Tag Archives

Why financial security should be addressed in the first presidential debate

Trump and Clintons plans to prevent or respond to another financial crisis are an integral part of national security. But they probably havent even considered that

This election season is enough to drive a normal voter by which I mean anyone in search of substantive debate on real issues to the brink of insanity. And the losers are us.

With the very real possibility that we are heading towards another financial crisis, all we are discussing is whether Hillary Clinton had a body double after the her fainting episode. Or the latest outrage from Donald Trump, or his kids. Its idiocy ad nauseam.

With the two main candidates finally set to meet face-to-face for the first televised debate tomorrow, youd be forgiven for hoping that might be finally about to change. I wish I shared that confidence.

I do believe that both Clinton and Trump will engage in a free-for-all in an effort to show just how tough theyll be when it comes to homeland security. Thats probably inevitable, given that the debate will take place only about 10 days after a bomb exploded in a dumpster on West 23rd Street in Manhattan, injuring 29 people.

Clearly, its important for the two candidates to spell out their views on national security issues. Hopefully this can be accomplished with a minimum of melodrama and a maximum of substantive dialogue.

What worries me is that theres one aspect of national security that no one has mentioned, that no one will mention, and that neither of the two major candidates is even thinking about.

What am I talking about? The risk that we could be heading for another financial crisis one that might make the events of 2008 look like a walk in the park. And that kind of event the prospect that the banking system will collapse, leaving us without access to our savings, and with no way to pay our bills or collect our paychecks is just as much of a threat as the more conventional perils that spring to mind when I use the phrase national security.

Lets be clear: statistically its much more likely that the next president will have to deal with a massive financial crisis than it is that she or he will have to contend with a terrorist attack of the magnitude of 9/11. It not a certainty, but it is a possibility given our never-ending cycles of boom and bust. And neither has even mentioned how theyd prevent, or respond to, to such an event.

The problem with trying to evaluate the probability of a financial crisis is that all the risk-management tools we use inevitably rely on what happened in the past. Inevitably, the next crisis comes from something we hadnt imagined could or would become a problem, or hadnt been watching. After the collapse of Long-Term Capital Management in 1998, regulators knew they needed to worry about contagion, or the way that the financial links between banks and other financial counter-parties, could spread problems, like a virus, throughout the system. But they were looking at hedge funds, not mortgage lending.

Someone needs to ask Trump and Clinton who their top candidates for treasury secretary are and what kind of instructions they would give that individual in terms of monitoring the financial markets and guarding against catastrophic outcomes.

Well-informed candidates could deliver revelatory responses. Someone representing a traditional Republican view, for instance, might echo the view that private equity tycoon Stephen Schwarzman of Blackstone Group put forth in a Wall Street Journal opinion piece last year, and argue that new rules passed following the 2008 crisis might create another liquidity crunch, cutting off access to capital just when its needed most.

Someone from the other side of the aisle would focus on the fact that the shadow banking system has exploded in size since the 2008 crisis. The private funds that form part of this universe now handle about 60% of all trading in the US Treasury securities market found in virtually every major investment portfolio using high-speed trading based on algorithmic models.

This does assume that we end up with an informed candidate, of course, and not just someone who blusters that because he is rich, we should trust him with the nations finances. (Forget about that unpleasant matter of the multiple corporate bankruptcies ) Or someone who does seem to be well-informed, but who may still be getting a lot of her information on the subject from one powerful constituency. (Yeah, Id still like to see those speeches, even if I can pretty much guess whats in them.)

An informed moderator would asked an informed candidate during tomorrows debate what kinds of risks have been created in the name of trying to jumpstart the economy by keeping interest-rates at rock-bottom levels?

At best, the result has been a surge in the issuance of junk bonds speculative investments offering above-average bond yields because investors have become desperate enough to take those risks. In some areas particularly energy they have discovered the perils of that approach, sometimes losing billions in days when crude oil prices slumped. But what will happen when interest rates make all of these bonds look like bad investments?

At worst? Well, thats a trickier matter altogether. The Federal Reserve now has an astonishing $4.5tn on its balance sheet, compared to only about $1tn at the onset of the financial crisis. The difference? Thats all the assets it bought from the banks to stabilize the banks and keep interest rates low. Now, how does it reduce that bloated balance sheet without freaking markets out? No one really knows, because no one has ever done it before. Thats another factor that could end up causing or worsening a crisis, because it means the Feds hands would be tied behind its back in the midst of another crisis. So how would the next president cope in such an eventuality?

Both presidents have said they want to reinstate Glass-Steagall financial regulations and break up the big banks. Setting aside the merits of that policy, how would the deal with the instability that would accompany its implementation?

While were on the subject Since most banks today would fail a real stress test, do the candidates know what one incorporating realistic scenarios would look like? In other words, can they do more than utter the words, Id get tough on big banks and make sure they wouldnt take foolish risks with your money again?

All of this matters even in the best of all possible worlds. And when it comes to financial markets, we arent living in the best of all possible worlds. Stocks and bonds alike are priced for perfection, and when thats the case, the slightest hiccup like comments made by Federal Reserve officials early this month can ignite a big selloff. And there are many, many things that could send markets into a tailspin, and generate a massive loss of confidence.

Including, its worth noting, whether or not the countrys next commander-in-chief seems to have a grasp of how financial markets work, and how to manage that part of his or her national security responsibility.

Im hoping financial security will make it into Mondays debate. But given this election cycle Im not holding my breath.

Read more:

Trump plan to avoid business conflicts of interest doesn’t fly

Washington (CNN)Republican presidential candidate Donald Trump reiterated Thursday that if he wins the presidency he’ll have his children run his companies to eliminate any conflicts of interest as commander in chief — but it turns out, it’s not that simple.

Handing the business to his kids will do nothing to minimize the potential for foreign influence on the presidency and would make it possible for the Trump family to gain financially from the highest office in the land, global businesses analysts and former presidential advisers said. Now it’s become another line of attack for the campaign of his rival, Democratic candidate Hillary Clinton.
    Trump has said that his children will be his business management back-up plan for months now, most recently in a Fox News interview Thursday.
    “I will sever my connections and I’ll have my children and executives run the company, and I wouldn’t discuss it with them,” Trump said in reference to a Newsweek magazine article about the potential conflicts of interest caused by Trump’s business holdings in India, South Korea, Russia and elsewhere.
    However, there are a number of reasons why putting his kids in charge wouldn’t address concerns, according to experts. Trump would still know where his family properties are located in the US and overseas, and as president, would be in a position to make decisions on the economy and foreign policy that could benefit his family’s fortunes.
    And foreign countries might see Trump business ventures in their country as a way to exert pressure or curry favor.
    Clinton campaign chairman John Podesta charged that the details in the Newsweek report “paint a frightening and dangerous picture of the influences circling Trump and the Trump organization. Trump’s business dealings could effect his judgment.”
    Podesta noted that few of Trump’s foreign interests were disclosed in his filing with the Federal Election Commission and raised the question of transparency — a weapon both campaigns are trying to deploy against the other.
    “There are 54 days to go to election day,” Podesta said. “It’s simply appalling that we don’t know more about the debts and foreign business dealings of the man running to be president,” he said in a conference call Thursday.
    Trump’s “extensive financial dealings overseas with America’s allies and enemies pose an unprecedented conflict of interest that could threaten our national security interests and global interests.”
    The Trump campaign, meanwhile, has been accusing Clinton of conflicts because of the donations her family’s charitable foundation receives from international figures.
    Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said Trump’s massive empire meant that a Trump White House will be “a constant drama as to whether his business ventures are benefiting or being harmed by his public policy decisions.”
    Kenneth Gross, who has advised previous presidential candidates on how to handle their finances, said Trump’s handing his business over to his heirs or placing the holdings into a blind trust doesn’t work well with physical properties. Generally, these techniques are applied to stock or bond assets that someone else trades for the original investor.
    “Putting it into a blind trust doesn’t wipe out your knowledge of it. You know it’s there,” said Gross, now a lawyer at Skadden, Arps, Slate, Meager and Flom.
    Trump’s Financial Disclosure Report shows the bulk of his business interests are in the US, but he has holdings such as hotels and golf courses in at least 22 countries, including Saudi Arabia, China, Turkey, Panama, Egypt and the United Arab Emirates.



      Does Trump devalue golf properties to avoid taxes?


    In an example of how complicated Trump’s business holdings are, the candidate paused during remarks about Chinese currency manipulation at the Economic Club in New York Thursday to add a thought — that he “likes China” because it rents a lot of condos.
    Podesta also raised Newsweek’s description of Trump’s stymied efforts to get more of a toehold in India’s market, wondering aloud if Trump’s would “come down harder on Pakistan to win favor with the Indian government.”
    “These are decisions affecting countries with nuclear weapons,” Podesta said. “They’re serious and they’re potentially catastrophic” if influenced by anything other than the concerns for our national security, he said.
    Norm Ornstein, a political scientist at the American Enterprise Institute, said that since Trump’s international holdings are largely in property and real estate, if he became president, “most foreign policy decisions you would make would have real implications for your holdings and your net worth, which means the conflicts of interests would be piling up beginning with every morning’s security briefing.”
    And other countries could see Trump’s business as a means to wield influence. “There would always be the question — whether they’re putting the screws on him in his private life to have him change his policies in his public life,” Hufbauer said.
    A former ethics lawyer for President George W. Bush said another problem will be the way banks and regulatory agencies in the US deal with Trump family members managing his properties.
    “You think the banks are going to turn down the president’s son on a leveraged loan?” said Richard Painter, now a corporate law professor at the University of Minnesota.
    In Thursday’s Fox interview, Trump was also asked how he would handle a situation in which sanctions were imposed on a country where his businesses are located.
    “Oh, I would absolutely get out in some form, if its ownership — would have to sell,” Trump said. “I would get out of those countries. I wouldn’t be want to be involved.”
    CNN Map

    Podesta said the fog around Trump’s foreign interests mean he must meet three demands. The first would be to disclose those business dealings, a second is that he has to divest from his company if he wins the presidency — a requirement that would apply to Cabinet members, said Podesta, a former noted.
    “Surely the same standard should apply to those seeking the presidency of the United States,” he said.
    And he called on Trump to release his tax returns so people can have greater clarity on what his business interests actually are. Those deals, he said, raise the question of whether a President Trump would “be basing decisions on the best interests of the United States and national security or would he be basing his decisions on what’s good for the Trump organization’s bottom line.”

    Read more:

    Why a surging stock market isn’t making ordinary investors happy

    For the first time since 1999, the three major US stock market indices have scored records simultaneously but big personal gains depend on big risks

    You dont have to look as far afield as Rio to find all-time records being smashed to bits in the last two weeks.

    The US stock market has been celebrating Team USAs string of gold medals by posting a string of new highs, having staged a decisive recovery from its Brexit swoon, after Britain voted to leave the EU in late June. The three major indices Standard & Poors 500-stock index, the Dow Jones Industrial Average and the Nasdaq Composite even scored new records simultaneously for the first time since 1999, the height of the dotcom boom.

    So why, amid all this market ebullience, do most ordinary investors feel downright glum?

    The problem is that though stock markets bounced back to life rapidly following the 2008 financial crisis, the typical investor waited until 2013 to return, missing out on the earliest and biggest parts of the post-crisis rally.

    Most people remain deeply wary of stocks not surprising, after they saw the equity portion of their retirement shrink by 40% or more within a single year. A professional investor isnt worrying about needing to retire in four or five years with a much, much smaller 401k plan. He can afford a long-term view.

    The average woman in the street, however, is in a much different position. Not only are her savings smaller, but the collapse in interest rates part of the Federal Reserves repeated attempts to jump-start the economy has left her fixed income investments yielding almost nothing.

    Her house, which represents a larger share of her net worth than that of a more affluent investor, may have lost value. Or at least she probably cant count on its value at the same rates as before 2008, when the housing market cratered and left only San Francisco and New York City as real estate exceptions.

    Her job may be less secure, as companies cut costs. Her salary, which also is more important to her financial wellbeing than her investment income, is almost certainly flat, and she pays a higher proportion of the cost of the benefits she receives.

    To profit from the markets record highs, she would have to be willing to take on more risk in her investment portfolio if she has one at all and load up on stocks. And for many Americans, that feels like its asking too much. They probably arent wrong.

    The last bull market in stocks ended brutally when the dotcom bubble burst in the spring of 2000, but it wasnt followed by a chasm opening in wealth inequality, as in the crisis of 2008. If that late-1990s boom gave birth to equity culture the idea that stock investing can go mainstream then the 2008 crisis may have handicapped the idea.

    Too few Americans have profited too little from the stock market rally, while a handful of the countrys wealthiest have taken the lions share of the profits, simply because they have the spare capital to invest.

    Rises in the stock market have persistently accompanied increases in income inequality from 1979 to 2011, according to a report by the St Louis Federal Reserve. Even middle-income families are less likely to expose their savings to the higher risks of the equity markets, the report concluded.

    And the reason those stocks have climbed? Well, its as much due to interest rates as corporate profits. As long as bond yields are at their current basement levels, even anemic profits look attractive to investors,relative to bonds. Its growth! And bonds arent going to be delivering that any time soon. So what else is an investor to do? As the old saying goes, in the kingdom of the blind, the one-eyed man is king. And that one-eyed man, right now, would be US stocks.

    The truth is that the stock markets records may be fragile. Corporate earnings have declined for the fifth straight quarter, and those companies that have managed to post higher profits have done so by cutting costs rather than generating higher sales. That should be bad news for stock prices, which typically trade as a multiple of a companys earnings.

    The only thing thats keeping the party going for now is super-cheap money, AKA low interest rates. As long as thats happening, well, the only place to park your spare cash if youre an investor is in stocks.

    But its interesting to look at just where those investors are choosing to put their money. By far the strongest performers of the S&P 500s 10 sectors are the telecommunications and the utilities sectors, both crammed full of stocks that pay out big dividends to their investors every quarter. In other words, investors are flocking to the safest companies out there, and the ones that will behave the most like bonds, paying them dividends instead of interest . There just arent very many cheap stocks left another reason to feel gloomy as the market has hit highs.

    Perhaps it wouldnt matter as much if more of us had managed to capture more of the gains. But we havent. But when this geriatric bull market eventually gives up the ghost, all of us who have any kind of investment portfolio, however small, will share the pain. The smaller our portfolios, the more significant those losses will be.

    Ultimately, the only thing average Americans seem able to count on is financial insecurity. Their increased productivity has gone to higher profits for corporations, and companies have paid those profits to shareholders in the form of higher stock prices, rather than to employees in the form of higher compensation. Only if that is reversed will we all be able to truly celebrate a bull market that profits everyone.

    Read more:

    Clinton ‘relentless’ in attacking Trump’s business record

    New York (CNN)Hillary Clinton goes after those Trump neckties. Donald Trump’s in a New York state of mind. And all eyes are on data and the ground game.

    Our reporters explore all this and more in this week’s “Inside Politics” forecast, where you get tomorrow’s headlines today.

      1) Clinton’s slams Trump’s business record

      Donald Trump wears many labels: real estate mogul, reality show star and now, Republican presidential nominee. So how does an opponent take on Trump when his appeal goes beyond politics?
      The Clinton campaign may have an answer.



        Trump, Dole & why 2016 can’t be like 1996


      New York Times’ Maggie Haberman says look no further than 1996 to read the 2016 tea leaves:
      “Everybody talks about the Bob Dole year, 1996 … Bob Dole was a different case. He was friends with the then-RNC chairman, Haley Barbour and he himself was a senator. He had a different view of this…. That is not what you’re going to see this time, if you see it.
      “The RNC is also still pretty dependent on Donald Trump, in terms of fund-raising. And it is not clear exactly how that will work out once there is a split. The resources are linked together in a different way than they were in that year when there was still soft money.”

      Read more:

      All hail the CFPB: banking watchdog hangs in balance as election nears

      The Consumer Financial Protection Bureau, a brainchild of Elizabeth Warren, celebrates its fifth birthday as it faces a Republican threat

      Almost, but not quite, lost in all of the noise surrounding the back-to-back presidential nominating conventions in Cleveland and Philadelphia in July was the fact that the Consumer Financial Protection Bureau (CFPB) celebrated its fifth birthday.

      What does this have to do with election day? Well, depending on who wins, it might not get a sixth.

      The CFPB, the watchdog agency charged with ensuring that the financial markets work for ordinary consumers and to police financial institutions, was the brainchild of Elizabeth Warren, then a law professor at Harvard.

      Her advocacy of the financial interests of ordinary, middle-class Americans, and her understanding of the situation in which they found themselves even before the financial crisis wreaked further havoc on their personal balance sheets, catapulted her to political stardom, even as it won her a host of enemies among bankers.

      Today, a sizable group of Democrats still quietly mourn the fact that Warren, now a Massachusetts senator, wont be their standard bearer in Novembers election, and wasnt chosen as Clintons vice-presidential candidate. Regardless of her official status, she may wield as much influence as the Vermont senator Bernie Sanders.

      But while most Democrats celebrate Warren and her accomplishments, the Republicans deplore both the senator and the CFPB. Warren seems to have gotten under the skin of the Republican presidential nominee, Donald Trump. The two have traded barbs on Twitter.

      Donald J. Trump (@realDonaldTrump) June 11, 2016

      Goofy Elizabeth Warren, sometimes referred to as Pocahontas, pretended to be a Native American in order to advance her career. Very racist!

      Elizabeth Warren (@elizabethforma) May 7, 2016

      .@realDonaldTrump spews insults and lies because he cant have an honest conversation about his dangerous vision for America.

      And as for the CFPB, well, Republican language turns downright Trumpian. Ted Cruz dubbed it a runaway agency that doesnt do much to protect consumers; the Republican partys platform described it as a rogue agency that should be abolished or overhauled if those consumers are really going to be protected.

      I interviewed Warren in July 2009, when the CFPB was still merely a proposal, and I doubt that any of these reactions or overreactions would come as much of a surprise to her today.

      The big banks want things to go back to the way they were, she said then, in the immediate aftermath of the financial crisis, and only a few months after the stock market had begun to struggle back to life. They made billions of dollars from consumers who didnt fully understand the products these banks were selling. That whole process brought this economy to the brink of collapse and must be changed. We all have an interest in a safer consumer credit market.

      And while hardball Washington politics meant that when it came time for Barack Obama to nominate the first head of the CFPB, he tapped Richard Cordray, the former attorney general of Ohio, rather than Warren, who stood beside the president and Cordray at the Rose Garden ceremony. It had been made very clear that, if Obama had nominated her, the Senate would never have confirmed her in the role.

      That didnt stop the CFPB from becoming what Jennifer Lee, a partner in the banking and financial services practice of Dorsey and Whitney (and herself a former CFPB enforcement attorney) describes as one of the most powerful and aggressive agencies in the country. Its accomplishments, she argues, are voluminous for a baby agency.

      Lee says one of the reasons the CFPB has been successful is the way it has responded to its track record. With each successive new development, the agency gets emboldened to do more, she explains. The current appetite for increased enforcement is not going to change.

      Thats clearly true. Even as the Republicans were rattling their freshly sharpened sabers, the agency announced a new line of attack. This time, it plans to crack down on abusive debt collection practices, tightening the rules that govern the industry. The goal is to ensure that debt collectors are pursuing those who actually owe the debt, that they arent harassing debtors, and that they abide by statutes of limitations barring them from trying to collect on older debt. That would make a significant difference to the estimated one in three Americans who have an a debt that has reached the stage where its in the hands of a collection agency.

      So far, the CFPBs pursuit of financial institutions, from banks to payday lenders, that have relied on a lack of financial sophistication or understanding on the part of consumers to take advantage of them has resulted in the payment of about $11.7bn to more than 27 million of those consumers directly. Another $500m or so has been generated in penalties. The largest of those settlements was with Ocwen, the countrys biggest nonbank mortgage loan servicer, under the terms of which the company refunded $2bn to 185,000 borrowers whose mortgages were underwater. Ocwen took advantage of borrowers at every stage of the (mortgage) process, Cordray said at the time.

      This is pretty much what Warren hoped the agency would accomplish when she drew up the blueprint for it following the financial crisis.

      Any market in which a credit card agreement is more than 30 pages long and mortgage documentation runs into the hundreds of pages none of which is designed to be easily read and understood by the consumer is a broken market, she said. Not all banks suffer from this: smaller banks, for instance, that offer more straightforward products get drowned out by multimillion dollar advertising campaigns for credit cards and mortgages by bigger institutions that may not offer consumers such favorable terms. She saw part of her mission as levelling the playing field. Its not a surprise that the biggest banks with the most powerful lobbyists seem ready to declare all-out war on a readable contract and other minimal consumer protections.

      Unsurprisingly, the same groups are still at war today with the CFPB, which carries on Warrens mission.

      Even before the November election, warning lights were flashing. Jeb Hensarling, the Republican member of Congress who chairs the House financial services committee, has declared he wont rest until he tosses post-financial crisis reforms like the Dodd-Frank Act on to the trash heap of history. Hensarling is also a fierce opponent of the CFPB, which has calls a dangerously out-of-control agency.

      Hensarlings plan to repeal Dodd-Frank and replace it with a patchwork quilt of lightweight, bank-friendly rules, unveiled in June, would gut the CFPB. It would deprive the agency of the right to scrutinize some kinds of lending altogether (such as auto loans), and it would politicize the entire process. Right now, the CFPB is about as independent as any Wall Street agency can be: its head is appointed by the president and left to get on with his job, with independent funding received from the Federal Reserve.

      If Hensarling gets his way, the CFPB would become completely accountable to Congress, having five commissioners appointed by party leaders, and having to fight for an annual budget. In other words, the same politicians who receive lobbying funds from Wall Street would be deciding who runs the agency that protects consumers from Wall Street and how much money that agency should get. That hasnt always worked out terribly well for the SEC, which has battled for its budget, and which is still waiting for the Senate to confirm two nominees to its five-member commission.

      So lets celebrate the CFPBs fifth birthday, and its success in fighting for the interests of the ordinary borrowers and debtors against the big financial institutions that seem to have the decks stacked in their favor.

      Lets also hope that the Republicans remember that there is tremendous bipartisan support for financial regulation, and for the agency in particular. Turning it into a scapegoat to make the banks happy could prove to be a very costly error for all concerned.

      Read more:

      One month after the referendum, are predictions of Brexit blight coming true?

      Though the Leave vote hit share values hard, many have recovered. But other sectors of the economy will be counting the cost for years

      The overall impact of the historic referendum that saw the UK unexpectedly vote to leave the European Union has so far, in the space of a month, been less severe than some of the more apocalyptic warnings had suggested. But there have been winners and losers across the economy.

      The pound

      Sterling went on a rollercoaster ride on referendum night, ending up down 8% against the dollar as the results confirmed a victory for the Leave camp. Since then, its decline has continued and the pound is now at levels not seen since 1985, having lost about 12% against the US currency. Compared with the euro, the pound has fallen by 9% since the vote and is at a three-year low making holidays in euroland more expensive.

      The decline comes as investors worry about weakness in the UK economy and the prospect of interest rate cuts to boost demand. This month the Bank of England left rates on hold but said most members of its monetary policy committee expected a cut in August if the economy did not improve.

      The weak pound is a boon to exporters but will make imported goods more expensive. On Thursday, Unilever the business behind brands including Dove, Flora, Bertolli, Hellmans and Persil became the first major food and consumer goods company to warn that companies were likely to pass on increased costs to customers.

      Stock markets

      Markets were caught by surprise by the Leave result and a record $2tn was wiped off the value of global shares. But since then, there has been something of a recovery, particularly for the FTSE 100, which has regained all lost ground and more, and is currently at 11-month highs. However, the leading UK index is chock-full of companies with international operations, which are less exposed to any slump in the UK economy, and which earn in dollars, thus gaining from the new lower exchange rate.

      The weak pound has also raised the prospect of UK-listed companies being snapped up by foreign rivals because suddenly they look cheap. Just last week chip designer ARM agreed to be taken over by Japans SoftBank for 24bn, while South African retailer Steinhoff has agreed to buy Poundland. Analysts believe more deals will follow.

      Markets have also been lifted by bargain hunters who believed valuations had fallen too far, as well as by the quick resolution to the political crisis threatening to engulf the government following Theresa Mays appointment as prime minister.

      However, the mid-cap FTSE 250, which is more exposed to the UK economy than the 100 index, has yet to reach the level it was sitting at before the referendum result, despite recovering more than 13% from its lows. It is now down 2% from its pre-Brexit level.

      Housing market

      There has been a spate of profit warnings from estate agents, and many are making gloomy forecasts for the rest of the year. Agents in some upmarket parts of London have reported a bounce in interest from overseas buyers keen to take advantage of weak sterling, but for the mainstream market there are signs both interest and price growth have cooled.

      On Friday, LSL, Britains second-biggest estate agent group owner of Your Move and Marsh & Parsons among others said business had slowed since the vote and warned that its annual profits would be significantly lower than anticipated. London-focused Foxtons issued a similar warning in late June.

      Forecasts for the rest of the year are for falling interest from buyers and price drops, particularly in the most expensive parts of the market. French bank Socit Gnrale said last week that a price correction of even 40-50% in the most expensive London boroughs could be possible.

      The Royal Institution of Chartered Surveyors (Rics) says its members expect sales to slump over the summer, because buyer inquiries fell significantly in June. Ricss findings were cited by the Bank of England when it announced that it was revising down its forecast for price rises.


      Shares in housebuilders lost around 40% of their value in the immediate aftermath of the Brexit vote, with investors worried that an economic slowdown in the UK would hit their business, despite the country seeing record low interest rates.

      There has been some recovery since then, but the companies have failed to regain all their losses. Barratt Developments, Britains biggest housebuilder, is still down around 28%, and it has said that it may build fewer homes because of the current uncertainty.

      Even before the vote, upmarket rival Berkeley had warned in June of a 20% drop in reservations of new homes.

      Barratts share price is down 28%. Photograph: Bloomberg via Getty Images

      Commercial property

      The commercial property market was already stalling in the months running up to the referendum as investors put plans on hold to await the result. The UKs decision to leave the EU has not encouraged them back.

      Rics said last week that there had been a significant drop in confidence and demand among investors and tenants since the vote. Both rent and capital value expectations are now in negative territory, it reported, adding that office and retail properties have been hardest hit.

      Funds invested in commercial property were forced to close their doors for a while, as panicked savers tried to withdraw their cash. Those barring withdrawals included funds run by Standard Life, M&G Investments and Aviva Investors. Last week, they started to reopen for business, but some investors who want to get their money out will take a hit. Aberdeen Asset Management, for example, is adjusting payments downwards by 7%.


      The banking sector has been hard hit by the Brexit fallout, thanks to a combination of low interest rates, worries about future access to European financial markets and the prospect of a general downturn.

      With expectations of another rate cut in August, the banks are braced for more strain on their stretched balance sheets, at the same time as the economy is slowing and the risk of bad debts is increasing.

      Moreover, so-called passporting arrangements, under which banks can sell financial products throughout Europe even though the UK is not part of the single currency, could come under threat after Brexit.

      Banks most exposed to the UK market have been hardest hit, with Lloyds Banking Group and Royal Bank of Scotland down 25% and challenger bank Virgin Money falling 35%.

      Profit warnings

      Estate agents have been the only businesses to issue profit warnings following the Brexit vote. However, British Airways owner International Airlines Group was quick off the mark to say the uncertainty would hit demand, closely following by easyJet. Last week, the budget airline added that the fall in the pound had cost it 40m.

      Other travel companies are also suffering as, along with increased concerns about terror attacks, they face the prospect of UK holidaymakers ditching more expensive overseas trips and staying at home.

      But executives at Heathrow airport said on Friday that the Leave vote had been good for business, with the falling pound encouraging international visitors to spend more in its shops, as well as making it easier to raise money from foreign investors.


      The first real sign that Brexit is having an impact on the economy emerged last Friday, with a Markit survey showing business activity in services and manufacturing shrinking in July at its fastest rate since the global financial crisis in 2009. The data suggested that UK GDP could contract by 0.4% in the third quarter, according to Markit.

      Until then, the data had been equivocal. The International Monetary Fund, which before the referendum had warned of possible recession if the Leave campaign won, cut its forecast for UK growth in 2017 by 0.9% points to 1.3% from its April estimate. But that is still similar to its forecasts for Germany and France.

      A report from the Bank of Englands regional agents last week showed that a majority of firms were not planning to mothball investment or change their hiring plans.

      The latest job figures looked upbeat: showing unemployment at its lowest level for more than a decade, with 31.7 million people in work in the three months to the end of May 176,000 more than for the three months to February 2016.

      On the high street, however, the volume of retail sales fell by 0.9% between May and June. This compared to a rise of the same amount in the previous three months, and showed the effect of falling consumer confidence in the run-up to and immediate aftermath of the EU vote.

      This was backed up by a survey from the British Retail Consortium and KPMG showing retail sales in the three months before the vote at their weakest for seven years, while market research group GfK recorded the biggest slide in consumer confidence for 21 years in a one-off poll following the referendum.

      Inflation is on the rise, with official figures showing that dearer air fares and driving costs helped to push the consumer price index up by 0.5% in the year ending in June, up from 0.3% previously.

      With higher prices on the way after the Brexit vote, inflation could breach its 2% target during 2017.

      Read more:

      ACLU suing US over law that could let software discriminate by race or gender

      The Computer Fraud and Abuse Act makes technology terms of service legally enforceable, which the ACLU says can be used to hide illegal activity

      The American Civil Liberties Union (ACLU) is suing the US Department of Justice over a law that it argues bars researchers from investigating whether software is being used to discriminate against people by race, gender and age.

      The Computer Fraud and Abuse Act includes a clause that makes software and hardware makers terms of service legally enforceable, which the ACLU says can be used to hide illegal activity.

      The act makes any unauthorized access to a computer illegal and prevents academics and researchers from testing a system by using aliases or fake IDs.

      By allowing tech companies to essentially write legislation, the ACLU wrote in a complaint filed in Washington DC district court on Wednesday, the government allows those companies to chill research that has exposed systemic financial discrimination by using dummy accounts to test variables such as race, gender and age. Those accounts generally violate terms of service restrictions.

      The complaint says that tests for fairness often involve a measure of dishonesty, especially when auditors want a truthful answer to questions of bias. In the offline world, pretending to want a job or a home to learn about discrimination is specifically legal. This testing involves pairing individuals of different races to pose as home- or job-seekers to determine whether they are treated differently. The law has long protected such socially useful misrepresentation in the offline world, according to the suit.

      But online, say the plaintiffs, terms of service prohibit misrepresenting your identity. Moreover, terms of service change often enough and are obscure enough that ticking the little I agree box can let defendants in for a world of hurt if the Department of Justice deems them bad actors and decides to prosecute them.

      And the issue has become more pressing as data brokers organizations that compile huge troves of information about private citizens through their credit card statements, online activity and loyalty card purchases, among other means have few qualms about making race-based inferences. According to a 2014 report from the Federal Trade Commission, data brokers often focus on minority communities with lower incomes, giving those communities names like Urban Scramble or Mobile Mixers which, the report says, include a high concentration of Latino and African American consumers with low incomes.

      Provided to retailers, real estate brokers, employers and financial institutions, this kind of demographic breakdown enables discrimination, the ACLU argues.

      The problematic nature of this has been it raises problems for a whole host of parties not before the court, said Esha Bhandari, staff attorney for the ACLUs speech, privacy and technology project. The government is given the discretion to use the CFAA to add on charges where they believe theyre prosecuting bad actors. But if the act of violating services is criminal under the CFAA, people we dont consider bad actors are criminals.

      As the ACLU has begun to focus on data-mining practices, Bhandari said the organization has heard researchers express concern that by testing for discrimination, they are breaking the law.

      Bhandari pointed to US v Drew, the 2013 case in which criminal charges were brought against an adult woman named Lori Drew, who messaged Megan Meier, a classmate of her daughters, using a false name on MySpace. Meier killed herself after receiving bullying messages from Drew; Drew was convicted of violating MySpaces terms of service.

      The Department of Justices prosecution of Drew, Bhandari said, had nothing to do with MySpace and everything to do with its low opinion of Meier, and the pursuit of the case endangered anyone trying to maintain their privacy on social media.

      Read more:

      UK loses triple-A credit rating after Brexit vote

      Standard & Poors issues downgrade and pound hits 31-year low despite chancellors attempts to soothe markets

      The UK has been stripped of its last AAA rating as credit agency Standard & Poors warned of the economic, fiscal and constitutional risks the country now faces as a result of the EU referendum result.

      The two-notch downgrade came with a warning that S&P could slash its rating again. It described the result of the vote as a seminal event that would lead to a less predictable stable and effective policy framework in the UK.

      The agency added that the vote to remain in Scotland and Northern Ireland creates wider constitutional issues for the country as a whole.

      S&P was the last of the big three ratings agencies to have a blue-chip rating on the UKs credit-worthiness. Moodys, which stripped the UK of its top notch rating amid the austerity cuts of 2013, said last week it might further cut its view of the UK.

      Rating agency moves have the potential to make it more expensive for the government to borrow.

      The S&P move came after another torrid day on the financial markets. The pound hit fresh 31-year lows and 40bn was wiped off the value of the UKs biggest companies on Monday, despite efforts by George Osborne to quell investors concerns about the economic and political ramifications of the Brexit vote.

      After three days of silence, the chancellor made a statement on Monday morning to try to calm the markets. However, sterling remained under sustained pressure on the foreign exchange markets as economists slashed their forecasts for UK economic growth. Wall Street was also weaker while continental bourses sold off sharply after Fridays record $2tn of losses on global stock markets.

      Expectations are mounting that the Bank of England will cut interest rates possibly to zero from their historic low 0.5% to stimulate the economy, and yields on government bonds fell below 1% for the first time, which could spell cheaper mortgage rates.

      In a live broadcast just after 7am, as dealers in London braced for another day of turmoil, Osborne insisted: Our economy is about as strong as it could be to confront the challenge our country now faces.

      But moderate losses on the FTSE 100quickly deepened and at one point sterling was down 3.5% against the dollar, at $1.3122, its lowest level since 1985. Against the euro, the pound was down 2.4% at 1.19.

      Speaking at the World Economic Forum in China, Nouriel Roubini, economist at New York University, described Brexit as a major significant financial shock that would create a whole bunch of economic, financial, political and also geopolitical uncertainties.

      By the end of trading, the FTSE 100 index was down 2.6%, or 156.5 points, and below 6,000. The FTSE 250, the next tier of companies and more closely tied to the UK economy, was down 7%, coming on top of a 7% fall on Friday.

      Its been another dramatic day of trading on the UK stock market, said Laith Khalaf, senior analyst at the financial firm Hargreaves Lansdown.

      Companies likely to be impacted by a Brexit-induced recession were hit hard. In two days, about 40bn has been wiped off the value of banking stocks and 8bn off housebuilders. At one point, shares in the bailed-out Royal Bank of Scotland plunged 25%, while housebuilders such as Persimmon and Taylor Wimpey have lost more than 40% in just two trading days.

      Michael Hewson, chief market analyst at CMC Markets, said while Osbornes statement had been measured his comments were unable to prevent the feeling that UK politics remains in a state of paralysis, with no clear contingencies in place to deal with the fallout of a leave vote.

      The biggest faller in the FTSE 100 was short-haul airline easyjet, which plunged by 22% after warning that wary consumers would now rethink their travel plans. Exchange rate movements, the carrier added, would add 25m to costs.

      Another profit warning came from the London-focused estate agent Foxtons. Its shares dived 25% after it said Brexit would hit sales for the rest of the year. Shares in so-called challenger banks such as Virgin Money were also pummelled.

      Osborne spoke after it emerged that the Bank of England governor, Mark Carney, had cancelled a trip to Portugal to remain in the UK to oversee any response from Threadneedle Street.

      The Banks financial policy committee, set in the aftermath of the financial crisis to look for threats to stability, will meet on Tuesday, when the Bank of England will again offer emergency loans to banks as part of its Brexit planning.

      The fallout from the vote is being felt around the world. Italys main index fell 4%, extending Fridays record losses of 12.5%. In Germany and France there were losses of 3%. At the time of the London close, on Wall Street the main share indices were all down more than 1%.

      The chancellor may have taken some comfort from the fall in yields on 10-year government bonds. Yields on these gilts, which move inversely to prices, fell below 1% for the first time. This fall in gilt yields will keep government borrowing costs down and lead to lower mortgage rates. However, they also mean pension companies have started cutting the amount paid to the newly retired.

      Osborne refused to repeat his pre-vote warning of a Brexit recession, saying only that the economy would face adjustments. But analysts started to cut their forecasts for UK growth. Goldman Sachs, forecasts just 0.2% growth in 2017, down from 2% predicted previously.

      The consultancy Oxford Economics said interest rates could be slashed to 0% within weeks. Morgan Stanley analysts said European and UK stocks would fall up to 10% over the coming months and sterling would fall to between $1.25 and $1.30.

      Much of the markets focus has been on the pound, particularly after the speculator George Soros, who made $1bn when sterling fell out of the exchange rate mechanism in 1992, had warned of a black Friday in the event of Brexit. His spokesman stressed that he had not bet against the pound last week.

      George Soros did not speculate against sterling while he was arguing for Britain to remain in the European Union, the spokesman told Reuters. However, because of his generally bearish outlook on world markets, Mr Soros did profit from other investments

      Read more:

      ExxonMobil under investigation over lucrative Nigerian oil deal

      Exclusive: documents obtained by the Guardian show Nigerian agency looking into 2009 lease agreement for countrys Crown Jewels oil fields

      ExxonMobils deal to secure the Crown Jewels of Nigerian oil reserves is under investigation by the west African countrys economic and financial crimes commission, according to documents obtained by the Guardian.

      Exxon, the worlds largest oil company, secured the lucrative oil rights in 2009 by beating out Chinas fourth-largest oil producer for access, despite apparently underbidding its rival bid by $2.25bn.

      A letter provided to the Guardian addressed to an Exxon subsidiary from Nigerias federal ministry of petroleum resources shows the accepting of a 2009 bid of $1.5bn for a 20-year lease on the Oso, Ekpe, Edop and Ubit oil fields, which produce about 580,000 barrels a day between them close to a third of Nigerias crude oil production of about 1.8bn barrels a day, according to Opec.

      Local Exxon rival Sunrise Power & Transmission, at the time a consortium of Nigerian and Chinese interests that included the Chinese National Offshore Oil Corporation (CNOOC), bid $3.75bn for the same rights, according to a letter from Sunrise to the Nigerian president.

      The deal was reported to the Nigerian authorities by Lanre Suraju, a Nigerian anti-corruption activist and chairman of the Civil Society Network Against Corruption. Suraju said he was passed documents related to the deal by a concerned citizen after his June 2015 petition to investigate the bid was made public. Suraju was the recipient of a letter dated 17 August 2015 in which the authorities confirm they are investigating the deal.

      lanre suraju letter
      The letter to activist Lanre Suraju confirming the investigation of Exxons deal.

      The documents were given to the Guardian by international watchdog group Global Witness, which said it had confirmed the investigation with the Economic and Financial Crimes Commission (EFCC). The EFCC told the Guardian it could not comment on the existence of an investigation, though Suraju said that as of last week the EFCC has progressed impressively on the matter.

      Revelations about the investigation come at a sensitive moment for the oil industry: the US Securities and Exchange Commission (SEC) is currently considering a rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act that would require energy companies to disclose the specific payments, down to the level of the individual project, that the firms make to foreign governments in order to secure lucrative mining and drilling rights.

      Dominic Eagleton of Global Witness said his organization wants to support greater transparency in international oil deals and hopes the SEC rule passes as proposed. Its vital that the US introduces strong transparency rules to bring these deals into public view, enabling citizens in Nigeria and other oil-rich nations to hold their governments and companies to account for how the money is used, he said.

      Exxon has argued to the SEC that the new rule disregards a court ruling against the regulator and the many comments, concerns, and good-faith proposals for alternative approaches put forward by industry.

      An internal memo signed by executives of the nations state-run oil firm, the Nigerian National Petroleum Corporation (NNPC), shows Exxons local subsidiary Mobil Producing Nigeria (MPN) originally tried to acquire a 25-year license to receive billions of dollars of oil for just $75m, saying they had expected the price for the lease renewal to be millions not billions.

      The three oil-mining leases, or OMLs, renewed in 2009 at the end of a 40-year lease, are for shallow-water offshore lots of oil-rich real estate labeled blocks 67, 68 and 70. Production at the properties is very high, according to reports. Assuming the leased properties generate that many barrels every day of the year at an average of $50 a barrel, the gross revenue from ExxonMobils 40% stake in the wells would come to $4.2bn annually. The properties also produce natural gas.

      Mobil Producing Nigeria takes strong exception to these allegations, Lauren Kerr, the operations media relations manager for ExxonMobil, told the Guardian. Mobil Producing Nigeria fully complied with the requirements outlined by Nigerian law for the renewal of oil mining licenses 67, 68 and 70. Nigerian law, as prescribed under the Petroleum Act, outlines the processes and procedures for an oil mining license renewal in the country. Within this framework an agreement between the Nigerian government and MPN was reached and legally executed.

      We have noted the same to Global Witness.

      The company adheres to the highest standards of business conduct, and to imply so without evidence is grossly irresponsible.

      Mobil Producing Nigeria memo

      CNOOC said it would not comment on the specifics of the deal, though spokeswoman Irene Gao said the company had learned from the experience: In the future, the Company will attach more importance to the organic development of overseas assets and further optimize its overseas portfolio, Gao told the Guardian.

      For the year ending 2015, ExxonMobil reported realizing $12.2bn from all of its Nigerian assets in sales and other operating revenue.

      Just two months before the renewal, the Financial Times reported that Tanimu Yakubu, economic adviser to Nigerias former president Umaru YarAdua, had said that Chinese bidders are really offering multiples of what existing producers are pledging [for licences] we love to see this kind of competition.

      But the leases stayed with Exxon to the consternation of Leno Adesanya, at the time the chairman of Sunrise Power & Transmission, a consortium of local and Chinese interests that included CNOOC.

      In the case of ExxonMobils OML 67, 68 and 70, our consortium offered $3.75bn for 40% equity interest in oil reserves, Adesanya wrote to Nigerias current president, Muhammadu Buhari, last July according to one letter provided to the Guardian. The letter goes on to say that the company had offered $18.75bn for a 100% interest in the same properties under the original agreements, the wells are a joint venture in which 40% of the oil goes to Mobil Producing Nigeria, and the other 60% to Nigerias state oil company.

      A letter from 31 August 2009, little more than two months before the acceptance of the lower bid, details the $18bn bid from Sunrise and seems to assert the Chinese firms ability to handle the daunting logistics of changing ownership from Exxon, though it does not directly refer to its competitor: It is important to emphasize that Sunrise, CNOOC and the other constituent members of the Consortium are not only capable of funding petroleum operations in the respective OMLs, but have the technical know-how to undertake and carry out petroleum operations as required by international petroleum oilfield practices.

      Exxons current rights are based on a disputed November 2009 deal, the negotiation of which was the subject of an inquiry by Nigerias now former oil minister Diezani Alison-Madeuke, who said at the time she would recall the agreement since they had only been signed by a junior minister, Henry Odein Ajumogobia, and had never been countersigned by the senior oil minister, the late Rilwanu Lukman. A letter from Ajumogobia sets the price of the Exxon deal at $1.5bn, though it was widely reported as costing only $600m.

      Alison-Madeuke, later the president of Opec, was arrested in London last October by Britains National Crime Agency as part of a corruption investigation. She was released on bail and did not appear before a magistrate in October, citing health concerns.

      The documents appear to include pages one and three of an initial agreement from Ajumogobia confirming the renewal of the leases. Page two has been withheld; Suraju said he believes that it contains terms outlining the construction of a power plant, which the government presented as evidence that it had driven a hard bargain when pressed to investigate the deal for corruption.

      Sunrise Power letter

      Local news reports citing Nigerian officials value the power plant at $900m, which Suraju believes accounts for the difference between the $600m reported and the $1.5bn described in the letter to MPN from Ajumogobia.

      The design contract for the power plant was awarded in 2009. In 2010, the NNPC announced groundbreaking on the project. An article published Tuesday described progress on the power plant, located at ExxonMobils Qua Iboe terminal in Akwa Ibom state, as slow.

      One of the documents obtained by Suraju is a memo signed by officials of the national oil firm, the NNPC, describing the negotiations with Exxon. [T]hese blocks, particularly OMLs 67, 68 and 70 are the most prolific portfolio of hydrocarbon assets in offshore Niger-Delta, the governments representatives said. They are rightly referred to as the Crown Jewels.

      Exxons lease on the blocks was set to expire in November 2009, and renegotiating that agreement was of paramount importance to the west African nation. [T]hese blocks represent the last remaining shallow-water resources of this magnitude in the Nigerian continental shelf and therefore lease renewal represents a unique opportunity for value capture for the Government, the reports authors wrote. Assuming a long-term minimum oil price of $50 a barrel (Brent crude was trading for just over $50 a barrel on Thursday), the government asked for $2.55bn.

      Read more:

      From cash woes to digital #fails, Trump’s campaign is ‘worst of all possible worlds’

      He may rule Twitter, but there is no evidence that the presumptive GOP nominee is building the digital fundraising and volunteer network he needs to win

      Judging by the headlines, Donald Trumps presidential campaign is in meltdown. He sacked his campaign manager, raised a historically low amount of cash, and is tanking in opinion polls in key swing states.

      Thats just the start of it.

      Behind the scenes, in the largely invisible world of digital organizing on which modern presidential campaigns increasingly depend, Trump is not merely lagging behind hes not on the map.

      Technology is a key battleground in any election, and increasingly so. Trump may rule Twitter, yet there is no evidence that the real estate billionaire is doing anything to build the more prosaic but essential digital fundraising and volunteering network that in no small part propelled Barack Obama to victory in both of his runs for the White House.

      On the national stage, Trump is vastly out-organized by Hillary Clinton with just 70 campaign staff to her 732. On Tuesday night, Trump announced he had hired several staff members to expand his campaign operations including a new digital director, but that still leaves him lagging far behind.

      Zoom in to essential swing states such as Ohio a state that should be promising territory for Trump given its old manufacturing base and preponderance of angry white male voters and Democrats outgun the Republicans by three to one: 150 full-time employees on the ground, according to the Cleveland Plain Dealer, to Republicans 50.

      That disparity is reflected in and compounded by Trumps diabolical financial figures. New campaign filings released on Monday night showed he has just $1.3m cash available, 1/30 of the war chest at Clintons disposal.

      The filings for May also revealed a bizarre set of spending priorities. Instead of using his paltry income to bolster a modern campaigning machine ahead of November, Trump spent large amounts on his own properties, including $423,372 to rent his Florida resort, Mar-a-Lago, and a further $207,869 on Make America Great Again hats.

      Thats before you get to the $35,000 paid to a New Hampshire advertising firm named after characters from Mad Men.

      So far, Trump has defined his digital prowess almost exclusively through his strident personal use of social media, specifically Twitter. The strategy proved to be a winning one in the primary stage of the election, with the candidates Twitter feed acting as a megaphone that amplified his contentious views on immigration and national security through cable television in a constantly revolving feedback loop.

      But that was then. The general election in November is an entirely different ball game in which the participants proliferate dramatically from the small number of devoted primary voters to a giant sea of largely disengaged Americans.

      Trumps team of core advisers appears to believe that the same social media sleight of hand can be pulled off in the general election and that a lean, mean campaign can work for the candidate again. As Corey Lewandowski, the billionaires dumped but loyal-to-the-end campaign manager, told CNN: Its been proven time and time again that the amount of money you spend on paid advertising doesnt equate to votes its not like that.

      But experts in mass communication and modern elections warn that the presumptive Republican nominee is making an epic mistake in thinking that his attention-grabbing tweets will suffice to sway the entire nation. Trump sending out a tweet in response to events is hardly comparable to the millions of contacts produced by the ground game, said Shanto Iyengar, a Stanford professor of political science and communication.

      Studies have found that state-of-the-art voter mobilization technology, which uses digital tools to harness the enthusiasm and energy of volunteers, can boost voter turnout on election day by about 7% in battleground states. Obama deployed the methodology to devastating effect in 2012, helping him rout his Republican rival Mitt Romney and acting as a game-changer in todays electioneering.

      Barack Obama used state-of-the-art voter mobilization technology to devastating effect in 2012. Photograph: Jewel Samad/AFP/Getty Images

      For Iyengar, that means Trump ignores the new technologies at his peril: If the Trump campaign does not invest heavily in developing a sophisticated voter mobilization campaign, I dont see how they can be competitive in battleground states. At the moment, I dont think there is any doubt that the Clinton campaign is miles ahead in being able to target and mobilize their voters.

      Even Trumps advantage on social media appears to be slipping. Clinton began shakily as she sought to respond to his constant barrage of attack tweets. Her answer to his piercing moniker for her Crooked Hillary was the wooden Dangerous Donald, which lacked similar impact.

      Donald J. Trump (@realDonaldTrump) June 1, 2016

      Crooked Hillary Clinton is a fraud who has put the public and country at risk by her illegal and very stupid use of e-mails. Many missing!

      Recently, though, observers have noted that Clintons use of social media has shown a new wry edge.

      andrew kaczynski (@BuzzFeedAndrew) June 17, 2016

      Clinton’s social team doing a decent job of doing something Trump can’t do, be funny without seeing unhinged.

      Her three-word slap in Trumps face will go down in Twitter history.

      Besides, it remains a truism of modern presidential elections that no amount of clever tweeting will drive voters to the polls in large enough numbers to take key swing states such as Ohio. Trump has made Twitter relevant again, but hes done nothing to capture the enthusiasm that hes generated in the process, said Patrick Ruffini, a Republican digital strategist who advised George W Bush in 2004 and primary candidates in both the 2008 and 2012 elections.

      Ruffini said that Trump was beginning to bump up against the limits of celebrity in contemporary politics. His digital weakness Clintons campaign website is recording five times more traffic than his is hurting him by restricting the cash he can raise through small online donations, which in turn gives him less to spend on ground organizing, setting up a vicious circle of decline.

      This is the worst of all possible worlds, Ruffini said. At least in 2012 we had a professional campaign that tried to make use of digital tools. But Trump is just phoning it in, not just digitally but in everything fundraising, ground organizing, every aspect of a modern presidential campaign.

      The fall-guy in all this is the Republican National Committee, to which Trump has indicated he plans to devolve all responsibility for a ground game and digital strategy. The good news for conservatives is that the RNC is much better placed than it was even four years ago to launch a robust effort on the billionaires behalf, having invested more than $100m in building up an email list of potential supporters that can be used to fundraise and get out the vote.

      The bad news is that unless the candidate steps up and engages with the RNC, its potential for making real headway in key states will be limited. Four years ago, Romney worked with the RNC to maximize his fundraising and organizing potential, and vice versa; this year the connection between presumptive nominee and party is minimal.

      The results are already palpable. As the New York Times pointed out, new figures released on Monday showed that the RNC raised three times as much in May 2012 with Romney at the helm than the $13m it reported for the same month this year with Trump as its figurehead.

      That bodes badly for Trumps presidential ambitions. It will mean less money to pay the salaries of ground staff; less online advertising targeting women, young people, independents; fewer volunteers to send out emails and knock on doors; and ultimately what this is all about fewer voters bothering to get out of their armchairs and to the polling stations to elect Donald Trump as the next president of the United States.

      Read more:

      Page 5 of 6First...456

      Recent Tweets

      Call Now Button