Burger King May Invert
Burger King may flee to Canada. WSJ: "Burger King Worldwide Inc. is in talks to buy Canadian coffee-and-doughnut chain Tim Hortons Inc., a deal that would be structured as a so-called tax inversion and move the hamburger seller's base to Canada ... Even though many of the headline-grabbing inversion deals of late have involved European companies, Canada has also been the focal point for a number of them, given its proximity and similarity to the U.S. Canada's federal corporate tax rate was lowered to 15% in 2012."
But Obama has dampened inversion craze. Bloomberg: "The presidential rhetoric has caused several companies exploring inversions to put on the brakes to see what emerges from the political debate, people familiar with the preparations said."
"Can Treasury Make Inversions Rule Stand Up in Court?" asks WSJ: "If Treasury tries to address inversions and a court decides the administration’s plan is legally flimsy, the White House could inadvertently end up giving a legal 'green light' to companies pursuing inversions in the future. If Treasury moves forward with a policy that stands up in court, it could reshape future mergers for years in a way that many–even just a few months ago–didn’t think possible."
Fed Focused on Jobs
Inflation doves win at Jackson Hole. NYT: "Twenty years later, heresy has become gospel. Leaders of the world’s major central banks made clear in speeches at this year’s conference, which ended Saturday, that they were focused on raising employment and wages. The pursuit of lower inflation has been replaced by a conviction that inflation is actually too low for the good of the economy ... Looming over the conference, however, was the reality that central banks had made limited progress toward achieving these new goals. They also face mounting questions about how much more they have the power to do."
Though Bloomberg sees a "split": "Fed Bank of St. Louis President James Bullard said monetary policy may be tightened earlier than officials previously expected ... [But] Atlanta Fed President Dennis Lockhart said conclusions about the strength of the economy have to be taken as 'tentative' and that he was 'one of those who’s thinking in terms of the middle of next year' for the first rate increase ..."
TNR's David Dayen suggests wave of foreclosures could begin next year: "...a series of temporary relief measures and legacy issues from the crisis will begin to bite in 2015, causing home repossessions that could present economic headwinds. In other words, the foreclosure crisis was never solved; it was deferred. And next year, the clock begins to run out on that deferral ... A second foreclosure spike could stunt the housing recovery and really smash communities just rising from the ashes of the crisis."
Rush To Regulate
Obama administration moving fast on regulations. The Hill: "[The White House’s Office of Information and Regulatory Affairs] is currently reviewing 24 rules and has already completed reviews of another 70 rules, putting the agency on pace to cycle through close to 125 rules by the end of the year. Some say the tempo of regulations points to a schism between President Obama, who is focused on carving his legacy in Washington before his term expires in two years, and congressional Democrats, who are consumed with keeping control of the Senate."
Washington debating privatization of air traffic control. WSJ: "'Many have asked whether it makes sense to privatize' air-traffic control, FAA Administrator Michael Huerta said this year, noting that supporters believe such a move would provide 'a funding structure that is more stable.' Mr. Huerta on Thursday said the agency is sounding out the aviation community ... 'I am certainly open for the discussion,' Paul Rinaldi, the controllers' union president said this summer. 'I do not support privatization,' he said through a spokesman on Thursday. He said, however, that there is broad agreement 'something needs to change' and 'there is real urgency, and that is encouraging.' The Aircraft Owners and Pilots Association, which represents 350,000 general-aviation pilots, 'is open to all ideas…that would lower the cost of flying for general-aviation users and bring efficiencies to the FAA bureaucracy,' association President Mark Baker said in a written statement."
Democrats running on substance, if not name, of Obamacare. W. Post's E. J. Dionne: "As one Democratic pollster told me, his focus groups showed that when voters outside the Republican base are given details about what the law does and how it works, 'people come around and say, "That’s not so bad, what’s everybody excited about?" ... You’re going to be stuck with all the bad about this but not benefit from any of the good unless you advertise' what the Affordable Care Act does. This is what [Sen. Mark] Pryor has decided to do."
