican House and Committee leadership, including the bill’s sponsor Rep. Sean Duffy, Natural Resources Committee Chairman Rob Bishop, and House Speaker Paul Ryan, have vowed to do so without pouring…

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Over half a million college students recently graduated with Bachelor of Arts degrees. Many of them are looking for jobs this summer that don’t involve serving coffee. But the Department of Labor is working against them, recently finalizing a new overtime rule that doubles the salary threshold under which employers are required to pay overtime — to ,476 from ,660 a year.The consequences of this rule have been well-covered. In order to keep track of expensive overtime costs, employers will turn salaried employees into hourly ones. This will diminish the prestige of jobs - not to mention…

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With the recent announcement by Mobileye, an Israeli supplier of autopilot component, that it will provide systems for fully autonomous cars to two undisclosed automobile manufacturers in 2019, the forecasts for driverless vehicles on American roads by 2030 could soon be a fading memory - or not. Rapid technological developments are now creating an imminent reality for the American automotive consumer. In 2018, five major auto manufacturers, including Volkswagen, BMW, and General Motors, will be offering cars that operate autonomously when driven on highways, with this most recent deal…

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We are going to reveal the grand secret to getting rich by investing. It’s a simple formula that has worked for Warren Buffett, Carl Icahn and all the greatest investment gurus over the years. Ready?
Buy low, sell high.
It turns out that Donald Trump has been very, very good at buying low and selling high, and it helps account for his amazing business success.
But now Hillary Clinton seems to think it’s a crime. Campaigning in California last week she wailed that Trump “actually said he was hoping for the crash that caused hard working families in California and across America to lose their…

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In a time when it seems like central banks call the tune that everyone has to dance to, a book named Who Needs the Fed? (Encounter Books, 2016) is a deliberate provocation. Like his earlier book Popular Economics (Regnery, 2015), John Tamny takes on the potentially arcane issues of money, credit and banking with the help of contemporary tales of business adventure. The result is both accessible and sophisticated - more sophisticated than most academic work, whose obtuse mathematics actually amount to clumsy oversimplifications. It contributes to a growing consensus that the Federal Reserve’s…

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The United States Constitution declares in Article I, Section 2 that “representation and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers.” To accomplish this foundation for proportional government, Article 1 tasked federal authorities with “actual enumeration” within three years of the first meeting of Congress and then every ten years thereafter. The first Census was carried out in 1790 with Thomas Jefferson the nominal supervisor as Secretary of State. In fact, the first Census-takers were actually…

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WASHINGTON — How many times have you heard that Americans’ wages have stagnated? Countless commentators (including me) have repeated this complaint. Naturally, politicians of both parties — Hillary Clinton and Donald Trump — deplore it. It’s conventional wisdom that wage stagnation has contributed to the sluggish recovery and the downcast attitudes of millions.
But what if it’s not true?
A new study from the Federal Reserve Bank of San Francisco suggests just that. It concludes that widely cited figures showing stagnation are mostly a statistical fluke. Workers continuously employed in…

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There will be no essay on The Smartest Man in Europe this year. My good friend and mentor Edgar de Picciotto, Chairman of Union Bancaire Prive in Geneva, has passed away; he was 86. I met him during the 1980s when I was at Morgan Stanley and he was a regular attendee at our global client conference at Lyford Cay in the Bahamas. I came to know him well when we were both Supervisory Directors of Soros Fund Management and met for several days twice a year in Europe (Soros was an offshore fund.) When I started writing about him in 2002, I chose not to reveal his name to protect his privacy….

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California and Massachusetts regulators have decided to allow Uber drivers to be considered independent contractors rather than employees, a distinction crucial to the success of the ride-sharing app. But it’s hardly the last word on the matter. The left has been vilifying Uber as the villain of the new “gig economy,” in which more and more workers-especially younger ones- support themselves as self-employed contractors, stitching together a variety of app-enabled tasks. Liberals consider such arrangements largely exploitative-with companies such as Uber getting fabulously rich while the…

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Obama’s overtime end-run is the latest example of the fallacy of attempting to mandate prosperity. This labor rule mimics so many other administration initiatives that seek to unilaterally impose its will on circumstances not suiting their vision. However, the economy is a tough adversary. So the basic problem remains: Although government may redistribute wealth, government cannot create it. Last week, the Obama administration announced a rule doubling (from ,660 to ,476) the salary range within which employees must be paid time-and-a-half overtime. Like recent high-profile minimum…

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The Wall Street Journal is reporting that minutes of a meeting in China two months ago reveal that officials there have abandoned their commitment to give market forces greater sway in setting the yuan’s exchange rate.
Reportedly, in response to economists and banks request that officials stop resisting market pressure, one PBOC official explained that “the primary task is to maintain stability.” The WSJ cites the minutes of the meeting and interviews with Chinese officials and advisers to conclude that the central bank “had ditched the market-based mechanism,” though has not formally…

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Health reform (aka Obamacare) is entering a new stage. The recent announcement by United Health Care that it will stop selling insurance to individuals and families through most health insurance exchanges marks the transition. In the next stage, federal and state policy makers must decide how to use broad regulatory powers they have under the Affordable Care Act (ACA) to stabilize, expand, and diversify risk pools, improve local market competition, encourage insurers to compete on product quality rather than premium alone, and promote effective risk management. In addition, insurance…

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