Bolton’s Ousting Jacks Up the Trump Chaos

Today’s Agenda


They never saw eye to eye.

Photographer: BRENDAN SMIALOWSKI/AFP/Getty Images

Bolton Out of the Blue

President Donald Trump, moving on without John Bolton.

Photographer: LARS HAGBERG/AFP/Getty Images

President Donald Trump today
national security adviser John Bolton after only 18 months on the job, and just before Bolton got a chance to quit (or so he claims). Of the many straws on this camel’s back, the decisive one was reportedly disagreements over negotiations with the Taliban. But Eli Lake writes Trump is probably hankering to
go much easier on Iran
than Bolton wanted. In fact, he may soon strike a deal close to President Barack Obama’s.

Then again, Liam Denning’s advice to oil traders or anybody else betting on post-Bolton policy is to recall
the chaos is coming from inside the White House

And Jonathan Bernstein warns
the chaos will only get worse
. Agree with Bolton or not, he was at least arguably qualified for his job. Given that every other day of the Trump administration is a Red Wedding reenactment, recruiting qualified grown-ups to fill jobs keeps getting more difficult. And the chance of a terrible error keeps rising.

The Only Way to Win at Trade War Is Not to Play

In the marathon prizefight that is the U.S.-China trade war, both boxers are pretty bloody right now. This morning China lifted decades-old curbs on foreign fund investment in stocks and bonds. This once would have been cause for celebration but now signals how badly the country needs capital, write Shuli Ren and Nisha Gopalan

China is holding back on showering its economy with more stimulus, meanwhile, and Shuli Ren suggests the Hong Kong protests help explain why: Beijing fears the extra cash will just go into already expensive real estate,
worsening inequality and sowing even more unrest

The U.S. looks a bit better at the moment, with its markets and overall economic performance topping China’s. But
the trade war is hurting U.S. data
 too, notes Karl Smith. Parts of the country may
be in recession. And the trends in GDP and job growth look worse than those that helped get Trump elected in 2016, Karl notes. This fight Trump described 18 months ago as “good, and easy to win,” may yet knock him out. 

Further Trade War Reading: Senate efforts to get a government retirement fund to avoid Chinese assets may backfire. — John Authers 

Big Tech in Big Trouble

Just four years ago, America’s giant tech firms were relatively popular, especially compared with such disfavored sectors as airlines and banking. One tech-warped election and several data breaches and scandals later, that has changed. In case Big Tech wasn’t clear about this, the massive antitrust probe that 48 states, the District of Columbia and Puerto Rico announced yesterday against Google parent Alphabet Inc.
is a wake-up call
, writes Shira Ovide. It’s kind of ironic it came a day before Apple Inc.’s annual self-congratulatory gadget fiesta, in which it announced a new
 (three cameras!),
 (bigger screen!),
 (always on!) and
video service
 (cheaper than Netflix!). Big Tech can probably count on such shiny gewgaws to keep consumers somewhat in line. But Shira warns it may never again be much more beloved than, gulp, airlines or banks.

As if that weren’t enough trouble for Big Tech, Europe just gave
tech regulator Margrethe Vestager even more power
, writes Lionel Laurent

Further Big Tech Reading: Apple seems to be
finally embracing its slow-growth
reality. — Shira Ovide

Rethinking the Hunt for Yield

Just a couple of weeks ago, it looked as if interest rates would fall forever, with $17 trillion in global debt sporting negative yields, meaning investors pay borrowers for the deep honor of lending them money. Since then, trade-war optimism and cooler heads (somewhat) prevailing have taken some froth from the bond market. Some old debt worries have resurfaced too: Ford Motor Co. just got downgraded to junk status by one credit-rating agency, which Brian Chappatta writes will
get people looking out again for “fallen angels
” — bonds that lose investment-grade status, causing their mass dumping by investors.

Meanwhile, though, higher-rated credits have been selling bonds at rates not seen for decades. This, Brian Chappatta writes in a second column,
gives bond investors a great chance
to shore up their portfolios ahead of a possible recession.

Ominously, despite this borrowing frenzy,
companies aren’t using the cash to invest
 so much as to pay down old debt, writes Robert Burgess. In fact, despite the latest Fed rate cut, loan demand is stubbornly flat, Bob notes. This suggests the Fed is “pushing on a string,” unable to influence economic growth. Fiscal stimulus would help. But don’t hold your breath.

Further Bond Reading: Who owns
WeWork’s junk bonds
? — Brian Chappatta

What’s the Dem Idea?

On Thursday night, the top 10 Democratic presidential candidates will crowd onstage for a debate that will mercifully last just one night. It will still be messy, with little chance for candidates to flesh out policy ideas. Fortunately, Bloomberg Opinion does that daily. Today’s offerings:

Universal Pre-K: Most Dem candidates want to pay for pre-school to some degree. It’s a fairly popular position, partly because it’s
sold as “pre-school” and not “day care
,” writes Sarah Green Carmichael. The latter helps women stay in the workforce, which boosts the economy, but is unfortunately considered icky by a significant swath of the populace. 

Nuclear Power: The terrifying HBO show “Chernobyl” hasn’t done much to boost the popularity of nuclear power. And that’s too bad, because nuclear can
help us transition to a greener-energy future
, writes Liam Denning. Bernie Sanders wants to shutter old nuke plants, while Elizabeth Warren sensibly wants to keep them open (while signaling she’s not thrilled about it).

Drug Prices: Many candidates have aggressive proposals to lower drug prices — another popular idea — and House Speaker Nancy Pelosi today
released a plan that will push the party
 further to the left, writes Max Nisen.

Telltale Charts

robots aren’t taking our jobs
, and taxing companies that automate jobs, as Bill de Blasio wants to do, will only hurt American workers, writes Noah Smith.

Where's the Robot Effect?

Further Reading 

Emmanuel Macron can
play Boris Johnson’s maximum-pressure
Brexit game too. — Lionel Laurent 

The spy the CIA pulled from Russia was
probably not America’s best source
for Putin intel. — Leonid Bershidsky 

By favoring justice over knowledge, the “comfort” college makes
true justice impossible
to achieve. — Steven Gerrard 


Stanford has the world’s best business school, a survey says.

Texas land purchased for $1.50 an acre in 1913 is
now worth billions


It’s later than you think.

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