Posts Tagged ‘economic recovery’

New York Fed President Dudley to Announce Early Retirement

November 5, 2017

Announcement could come as early as Monday, search for successor to start immediately

William Dudley, president and chief executive officer of the Federal Reserve Bank of New York,at a panel discussion on banking ethics at the Bank of England in City of London, U.K., on March 21, 2017.
William Dudley, president and chief executive officer of the Federal Reserve Bank of New York,at a panel discussion on banking ethics at the Bank of England in City of London, U.K., on March 21, 2017. PHOTO: SIMON DAWSON/BLOOMBERG NEWS

Federal Reserve Bank of New York President William Dudley is set to announce he will retire next year, around six months earlier than scheduled, and the announcement could come as soon as Monday, according to two people familiar with the matter.

The search for Mr. Dudley’s successor will start immediately with the aim of finding a new president in mid-2018, after which time Mr. Dudley will retire, according to people familiar with the matter.

The decision has been long-planned and is unrelated to President Donald Trump’s announcement Thursday that he would nominate central bank governor Jerome Powell to succeed Chairwoman Janet Yellen when her term as chief expires in February, according to a person familiar with the matter.

The coming announcement about Mr. Dudley was first reported by CNBC. The New York Fed declined to comment.

Mr. Dudley, who serves as vice chairman of the interest-rate-setting Federal Open Market Committee, is one of the central bank’s top policy makers, and he has been a close ally of Ms. Yellen in recent years.

He also played a critical role in how the Federal Reserve responded to the financial crisis and its aftermath. Mr. Dudley played key roles in formulating policies to help the economy recover and has been very active in shaping the Fed’s response to make financial firms more resilient to future troubles. He has also been an unusually vocal critical of Wall Street culture.

Mr. Dudley started at the bank in 2007, running the part of the institution that implemented monetary policy and dealt directly with financial markets. He got the top job when then-president Timothy Geithner left to become then-President Barack Obama’s first Treasury secretary.

Mr. Dudley has been a strong supporter of the Fed’s low-rate policies. But he has also been for some time a key voice arguing in favor of raising rates over the last year, even as inflation has proved unexpectedly weaker than expected, in turn calling into question the push to boost borrowing costs. It is possible that his replacement wouldn’t see the same level of urgency to act.

Mr. Dudley has favored increases “in part because he gives more weight to the risk of financial overheating than to the need to get the inflation numbers right down to the last decimal place,” said Louis Crandall, chief economist with Wrightson ICAP. “If his replacement has a more academic background, the replacement might be less willing to raise rates if the inflation numbers are still lagging in the second half of last year,” he said.

Recent New York Fed leaders have all had strong connections to financial markets, and many expect any replacement would carry on that tradition. Possible contenders include Simon Potter, who now runs the New York Fed’s markets desk, as well as D.E. Shaw’s Brian Sack, who held that job before Mr. Potter.

Some close to the bank say there is also a chance it could be a current central banker. Dallas Fed leader Robert Kaplan, a former Goldman Sachs top executive, has deep market experience, as does the ambitious leader of the Minneapolis Fed, Neel Kashkari, who led the government’s financial bailout efforts during the financial crisis.

The New York Fed is the most powerful of the central bank’s 12 regional banks because of its role supervising some of the nation’s biggest banks and implementing monetary policy. Mr. Dudley, a former Goldman Sachs chief economist who took over the New York Fed in 2009, is serving a term that ends in January 2019.

Mr. Dudley is scheduled to give a speech at the Economic Club of New York on Monday.

The news about Mr. Dudley’s plan comes amid considerable churn in the top leadership ranks of the Fed.

Just last month, Fed Vice Chairman Stanley Fischer, another top Fed official and Yellen ally, stepped down last month and Randal Quarles, Mr. Trump’s first nominee to the Fed board of governors, took office. Three other seats on the seven-member board are also open, giving the president an opportunity to remake its policy-making team.

A fourth seat on the board would open if Ms. Yellen decides to leave after ceding the helm as chairwoman. She could stay on as a governor, if she chooses, in a term that extends to 2024.

Mr. Dudley’s exit gains in importance because Mr. Powell is not an economist by training. Mr. Powell may depend a bit more on central bank leadership to craft monetary policy.

“This is further change in an institution that was already experiencing considerable change,” said Tim Duy, an economic professor at the University of Oregon. There has been a big question of “do we have enough intellectual firepower” at the Fed given all the recent leadership change, he said. Mr. Dudley’s exit will remove a key thinker, in turn adding more uncertainty to future Fed policy, he said.

Several regional Fed banks that have seen their presidents exit in recent years have often found it to be a long process to replace their presidents. The Richmond Fed hasn’t yet named a successor to former president Jeffrey Lacker, who resigned in April.

The regional banks’ board of directors, who don’t represent financial institutions regulated by the Fed, select new presidents, subject to the approval of the Board of Governors in Washington.

Write to Nick Timiraos at and Michael S. Derby at


Brazil President Weakened by Graft Charge, Losing Fiscal Battle

August 12, 2017

Aug. 11, 2017, at 3:29 p.m.


Image may contain: 1 person, sky and closeup

Brazil’s President Michel Temer reacts during a ceremony in Sao Paulo, Brazil August 8, 2017. REUTERS/Leonardo Benassatto REUTERS

By Anthony Boadle

BRASILIA (Reuters) – Brazilian President Michel Temer has burned through political capital fighting corruption charges and is struggling to push forward his economic agenda meant to rein in a gaping budget deficit.

Even allies in Congress now doubt he can achieve anything but watered-down measures, likely delaying any fix to Brazil’s fiscal crisis until the economy recovers from deep recession.

With continued deficits, Brazil risks further downgrades in its credit rating. It lost its investment grade two years ago, adding to the cost of financing mounting public debt.

In a sign of Temer’s failure to restore fiscal health, the government is expected to revise upward its 2017 and 2018 deficit targets on Monday due to falling tax revenues in an economy that is barely growing.

More pessimistic analysts worry the insolvency already faced by some Brazilian states that cannot pay employees or provide basic services will reach the federal government.

Temer had a window to pass a pension overhaul earlier this year, but it closed in May when allegations emerged that he condoned bribes in a taped conversation with the then CEO of the world’s largest meatpacker JBS S.A..”We are dancing samba at the edge of the precipice,” said Sao Paulo-based wealth manager Fabio Knijnik. “I don’t see the political class at all concerned with resolving this.”

The deeply unpopular president won enough backing in Congress on Aug. 2 to block a corruption charge that could have led to his suspension pending trial by the Supreme Court. To survive, he approved about $1.5 billion in pork barrel spending to keep lawmakers happy.

His closest ally in Congress, the center-right Democrats Party of Speaker Rodrigo Maia, does not believe Temer has the 308 votes, or three-fifths of the lower chamber, needed to pass pension reform, the key measure in his fiscal rescue plan.

Speaking in Rio on Friday, Maia said Temer’s political troubles and lower-than-expected tax revenues had created the crisis. He said Brazil had no alternative but to seek whatever pension fix it could, given Congress would not raise taxes.

Congressman Efraim Filho, the Democrats whip, told Reuters Temer must dilute the pension bill to get it past Congress. He said the measure had to be stripped down to its most important provision, a minimum age for retirement of 65 years for men and 63 for women in a country where people only work on average until age 54.


Temer’s government coalition is in disarray. Parties who stood by the president are now demanding they be rewarded with cabinet positions, such as the big-budget Cities Ministry. It is now controlled by the Brazilian Social Democracy Party (PSDB), which split over whether to abandon the scandal-plagued president.

Until they get their way, the allies at the core of his coalition have said they will not put his proposed pension bill to the vote. Maia said the “climate” was not right to move to a floor vote and the bill could languish and miss a legislative window likely to close in December as an election year approaches in 2018.

The government has already made concessions on the pension bill provisions that will reduce planned fiscal savings by up to 25 percent in 10 years and nearly 30 percent in 30 years, according to Finance Minister Henrique Meirelles.

The pension overhaul is vital for Brazil to comply with a 20-year spending cap that was Temer’s first move to restore fiscal discipline, albeit without a full impact on accounts until 2019.

“That ceiling was like saying you are going on a diet two years from now,” said Daniel Freifeld of Callaway Capital, a Washington D.C.-based investment firm.

(Reporting by Anthony Boadle; Editing by Andrew Hay)

Signals on Stimulus Roil Global Markets — An end to easy money, especially in Europe

June 29, 2017

An end to stimulus programs would come as economies recover, especially in Europe

Mario Draghi, president of the European Central Bank.

Mario Draghi, president of the European Central Bank. PHOTO: ANTONIO COTRIM/EUROPEAN PRESSPHOTO AGENCY

Easy money unleashed by global central banks is receding, a development that could test a range of assets—from stocks to real estate—that have become tightly linked to monetary support since the global financial crisis.

Top European Central Bank officials left investors with mixed impressions over the past two days about when the ECB would reel in its €2.3 trillion ($2.6 trillion) bond-buying program, and the chiefs of the Bank of England and the Bank of Canada both suggested they’d be reducing stimulus.

The euro plunged against the dollar on Wednesday, then recovered. The pound and the Canadian dollar leapt. Yields on U.K. government bonds shot up. Yields on Treasurys and other bonds also moved higher.

When and how much Western central banks pull back from their unprecedented run of ultralow interest rates and large-scale asset purchase programs, known as quantitative easing, are the foremost questions for global investors.

The prospect of an end to stimulus has lurked in the background for months but has zoomed to the fore now that signs of an economic recovery are beginning to appear in regions, especially Europe, that have struggled to shake off the aftereffects of the global financial crisis.

An end to the ECB’s bond buying “is probably the most important supply-demand change that we can foresee in bond markets,” said Tim Haywood, investment director for fixed income at Swiss money manager GAM.

Global bond markets have been strongly interconnected, and U.S. government bonds closely tracked moves in Europe on Wednesday. The yield on the 10-year Treasury note rose to 2.223%. Higher yields on European government bonds make U.S. government bonds less attractive to overseas investors, who have been buying up Treasurys in search of better returns than what they can get at home.

Investors had been selling government bonds and buying the euro since Tuesday, when ECB President Mario Draghi’s comments, delivered at an ECB conference in Sintra, Portugal, on a “strengthening and broadening” economic recovery were interpreted as a sign the central bank was preparing to trim its massive bond buying.

But those moves briefly reversed on Wednesday. In an interview on CNBC, Vítor Constâncio, the ECB’s vice president, suggested investors might have overreacted to Mr. Draghi’s comments. An ECB spokesman declined to comment. The euro, which had neared $1.14 earlier in the day, dropped below $1.13.

Then Mr. Draghi, speaking again at the ECB conference, repeated his positive outlook for the eurozone economy. By the early evening in London, the euro was at $1.1375, up 0.3% on the day.

“Central banks are stumbling here and losing a bit of credibility with mixed communications, whether that’s in Europe or the U.K.,” said Jon Jonsson, a senior portfolio manager at Neuberger Berman.

Bank of Canada Gov. Stephen Poloz joined the fray Wednesday, noting in a television interview in Portugal that excess slack in the Canadian economy is being absorbed “steadily” at the current pace of growth, a comment investors took as evidence the Canadian central bank could raise short-term interest rates as early as next month.

Together, the policy makers’ comments highlight a readiness to start moving away from the extraordinary measures—including interest rates pushed to zero and below and large-scale asset-buying programs—employed since the crisis to revive their battered economies.

At the same time, many central bankers face a policy dilemma. Falling unemployment normally justifies higher interest rates to prevent their economies and asset prices from overheating, but still-muted inflation calls for continued stimulus measures to ensure it doesn’t drift lower.

Officials at the Fed, the ECB and BOE are actively debating whether they might be withdrawing support too soon, or too late.

A range of factors are suggesting a shift away from easy money may be in the offing. As financial crises recede and economic growth proceeds steadily, central bankers see slack in their economies disappearing. That raises the potential for inflation to pick up after running below their targets for several recent years.

The World Bank earlier this month forecast global growth to hit 2.9% next year, which would be its fastest pace in nearly seven years, up from 2.7% this year.

Mr. Draghi’s remarks follow a run of strong eurozone economic data this year. Growth has firmed, unemployment has fallen, and business and consumer confidence is at highs not seen since before the financial crisis. Lending to households in the eurozone grew at a faster pace in May while lending to firms held steady, the ECB reported Wednesday.

Mr. Poloz said Canada’s growth would proceed at a “more normal pace but still above potential. That’s the important thing. That means that we’re absorbing excess capacity that was built up in the wake of the crisis and then built up again in the wake of the oil shock two years ago.”

This is the Fed’s calculation, too. With the U.S. jobless rate down to 4.3%, the Fed is expected to raise short-term rates one more time this year and start shrinking its bond portfolio.

Some government officials in Europe are growing concerned about the side effects of years of easy money. In Germany, Europe’s largest economy, senior officials have complained for years that low interest rates harm savers and pensioners. The nation’s central bank has warned that house prices may be overvalued by as much as 30%.

Jens Weidmann, who sits on the ECB’s governing council as head of Germany’s Bundesbank, has pressed the ECB to consider changing course. Central banks shouldn’t allow themselves to be taken hostage by governments or the markets, Mr. Weidmann said in an interview published Tuesday on the Bundesbank’s website.

Not all central banks are ready to shift toward tighter policy. Bank of Japan officials have emphasized that, with inflation still far below its 2% target, they will stick with its current mix of stimulus efforts, including negative interest rates and asset purchases. BOJ Gov. Haruhiko Kuroda touched on the issues raised by a shift in policy at The Wall Street Journal CEO Council in Tokyo in May, but he insists the bank hasn’t reached the stage of talking about an exit strategy.

Write to Tom Fairless at, Paul Vieira at and Christopher Whittall at

Appeared in the June 29, 2017, print edition.

Europe Investors Bid Adieu to Political Jitters and Begin Buying

April 30, 2017

Money flows to the continent as focus turns to economic recovery

Image result for euro, currency, photos


April 30, 2017 7:00 a.m. ET

Investors aren’t waiting for the conclusion of the French election to put money back into Europe.

They are already flocking back, betting that the region has finally unshackled itself from fears of political turmoil.

Local stock markets just had their best week this year following the first round of the French presidential vote, and investors have poured money into the region’s equity funds at the fastest pace since 2015. The euro climbed 1.6% against the dollar in its best week since July.

All this comes as investors start to look beyond political risks and focus on the continent’s strong economic recovery.

“People are beginning to let go of European political risks as a theme,” said George Maris, portfolio manager at Janus Capital. The underlying economy and earnings picture are becoming more evident now in Europe, Mr. Maris said.

Europe’s buoyant equity markets are already reflecting much of that optimism, despite coming political events that had once concerned investors–chiefly the final round of voting in France’s presidential elections and votes in Italy and Germany.

Germany’s benchmark DAX index reached a record in the week following the French vote, while the Euro Stoxx 50 index of blue-chip eurozone stocks climbed 3.5%, with advances in Europe led by the banking sector. In dollar terms, the Euro Stoxx 50 index is up almost 12% this year, nearly double the S&P 500’s gains.

European equity funds recorded their strongest inflows since December 2015, with inflows of $2.4 billion in the week to April 26, according to EPFR Global data.

Eurozone markets have rallied since the first round of French presidential elections on April 23, when pro-European centrist Emmanuel Macron won more votes than both Marine Le Pen, who pledged to take France out of the euro, and Jean-Luc Mélenchon, a far-left antiglobalist candidate. Mr. Macron is now seen as a heavy favorite in the second round on May 7, when he will face Ms. Le Pen.

A solid election victory for the Dutch political establishment in March has also soothed fears of a continentwide lurch toward nationalism that had weighed on asset prices through this year.

Instead of politics, investors are focusing on economics and earnings.

Unlike previous years, analysts have continued to raise their projections for annual growth in earnings per share in the eurozone, according to J.P. Morgan.

First-quarter earnings in the Stoxx Europe 600 are expected to increase 5.5% from the first quarter of 2016, according to Thomson Reuters data.

Investors point to good signals from the economy. Business confidence and gauges of activity in the eurozone’s manufacturing and services sectors rose to six-year highs in April, despite uncertainty ahead of the French vote.

“European growth is the best it’s been since the global financial crisis, ” said Robert Waldner, chief strategist at Invesco Fixed income. “The combination of supportive financial conditions and a solid economy should boost equities and credit markets in the region.”

All this has ramifications for the European Central Bank as it contemplates an exit from a EUR2.3 trillion ($2.5 trillion) bond-purchase program. On Friday, eurozone inflation data for April came in higher than expected, reaching 1.9%. The ECB targets inflation close to 2%. The region has been battling low and at times negative inflation for much of the past three years.

The euro jumped after Friday’s inflation figures to settle at $1.0897. “The market is pricing out political risks and is pricing in a less cautious [European Central Bank],” said Vasileios Gkionakis, head of foreign-exchange strategy at UniCredit Research.

Mr. Gkionakis expects that if Mr. Macron becomes French president, the euro would go past $1.10.

The ECB’s signals in the months ahead are expected to be critical for the euro’s performance toward the end of the year.

Risks remain. There is still a chance that Ms. Le Pen could win the French presidency, renewing questions about the future of the eurozone. Euroskeptic parties have a shot at winning Italian elections that will come by next year, at the latest, and Italy continues to struggle with weak banks and bleak economic prospects.

French economic growth slowed at the start of the year, while ECB President Mario Draghi highlighted Thursday that consumer prices remain subdued across the euro area.

For now, the European party continues.

Assuming French elections go as expected, “it at the very least removes the immediate existential concerns about the eurozone and euro currency itself,” said Abi Oladimeji, chief investment officer at Thomas Miller Investment.

Write to Riva Gold at and Georgi Kantchev at

With its China bashing, America risks breaking a profitable partnership

March 22, 2016

Daniel Wagner says America must realise that its economic recovery cannot be achieved by isolating China

By Daniel Wagner
South China Morning Post


China bashing has become as much a part of the modern American political tradition as criticising foreign producers of oil. The American electorate has regrettably become accustomed to the predictable torrent of anti-Chinese rhetoric from politicians of a variety of political persuasions – currently manifested by the incendiary rhetoric of Donald Trump.

He is playing upon the fears and disillusionment largely of blue-collar workers who do not understand that China is not the source of their problems; rather, America’s failure to remain competitive in the global economic landscape is to blame.

They also do not realise that China will soon reassume the mantle of the world’s largest economy – a title which it held until just before the start of the Industrial Revolution. Until that time, China was the leading steel producer, textile manufacturer and trading nation – from the Chinese perspective, it is simply about to resume the status which it previously held.

Some Americans may bristle at the notion that capitalism has helped China dominate the global economy but, the truth is, China was practising capitalism a long time before America even became a nation.

China is not above criticism, and some American politicians do raise some valid points in criticising China, such as that the government controls large parts of the Chinese economy through state-owned enterprises, which distorts the domestic market and gives some Chinese companies unfair competitive advantages. But what they then fail to say is that China must also compete in the global marketplace, and that it pays a price for supporting companies that should otherwise fail as a result of being poorly run, inefficient or bloated.

If the US does not like the way China does business, it is of course free to do business elsewhere, but that would be a really bad idea for America. Exports to China totalled US$120 billion in 2014, making it the third-largest export market for US goods (behind Canada and Mexico).

Between 2005 and 2014, US exports to China increased 198 per cent – greater than growth to any of the other top 10 US export markets. The truth is, there is no country in the world more important to the growth of US exports. China’s rapidly growing middle class is the single most important factor accounting for the success of US President Barack Obama’s National Export Initiative.

The US not only needs to tap China’s vast foreign currency reserves (US$3.3 trillion – almost 28 times that of the US, at US$119 billion) in order to finance its trade and fiscal deficits, it also needs access to China’s vast market to sustain its economic recovery and continue to create much needed jobs for American workers.

When was the last time you heard a US politician admit that?

Six of the top 10 states that lead in exports to China (California, Illinois, Ohio, South Carolina, Texas, and Washington) set records in 2014 for exports and creating export-related jobs. Just ask any chamber of commerce in these states what their view of China is and you will find they are highly complimentary of the contribution it is making to the creation of jobs in their states. Since 2000, China has invested tens of billions of dollars in the US, generating tens of thousands of jobs.

In 2015, 18 per cent of Chinese exports went to the US, which remains a very important partner for the growth of the Chinese economy. Chinese leaders realise this, and do not reciprocate in bashing the US for allegedly taking away Chinese jobs by doing business together. Campaign rhetoric aside, both countries know they need each other. As the largest holder of US Treasury Bills, China needs and wants the US to succeed economically. Rather than bashing China, US politicians would be well advised to forge an even stronger relationship with it.

Instead of following predictable and boring scripts, US politicians should turn the page on cold-war-style rhetoric and find ways to join hands with China to mutually benefit from each other’s comparative advantages.

It is also worth noting that China bashing actually makes little sense in terms of getting US presidential candidates elected. The top five US states exporting to China by dollar volume in 2014 (Washington, California, Texas, Illinois and South Carolina) between them account for nearly 50 per cent of the votes needed to win the presidency in the Electoral College (270 votes are required, and 134 votes are accounted for by just these five states).

Bashing China is actually less likely to get a candidate elected, because the workers in these states have the most to lose economically by curtailing America’s economic relationship with China, and they know it.

The fact is, a continued economic recovery in the US cannot be achieved by isolating China. Considering what can be achieved together, and what both countries stand to lose if they are pitted against each other, forming a Sino-American strategic alliance is critical to the future economic viability of both nations.

American politicians, and the American people, would be much better off recognising this, rather than succumbing to demagoguery and incendiary rhetoric aimed at creating divisiveness between China and the US.

Daniel Wagner is CEO of Country Risk Solutions and co-author of the forthcoming book, Gobal Risk, Agility and Decision Making

Market rout continues, Fed’s Yellen sticks to her guns — U.S. stocks down, Gold up

February 11, 2016

Federal Reserve Chair Janet Yellen returned to Capitol Hill on Thursday amid an ongoing meltdown in global equity markets and growing skepticism that the U.S. central bank can carry out its long-planned pivot to “normal” monetary policy.

U.S. Federal Reserve Board Chair Janet Yellen testifies at the House Financial Services Committee in Washington February 10, 2016. REUTERS/Gary Cameron

WASHINGTON: Federal Reserve Chair Janet Yellen returned to Capitol Hill on Thursday amid an ongoing meltdown in global equity markets and growing skepticism that the U.S. central bank can carry out its long-planned pivot to “normal” monetary policy.

Yellen repeated to the Senate Banking Committee the testimony she delivered on Wednesday to a House of Representatives committee, putting a brave face on the U.S. economic recovery while acknowledging that a weakened global economy and steep slide in U.S. equity markets is tightening financial conditions faster than the Fed wants.

Yellen warned on Wednesday that the rout, if proven to be “persistent,” could change the U.S. economic outlook – and by implication the Fed’s policy plans.

For the time being persistence seems just what investors have in mind. U.S. stock indexes all dropped more than one percent when they opened, while major European and Asian exchanges were off more than two percent overnight and into Thursday.

Investors in Fed Funds contracts meanwhile fully priced out the expectation of a Fed rate hike this year, pushing the interest rate expected in December below the effective rate calculated by the central bank.

In her prepared testimony, Yellen leaned heavily on continued job creation in the United States, rising wages, and an expectation that household spending would keep the economy afloat. But she also acknowledged that global and U.S. market conditions could upend that forecast.

Yellen is due to begin her testimony at 10 a.m. and will then take questions from senators.

(Reporting by Jason Lange; Editing by Paul Simao)

Standard & Poor’s downgrades Greece’s credit rating 1 notch further into junk territory

June 10, 2015


NEW YORK (AP) — Standard & Poor’s downgrades Greece’s credit rating 1 notch further into junk territory.


S&P just downgraded Greece.

“We have lowered our long-term sovereign credit rating on Greece to ‘CCC’ from ‘CCC+’ to reflect our opinion that in the absence of an agreement between Greece and its official creditors, the Greek government will likely default on its commercial debt within the next 12 months,” the credit rating agency warned.

This comes as little surprise for euro crisis watchers who’ve seen Greece hopelessly pull itself out of crushing debt as its economy suffers from a full-blown depression.

“As its liquidity position continues to deteriorate, Greece appears to be prioritizing other spending items over debt servicing,” S&P explained. “In our view, without a turnaround in the trajectory of nominal GDP and deep public-sector reform, Greece’s debt is unsustainable.”

S&P’s assessment is bleak and its outlook is officially “negative,” which means another rating downgrade could happen within a year.

But there is a bit of hope.

“The ratings could stabilize at the current level if we believe that a new financial support program will be agreed with policy conditions that satisfy both the political priorities in Greece and the creditor countries,” S&P said. “Such a scenario could contribute to promoting political stability, tax compliance, and a gradual economic recovery.”

Here’s the full announcement from S&P:

Greece Long-Term Rating Lowered One Notch To ‘CCC’; Outlook Negative


Greece delaying its payment to the International Monetary Fund (IMF) last
Friday, June 5, appears to demonstrate that the Greek government is
prioritizing pension and other domestic spending over its scheduled debt
service obligations.

We have lowered our long-term sovereign credit rating on Greece to ‘CCC’
from ‘CCC+’ to reflect our opinion that in the absence of an agreement
between Greece and its official creditors, the Greek government will
likely default on its commercial debt within the next 12 months.

The outlook is negative.


On June 10, 2015, Standard & Poor’s Ratings Services lowered its long-term
sovereign credit rating on the Hellenic Republic to ‘CCC’ from ‘CCC+’. The ‘C’
short-term rating is unchanged, and the outlook is negative.

As defined in EU CRA Regulation 1060/2009 (EU CRA Regulation), the ratings on
Greece are subject to certain publication restrictions set out in Art 8a of
the EU CRA Regulation, including publication in accordance with a
pre-established calendar (see “Calendar Of 2015 EMEA Sovereign, Regional, And
Local Government Rating Publication Dates: First-Quarter Update,” April 8,
2015). Under the EU CRA Regulation, deviations from the announced calendar are
allowed only in limited circumstances and must be accompanied by a detailed
explanation of the reasons for the deviation. In Greece’s case, the deviation
was prompted by the decision of the central government to delay making a
scheduled debt service payment to the IMF that was due on June 5, 2015.


As its liquidity position continues to deteriorate, Greece appears to be
prioritizing other spending items over debt servicing. In our view, without a
turnaround in the trajectory of nominal GDP and deep public-sector reform,
Greece’s debt is unsustainable. The downgrade reflects our view that in the
absence of an agreement with its official creditors, Greece will likely
default on its commercial debt within the next 12 months.

The European Central Bank (ECB) is currently providing financing to Greece’s
banks and economy at a level exceeding 60% of GDP. Continuous withdrawals of
deposits from Greek banks increase the possibility that the government could
impose capital controls to staunch further deposit outflows and issue a
parallel currency alongside the euro. The uncertainty around Greece’s
relations with its creditors and its broader political stability is weighing
on the economy; tax payment arrears rose materially in May, while the
government appears to be conserving cash by delaying payments to suppliers. A
weakening underlying fiscal position raises questions about the realism of any
agreement with Greece’s creditors on fiscal targets, as projections for tax
receipts and real and nominal GDP appear speculative. Even if an agreement
with official creditors were to be reached over the next fortnight, we do not
expect that such an agreement would cover Greece’s debt service requirements
beyond September.


The outlook is negative, given the risk of a further worsening of liquidity
for the sovereign, its banks, and the economy. Our understanding is that the
Greek government has decided to consolidate this month’s €1.6 billion in debt
servicing owed to the IMF, an official creditor, into a single payment on June
30. If an agreement were reached between Greece and its official creditors
over the next week, we would still expect this to involve a temporary
three-month liquidity infusion. We do not consider it likely that there would
be any official debt relief or more substantial financing agreed to in the
next few days. In our view, this implies that confidence and investment
activity will remain weak and growth prospects muted.

The negative outlook means that we could lower the rating again within a year
if we perceive that the likelihood of a distressed exchange of Greece’s
commercial debt will increase further. This could be the case if, for example,
we took the view that further official creditor disbursements would remain
elusive, resulting in the Greek government’s inability to honor all its
financial obligations in full and in a timely manner.

The ratings could stabilize at the current level if we believe that a new
financial support program will be agreed with policy conditions that satisfy
both the political priorities in Greece and the creditor countries. Such a
scenario could contribute to promoting political stability, tax compliance,
and a gradual economic recovery.

Read more:

How Best To Fix Japan’s Constitution? Fix the Japanese Economy

July 13, 2014

By Peter Tasker

With fresh challenges emerging it is crucial to give the people a bigger say, writes Peter Tasker

‘Special relationship ‘ ... Japanese Prime Minister Shinzo Abe and Australian Prime Minis

‘Special relationship ‘ … Japanese Prime Minister Shinzo Abe and Australian Prime Minister Tony Abbott shake hands after signing the Japan-Australia Economic Agreement and the Agreement on the Transfer of Defence Equipment and Technology at Parliament House. Picture: Mark Graham Source: AFP

Shinzo Abe’s project to revitalise Japan is entering a dangerous phase. Three of its key elements – the prime minister’s reflationary economic policy, his security strategy and his personal popularity – are all coming under heightened scrutiny at the same time.

The stakes are high. If the priorities are wrong, his term in office may come to be viewed as a brief interlude in the long saga of Japanese decline. But if he plays his cards well, he could be remembered as a Margaret Thatcher-style transformational leader. His record would include not just the conquest of deflation but the re-emergence of a confident and outward-looking Japan.

Mr Abe’s immediate problem is the plunge in the high levels of public support which had bullet-proofed him against critics and rivals alike. The gap between his approval and disapproval ratings has shrunk from 30 per cent at the start of the year to just 8 per cent. If the trend continues, he can expect emboldened opposition on all fronts, from the deflationists associated with the Bank of Japan’s ancien régime to farmers hostile to the Trans-Pacific Partnership free trade agreement.

The trigger was the public’s unease with the government’s recourse to the familiar but shabby device of “reinterpreting” Japan’s pacifist constitution in order to greenlight some types of overseas military commitment. China’s burst of territorial claims has created a clear need for a counterbalancing force in the region. The optimum solution is reform of the constitution but that would take time. Team Abe took a short-cut and is paying the price.

Mr Abe has recovered from blips in the polls before but this time the economic background is less favourable. Officials sweet-talked him into raising the national sales tax in April and the predictable result has been a loss of momentum in the consumer economy. Worse, he has been cornered into making an early decision on a second hike, to take place next year, which will further squeeze household purchasing power.

Meanwhile, the increase in inflationary expectations, an achievement of Mr Abe’s first year in office, is not as secure as it looks. US-style “core” inflation for the Tokyo area was effectively zero in June and Tokyo University’s daily price index, based on real-time data from supermarket cash registers, suggests there has been little progress since last autumn.

The prime minister’s overriding priority should be to boost the reflationary impetus. His political capital depends on it, and his ability to transform the country’s security arrangements depends on his political capital. To this end, he should delay further VAT hikes until nominal GDP growth has reached 3 per cent for two consecutive years. Corporate tax breaks should be aimed not at promoting capital spending, but at releasing companies’ vast cash holdings to shareholders and employees. Likewise there should be no backsliding from the BoJ’s target of 2 per cent inflation in two years and no balking at a second round of quantitative easing.

Reconfiguring Japan’s security and diplomatic profile is essential. Amid the geopolitical jockeying that is likely to feature in the region for decades, Japan’s constitution is not fit for the 21st century. But such fundamental questions have to be subject to public assent.

In 2007, Mr Abe’s first government laid out a process for constitutional revision, comprising a referendum and parliamentary approval. Pledging to set the ball rolling within five years would defuse the issue. Promising a referendum would be popular with voters, just it has been in the UK, where David Cameron, prime minister, has promised to hold a vote on EU membership.

It would also be a signal of the robust health of Japanese democracy. The country’s first constitution was put together in 1889 by a cabal of oligarchs. The second was imposed by the US on a defeated nation. If Mr Abe were to offer citizens a say in their system of governance, it would be for the first time since Japan’s first mythical emperor came ashore in the seventh century BC.

But the prime minister has to get the sequencing right. When economic recovery is in the bag, stock prices are well into a multiyear bull market and the streets are abuzz with the feelgood factor, then and only then will the auguries be favourable for the massive undertaking of constitutional reform.

The writer is a Tokyo-based analyst at Arcus Research



U.S. Economy Slows to Crawl in 1st Quarter, Up 0.1%

April 30, 2014


By Ben Leubsdorf and Eric Morath
The Wall Street Journal

WASHINGTON—The U.S. economy slowed in the first quarter to one of the weakest paces of the five-year recovery as the frigid winter appeared to have curtailed business investment and weakness overseas hurt exports.

Gross domestic product, the broadest measure of goods and services produced across the economy, advanced at a seasonally adjusted annual rate of 0.1% in the first quarter, the Commerce Department said Wednesday. Economists surveyed by The Wall Street Journal had forecast growth at a 1.1% pace for the quarter.

The broad slowdown to start the year halted what had been improving economic momentum during much of 2013. In the second half of last year, the economy expanded at a 3.4% pace. The first quarter reading fell far below even the lackluster average annual gain of near 2% since the recession ended.

The report offered the first official gauge of the economy’s output from January through March, months that were abnormally cold in much of the country. The weather likely slowed consumer spending on goods, which rose at a mere 0.4% pace during the quarter. But households spent more on sevices–including energy to heat their homes and health care–causing total consumer consumption to rise at a 3.0% pace, only slightly below the fourth quarter’s 3.3% rate.

However, business spending on items such as equipment, buildings and intellectual property fell at a 2.1% pace in the first three months of the year. That was the first decline in a year and reversed in part the 5.7% gain the prior period. The slowdown in investment coincided with weaker hiring during the quarter.

U.S. exports fell at a 7.6% pace in the first quarter. That was the largest drop since the recession ended. Declining exports show that shaky economies in Europe and Asia are generating weak demand for U.S. goods and services. Imports into the U.S. declined at a 1.4% pace, reflecting weaker consumer demand for foreign goods.

The latest numbers continue a familiar pattern. The nation’s economic recovery, which started in mid-2009, has been marked as much for its choppiness as its slow pace.

At several junctures, consecutive strong quarters have raised hopes for a breakout–only to be upended by a slowdown. The overall gains have been too weak to push the unemployment rate back in line with historical norms. The unemployment rate in March stood at a still-elevated 6.7%.

However, many economists believe the first-quarter pullback was a temporary speed bump. They expect demand that slowed in the winter to accelerate later in the year.

Forecasting firm Macroeconomic Advisers projects the economy will grow at a 3.5% pace in the second quarter and hold near that rate for the remainder of the year.

Details of Wednesday’s report offered some evidence of such a rebound. Consumer spending largely held up, posting its second-strongest quarterly increase since 2010.

The change in private inventories subtracted 0.57 percentage points from growth, showing that businesses let supplies dwindle. Depleted stockpiles could cause manufacturers to increase future output in order to meet demand.

A measurement of GDP that excludes changes to inventories expanded at a 0.7% pace in the first quarter. That compares with a 2.7% rate in the fourth quarter.

Overall government outlays continued to be a drag, but federal spending made a positive contribution to growth for the first time in six quarters. The pace of federal government spending had mostly been a drag on growth since late 2010 because stimulus measures enacted during the recession were replaced with budget cuts known as the sequester.

As the effect of budget cuts fade, federal spending should boost growth this year. Federal outlays increased at an 0.7% pace in first quarter compared with an 12.8% decline in the fourth quarter of 2013, which included a 16-day government shutdown.

Residential fixed investment–spending on home building and improvements–declined at an 5.7% rate in first quarter. That was the second straight quarterly decline for the category that had contributed to growth for the previous three years.

Cold weather likely halted some building, but other factors are slowing demand in the housing market. Mortgage interest rates were about a percentage point higher in the first quarter than a year earlier, making house payments more expensive for borrowers. Rising prices and limited selection also could be dissuading families from moving. Spending on improvements and furnishings often follow home purchases.

The latest figures come as Federal Reserve officials conclude at two-day meeting Wednesday. The numbers aren’t likely to have a large influence on policy, given the expectations for improved growth later in the year.

Officials, however, are closely monitoring inflation measures. Persistently low inflation could complicate the Fed’s decisions about how to wind down its bond-buying program this year and when to raise benchmark interest rates from near zero.

The personal consumption expenditure price index, the Fed’s preferred inflation gauge, advanced at an annualized 1.4% in the first quarter, the report said. That was a slight acceleration from the fourth quarter, but still below the Fed’s 2% inflation target.

Write to Ben Leubsdorf at and Eric Morath at


Containers are pictured at the ITS terminal at the Port of Long Beach, California December 4, 2012. REUTERS/Mario Anzuoni

Containers are pictured at the ITS terminal at the Port of Long Beach, California December 4, 2012.  Credit: Reuters/Mario Anzuoni

(Reuters) – The U.S. economy barely grew in the first quarter as exports tumbled and businesses accumulated stocks at the slowest pace in nearly a year, but activity already appears to be bouncing back.

Gross domestic product expanded at a 0.1 percent annual rate, the slowest since the fourth quarter of 2012, the Commerce Department said on Wednesday. That was a sharp pullback from the fourth quarter’s 2.6 percent pace.

Economists polled by Reuters had expected growth to slow to a 1.2 percent rate. The slowdown partly reflected an unusually cold and disruptive winter, marked by declines in sectors ranging from business spending to home building.

The Commerce Department’s first snapshot of first-quarter growth was released just hours before the Federal Reserve wraps up a two-day policy meeting.

While harsh weather could partially explain the weakness in growth, the magnitude of the slowdown could complicate the U.S. central bank’s message as it is set to announce a further reduction in the amount of money it is pumping into the economy through monthly bond purchases.

The first-quarter slowdown, however, is likely to be temporary and recent data have suggested strength at the tail end of the quarter.

Economists estimate severe weather could have chopped off as much as 1.4 percentage points from GDP growth. The government, however, gave no details on the impact of the weather.


After aggressively restocking in the second half of 2013, businesses accumulated $87.4 billion worth of inventory in the first quarter, the smallest amount since the second quarter of 2013.

That was a moderation from the $111.7 billion amassed in the fourth quarter that has resulted in manufacturers receiving fewer orders. Inventories subtracted 0.57 percentage point from GDP growth in the first quarter.

Trade also undercut growth, taking off 0.83 percentage point, partly because of the weather, which left goods piling up at ports. Exports fell at a 7.6 percent rate in the first quarter after growing at a 9.5 percent pace in the final three months of 2013.

Together, inventories and trade sliced off 1.4 percentage point from GDP growth.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 3.0 percent rate, reflecting a spurt in spending on services linked to the Affordable Healthcare Act.

Spending on goods, however, slowed sharply, indicating that frigid temperatures during the winter had reduced foot traffic to shopping malls. Consumer spending had increased at a brisk 3.3 percent pace in the fourth-quarter.

Harsh weather also undercut business spending on equipment. While investment in nonresidential structures, such as gas drilling, rebounded, the increase was minor.

Investment in home building contracted for a second straight quarter, in part because of the weather. But a rise in mortgage rates over the past year has also hurt.

A second quarter of contraction in spending on home building suggests a housing recession, which could raise some eyebrows at the U.S. central bank. A bounce back is, however, expected in the April-June period.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Most Young Voters Plan to Sit Out Midterm Elections — Voters Want a Republican Congress to Stop Democrats, Revive Economy — New Low in Obama’s Approval

April 30, 2014

Barack Obama's campaign used social media to drum up support from young voters in 2008. (The Week)

By Yahoo News

A new poll of America’s youth finds that three-quarters of voters aged 18-29 plan to sit out the 2014 midterm elections, a significant drop compared with recent years.

The Harvard Institute of Politics (IOP) poll found that just 23 percent of younger voters said they would “definitely be voting” in the midterm elections, an 11-point drop from a similar poll conducted in December.

Those results could be problematic for Democratic candidates, who have benefited from a surge in the youth turnout, particularly during President Barack Obama’s 2008 campaign.

“There’s an erosion of trust in the individuals and institutions that make government work — and now we see the lowest level of interest in any election we’ve measured since 2000,” IOP Polling Director John Della Volpe said in a statement. “Young people still care about our country, but we will likely see more volunteerism than voting in 2014.”

Though overall youth turnout appears set to decline, young Republican voters are more enthusiastic than their Democratic counterparts. Thirty-two percent of self-identified young conservatives said they are likely to vote in the midterms compared with 22 percent of liberals, according to the IOP poll. Men also appear more inclined to vote than women, 28 percent to 19 percent, and whites (27 percent) appear more likely to vote than African-Americans and Hispanics (19 percent).

Overall, 44 percent of young voters who supported Mitt Romney in 2012 say they plan to vote in the midterms, compared with 35 percent of Obama voters. Obama’s youth turnout dropped by more than 2 million votes in the 2012 election compared with 2008. The bulk of that drop was the result of young voters staying home, as opposed to voters switching from the Democratic to the Republican column.

Of course, the youth vote is just one indicator of potential turnout in the midterm elections. A Democracy Corps poll released on Monday found a more encouraging story for Democrats, noting that voters — particularly independents — are warming to the Affordable Care Act (ACA). Criticism of the ACA has been the lead talking point for Republicans seeking federal office across the country, and any softening of opposition to the health care law would presumably be a net gain for Democratic candidates.

Read the rest:–new-poll-finds-190922923.html


Voters Seem to Want a Republican Congress — New Low in Obama’s Approval

AP obama fort hood remarks jef 140402 16x9 608 Public Preference for a GOP Congress Marks a New Low in Obamas Approval

(Carolyn Kaster/AP Photo)

By Gary Langer

Weary of waiting for an economic recovery worth its name, a frustrated American public has sent Barack Obama’s job approval rating to a career low – with a majority in the latest ABC News/Washington Post poll favoring a Republican Congress to act as a check on his policies.

Registered voters by 53-39 percent in the national survey say they’d rather see the Republicans in control of Congress as a counterbalance to Obama’s policies than a Democratic-led Congress to help support him. It was similar in fall 2010, when the Republicans took control of the House of Representatives and gained six Senate seats.

See PDF with full results and charts here.

Obama’s job approval rating, after a slight winter rebound, has lost 5 points among all adults since March, to 41 percent, the lowest of his presidency by a single point. Fifty-two percent disapprove, with “strong” disapproval exceeding strong approval by 17 percentage points. He’s lost ground in particular among some of his core support groups.

Economic discontent remains the driving element in political views in this survey, produced for ABC by Langer Research Associates. Americans rate the condition of the economy negatively by 71-29 percent – the least bad since November 2007, but still dismal by any measure. Only 28 percent think the economy’s improving, down by 9 points since just before Obama won his second term. He gets just 42 percent approval for handling it.

Economic views are strongly related to political preferences. Among people who see the economy improving, 65 percent prefer Democratic control of Congress, while among those who see the economy as stagnant or worsening, 62 percent favor Republican control. Notably, economic views are linked with preferences for control of Congress regardless of people’s partisan affiliation.

The results suggest the corrosive effects of the long downturn on the president’s popularity: Among those who say the economy is in bad shape, Obama’s overall approval rating has lost 20 points since February 2012, from 46 percent then to 26 percent now.

The president faces other challenges. While he’s hailed insurance exchange sign-ups as a marker of the Affordable Care Act’s success, the program and his rating for handling it have lost ground, both down from their levels late last month after the website was stabilized. The law gets 44 percent support, down 5 points; Obama has just 37 percent approval for its implementation, down 7.

One reason is that the law seems to have opened an avenue for public ire about health care costs to be directed at the administration. Six in 10 blame the ACA for increasing costs nationally, and 47 percent think it’s caused their own health care expenses to rise. Regardless of whether or how much those costs would have risen otherwise, Obamacare is taking a heavy dose of the blame.

Separately, a current issue on the world stage offers no respite for Obama: Given continued tensions over Ukraine, just 34 percent of Americans approve of how he’s handling that situation, 8 points fewer than early last month. Forty-six percent disapprove, with two in 10 withholding judgment.

DISCONTENT/MIDTERMS – With these and other problems – but chiefly the economy – the public by more than 2-1, 66-30 percent, says the country’s headed seriously off on the wrong track. That’s about where it’s been lately, and more negative than a year ago.

General anti-incumbency results: Just 22 percent of Americans say they’re inclined to re-elect their representative in Congress, unchanged from last month as the fewest in ABC/Post polls dating back 25 years.

Another outcome is risk for the president’s party, in punishment for his handling of the helm. A single point divides Democratic and Republican candidates for the House in preference among registered voters, 45-44 percent. Among those who say they’re certain to vote (with Republicans more apt to show up in midterms), that goes to 44-49 percent.

Independents, a sometimes swing-voting group, favor Republican House candidates by 55-32 percent (among those who say they’re certain to vote). And, as with views on control of Congress, perceptions of the economy correlate with congressional vote preference, regardless of partisanship.

ISSUES – None of this means the GOP is home free. A robust improvement in the economy could change the equation. (As many, at least, say it’s currently holding steady, 35 percent, as think it’s getting worse, 36 percent.) And even as the brunt of economic unhappiness falls on the president, the public divides essentially evenly on which party they trust more to handle the economy – suggesting that the Republicans have yet to present a broadly appealing alternative.

In another example, for all of Obamacare’s controversies, the Democrats hold a slight 8-point edge in trust to handle health care, again indicating that the Republicans have yet to seize the opportunity to present a compelling solution of their own. Indeed, the Democrats have a 6-point lead in trust to handle “the main problems the nation faces” – although, as with all others, that narrows among likely voters, in this case to 37-40 percent, a numerical (but not significant) GOP edge.

The Republicans have a 9-point advantage in trust to handle the federal deficit – an improvement for the party from last month. Similarly, Americans by a 7-point margin trust the Republicans over Obama to find the right mix of spending to cut and federal programs to maintain. The president had an 11-point lead on that question just after the partial government shutdown last fall.

The Democrats push back with two results that they’re likely to stress as the November election draws closer: One is a broad, 20-point advantage, 52-32 percent, in trust over the Republicans to help the middle class (but again, this narrows among likely voters). The other is an even wider, 30-point lead, 55-25 percent, in trust to handle issues of particular concern to women.

The Republicans have some vulnerability in other areas, as well. Americans say the Democratic Party comes closer than the GOP to their positions on climate change, by 18 points; whether or not to raise the minimum wage, by 16 points; gay marriage, by 14 points; and the issue of abortion, by 8 points. On one remaining issue, gun control, the Republicans have a slight, 5-point edge.

HEALTH CARE – Obamacare, for its part, is a subject the Republicans have sought to turn to their advantage in the midterm elections, and the poll results show ample opportunity.

Costs are a particular target. As noted, 47 percent of Americans feel that their health care costs are rising as a result of the ACA; 58 percent say the same about the overall costs of health care nationally. Just 8 and 11 percent, respectively, say the law has decreased these costs. If there’s a case to be made that costs would have risen anyway – or that they would have risen faster absent the ACA – it’s yet to resonate with large segments of the population.

Other assessments also are critical. The public by a 20-point margin, 44-24 percent, is more apt to say the law has made the overall health care system worse rather than better (although the number who say it’s made things better is up by 5 points from December). The rest, 29 percent, see no change. Americans by 29-14 percent likewise say the ACA has made their own care worse rather than better, with more, 53 percent, reporting no impact.

Despite the website’s improvements, half say the law’s implementation is going worse than they expected when it began, vs. 41 percent better – another sign of the persistent antipathy that’s dogged Obamacare from the start.

The poll also shows both the striking partisan division on Obamacare and the extent to which, on several questions, independents side more with Republicans on the issue. Thirty-eight percent of Democrats, for instance, say the ACA has increased health care costs nationally; that soars to 67 percent of independents and 73 percent of Republicans. And while 47 percent of Democrats think it’s made the health care system better, just 6 and 16 percent of Republicans and independents, respectively, agree.

OBAMA/GROUPS – Divisions among groups remain especially stark in terms of Obama’s ratings; further, as noted, he’s lost ground in some of his core support groups. The president’s approval rating since early March has lost 14 points among liberals, 12 points among people with postgraduate degrees, 10 points among urban residents, 9 points among Democrats and 7 points among those with incomes less than $50,000. He’s lost 9 points among independents as well.

With 41 percent approval overall (his previous low was 42 percent last November and the same in October 2011), Obama’s at new lows among nonwhites (61-34 percent, approve-disapprove) and liberals (63-31 percent), and matches his lows among moderates (46-48 percent) and independents (33-59 percent). His rating among Democrats, 74-22 percent, is a single point from its low.

Other results also mark the extent of the difficulties facing Obama and his party alike. A form of statistical analysis called regression finds that, as noted above, views on the economy correlate both with congressional vote preference, and views on which party should control Congress, independently of partisan affiliation. That suggests that the Democrats are in serious need of a positive shift in economic views.

That may be hard to accomplish. While 50 percent of Democrats say the economy’s in good shape, that plummets not only among Republicans but independents as well, to 12 and 22 percent, respectively. And while 46 percent of Democrats see improvement in the economy, again just 22 percent of independents, and 15 percent of Republicans, agree.

Preferences on which party controls Congress may reflect a general inclination in favor of divided government – and don’t always predict outcomes, as in 2002, when more registered voters preferred Democratic control yet the GOP held its ground. It’s striking, nonetheless, that this poll finds Republican control favored not only in the 2012 red states, by 56-36 percent, but also by 51-41 percent in the blue states that backed Obama fewer than two years ago.

METHODOLOGY – This ABC News/Washington Post poll was conducted by telephone April 24-27, 2014, in English and Spanish, among a random national sample of 1,000 adults, including landline and cell-phone-only respondents.Results have a margin of sampling error of 3.5 points, including design effect. Partisan divisions are 32-21-38 percent, Democrats-Republicans-independents.

The survey was produced for ABC News by Langer Research Associates of New York, N.Y., with sampling, data collection and tabulation by Abt-SRBI of New York, N.Y.