It's Beginning to Look a Lot Like a Crisis

Today’s Agenda

It's Beginning to Look a Lot Like a Crisis

Emerging Markets, Now More Crisis-y

(Bloomberg Opinion) -- Financial crises are sort of like snowflakes: No two may be exactly the same, but they sure look enough alike that you can tell what they are.

Emerging-market currencies and stocks tumbled again today, part of a long selloff that increasingly has a crisis-y feel. Satyajit Das lays out all the hallmarks of a standard EM crisis: “a large dose of debt and an associated domestic credit bubble, including misallocation of capital into uneconomic trophy projects or financial speculation. Then add: a weak banking sector, budget deficits, current-account gaps, substantial short-term foreign-currency debt and inadequate forex reserves. Season with narrowly based industrial structures, reliance on commodity exports, institutional weaknesses, corruption and poor political and economic leadership.” 

Remind you of any country in particular? It could apply to Turkey, certainly, where inflation has spiked and a central bank of questionable independence is waiting too long to doing anything about it, writes Marcus Ashworth.

It could also describe Argentina under past leadership, which has left such a mess for its current president that the IMF must soon bulk up its relief package or watch the crisis grow, warns Mohamed El-Erian. That said, Argentine President Mauricio Macri has harmed market confidence more than he has helped, writes Mac Margolis.

If current-account deficits and foreign-exchange reserves make your eyes glaze over, then you can look for sexier signs of market froth, in the form of honkingly enormous buildings and artificial islands. Malaysia is hard at work on such vanity projects right now, points out David Fickling – who notes there’s a reason these things tend to herald an impending crisis.

Kavanaugh’s a Done Deal – But Should Be Questioned on Guns

Brett Kavanaugh’s Supreme Court confirmation hearing began today. While his stance on abortion will top headlines, Bloomberg’s editors write he should also be pressed on his views on gun laws. That’s because he seems to favor limiting the ability of state and local governments to regulate guns – meaning the nation’s laws could soon be in the hands of a Supreme Court guided by the NRA’s extremism. Francis Wilkinson warns Kavanaugh will be more pro-gun than Antonin Scalia, in fact. No matter what Kavanaugh says in this hearing, though, Democrats won’t be able to stop his appointment, the culmination of decades of work by the Federalist Society to pack the high court with conservatives, writes Noah Feldman.

Bonus editorial: The hour is getting late, but it’s still possible – and necessary – to avoid a no-deal Brexit.

A Blast From the Steve Bannon Past

Ever invite somebody to something and then immediately regret it? New Yorker magazine editor David Remnick knows the feeling. This weekend he announced Steve Bannon would headline the New Yorker Festival in October. Just hours later, after an explosion of Twitter outrage, he disinvited Bannon. In a note defending both of his decisions, Remnick cited an interview of Bannon by Michael Lewis for Bloomberg Opinion. 

So it’s a good time to resurface Lewis’s story – if only to think about how this great piece of journalism compares to an on-stage festival interview.  

You Can’t Spell Kaepernick Without ‘Nike’

Speaking of Twitter outrage, conservatives are burning expensive athletic gear today because Nike Inc. launched a new ad campaign featuring Colin Kaepernick, the former NFL player who kicked off the whole kneeling-for-the-anthem controversy. Nike's stock took a bit of a hit, but the news generated millions of dollars' worth of buzz, and Sarah Halzack writes the campaign is worth the blowback for Nike – which is strong enough to handle it anyway. 

How to Make Schools More Gooder, If That Even Matters

It’s back-to-school time in the U.S., when parents worry anew about whether kids are getting a good education. Many are not. For a long time, school reformers, led by Bill and Melinda Gates, pushed top-down, one-size-fits-all fixes such as Common Core. As any parent could tell you, that approach has not always gone so well. Now these same reformers are reviving some good ideas from decades past, such as letting local schools network to figure out what works best for them, writes Andrea Gabor.  

Most parents want their kids to go to a good school, but Leonid Bershidsky suggests a better approach might be to let your kid be a top student in a relatively bad school. Studies suggest big fish in small ponds tend to perform better.

What Follows China’s Economic Boom?

China’s economy has grown so quickly for so long that it’s easy to think it will just keep doing that forever. But Dan Moss takes a look at a groundbreaking new study that tries to estimate China’s growth further into the future. And the results are surprising: After “a brutal demographic collapse” caused by its one-child policy, China’s growth after 2030 could well lag behind that of the U.S. 

Bonus China reading: Why are two Chinese telecom giants merging? To keep up with the U.S. in the race to 5G. – Shuli Ren and Nisha Gopalan

Chart Attack

Amazon.com Inc. today joined Apple Inc. in the $1 trillion company club. Valuations are typically about hopes for the future, but Amazon’s future is hazier than most, warns Shira Ovide

It's Beginning to Look a Lot Like a Crisis

Oil executives seem to get paid for luck, which they make for themselves, writes Liam Denning

It's Beginning to Look a Lot Like a Crisis

Quick Hits

Be careful, Democrat rebels;  Nancy Pelosi is the strong leader you’ll need to run the House. – Al Hunt 

The truth about Trump’s regulation rollback is more complicated than you might think. – Cass Sunstein

The antitrust movement is making a comeback, and this time it has new allies: economists. – Noah Smith 

Google is biased, but not in the way Trump claims. – Cathy O’Neil 

Going to  semiannual earnings reports would help people get more sleep, at least. – Matt Levine 

The fiduciary rule may be dead, but its legacy lives on, and that’s good news for investors. – Nir Kaissar 

A disappointing new study is no reason to give up on bundled payments as a way to cut health-care costs. – Peter Orszag 

ICYMI

Jon Kyl will fill John McCain’s Senate seat. Jeff Bezos is $67 billion richer so far this year. Gary Cohn took papers from Trump’s desk to save trade deals, according to Bob Woodward’s new book. Trump and Woodward had a chat. Facebook has a new office.

Kickers

Scientists have figured out a new way to turn sunlight into energy: photosynthesis on steroids.

Scientists are growing “minibrains” in jars, in case you didn’t have enough to worry about. 

Actually, 98.6 degrees Fahrenheit is not really normal human body temperature.

Here's the military secret to falling asleep in two minutes.

The U.S. government once tried dynamiting the sky to make it rain.

The hot new sport for dogs is “nose work.”

Here are the 10 best Stephen King works for exploring his interconnected universe. 

Note: Please send minibrains, suggestions and kicker ideas to Mark Gongloff at mgongloff1@bloomberg.net.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal.

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