White House has Plan for Afghanistan and Housing Prices are Up
August 22, 2017
President Trump announced that he would be increasing the number of troops in Afghanistan. He also declined to provide exemptions to a coal CEO and friend, who wanted to ignore environmental rules. Because of limited supply, U.S. housing prices have continued to increase. Emerging markets are being hit by the end of the ECB’s quantitative easing.
- Trump announces Afghanistan plan. The president announced in a speech last evening a plan for a modest troop increase in Afghanistan, adding firepower to America’s 16-year-old conflict. Faced with a resurging threat from both the Taliban, which controls around 40% of Afghan territory and the Islamic State, President Trump opted to increase American presence with an undefined amount of troops. His comments included a critique of Pakistan, which is widely believed to be supporting terrorist groups to wrest control of the region from Kabul, and outreach to India, which has large economic influence in the region. Lawmakers such as John McCain and Lindsey Graham praised the new strategy, citing its focus on Pakistan and measured approach. Critics and military experts have argued, however, that adding a few thousand troops to the region will do little to alter the “strategic reality” of the longstanding conflict. [Bloomberg]
- Trump declines coal plant’s request for emergency exemptions. Bob Murray, a coal CEO and longtime Trump supporter, has requested the administration use its emergency authority to keep one of his subsidiary coal plants open, even in the event of bankruptcy. The emergency designation is a little-used provision that would, among other things, allow the coal plant to flout environmental regulations in order to stay open. Murray explained in his request that, if it were not granted, 6,500 coal miners would lose their jobs. The president declined to approve that request, indicating that there are limits to his campaign trail promise of propping up the coal industry. [The Hill]
Economic Indicators & News
- US Home prices rise due to limited supply. US home prices rose 6.6% this past quarter from a year prior, and 1.6% from the last quarter. While new home construction has slowed, the housing market is holding steady, and rising prices are indicative of more buyers competing for a limited supply of listings. National median prices of existing single family homes are up 6.2% from last year, amounting to $255,600. [Bloomberg]
- Emerging economies grapple with Euro-zone reverse-QE. The European Central Bank, in the wake of the financial crisis, had developed a similar easy-money policy to the Fed’s policy, injecting 60 billion-euro each month into the euro zone economy. This has led to record levels of debt in emerging economies held in euros. Fears abound as the ECB prepares to taper the economy off of the program, as the lack of availability to easy financing could derail an emerging market rally. This is not only Europe’s problem, as many central banks are struggling to unwind stimulus packages from the financial crisis without scaring the markets they’ve tried so hard to bolster. [Reuters]